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April 2012


By Your Employee Matters | No Comments

According to the EEOC’s suit, Celadon, a trucking company headquartered in Indianapolis, performed medical examinations on applicants for driving positions before making conditional offers of employment to them. The agency alleged that Celadon conducted these examinations in a manner inconsistent with the standards set by the U.S. Department of Transportation / Federal Motor Carriers Administration, and then used the results of those non-compliant examinations to reject qualified applicants Celadon thought were disabled.

Such alleged conduct violates the ADA, which prohibits employers from subjecting applicants to medical examinations before making a conditional offer of employment, and also prohibits discrimination based on disability or perceived disability. The EEOC filed suit (EEOC v. Celadon Trucking Services, Inc., Cause No. 1:12-cv-0275-SEB-TAB) in U.S. District Court for the Southern District of Indiana, Indianapolis Division, after first attempting to reach a pre-litigation settlement through its conciliation process.

“Celadon and all motor carriers must conduct medical examinations in accordance with the ADA,” said Laurie Young, regional attorney for the Indianapolis District Office of the EEOC. “Under the ADA, an employer cannot conduct a medical examination of a job applicant until the employer has given the applicant a job offer conditioned upon the applicant passing the examination.The EEOC will enforce these obligations.”

The EEOC is seeking compensatory and punitive damages against the company, as well as other relief, including a permanent injunction to prevent Celadon from engaging in any further employment practice that violates the ADA.

Lesson to employers: If you’re going to do pre-hire physicals make sure to do so only after you make a conditional job offer. See the report and forms in HR That Works.


By Your Employee Matters | No Comments

At the beginning of law school, every student learns “the method” used to help clients solve problems. IRAC stands for Issue, Rule, Analysis, and Conclusion.

  • Issue: Issue spotting is a lawyer’s tool in trade. Never assume you know what the issues are without changing viewpoints or getting outside input. For example, HR executives not highly experienced in the law might assume the issue might relate to a Workers Comp return-to-work situation when in fact it’s also related to both the ADA and the FMLA. They might assume that the issue is getting rid of a poor performing employee when the real issue is what the manager did to create this poor performance. One reason that appellate tribunals consist of multiple judges is so that there can be a variety of viewpoints, especially when establishing the true issue. The ability to spot issues is one reason you should have a lawyer check your head when you have a serious problem.
  • Rule: Rules come in many forms. There are hard and fast rules, such as those promulgated by legislatures and the court system. Then there are softer ones, such as those that relate to culture or values. In many cases, a whole host of rules can apply to a situation. You might have a contract, policy, procedure, habit, government requirement, vendor requirement, or some other rule that applies.
  • Analysis: Now that you know the issues are, as well as the rules, it’s time to do your analysis. As lawyers know, tough facts make for tough cases. There are times when applying a rule is not in your best interest. For example, the normal rule of the road is that you walk facing traffic; however, there might be a situation in which it’s safer to walk with traffic. In this case, complying with the law would generate an unsafe outcome. Experts make their money by knowing how to judge a situation for what it is, and not for what you’d like it to be. Their detached analysis is your best friend.
  • Conclusion: Last, but not least, you need to make a decision. Of course, doing nothing is a decision in itself (sometimes this is the best course of action). In other cases, you need to take swift and immediate action. One of the main questions in deciding what path to take is to ask “Is there a way to get to the outcome we’re seeking that benefits all parties?” When we come to a conclusion, we must consider all stakeholders to a situation.

After answering questions from professors and law school exams for three straight years, IRAC becomes part of who lawyers are. There are many ways to “frame” a situation; IRAC adds one more arrow in your problem-solving quiver. May you use it well!


By Your Employee Matters | No Comments

During the past year, I’ve read at least a dozen articles citing statistics that anywhere from a quarter to 42% of employees intend to look for new jobs once the economy recovers. My reaction to these articles: Seriously? Where are these folks going to go? To the companies where one-third of their employees are leaving? I wonder how much energy employees who plan on leaving are putting into their current job. My bet is that if they took the energy they’re using to think about employment elsewhere and applied it in their current job, they wouldn’t need to go anywhere!

Management should take these surveys as a sign of dissatisfaction — which shouldn’t come as a surprise. By definition, half of your employees are always happier in their jobs than the other half. The solution: Try to limit your hiring to these happy folks and to do everything possible to keep them that way.

