Professional Service Agreement

The SESCO Report – February 2012

Department of Labor Wage and Hour Division Targets Industries

The Department of Labor traditionally has been "complaint driven" in regards to the organizations that they investigate. In the past, an employee or ex-employee would complain to the Department of Labor regarding their compensation or their employer's compensation practices. This complaint would initiate an investigation by the Department of Labor, Wage and Hour Division.

Those employers who maintained "good relations" with their current and ex-employees reduced the likelihood of an investigation. Because of this as well as the "active nature" of our current Department of Labor, Wage and Hour Division, the efforts now are going to be "directed."

"Directed investigations" by the Department of Labor are just that — the Department of Labor has identified several industries in which they have "targeted" for investigations. This means that those operating within these industries are likely to be investigated.

Therefore, employers, more than ever, need to ensure that they are complying with all Wage and Hour regulations as the possibility of an investigation is greater.

The industries "targeted" include:

Temporary agencies
Healthcare including long-term care and home health
Retail/fast food
Agriculture and mining
Funeral industry

Wage and Hour disputes led the way in terms of litigation in 2011. Retail/wholesale as a general industry got hit the hardest with a 37% increase in Wage and Hour cases. SESCO clients who fall within this retail/wholesale category include hospitality, automotive dealerships, automotive service, funeral service, fast food and others.

The more common Wage and Hour compliance issues include:

Paying nonexempt employees on a salaried, exempt basis without overtime.
Improper recordkeeping
Not paying for travel time
Improper deductions to include deductions from an exempt salary and improper deductions for short "clocks" such as breaks and meal periods.
Not paying overtime on all earnings to include commissions and bonuses.
Improper use of independent contractors

All organizations, no matter how many employees or in what industry, should have a thorough Wage and Hour and employment law compliance audit conducted annually. SESCO specializes in conducting these assessments and most SESCO retainer clients receive these audits on an annual basis.

SESCO Recommendations to Make FMLA Manageable

Family and Medical Leave continues to be a significant compliance challenge for SESCO clients. In addition to implementing effective compliance practices and training human resource staff and managers, the following are policies that need to be considered:

Intermittent Leave An organization should describe the smallest increment in which Family and Medical Leave can be taken (hourly, etc.). State that Family and Medical Leave can be used either on a continuous or intermittent (reduced/part-time) basis. Finally, implement the DOL permitted exception that Family and Medical Leave related to the birth, placement for foster care or adoption of a child cannot be taken intermittently and must be used within one (1) year of the birth or placement of the child.

Call-in Requirements Policy should state that employees who are approved for intermittent Family and Medical Leave must continue to comply with the company's regular "call-in" and other absence reporting policies to the extent possible. Many employees think that they can come and go as they please when they are on Family and Medical Leave, but we can require employees comply with rules and policies that we would normally implement on Family and Medical Leave cases.

Restoration Rights Policy should describe the FMLA's restoration rights. Policy can provide for termination at the end of an FMLA leave under certain circumstances if you wish. Be careful to ensure before someone is terminated due to a medical condition that we consider reasonable accommodation as required by the ADAAA. Policy should state that the return-to-work certification is required for leave necessitated by the employee's own serious health condition.

Documentation and Benefits During Leave Policy should state that periodic updates and additional documentation supporting the continued need for leave be required. Policy should describe how an employee's health insurance benefits will be continued during an FMLA leave and how the accrual of other employee benefits such as seniority and vacation time will be treated during leave.

Fraudulent Acts Policy should state that employees who fraudulently obtain or use Family and Medical Leave will be subject to immediate termination.

FMLA Contact Every organization should identify a company position/individual to whom all FMLA questions should be directed. Managing Family and Medical Leave is very complicated and certainly critical to an organization's overall compliance posture. As such, ensure that managers are trained and there is regular audits to ensure compliance.

SESCO has authored a complete compliance guide for the Family and Medical Leave Act to include forms, policies and staff recommendations for compliance. This guide can be ordered by contacting SESCO. SESCO also conducts FMLA assessments to ensure all practices are compliant.

Coaching Versus Progressive Discipline

Consider the following differences between coaching and progressive discipline to include SESCO tips:

Coaching Tips

The cornerstone of effective coaching is initiating an interactive and positive dialogue where the employee does not become defensive. The purpose of coaching is to help an employee turn his or her behavior and performance around into what is expected by the organization and manager. Effective coaching many times will "save" an employee early on in their career avoiding difficult progressive discipline sessions and termination.

1. State the reason for the conversation. Use "I" statements since such statements are less accusatory in tone rather than "you" statements.

2. Give the employee a chance to explain their actions. Be careful not to phrase concerns as, "Why haven't you" type of challenge. This puts the employee on the defensive immediately.

3. Explain the effects of their behavior. It is entirely possible that the employee does not realize that the behavior is disruptive at all or to the extent that it is.

4. State the expected behavior. Be very specific and direct in what you expect from that employee. The employee needs to understand what is fully expected and what is not.

5. Ask the employee to suggest solutions. Managers who get employees to accept responsibility for their own actions are much more successful in "saving" an employee. Additionally, when there is agreement, there is less confusion and should the behavior not be corrected, then further disciplinary action up to and including termination is much cleaner.
6. Decide together on a plan of action. Employees will be much more invested in changing their behavior if they have a say in the process and ultimate outcomes.

