The SESCO Report – September 2011

U.S. Chamber of Commerce-Small Business Outlook

The U.S. Chamber of Commerce engaged Harris Interactive to conduct a Small Business Survey. The survey included a national sample of 1,409 small business owners with an annual company income of $25 million or less. The survey was conducted in July of 2011.

Excerpts of the survey include:

BUSINESS ENVIRONMENT: CHALLENGED BY ECONOMIC UNCERTAINTY

• Economic uncertainty is the most important challenge facing small businesses, with 49% ranking it within the top three choices.
• Small business owners also feel challenged by the national debt (47%), the new health care law (39%), and the impact of regulations (36%).

Top Five Challenges Facing Small Businesses

1. Economic Uncertainty — 49%
2. America's Growing Debt & Deficit — 47%
3. The 2010 Healthcare Bill — 39%
4. Over-regulation — 36%
5. High Taxes — 28%

REGULATIONS: IMPACT OF REGULATIONS ON BUSINESS

• 85% say they are somewhat or very worried about the impact of regulations on their business.
• 79% say taxation, regulation and legislation make it harder for their business to hire more employees.
• 75% say the healthcare law makes it harder to hire more employees.

SUMMARY

• Vast majority of small business owners say the U.S. economy is on the wrong track (84%).

- Only 20% believe that the country's best days are ahead.
- 79% believe Washington should get out of the way of small businesses, instead of offering a helping hand (14%).

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Employee Morale and Motivation

Why can't I motivate my employees?

Morale is defined as the "...willingness to perform assigned tasks, cheerfulness and discipline." We often think that morale is tied directly to productivity – when productivity is high, then morale must be high, whereas if morale is low so goes productivity. While there is a relationship between the two, morale can be more accurately tied to the relationship between the manager/supervisor and the employee.

Morale and motivation are often used synonymously. Motivation is the reason "why people do the things they do." So how can you motivate people and keep the morale level high? Unfortunately, studies have shown that you really cannot motivate another person. Motivation comes from within – it is a result of a person's individual perceptions, needs, and desires. People can only motivate themselves. Having said that, it is important to realize that supervisors can have a direct impact on an individual's motivation by creating an environment within which a person will want to motivate him/herself.

Motivation can be defined as the act of getting a person or a group, each with his or her own distinctive needs and personality, to work to achieve the organization's objectives, while also working to achieve individual objectives. This is very different from manipulation, which is a process that moves people toward ends that the supervisor desires – without regard for the feelings and needs of the employee. Manipulation often uses threats, short-term rewards, or promises. True motivation must be done with respect for the other person. It is accomplished by linking what the individual desires with the specific goals, tasks, and behaviors that the job requires.

"People often say that motivation doesn't last. Well, neither does bathing — that's why we recommend it daily." — Zig Ziglar

Legal-Synthetic Drugs in the Workplace

In providing a safe workplace, employers commonly utilize drug testing programs. Ordinarily, drug testing programs are utilized in pre-employment, post-accident, return to work, random, and reasonable suspicion. However, with the increase in use of experimental medical chemicals, known as synthetic or designer drugs, employers are finding that standard drug tests cannot guarantee a drug-free workplace. Varying slightly in chemical structure, synthetic drugs are designed to go undetected in standard drug tests. Furthermore, synthetic drugs produce similar effects of known illegal hallucinogens and narcotics, while currently remaining legal in some states. The reality of the situation is that employers might hire or currently employ persons that abuse synthetic drugs. To combat the use of the drugs, employers need to ready themselves with knowledge of common synthetic drugs so that they can enforce a drug free workplace.

BACKGROUND

Synthetic drugs have become increasingly popular throughout the United States and can be found in gas stations, convenience stores, adult novelty stores, and "coffee shops," which are similar in concept to cigar bars or "hookah" lounges. Additionally, they are heavily marketed and sold via online resources with no apparent age restriction. Producers of these experimental drugs label some of the synthetics as "incense," "plant fertilizer," "bath salts," and "toilet bowl cleaner." Synthetic cannabinoids, which are found in "incense" and "plant fertilizer," are the most common synthetic drugs on the market and mimic the effects of marijuana use. Popular brands of synthetic cannabinoids are K2 and Spice. However, "bath salts" and "toilet cleaners" are chemically based alternatives that simulate the effects of a harder substance, such as methamphetamines, cocaine, ecstasy, Lysergic Acid Diethylamide (LSD), Phencyclidine (PCP), or a combination of the substances.