Suppose you were bold enough to invite your dissatisfied employees to quit? Zappos does this with its new trainees. After they complete training, the company offers them a $3,000 bonus if they decide to quit. Zappos CEO Tony Hsieh believes that he’s better off giving an employee who has only one foot in the door $3,000 to leave, rather than keeping them. Even if these dissatisfied workers were only 10% less productive than the other Zappos’ employees, this loss of productivity would cost the company far more than the $3,000 “quitting bonus,” over the long run.

Invite your employees to one-on-one conversations about job satisfaction. Chances are, if an employee believes something feels “unfair” in the relationship, you can deal with the situation like two adults who don’t need unnecessary dramas. If the employee would feel better leaving, that’s their choice. However, if they’d like to feel better about their job, and you want them to stay, make it clear that you’re willing to work with them.

As I discuss in the Victims, Villains and Heroes book, even though there are few real workplace victims today, there’s a growing victim mentality. Anyone who wishes to educate themselves and work hard can enjoy employment opportunities; your job is to keep only the best on the bus.


By Your Employee Matters | No Comments

In his book Predictably Irrational, Dan Ariely provided two interesting observations related to employee benefits. First, he pointed out that benefits are more of a social contract than an economic one. The distinction between the two is very powerful. For example, if you have a department with 15 employees and someone walks in with a tray of 15 cookies and says that she baked cookies for the department today, under a social contract analysis, most employees would realize quickly that they should take one cookie each. However, if that was now turned into an economic arrangement in which the person stated that those cookies were baked for her child’s fundraiser, there would be no guilt or judgment associated with someone who proceeded to gobble up half the tray. Ariely reminds us that social contracts are much more powerful than economic ones.

Second, Ariely argues that asking employees to chip in for the payment of benefits or providing total compensation statements (something that we’ve recommended for years) diminishes the cohesiveness of the social contract.

These are provocative thoughts — and surveys about employee motivators mirror them to a certain degree. Although book after book after book talks about the “work experience,” in reality, most people go to work to be paid. The other motivational factors kick only after they feel they’re being paid a fair days’ wage. In today’s economy, employees rank benefits over compensation as their top concern. Benefits fulfill a security need more than does straight compensation. In a sense, the workforce is telling us that a dollar spent on benefits (which is a tax-free payment) is worth more than a dollar spent on straight compensation. Consider this if you’re considering a cut in benefits.


By Your Employee Matters | No Comments

The quality of our lives and of our companies depends on the questions we ask and the challenges we set for ourselves. For example, you might ask yourself “Do I dare to be great?” That’s a good question. You can also ask yourself what kind of nonsense would get in the way of believing that you can be great. That’s a good question, too! With this spirit in mind, here are questions that could open you up to higher thoughts.

  1. How clear is the vision for your company? Does everyone at the company know what it is? Have you branded it in your employee literature, on your intranet, on your walls, and so on? Would I know it simply by walking into your place or visiting your website?
  2. Is your vision for your company a big, hairy, audacious one? It’s better to really go for it and succeed at 50% than to shoot for average — and end up average.
  3. Have you played the movie forward to the end? If you got everything you had hoped for, what would it look like? How would it feel? How would your life be different?
  4. What personal sacrifices are you willing to make to create a great company or career?
  5. What personal sacrifices are you willing to ask others to make to build a great company or career?
  6. What effort have you made to guarantee you bring the right people on every seat of the bus?
  7. How do you stimulate your workforce to think for itself?
  8. How do you create an employee suggestion system that works?
  9. What have you done to eliminate the possibility of people making unnecessary mistakes?
  10. What “one big thing” could wipe out your business tomorrow?
  11. How could your business die from a series of 1,000 cuts?
  12. Do you really want to do this anymore? If not, what would you rather be doing instead?
  13. How could you stay in your business/career and reinvent how you work in it?

Have fun with the answers!