7. Explain the consequences of failing to improve the behavior. Be careful not to threaten the employee, but pending the behavior and concerns, don't be afraid to spell out the disciplinary actions of continuing the poor behavior and the timeline for improvement.

Discipline Tips

Discipline comes into play when coaching doesn't work and/or the employee situation demands immediate discipline based upon behavior. Always follow company policy and discipline guidelines. Not enforcing such guidelines creates legal liability as well as poor morale amongst those employees who are performing as expected. When in the discipline meeting, follow these guidelines:

1. Don't be evassive or effusive. Be very direct and drive home the point that the behavior will not be tolerated and where appropriate, reference previous conversations, policies, performance reviews or other appropriate supporting documents.

2. Always be respectful. Although a discpline meeting can quickly turn ugly, always ensure your tone and demeanor do not convey a condescending or parental attitude or become disrespectful with poor language or inappropriate personal comments. Stay above the employee's attempt to make it personal.

3. Reiterate what the problem behavior is. Tell the employee what you fully expect to include specific standards, policies or rules. Most problems arise because employers and their managers do not clearly and effectively articulate expectations and required outcomes.

4. Never apologize. Even if you disagree with the policy that was violated or with the general discipline process of the employer, be firm during this conversation and never apologize for yourself or any policy. As a manager or supervisor, you are an agent of the employer and thus, must support all policies, procedures and job standards.

5. Always stay in control with your emotions. Don't be overly swayed by excuses or allow yourself to be manipulated or distracted from the disciplinary purpose of the interview. Many times, disciplinary meetings become emotional and managers must be careful not to be swayed or become distracted with either angry employee reactions or reactions that produce tears or sadness.

6. Outline penalties. Always tell the employee if any penalty being imposed such as a suspension without pay, a demotion or not receiving a pay increase. Always outline further, potential disciplinary measures for continued infractions.

7. Document the meeting. Always have the employee sign the documentation. Date the documentation and when appropriate, based upon the disciplinary meeting, have a witness sit in.

SESCO Client Case

Problem: Co-worker conflicts two (2) employees just don't like each other and can't get along.

SESCO's Proposed Solution

If a conflict is based on a protected category such as race, sex, national origin, age, religion or another protected characteristic, warn both parties that such conduct will not be tolerated and will result in discipline. Ensure that they have received their annual anti-harassment training and also know the steps in which to complain to management. Consider an internal investigation to involve your SESCO consultant.

More often than not, co-worker conflicts are due merely to a personality clash. SESCO recommends taking the following actions:

Tell both parties what you expect and that they need to act like professionals.

Don't allow the co-workers to point the finger at each other. Make them focus on their own behavior and how they can improve the relationship.

The manager must always remain impartial and never take sides. Taking sides will quickly create a much larger issue to include an EEOC charge, involving other co-workers, creating family involvement and many others.

Warn employees that if they can't put their differences aside, that they may need to find new positions.

In summary, the best way to address co-worker conflicts is to address the conflict head-on, don't pick sides and hold them accountable for their own actions and behaviors.

Special Thanks to SESCO Clients!

Ridgecrest Health Group
Duffield, VA

Greater Prince William Community Health Center
Woodbridge, VA

Edible Arrangements Franchisees Association, LLC
Huntersville, NC

Universal Fibers
Bristol, VA

DuPont Employees Credit Union
Memphis, TN

Smyth County Animal Hospital
Marion, VA

Generation's Home Medical Equipment
Lynchburg, VA

SESCO Client Feedback

"We had two situations — we needed the new book on "How to Comply with Federal Wage-Hour Regulations for the Funeral Industry" and also had some specific questions which Phil Richards answered. All of these books/contacts and the NFDA seminar recently have been very helpful. SESCO is very knowledgeable and a good company with whom to work for human resource information." ~ Frank Jones Jones and Sons Funeral Home

"Excellent organization to do business with." ~ Don Cotney — The Learning Tree

"Bill, I wanted to thank you for all your good work on behalf of our dealers this past year. I continue to hear positive comments about you, your team and your service. Happy New Year and I look forward to working with you this new year." ~ Bob Ramsey Virginia Automobile Dealers Association

"SESCO is always there for us with a timely response. They're always willing to help and go the extra mile when needed. SESCO is great! Easy to reach out to for guidance on many issues." ~ Amy Howard Lifespan Health

SESCO Client Inquiry — Staff Response

Question: May we speak to an employee's doctor to understand more about the employee's disability and any accommodations that may be required?

Answer: If an employee requests an accommodation under the Americans with Disabilities Act As Amended (ADAAA), the employer must know the nature of the disability so that possible accommodations may be sought. The employee (or applicant) must advise his physician to release relevant medical information to the employer. In this circumstance, employers may forward a job description to the physician to obtain a medical opinion regarding the employee's (or applicant's) ability to perform the various duties of the job.

Special Insert — Spring Seminar Series 2012

Seminar Agenda

Effective Leader/Manager
March 7-8, 2012 (Richmond, VA)
March 21-22, 2012 (Bristol, 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
April 11-12, 2012 (Richmond, VA)
April 18-29, 2012 (Bristol, 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
May 2, 2012 (Richmond, VA)
May 16, 2011 (Bristol, VA)

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

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

Richmond, Virginia Location:

Virginia Community Healthcare Association (VCHA)
3831 Westerre Parkway — Henrico, VA 23233-1330

Bristol, Virginia Location:

Holiday Inn
3005 Linden Drive — Bristol, VA 24201

To register contact:

Betty Treadwell, Seminar Registrar
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