Three Ways to Reduce Labor Costs

Listed below are three practical steps to reduce labor costs.
Wage and benefit levels are typically dictated by market forces out of the control of most employers. As a result, increased focus should be placed on the cost of failing to comply with increasingly hostile regulations. The surest way to maximize profit margins is to reduce litigation exposure and increase worker efficiency.

1. DEFINE YOUR POLICIES
Develop an employee manual to create consistency and reduce litigation costs.
The development process itself is critical. Just buying a form employee manual on the Internet will not achieve meaningful results because those cut and paste policies will not have been carefully evaluated. Well considered employee manuals offer many benefits. Primarily, manuals help employers focus on their priorities and create paths to providing consistency in the workplace. Disparate treatment is the primary cause of lawsuits. When one supervisor allows twenty-minute breaks and another never does, employees start to feel mistreated. When one person is terminated for violating a rule, but another is not, a lawsuit is often the result.

Employers lose out on certain legal defenses if they do not have a reporting mechanism in place to stop sexual harassment.
Employee manuals provide an avenue for informing employees about what they can do to stop workplace harassment. Additionally, employees should be notified of basic workplace rights such as those related to jury duty, military service and family and medical leave. Informing employees about their options when confronted with a potentially hostile environment will reduce the possibility of lawsuits and potentially limit monetary damage awards.

2. AVOID OVERTIME LAWSUITS
Conducting an audit to determine if your company is complying with federal pay laws could save you a boatload of cash.
One of the favorite sources of revenue for contingency-fee-chasing-lawyers is overtime lawsuits. If your company pays all employees by the hour, records all their time, and pays them time and a-half for hours worked in excess of forty every week, you have little to worry about. If you deviate from that preferred method, you need to make sure an exemption to the Fair Labor Standards Act applies.

FLSA suits can destroy small businesses.
Incorrectly paid employees can reach back three years for owed, but unpaid, overtime. Additionally, they can double the amount of overtime due as a penalty. The FLSA also provides for personal liability including criminal penalties for failure to comply with overtime and minimum wage requirements. Guessing wrong here is just not an option.

3. FIND OUT WHAT IS GOING ON
Targeted workforce audits can identify problems before they make headlines.
You can probably think of at least one company that recently terminated a high profile executive as a result of a sexual harassment allegation. Or perhaps you may have heard about an employee becoming so frustrated with his job that he cussed out customers and departed his worksite in dramatic fashion. Hiring a third party to enter your workplace and delicately discuss issues that will illicit information about "what is really going on" at your company can head off these disasters before CNN reports about them. Even where no specific concern exists but where a company wants to ensure that its workforce is comfortable with their jobs and their leadership team, it has proven beneficial time and again for companies to conduct workforce audits.

Be aware that non-attorneys who provide auditing services will not be able to protect their reports with the attorney-client privilege.
Due to the sensitive nature of the information obtained during workforce audits, limiting access to that information is often more important than obtaining it in the first place. While many non-attorneys provide workforce audits, identified by many different names and marketing tactics, they cannot provide the same level of information protection as attorneys.

Once the "horse has left the barn" and your company is defending against a lawsuit, is faced with a union drive, or is answering questions about a beer-stealing-customer-insulting-emergency-chute-sliding employee, it is not too late to protect your organization with the methods outlined above.

It just costs more.

Authored by: Paul Flannigan

Health Care Reform's Impact on Employment Issues

The Patient Protection and Affordable Care Act ("PPACA") will impact every citizen in a variety of ways and challenge employers to meet its requirements. It remains to be seen whether the PPACA will survive the multiple lawsuits already filed against it and the elections coming this November. As currently written, however, beginning in 2014 the PPACA will require employers who employ as few as fifty employees to provide federally approved health insurance or pay a fine. While the PPACA imposes multiple health insurance changes affecting every citizen, this article highlights a few broad points every business should be aware of.

Among many other issues of concern to businesses, the PPACA will most likely lead to an increase in discrimination lawsuits. Unfounded discrimination claims are already a constant concern. Unfortunately, the PPACA creates a new protected class, the poor, who will sue employers at every opportunity when they are subject to adverse employment actions.
This problem has been created because Congress decided that certain employees should be more costly to employ than others. Employers will be required to pay increased fines for employees who elect to receive premium subsidies from the government. Whether a person qualifies to receive these subsidies will depend upon their income or family income, if applicable. This will result in circumstances where it becomes more costly to employ a person if their spouse loses his or her job, thus lowering their family income. Because this presents an obvious disincentive to hire such individiuals, the new law provides that taking an adverse employment action against them, because of their economic status, is unlawful discrimination. This results in an entirely new class of workers that can, and very likely will file discrimination claims based upon their individual or family income level.
As a result, employers are further encouraged to ensure that employment decisions are consistent. Consistency is no easy task and requires an evaluation of the many and varied relationships within each workplace. Congress' foray into health care has increased the need to maintain constant vigilance in this area...

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This article was written by L. Kyle Ferguson