Bourgon HR Blog: HR Advice & Outsourcing Tips for Small Companies

Robert Craig

Recent Posts

Does PTSD Only Affect the Vets Your Company Hires?

Posted on Mon, Nov 30, 2015

Many people associate Posttraumatic Stress Disorder (PTSD) with our returning veterans.  Over the past few years, many corporate leaders have placed high importance on hiring veterans at their firms.  I have heard grumbles from some hiring managers that their new hires may be diagnosed with PTSD and could adversely affect their company. 

Is this true?  Is there a risk from PTSD? 

Contrary to common belief, PTSD is not isolated to our brave vets.  Any person could suffer from PTSD when exposed to a traumatic event.  PTSD can be defined as a list of symptoms that surface after exposure to a traumatic event. 

Mental health professionals diagnose and provide assistance to people suffering with PTSD.  This diagnosis has specific criteria and symptoms, which include: social interaction, capacity to work, reliving the incident (nightmares), avoidance, intrusive thoughts, difficulty sleeping and concentrating, memory problems. This diagnosis is not specific to the battlefield or overseas deployment.  The traumatic event could occur while the person is at work, such as the case of an on-site death or injury, or at any point during their daily life.  In some cases, the PTSD may be associated with an event which occurred prior to employment.  Therefore, this issue is not isolated to veterans and any person can suffer from PTSD.  According to the National Institute of Mental Health, 3.5% of the US population suffers from PTSD at any given time. 

Given the list of symptoms, it is easy to understand how this issue may affect the workplace.  If an electrician or heavy-crane operator is unable to focus while at work, the worker’s safety and the safety of others could be compromised and lead to increased Workers’ Compensation claims.  Fatigue will lead to slower production and worker efficiency.  Absenteeism and employee turnover can also be linked to PTSD.  If an employee is unable to perform well, this performance may lead to termination.  The employee may miss work as a result of PTSD symptoms or to seek treatment. 

Regardless of the reason, the result is the same to a company:  lower production and efficiency.  Companies experience direct costs associated with hiring, training, and filing slots for missing employees.  It is important to understand that this is not a hiring issue.  Companies cannot simply choose to avoid people with PTSD. Statistics indicate nearly every company will have to address this issue at some point in time.

Although every case is unique and a disability determination will be made by the EEOC, PTSD will most likely fall within the definitions and protections afforded by the Americans with Disability Act (ADA).  Therefore, companies must provide accommodations for individuals that request them.  Common accommodations are:  private work areas, frequent breaks, time management strategies, identify anxiety triggers, and memory aids.  Often, the accommodations are simple and low-cost. Improving work conditions is not merely a compliance issue; it will lead to a better employee and workforce, higher production & efficiency, and lower risk. 

Traditional corporate responses to, and mandates for PTSD are well documented.  All of the things mentioned in this article are reactive responses to PTSD.  However, I believe corporate leaders should develop proactive measures to minimize the effects of PTSD on a workplace.  I recommend companies conduct a workplace assessment.  This assessment should seek to identify positions that are more likely to be exposed to trauma.  Also, supervisors should be provided training on this topic and the appropriate responses.  This training should include common causes, symptoms, accommodations, and the nature of individuals suffering from PTSD.  Through proactive work and planning, a company can lower their risk by reducing the likelihood of an ADA claim, termination lawsuit, or monetary fine. 

As leaders of a company, it is important to remember you have a duty to protect your employees.  For example, manufacturing facilities maintain robust safety procedures.  In addition, any post-accident protocols are well defined and documented.  These protocols ensure quick treatment for the injured.  Companies should include a procedure that addresses the mental health and wellbeing of affected employees and witnesses.  Most companies do not include any debrief or post-critical incident procedure for affected employees.  These procedures have proven an effective means to mitigate the effects of any critical incident.  Some employers mandate any employee witnessing a critical incident attend a debrief session shortly after the event.  In addition, most employers maintain emergency contact information for all employees, in the event of serious injury or death.  However, many employers do not store that information in a readily available place, especially during evening or overnight shifts, and emergency notifications may take hours to occur.  This delay is not good for the injured employee, their family, or the company.  