Synthetic drugs vary in chemical composition, making it extremely difficult for lawmakers to classify them as a controlled substance. Currently, the Drug Enforcement Agency (DEA) has placed an emergency ban on five formulas of cannabinoids to include JWH-018, JWH-073, JWH-200, CP 47.497, and cannabicyclohexanol. Under the emergency scheduling guidelines, the DEA has up to one (1) year to finish research and enforce the ban, with a six (6) month possible extension for additional research and completion. Other cannabinoids and cathinones have been banned through state law. As of June 2011, at least 32 states have banned substances related to synthetic cannabinoids. In addition, 23 states have banned substances related to synthetic cathinones. However, it is difficult to regulate the market of synthetic drugs as producers change chemical composition or formulas when lawmakers ban specific chemical compounds. Even with recent legislation to stop synthetic drugs, the DEA estimates that there are at least 1,000 synthetic drug makers with recognizable brands in the U.S. Additionally, the DEA worries about small time producers making their own synthetic drugs from online instructions or detailed video instructions that have been posted on YouTube.

HOW SYNTHETIC DRUGS AFFECT EMPLOYERS

Synthetic drug use creates difficult issues for employers. Since synthetic drugs and illegal narcotics/hallucinogens elicit similar behaviors in users, employers will be unable to determine which substances an employee may be abusing when faced with an obviously impaired employee. Employers that are steadfast in stopping employee drug use, may be required to utilize both a standard drug test and a synthetic drug test. However, employers that choose to utilize specialized synthetic drug tests can expect to pay more, as the current tests are only available at a handful of specialized labs around the country. Also, synthetic drug testing only utilizes urine analysis at this time, as hair follicle testing is still in the research and development phase for synthetic substances.

Another method to deter synthetic drug abuse amongst employees in an organization is to develop policies and procedures relating to an employees' ability to perform all functions and duties of their job as assigned. If an employer has reasonable suspicion that the employee may be under the influence of an illegal substance or synthetic drug, it is appropriate to require a medical or fitness-for-duty evaluation. Fitness-for-duty evaluations are appropriate in instances where 1) an employee's conduct appears to create a threat to his/her own safety or the safety of other employees; or 2) there is objective evidence that the employee cannot perform the essential functions of the job. While an employer may not be able to legally confirm that an employee is violating their drug policy, the employer can discipline the employee for failing the fitness-for-duty evaluation. However, this requires a separate policy within an employer's handbook which details what the fitness-for-duty evaluation is and what the discipline procedure is when an employee fails the evaluation. Similar to an employer's drug policy, this separate policy is important in ensuring a safe and productive working environment.

Final Rule Requires Employers to Post NLRA Rights

The National Labor Relations Board (NLRB) has issued a Final Rule that will require employers to notify employees of their rights under the National Labor Relations Act (NLRA) as of November 14, 2011. Private sector employers whose workplaces fall under the NLRA will be required to post the employee rights notice where other workplace notices are typically posted. The posting requirement applies to private employers of any size other than agricultural, railroad, and airline employers. Also, employers who customarily post notices to employees regarding personnel rules or policies on an internet or intranet site will be required to post the NLRB notice on those sites. The notice must be posted in English and in another language if at least 20% of employees are not proficient in English and speak the other language.

The notice, which will be similar to the one required by the U. S. Department of Labor for federal contractors, will state that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to refrain from any of these activities. It will also provide examples of unlawful employer and union conduct and will instruct employees how to contact the NLRB with questions and complaints. Failure to post the notice may be treated as an unfair labor practice under the National Labor Relations Act.

The new poster can be pre-ordered from SESCO Management Consultants for $9.99. You may order the poster from our online publications store by clicking HERE by calling or emailing SESCO. Should you have questions about this new requirement, you may contact us by phone at 423-764-4127 or by email at sesco@sescomgt.com .