By Your Employee Matters | No Comments

Business owners love the idea of independent contractors. They afford flexibility, expertise, outside perspective, and of course, reduced insurance, benefit and tax burdens. Unfortunately, for these same owners, the Federal and state authorities are coming down big time on what they claim are independent contractor misclassification schemes. They don’t like the idea of you not collecting payroll taxes and not providing employees with Workers Comp, healthcare, and other benefits they might otherwise enjoy. Here are four of the more common ways employers get into trouble when they misclassify employees:

  1. They get hurt on the job — Guess what? Since these people are not considered employees, your Workers Comp policy doesn’t cover them; which means they can sue you directly for negligence, expanding their recovery potential dramatically. What’s more, you might face a fine for not treating them as employees and providing them with Work Comp coverage.
  2. They file for unemployment — A number of HR That Works Members have told us that because one person filed for unemployment, the authorities are trying to attack their independent contractor relationship with dozens of people. If a company in this situation comes out on the wrong side of a misclassification judgment, it could go out of business. Part of the thinking involved is that you can somehow “control” employees, but not independent contractors. For example, when I hire an independent contractor to paint my house, I pay them to get the job done and I don’t tell them how to apply the paint.
  3. They didn’t pay self-employment taxes — When the IRS comes knocking on an independent contractor’s door and asks them about their tax payments and the work they did, they tend to conclude that they were an employee and you should have been withholding that 14% annually. If they can’t collect this from the independent contractor, they’ll try to collect it from you — not to mention fines and penalties. Some states, such as California, have kicked this up a notch and are making it a criminal offense to engage in intentional misclassification. Unsurprisingly, these bills are introduced into the legislature by the plaintiffs’ bar, which makes sure that the legislation includes handsome attorneys’ fees for enforcement.
  4. Finally, the NLRB is getting interested too — Independent contractors don’t have the ability to organize the workplace, only employees do. This means that the National Labor Relations Board, which is very pro-union, doesn’t like it when you classify folks as independent contractors. Recently, because of one or two disgruntled employees, they ruled that independent contractors from a small orchestra were really employees, which will probably end up shutting down that business. I wrote an article about this called “The Day the Music Died.”

The bottom line: This fight is not about common sense or economics. It’s about political power, plain and simple. The pendulum has swung and employers have been pushed up against a wall. The problem is that they’re powerless to do anything about this situation and have to change the way they do business, even when they don’t think it makes sense to do so. That’s the beauty of living in a democracy.


By Your Employee Matters | No Comments

The government has an excellent publication covering everything about I-9s that all employers should know about. Here’s what it covers:

  • Obtaining Forms and Updates
  • Part One — Why Employers Must Verify Employment Authorization and Identity of New Employees
  • Part Two — Completing Form I-9
  • Part Three — Photocopying and Retaining Form I-9
  • Part Four — Unlawful Discrimination and Penalties for Prohibited Practices
  • Part Five — Instructions for Recruiters and Referrers for a Fee
  • Part Six — E-Verify: The Web-based Verification Companion to Form I-9
  • Part Seven–Some Questions You May Have About Form I-9

Click here to access the handbook.


By Your Employee Matters | No Comments

I’m a big fan of podcast learning. During the past four years, I’ve educated myself on a wide variety of subjects from business to personal growth, financial matters, and spiritual ones.

I would encourage all businesses to make their managers and employees podcast learners. For starters, your HR person should be listening to our monthly podcast. It’s not as fancy as the big guys’ podcast, but the information is there. I would then make sure all my managers listen to the Harvard Business Review podcasts, which provide an MBA-level education. They’re excellent — and they’re free. I would encourage you to consider TED videos and audios, which are outstanding. Pick out a few you think might apply to your business and encourage your team to watch them. They are 15 minutes long. Start one of your business meetings with one of them (maybe even every business meeting).

I also like the Stanford Entrepreneurial School podcasts. The Stanford graduate network has started more entrepreneurial businesses than anywhere else. Tap into this wisdom, even if you have a 50-year-old business. Podcast learning can stimulate thought and innovation at any company.

I’m most familiar with iTunes. Go there and check out all of their free podcasts. You can hire a high school intern to download about 20 podcasts each into a $50 player, so your employees can listen to them in their cars or at the gym. In the end, they will thank you for it.

Here are the links to the podcasts:

P.S. You can also develop a comprehensive leadership training program by taking advantage of the more than a dozen leadership webinars and podcasts stored on HR That Works. If you haven’t checked these out yet, do yourself a favor.