Many corporate leaders look at PTSD through a narrow lens of compliance and mandates.  However, a strategic approach will ensure compliance and improve profits, while reducing risk.  The physical aspects of any critical incident are obvious.  The mental health issues are often hidden and may only become apparent when things become too burdensome for the employee or too costly for the employer.  Planning, workplace assessments, and proactive steps will help a company develop policies and training measures to aid your employees and provide your supervisors with additional tools to help the company survive and grow.  

Tags: hr legal compliance

Are Your Independent Contractors Really Independent?

Posted on Fri, Jul 24, 2015

Businesses should carefully assess any independent contractor arrangements in light of an “Administrator’s Interpretation” issued on July 15, 2015 by the U.S. Department of Labor’s Wage and Hour Division (DOL). While the DOL’s Interpretation is not binding legal precedent, its Wage and Hour Division pursues enforcement actions against employers based on misclassifications of workers as independent contractors.

The Interpretation makes clear that the DOL takes an expansive view of which individuals are properly considered employees rather than independent contractors. The DOL’s enforcement actions are part of an aggressive Misclassification Initiative, which involves cooperation with 23 states (including Minnesota, Missouri and Colorado), the IRS, the Employee Benefits Security Administration, the Occupational Safety and Health Administration, the Office of Federal Contract Compliance Programs, and the Office of the Solicitor.

The DOL’s Interpretation is based on the Fair Labor Standards Act’s (FLSA) definition of “employ” as “to suffer or permit to work” and the “economic realities” test subsequently developed by the Supreme Court and federal appellate courts. It cites Supreme Court precedent supporting the view that the “suffer or permit” standard was specifically designed to ensure the broadest possible scope of statutory coverage.

An entity “suffers or permits” an individual to work if as a matter of economic reality, the individual is dependent on the entity. In order to determine whether a worker is an employee or an independent contractor under the FLSA, courts apply the following multi-factor “economic realities” test:

  • the extent to which the work performed is an integral part of the employer’s business;
  • the worker’s opportunity for profit or loss depending on his or her managerial skill;
  • the extent of the relative investments of the employer and the worker;
  • whether the work performed requires special skills and initiative;
  • the permanency of the relationship; and
  • the degree of control exercised or retained by the employer. 

Each factor is to be examined and analyzed in relation to one another, and no single factor is determinative. The DOL stresses in its Interpretation that the application of the factors is to be guided by the “overarching principle that the FLSA should be liberally construed to provide broad coverage for workers," as evidenced by the “suffer or permit to work” definition.

The Interpretation notes that an agreement between an employer and a worker designating or labeling the worker as an independent contractor is not indicative of the economic realities of the working relationship and is not relevant to the analysis of the worker’s status. The ultimate inquiry, according to the DOL, is whether the worker is economically dependent on the employer or truly in business for him or herself. If the worker is economically dependent on the employer then the worker is an employee regardless of what label is used. If the worker is in business for him or herself, then the worker is an independent contractor.

Employers who improperly classify workers as independent contractors rather than employees have potential liability under the wage and hour laws (minimum wage and overtime), ERISA (failure to provide benefits), tax laws (failure to withhold and to pay FICA/FUTA), and workers compensation laws (failure to provide coverage). In the last fiscal year (2014), DOL investigations have resulted in more than $79 million in back wages for 109,000 workers, in industries such as janitorial, temporary help, food service, day care, hospitality and garment manufacturing.

Employers should review their independent contractor arrangements carefully to assess compliance with the above standard. In particular, employers should examine closely the status of workers who are engaged full time, who have no other clients or customers and who have made little or no investment in their own business.

Tags: hr management

Telecommuting Under the ADA – Common Sense Can Apply

Posted on Tue, Jul 21, 2015

In late spring 2015 the Federal Court of Appeals for the 6th Circuit issued an opinion in Equal Employment Opportunity Commission v. Ford Motor Company.

The EEOC sued Ford under the ADA alleging that it had failed to reasonably accommodate an employee who had a disability when it denied her request to work from home up to four days a week on an as needed basis.

Ford made the determination that the employee’s accommodation request was unreasonable because she could not effectively perform an essential function of her job while working remotely.

