Five ways HR can improve an executive team’s mileage by “pumping the brakes” before making important employment decisions
BY A. KEVIN TROUTMAN, Fisher & Phillips LLP
For busy healthcare executives and managers, time and budget dollars are precious. By effectively vetting important employment decisions before they are implemented, Human Resources (HR) executives can save significant time and money for their organization’s leaders, particularly when risks are not readily apparent. Unfortunately, the risks associated with many employment decisions are imperceptible to an untrained eye. Making matters worse, the “at-will” employment doctrine provides far less protection than most managers believe.
HR, of course, fulfills many vital roles such as recruiting and retaining qualified candidates for hard-to-fill positions. But it can be easy to overlook its value in mitigating the various risks associated with employment decisions. These risks are significant in a variety of ways. For example, even when the employer wins before a court or administrative agency, it typically incurs substantial legal fees, not to mention all the time and distractions related to activities such as document production, depositions, and hearings, or on-site investigations. Most supervisors, however, do not recognize the weight of their employments decisions until after they have been accused of wrong-doing. These risks can be reduced, or possibly even eliminated, by effectively evaluating and tweaking such decisions before implementation. HR’s role is therefore critical.
With this in mind, these are five areas in which thorough HR review is especially important, offering opportunities to save significant time and money:
Managing Employees Who Need Medically- Related Time Off: This is perhaps the most challenging employment issue that executives and managers face. These situations not only arise frequently, but they are complicated, confusing, and prone to exploitation by malingerers. The Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA), along with workers’ compensation laws, often apply. Each law raises different issues when it applies. Depending upon the circumstances, all three of these areas may apply simultaneously. The laws do not dovetail neatly, so they must be considered separately. Each, especially the FMLA, requires detailed communications to employees. Each law imposes legal duties upon employers, and each forbids retaliation against employees for exercising statutory rights.
Workers’ compensation law deals strictly with an employee’s work-related injury or illness. The ADA provides broad rights related to the employee’s own condition (and it prohibits discrimination against an employee because of an association with someone who is disabled). The FMLA requires job-protected leave and certain benefits during that leave.
Workers’ compensation laws apply from the beginning of employment. The ADA applies throughout employment and also protects job applicants. The FMLA applies after, among other things, one cumulative year of service – it applies to employees’ with serious health conditions, and it applies when an employee is involved in the care of certain relatives with such conditions.
No “magic words” are required to invoke protection. In fact, without any employee request, the employer may have a duty to make further inquiry to determine its duties. However, an employee’s supervisor is generally prohibited from asking about the particulars of an employee’s condition. In fact, a manager may be supervising an employee who would be considered “disabled” (and protected) under the ADA, yet not even know it.
An example further illustrates the complexity of these situations. After a disabled employee has fully-exhausted his FMLA entitlement, the ADA still applies. Among other things, the ADA prevents an employer from setting arbitrary or acrossthe- board limits on how much additional time off an employee may take. Instead, the employer has a duty to conduct an individualized assessment of possible accommodations. In short, no one should attempt to navigate through these situations without substantial HR guidance.
Proceed Cautiously When Treating Workers as Independent Contractors or Changing an Employee’s Payroll Classification: The Wage and Hour Division of the United States Department of Labor (DOL) devotes significant resources focused upon these issues. Specifically, the DOL seeks to identify individuals classified as independent contractors who should be treated as employees. It also scrutinizes employees who are treated as exempt from overtime (and paid a salary), searching for classification errors. These are longstanding hot areas of employment litigation. Again, the applicable rules are detailed, complex and often misapplied.
This area is attractive to plaintiffs’ lawyers for several reasons. First, cases can involve large groups of employees, opening the door to collective actions. Second, plaintiffs can recover two or even three years of back wages which are typically doubled through the enforcement process. Third, the law tacks attorney’s fees on top of any recovery by plaintiffs.
Accordingly, once again, managers and executives should include review by HR in any decision to classify workers as independent contractors. The applicable criteria is hard to fulfill. Mistakes can also result in problems with the Internal Revenue Service or workers’ compensation laws. Similarly, HR should be involved in decisions to classify employees as exempt from overtime. These criteria are also detailed and do not apply on the basis of job titles but instead hinge upon the duties and treatment of each individual employee.
Investigate the Facts Before Committing to Specific Action: Even when facts appear to be clear-cut, executives should always investigate and confirm committing to adverse employment actions such as terminations or demotions. Especially when the issues involve emotions or eyewitnesses, ensure that an objective HR representative or other designee confirms the key details. It is not unusual for witnesses’ perceptions to differ or to change over time. That is when a documented, thorough factual review is invaluable in establish that the employer’s motivation was legitimate and non-discriminatory.
At the least, a good investigation will confirm facts and demonstrate the employer’s attempts to be fair and reasonable. In more than a few instances, however, investigations are likely to uncover additional pertinent information, some of which might keep the employer from making an embarrassing decision.
Review How Similar Situations Have Been Handled in the Past: One of an employer’s best defenses is to establish that it followed a well-known policy that it has enforced on a consistent basis. This is another area that can haunt executives if a disgruntled employee can establish that the employer’s policy has not been consistently enforced. It is therefore vital to have HR involved before making a final decision, to determine whether the same or similar policy violation has been handled consistently in the past. HR is usually in the best position to gather this information.
If the company handled a similar situation differently in the past, that does not prevent it from making a different decision later. Before making such a decision, however, it is very useful to understand and be prepared to articulate why a similar situation was handled differently in the past. Again, this process may help keep a busy executive or manager from having to rehash the issues on-the-fly later, under more uncomfortable circumstances.
Screen Decisions for Applicability of the WARN Act, OSHA, ERISA, OWBPA or Other Laws: Especially when dealing with reductions in force, employee injuries, workers who are more than 40 years old, or employee benefits, HR should assess the applicability and requirements of other laws. These include but are not limited to the Worker Adjustment and Retraining Notification Act (WARN), the Occupational Safety and Health Act (OSHA), the Employee Retirement Income Security Act (ERISA), and the Older Workers Benefit Protect Act (OWBPA).
These and other laws require various notices, within specific time frames, as well as the implementation of various safeguards designed to protect employees’ interests. They place affirmative legal duties upon employers and prohibit retaliation against those who exercise their rights under the statutes. Any activity in these areas should, therefore, remind executives to ensure that HR helps them through the alphabet soup of related requirements.
In sum, today’s environment places tremendous demands on the schedules and budgets of busy executives. At the same time, making employment decisions can be like walking through a minefield, where one innocent misstep in a seemingly safe area can explode into a costly quagmire. In this environment, effective HR consultations can literally be worth their weight in gold.