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Professional Service Agreement

The SESCO Report – October 2010

Challenging Common Myths of Terminations

In assisting clients in processing terminations as well as in questions and comments we receive from managers and supervisors in conducting management "do's and don'ts" training, we find ourselves clarifying two (2) common myths in processing terminations. Please consider the following myths and our staff recommendations:

Myth 1 Why document at-will terminations?

Managers often ask us why they need to document when terminating employees since everyone is an employee at will. Although employment in every state in the country, other than Montana, is an employment-at-will state, the answer lies in what most employees do after they have been terminated.

Most employees, even if they voluntarily resign their position, will file an unemployment claim. Additionally, more and more employees are filing charges of discrimination through the EEOC or State Human Rights Commissions or even obtaining counsel and filing wrongful termination lawsuits.

When SESCO assists and represents employers before unemployment agents, EEOC and Human Rights officers or when contacted by an attorney, if our answer is the employee was terminated "at-will," the agent, officer or lawyer will infer that if this is the only reason, then there must have been wrong doing or some reason other than performance, attendance, quality or violation of a rule or policy.

Employment-at-will terminations, for all intents and purposes, should never take place. There should always be a reason for a termination and as such, the termination should be well documented. If an employee is ever surprised by a termination, then we as managers and human resource professionals have not done our jobs and should expect irrational actions by the surprised employee who is terminated. Always find "cause" and thoroughly document all terminations. Employment-at-will will simply not hold up in cases of alleged wrong doing such as an unemployment, discrimination or wrongful termination claim.

Myth 2 Employees have no rights if terminated during their orientation/probationary period.

Most managers believe that if they separate or terminate an employee during their initial employment/orientation period, re: their first 60 or 90 days or as defined orientation period, they can do so without fear of repercussion or liability. This is just not true.

Applicants, even those who are not hired, have protections under anti-discrimination and other employment regulations. Furthermore, once an employee is hired and they begin work, all applicable federal and state employment regulations are enforced. If an employee is terminated, even if it is within their first day of employment, they have every right and can pursue alleged wrong doing to include State Human Rights Commission, EEOC or wrongful termination.

SESCO strongly recommends that employers establish orientation or trial periods. The primary purpose for these periods is to provide training, orientation to the job and organization, closer scrutiny provides assistance and support, and to remove poor behavior early on so that the behavior does not "poison" the workforce or create service or quality issues with customers and clients. Mediocre behavior or poor behavior can not be allowed to "hang around" in an organization as it is costly as well as detrimental to the overall culture of an organization.

In summary, when terminating employees, always ensure that the reason for termination is well documented to include a history of progressive discipline where appropriate. Documentation should always reference a rule, policy, job description or other expectations. Finally, documentation should contain very specific information as to the reason of separation. In the end, if an employee should ever claim alleged wrong doing, our best, and frankly only defense, is effective employment documentation referring back to an infraction of a rule or policy.

Developing Handbooks for Multi-State Employers

Employers who operate in multiple states need to be aware that typically a "generic" employee handbook, although can be used, is not recommended. As there are varying state laws, it is critical that employers who operate in multi states customize their employee handbook for each state that they operate to reflect critical policies.

A core employee handbook can be utilized and subsequently customized to address specific state issues or an appendix be included to, again, reflect specific state compliance requirements.

Some of the more common state-by-state issues include:

FMLA/Maternity Leave Many states have requirements that provide eligible employees with additional medical leave in addition to the 12 weeks provided under Family and Medical Leave. Additionally, many states provide for pregnancy and maternity leaves in addition to Family and Medical Leave.

Jury Duty Leave Policies vary from no laws up to requiring full pay for jury duty for an indefinite period of time.

Access to Personnel Files States have different laws about whether or not employees have the right to see, remove or even copy their personnel file.

Vacation as Earned Wages States vary on whether or not vacation or other fringe benefits are considered wages earned for the purposes of paying these wages when an employee quits or is terminated. Additionally, states are very specific in that they require policies to reflect laws regarding compensation of earned, unused vacation. If not addressed, most all states will deem that earned, unused vacation or other fringe benefits must be paid at time of separation, regardless of the reason.

Other State Laws Other state laws that vary include smoking, drug testing, women's rights for family and child care, donating blood or bone marrow, Domestic Violence Leave laws and many, many others.

Furthermore, we are finding even local municipalities and counties are implementing various employment laws.

Generic handbooks once served a purpose; however, with the myriad of policies from state to state, employers must reflect specific state laws to ensure compliance, fairness and efficiency.