The essential function that was a critical aspect of her position required face-to-face interactions with customers, clients and work colleagues, a job function which could not be performed effectively while working remotely at home. The EEOC attempted to argue that in-person communications were not essential to the effective performance of the employee’s job. The Federal Appeals Court opinion reaffirms many legal principles that are fundamental to the administration and enforcement of the ADA.

The opinion’s key holdings include:

  • The general rule is that regularly attending work on-site is essential to most jobs, and that employees who do not come to work usually cannot perform their job functions – essential or otherwise: “Regular, in-person attendance is an essential function – and a prerequisite to essential functions – of most jobs, especially interactive ones.”
  • The employee here was NOT a qualified individual under the ADA because her excessive absences prevented her from performing the essential functions of her job as a resale buyer. This, attendance is required before a duty to accommodate arises.
  • An employee’s opinion as to what job functions are essential does not create a genuine dispute of fact.
  • An employer’s judgment as to essential job functions is controlling if it is job-related, uniformly enforced, and consistent with business necessity.
  • The determination of whether telecommuting is a reasonable accommodation requires a fact-specific analysis.
  • That an employer has a telecommuting policy and allows employees without a disability to telecommute does not require that it would allow all people with a disability to do the same if working remotely will not allow them to perform the essential functions of their jobs.

Tags: employment discrimination

New White Collar Exemptions Rules

Posted on Tue, Jun 09, 2015

The U.S. Department of Labor’s proposed regulations dramatically reducing the number of employees who qualify for the white-collar overtime exemptions to the federal Fair Labor Standards Act are expected to be announced publicly in June.

So far, no specifics have been provided by USDOL as to what the proposed regulations will say, but two changes are widely anticipated: (1) a new annual salary threshold in the range of $50,000 (more than twice the current salary threshold), and (2) a quantitative primary duty test requiring an employee to spend more than 50% of his or her time on tasks deemed exempt. We also believe the proposed regulations will preserve or increase the current complexity, subjectivity, and vagueness as to exempt criteria, contrary to President Obama’s directive to the Secretary of Labor to “simplify the regulations to make them easier for both workers and businesses to understand and apply.”

In any event, virtually all employers, large and small, will incur significant time and expense evaluating whether job positions currently classified as exempt still qualify and, if not, what actions to take. Employers should immediately initiate a proactive review of their exempt positions even before the specifics of the proposed regulations are announced.

In many cases, the potential increase in labor costs will be less significant than the hidden costs of additional recordkeeping, more complicated payroll administration, difficult employee relations issues, increased claims and litigation, scheduling complications, expanded training, and other human resource considerations.

Current Status

  • Proposed regulations, which have not been made public, were submitted to the White House OMB Office of Information and Regulatory Affairs (OIRA) on May 5, 2015.
  • USDOL anticipates that the OIRA review will be completed sometime in June.
  • Once OIRA completes its review, USDOL will publish the proposed regulations for comment.
  • How long will the public comment period be? Brief. A full and comprehensive public comment process cannot be accomplished in less than 120 days. However, employers are apprehensive that USDOL will not allow a comment period of more than 60 days.
  • At the end of the comment period, USDOL will review the comments and publish its final regulations. Given the USDOL’s “fast-track” leanings, the final regulations will likely appear in 4Q CY2015.
  • Will there be an implementation period? Yes, but likely short. It is believed that USDOL will “fast-track” implementation to begin in the 1Q CY2016.
  • Will Congress block the new regulations? Highly unlikely. There is no indication currently that key members of Congress are interested in taking on this issue. Most major employer associations have other labor and employment law matters that are higher on their priority lists.
  • Will there be litigation seeking to overturn or enjoin the regulations? Chances are remote at best. No legal theories have been publicly articulated and no potential plaintiffs have come forward.

Practical Impact

  • Fewer employees will qualify for exempt status. Food service and retail trades, in particular, will be impacted negatively.
  • It will be especially difficult to make determinations as to positions that are within +/- 10% of the new salary threshold and positions where currently exempt employees perform non-exempt duties to any significant degree.
  • Remember: The USDOL regulations apply only to potential claims under the federal FLSA.
  • If state law places more restrictions on salary basis or exempt duties than the proposed USDOL regulations, the employer must comply with state law even though it may be in compliance with the new USDOL regulations.
  • The publicity generated by the nationwide impact will cause more exempt employees to critically question their classification status and bring administrative claims or lawsuits.
  • If there is a collective bargaining agreement, employers will need to comply with the CBA in classifying or changing pay/benefits. Also, employees reclassified as non-exempt may become part of the bargaining unit.