By Life and Health | No Comments

Many people aren’t aware that Critical Illness insurance exists. The reason behind this is because Critical Illness coverage is fairly new to the United States market. Policy sales began in 1996. It’s also sold by brokers who are usually more focused on selling Life insurance. In addition to this, the coverage is aimed toward people who are between the ages of 30 and 55, which is a large group of people who aren’t as eager about purchasing Life insurance as they should be. Critical Illness insurance is affordable and simple. It is a supplement to a Health policy. If a person experiences a bout with cancer, a heart attack or a stroke, Critical Illness insurance contributes to financial stability during the experience.

Although the population is generally uninformed about this valuable type of coverage, it is similar to Long-Term Care coverage in the respect that it is becoming more necessary as our society changes. Since the population is living longer, the need for Long-Term Care insurance is increasing. In a similar fashion, the need for Critical Illness insurance is increasing because people are more likely to survive a heart attack, stroke or cancer today than they were several years ago. The chance of surviving cancer today is more than 60% for both men and women.

Since many bankruptcies result from extensive medical bills, it’s important to recognize how valuable Critical Illness coverage is. This type of insurance is designed to pay for the expenses that regular Health insurance won’t cover. Out-of-town care, copay fees, non-medical expenses, alternative treatments, deductibles and non-covered prescription drugs are a few examples of items that are covered under a Critical Illness policy. The coverage might also provide some compensation that Disability coverage offered by employers doesn’t cover. Benefits are paid in one lump sum. The sum is paid even if full recovery is expected. There are some policies that offer multiple payments.

Critical Illness coverage is a valuable investment for those who want to financially survive a critical illness. Treatment and recovery can become extremely expensive without insurance. Keep in mind that regular Health policies have limited coverage for the recovery period following the onset of a critical illness. The biggest issue is deciding how much coverage to buy. Since each person’s situation differs, there is no specific amount that every individual should buy. It’s best to contact our office to learn how this coverage works, how much will be enough to stay afloat financially and what steps must be taken to obtain proper coverage. Keep in mind that these policies are only for genuine critical illnesses. Skin cancer that can be removed or chest pain that doesn’t result in a heart attack are situations that would not be covered.


By Life and Health | No Comments

People who are considering Life insurance usually debate whether they need it or not. If anyone will suffer financially after a person’s death, that person should have Life insurance. This death benefit is meant to help surviving family members or dependents cope with the financial difficulties of losing the deceased’s income and paying for final expenses. Life insurance isn’t subject to federal income tax.

In order to determine how much Life insurance to buy, it’s important to consider what surviving loved ones would need if death occurred suddenly. Be sure to consider monthly living expenses, debts and final expenses when calculating costs. These are the essentials. There are also several more considerations. For example, college money for surviving children is a beneficial addition to a Life insurance funding plan. Long-term financial goals, a surviving spouse’s retirement and several other factors must also be considered. It’s best to speak with one of our qualified agents to discuss individual needs and determine what amount is sufficient. There are several aspects to consider with purchasing Life insurance.

Married Individuals. Many couples who get married don’t think they need to purchase Life insurance coverage until they have children. However, it’s important to know that the debts of one spouse must be paid by the surviving spouse in most situations. For example, if one of the individuals earns the sole income and has sufficient debt, the surviving spouse with the lesser income would face many serious struggles by inheriting such debt.

Parents with Young Children. Whether parents are single or married, it’s important to have enough Life insurance to cover the costs of child care and care. If one spouse stays at home and cares for the children, it’s important to be sure that they will all have enough money to live on. It’s also important to have Life insurance for the spouse who stays at home to care for the children. Without that spouse in the picture, the cost of transporting and caring for the children will be an issue. It might also be necessary to pay for housekeeping services. Single parents should always make sure that their children will have enough money to survive on. If possible, it’s best to leave extra money to contribute toward their college education.

Parents with Grown Children. It’s best for parents with grown children to make sure they leave enough money that their children will be able to pay their final expenses. Married parents with grown children must still consider the needs of their spouses.

Single Individuals. Although many singles think they don’t need Life insurance, this coverage is beneficial to have. Surviving parents, siblings or other acquaintances might benefit from the money. Aging parents might need extra money for health care. For example, parents who inherit this benefit might be able to afford a private room instead of a shared room in a nursing home.

There are several reasons for any person to purchase Life insurance. Even those who have no family members and few friends still have values that are important to them. In these cases, it’s helpful and satisfying to set up a Life insurance benefit amount to go to a preferred charity. To learn more about Life insurance and what options are best, speak with one of our agents.