Tips for Minimizing Workplace Negativity

The best way to combat workplace negativity is to keep it from occurring in the first place. These seven tips will help you minimize workplace negativity.

Provide opportunities for employees to make decisions about and control and/or influence their own job. The single most frequent cause of workplace negativity we encounter is traceable to a manager or the organization making a decision about a person's work without input. Almost any decision that excludes the input of the person doing the work is perceived as negative.

Make opportunities available for employees to express their opinion about workplace policies and procedures. Recognize the impact of changes in such areas as work hours, pay, benefits, assignment of overtime hours, comp pay, dress codes, office location, job requirements, and working conditions.

These factors are closest to the mind, heart and physical presence of each individual. Changes to these can cause serious negative responses. Provide timely, proactive responses to questions and concerns.

Treat employees as adults with fairness and consistency. Develop and publicize workplace policies and procedures that organize work effectively. Apply them consistently. As an example, each employee has the opportunity to apply for leave time. In granting his request, apply the same factors to his application as you would to any other individual's.

Do not create "rules" for all employees, when just a few employees are violating the norms. You want to minimize the number of rules directing the behavior of adults at work. Treat people as adults; they will usually live up to your expectations, and their own expectations.

Help employees feel like members of the in-crowd; each person wants to have the same information as quickly as everyone else. Provide the context for decisions, and communicate effectively and constantly.

If several avenues or directions are under consideration, communicate all that you know, as soon as you know it. Reserve the right to change your mind later, without consequence, when additional factors affect the direction of ultimate decisions.

Afford employees the opportunity to grow and develop. Training, perceived opportunities for promotions, lateral moves for development, and cross-training are visible signs of an organization's commitment to staff.

Provide appropriate leadership and a strategic framework, including mission, vision, values, and goals. Employees want to feel as if they are part of something bigger than themselves. If they understand the direction, and their part in making the desired outcomes happen, they can effectively contribute more.

Provide appropriate rewards and recognition so people feel their contribution is valued. The power of appropriate rewards and recognition for a positive workplace is remarkable. Suffice to say, reward and recognition is one of the most powerful tools an organization can use to buoy staff morale.

Take some time to analyze how well your organization is applying these seven recommendations. They form the foundation for positive staff morale and minimized negativity in your workplace.

Healthcare Reform Update

Based on a recent study conducted by Hewitt Associates, employers and workers both can expect to pay more for their healthcare coverage in 2011. In fact, employers who are renewing their healthcare plans currently are experiencing significant increases.

Increases are primarily being charged in order to cover:

No opportunity to screen out pre-existing conditions.
Dependents up to the age of 26.
Other expected increased costs.

In 2011, the combined average of premium and out-of-pocket cost for healthcare coverage for an employee is projected to climb to $4,386. This is a 12.4% increase or $486 over 2010.

Companies, will see their health insurance costs go up nearly 20%, to an annual tab of $9,821 per employee, or double the employer's annual worker tab from 9 years ago.

The reality is that we are getting to the point where the average employee is costing the "average employer" $10,000 a year for healthcare. In addition, healthcare costs continue to rise 6% to 8% annually, primarily due to advances in medical technology and the increasing use of medical services by an aging population.

In the wake of the recession, employment trends are also affecting healthcare costs: companies are hiring fewer younger employees, so premiums paid by this segment of the working population who typically use fewer health services are not absorbing the costs of the older employees.

Many employers will ask employees to shoulder more of the burden of healthcare costs or simply drop coverage.

Special Thanks to SESCO Clients!

Monro Muffler
Rochester, NY

Citizens Bank
New Tazewell, TN

Lutheran Homecare & Hospice, Inc.
Chambersburg, PA

Northeast Community Credit Union
Elizabethton, TN

Johnson City Federal Credit Union
Johnson City, TN

Comfort Keepers
Fairfax, VA

SESCO Client Inquiry Staff Response

Question: We suspect an employee is under the influence of drugs. May we send him/her for drug testing even though we do not currently have a drug-testing program?

Answer: No. It is unwise to drug test employees without having a written policy on drug testing. When you single out an employee for drug testing and you do not have a policy, your action likely violates state privacy laws and can be perceived as a discriminatory practice. Furthermore, an employer should not accuse an employee of substance abuse. Instead, focus on the employee's performance problems. Substance abusers often have problems with attendance, high accident rates, and low productivity and accuracy.

We recommend that employers consider adopting a drug-testing program. A drug-testing program can result in a safer work place, while identifying and providing assistance to employees with substance abuse problems. In addition, many states provide discounts on workers compensation insurance to employers with a certified drug-testing program.