Strategic Considerations for Maintaining Exempt Status

  • Increase salary to meet new salary threshold. Cost/benefit analysis.
  • Revise job descriptions to demonstrate that an individual’s primary duty involves actually performing exempt duties more than 50% of the time.
  • Make sure that, in practice, exempt employees are actually performing exempt duties more than 50% of the time.

Strategic Considerations Concerning Reclassifications

  • No employer is required to guarantee that an employee will receive overtime work.
  • No employer is required to pay an employee more total wages as a non-exempt employee than what the employee was making as an exempt.
  • To mitigate increased labor costs, employers may implement changes to bonuses, benefits, work schedules, and other measures.
  • In setting an hourly rate for a newly non-exempt employee, the employer has options in how to compute the new hourly wage for formerly exempt employees. As a legal matter, employers can configure the hourly wage and the anticipated overtime pay such that the employee’s total compensation is approximately the same as when the employee was paid on a salary basis.
  • Formerly exempt employees will often see reclassification as a “demotion” and resent being converted to hourly pay. Communications with employees about the conversion and, possibly, continuing to pay on a salary basis, while implementing a fluctuating work week program for overtime, may be a necessary employee-relations device.
  • A major administrative burden and employee-relations issue will be the need to train new non-exempt employees on filling out timekeeping records, complying with meal/rest break requirements, restrictions on working outside normal work hours, travel time, and other compensable hours.

Don’t Delay Planning

The USDOL final regulations on FLSA white-collar exemptions will go into effect very quickly in the near future. Employers need to begin their internal analysis of exempt positions now and identify their options to minimize negative impacts on employee relations, direct payroll costs, indirect administrative costs, and general operations.

Mike Bourgon
Bourgon HR Solutions

Tags: overtime

Criminal Records and HR Employment Decisions

Posted on Thu, Jul 12, 2012

Are you making the right employment considerations under Title VII of the Civil Rights Act of 1964?

eeoc and arrest records

On April 25, 2012, the EEOC issued enforcement guidance on the consideration of arrest and conviction records. The bottom line is that an employer’s use of an individual’s criminal history in making employment decisions may, in some instances, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964, as amended.

The guidance builds on longstanding court decisions and existing guidance documents that the EEOC issued over twenty years ago. The guidance focuses on employment discrimination based on race and national origin.

The fact of an arrest does not establish that criminal conduct has occurred, and an exclusion from consideration of a potential employee based on an arrest is not, in itself, “job-related and consistent with business necessity.” This is the standard the EEOC applies to exclusionary processes and procedures. However, an employer may make an employment decision based on the conduct underlying an arrest if the conduct makes the individual unfit for the position in question.

In contrast, a conviction record will usually serve as sufficient evidence that a person engaged in a particular conduct. In certain circumstances, however, there may be reasons for an employer not to rely on the conviction record alone when making an employment decision.

The EEOC guidance discusses disparate treatment and disparate impact analysis under Title VII. A disparate treatment violation may occur when an employer treats criminal history information differently for different applicants or employees based on their race or national origin. Contrarily, an employer’s neutral policy (e.g. excluding applicants from employment based on certain criminal conduct) may disproportionately impact some individuals. These would be individuals protected under Title VII and may violate the law if not job-related and consistent with business necessity. This is what is known as disparate impact liability.

According to the EEOC, national data supports a finding that criminal record exclusions have a disparate impact based on race and national origin. The national data provides a basis for the EEOC to investigate Title VII disparate impact charges challenging criminal record exclusions. However, there are two circumstances in which the EEOC believes employers will consistently meet the “job-related and consistent with business necessity” defense.

The first circumstance would involve an employer validating the criminal conduct exclusion for the position in question in light of “the uniform guidelines on employee selection procedures” (if there is data or analysis about criminal conduct as related to subsequent work performance or behaviors).