Special Thanks to New SESCO Clients!

Hartsell Funeral Home
Albemarle, NC

Warlick Funeral Home
Lincolnton, NC

White Horse Village
Newtown Square, PA

Mountain Mission School
Grundy, VA

SESCO Client Feedback

"SESCO is wonderful! Great to work with and very knowledgeable!" ~ Amy Howard, Lifespan Health

"Joel helped us be able to move to the final stages of our transition. We know we can count on SESCO's information as being correct and well researched. I know when I have a question or problem that when I call, SESCO will give me the quickest and most useful information available." ~ Jane O'Conner, Clinical Management Concepts, Inc.

"SESCO's Federal Wage-Hour Regulations Manual is well done and easy to understand. SESCO is professional and I would highly recommend them to any Funeral Director." ~ K.L. Brown, K.L. Brown Funeral Home/Crematory

"Auditing exempt/nonexempt made us feel comfortable that we were doing payroll correctly. I like SESCO's responsiveness. I would rate SESCO very highly on knowledge and service." ~ Suellen Palmer, Town of Pulaski Virginia

SESCO Client Inquiry — Staff Response

Question: Can employment be denied to an applicant based on their prior criminal history?

Answer: A distinction must be made between arrest records and conviction records. Because arrest records are not reliable evidence that a person has committed a crime, an employer would have difficulty justifying inquiries about an individual's arrest record. It is not recommended that employers inquire about arrest records on the employment application or during interviews.

Unlike arrest records, conviction records are reliable evidence that an individual actually committed a crime. However, a criminal conviction should not automatically eliminate an applicant from employment. The employer should consider when the crime occurred, the applicant's attitude about the crime, and the nature of the crime in relation to the job duties. For example, a bank would probably not hire a teller who had been convicted of embezzlement. On the other hand, a conviction for drug possession ten years ago might not exclude hiring a mechanic. Employers should check state laws for additional requirements regarding the use of criminal records in employment. Certain occupations such as child care workers and persons caring for the elderly may be subject to laws concerning criminal records.

Special Insert — Fall Seminar Series 2011

Seminar Agenda

Effective Leader/Manager – September 28-29, 2011 (Bristol, VA)
October 5-6, 2011 (Richmond, VA)

• Using Your Management Style Effectively
• Effective Leadership Skills
• Practicing Performance Management
• Setting Goals and Motivating Employees
• Positive Approach to Discipline
• Supervision Basics EEO, ADAAA, FMLA, EFCA, Wage Hour, Safety Compliance

Human Resources – The Basic Course – October 19-20, 2011 (Bristol, VA)
October 26-27, 2011 (Richmond, VA)

• Pre-employment Recruiting, Screening, and Hiring
• The Importance of Employee Handbooks and Clear Discipline Policies
• Determining Pay Rates and Developing Compensation Systems
• Effective Performance Appraisal Systems
• EEOC and Wage-Hour Regulations and Practices
• ADA, FMLA, COBRA, Workers' Comp Compliance

Human Resources – The Advanced Course – November 9, 2011 (Bristol, VA)
November 16, 2011 (Richmond, VA)

• Union Avoidance/Awareness
• Responding to EEOC Charges
• OFCCP Compliance
• Diversity
• Strategic Planning for the Human Resource Department

Tuition

$375.00 per person for 2 day classes and includes comprehensive take-home materials ($275.00 for 1 day)

Bristol, Virginia Location:

Courtyard by Marriott
3169 Linden Drive — Bristol, VA 24201

Richmond, Virginia Location:

(SESCO has partnered with one of our valued clients, Brown Distributing, to host our Richmond Seminar Series)

Brown Distributing
7986 Villa Park Drive — Richmond, Virginia 23059

To register contact:

Betty Treadwell, Seminar Registrar
betty@sescomgt.com
SESCO Management Consultants
P.O. Box 1848
Bristol, TN 37621
Telephone: (423) 764 4127
Fax: (423) 764 5869

For a complete seminar brochure and registration information, click HERE