The second circumstance involves an employer who develops a targeted screen considering at least the nature of the crime, the time elapsed, and the nature of the job (the three factors identified by the court in Green v. Missouri Pacific Railroad). The employer’s policy then provides an opportunity for an individualized assessment for those people identified by the screen to determine if the policy is applied as job-related and consistent with business necessity. According to the EEOC, although Title VII does not require individualized assessment in all circumstances, the use of a screen that does not include individualized assessment is more likely to violate Title VII.

This guidance is in large part based on the growing practice of employers nationally to perform background checks on all potential hires. Employers are often excluding employees for any type of arrest record, especially given the large number of applicants. Employers are advised to exclude cautiously because the guidance is the indication that the EEOC will step up its enforcement, and that members of the public going to plaintiff’s attorneys may find that this is a basis for a successful EEOC claim of disparate treatment liability. For a larger employer, there is concern of the disparate impact liability where there is a pattern or practice involving multiple applicants who may bring a consolidated class action. Even without a consolidated class action, the EEOC will sometimes enforce its rules and look for discrimination on a multiple applicant basis, where information is available to them.

Let Bourgon HR Solutions develop a compliant policy and practice for you. Please contact us.

Tags: employment discrimination

Michelle Super Consulting with Bourgon HR Solutions

Posted on Thu, Feb 23, 2012

Bourgon HR Solutions is proud to announce that HR veteran Michelle Super is now consulting with our clients in the the Twin Cities area.

hr consultant michelle superAs an HR Consultant for companies in a variety of industries, Michelle has created strategies, procedures and policies to produce a successful HR approach for clients.

Michelle’s experience includes employee relations, performance management, conflict resolution, training and recruiting. Michelle has a Bachelor’s of Science degree in Human Resource Management and is a member of her local Chamber of Commerce.

As a 12 year HR veteran, Michelle has been very successful in resolving a wide range of Human Resource challenges and will bring that experience to support the Bourgon HR Solutions client base.

Have an HR question or challenge that your company is facing? Contact Michelle Super today!

Tags: minneapolis hr consultant

Downsizing Management: Forced Reduction

Posted on Mon, Dec 05, 2011

downsizing management reduction in forceReduction in force is the difficult way to reduce staff expense but doing so, can cause employees to file discrimination claims based on characteristics such as race, age, gender, or disability. To avoid such issues, employers need create a plan and follow specific guidelines prior to inducing a reduction in force.

First, consider these alternatives to help work around the issue:

  • Hiring freeze
  • Temporary shut down
  • Exit incentive programs
  • Reduce work hours and pay reductions

Decide which alternatives are best for your business. This may include involving an outsourced HR consultant or by asking their most trusted employees.

After considering these alternatives, the next step is to understand the legal framework for reduction in force. The law governing force reduction is governed by various federal, state, and local laws. Some important laws to abide by are the WARN Act (Worker Adjustment and Retraining Notification Act), FLSA (Fair Labor Standards Act), and ERISA (Employee Retirement Income Security Act). Employers need to understand these laws so they can work with the issues and reduce the legal risk.

The next important guideline to follow is identifying the business need for the reduction. Identifying the business reason for the reduction can also help employers select the appropriate layoff criteria.

The last step is to plan the delivery of the message. It is very important the employer communicates to the management, affected employees, and to others.

Effective downsizing management, prior to a force reduction, can be very beneficial to companies who want to avoid making costly mistakes.

Employers also need to always remember that their employees are their company’s key asset; businesses need to look at all different alternatives before making any big decisions. But if a reduction in force is required by the plans of the company, be sure to carfully take into consideration these guidelines.

downsizing management button

Learn more about Bourgon HR Solutions and its approach to effective downsizing managment.

Tags: downsizing management

Barrett and the Potential for Employment Discrimination Lawsuits

Posted on Mon, Nov 21, 2011
employee discrimination

Title VII of the Civil Rights Act prohibits employment discrimination “because of such individual’s race, color, religion, sex or national origin.” But in light of Title VII’s broad remedial purpose of ending discrimination in the workplace, courts increasingly have construed this provision to protect employees from discrimination based on their associations with and advocacy for individuals of a different race.

In these cases, courts have reasoned that this discrimination is based on “such individual’s race” because the cause of the discrimination is the difference in races between the employee and the protected third party.

While courts generally agree that these associational discrimination claims may be brought on the basis of interracial spousal, romantic or familial relationships, courts are split over whether and to what extent arguably less significant relationships such as friendships or co-worker relationships support such claims. Many courts require a more finite degree of association than mere friendship or collegiality within the workplace.

But not with the federal Sixth Circuit Court of Appeals. In Barrett et al v. Whirlpool Corporation, the Sixth Circuit joined the Seventh Circuit and announced that the degree of the association is irrelevant to whether a plaintiff is eligible for the protection of Title VII under an associational discrimination theory.

As a result of Barrett, the class of potentially protected employees has expanded for employment discrimination lawsuits. Employers should remain mindful that white employees, as well as non-white employees, may bring discrimination and retaliation claims under Title VII.

Employers should alert supervisors to pay attention to workplace comments regarding interracial relationships and reporting behavior in particular. Employers should also train supervisors to take appropriate corrective action when these comments are brought to their attention.

With its decision in Barrett, the Sixth Circuit will potentially open the door to many more association-based discrimination claims. However, in doing so, the Court carefully limited the evidence relevant to such claims to only those remarks that attack the interracial nature of the relationship itself, as opposed to the race of the plaintiff or of the plaintiff’s spouse, child, friend or co-worker.

Thus, although this Court’s decision arguably expanded the protection of Title VII, its judicious analysis ensures that associational discrimination claims will remain moored to Title VII’s stated purpose of eliminating discrimination in the workplace “because of such individual’s race.”

Tags: employment discrimination

HR Legal Compliance: Do You Understand Furloughs?

Posted on Wed, Nov 16, 2011

hr legal compliance furloughsA furlough, typically defined as a temporary layoff for work, is often considered by employers as a layoff alternative. It's important to understand exactly what a furlough is -- and how it's implemented -- in order to maintain your hr legal compliance.

Furloughs allow employers to keep people employed and maintain institutional knowledge during a time of financial hardship. They can result in much-needed cost savings without having to incur financial and emotional costs of layoffs and can leave an organization better prepared to take advantage of an anticipated upswing in financial performance.

What is a Furlough?

A furlough is either a voluntary or involuntary unpaid leave of absence from employment. In the private sector, assuming that the targeted workforce terms and conditions of employment are not governed by a collective bargaining agreement or individual payment contracts, employers may choose to utilize furloughs as a means to saving money for their company through planned or emergency procedures to reduce payroll costs. This reduction is normally effectuated on an hourly, daily or weekly basis.

How does this differ from layoffs?

Generally a workforce layoff constitutes a group termination and the employees selected to participate in the layoff are usually not expected to return to work; in contrast, furloughs contemplate that the employees will remain with the company but at a reduced labor cost.

How are furloughs implemented?

For private employers there are no special implementation procedures. Rather, furloughs can be planned as a means of saving money or utilized in an unexpected emergency. However, an employer is wise to provide employees with an advanced notice. Many states require such an advanced notice under the general notice requirements of their wage payment laws and some specify amount of notice for their reduction in compensation.

Contact Bourgon HR Solutions if you have any questions regarding the HR legal compliance of your furloughs and layoffs. This will help to protect you from claims of unlawful termination of employment.

Tags: furloughs, hr legal compliance

Increase in Age-Based Employment Discrimination Lawsuits

Posted on Wed, Oct 26, 2011

With discrimination claims continuing to rise as aging employees are claiming unlawful termination of employment, employers are taking a long look at their policies and training programs.

aging emploment discriminationPreventing age discrimination in the workplace requires not only that strong HR policies and training programs are in place but also that employees know and understand the rules, particularly in these continually troubled economic times.

“We’re seeing an increase in age discrimination claims because of the volume of reductions in force that are occurring throughout the country,” said Janine Yancey, HR Lawyer and CEO of Emtrain. “Any different group can make a claim that they are adversely affected by reductions in the workforce, but there do seem to be more age discrimination claims than others, in large part due to age being associated with disproportionately higher salaries.”

It is time to update diversity programs. HR says it’s a difficult challenge to balance three to four culturally different generations in today’s workplace.

“HR needs to issue policies in a way that whatever they are saying within the organization will not have a disproportionate effect on older workers,” says Yancey. “Although diversity programs may already exist in an organization, they should be updated to include generational diversity.”

Tags: employment discrimination