“I have a few employees who I consider to also be my friends. However, I’m noticing these friends don’t take me as seriously as my other employees do. How can I change this?”
Your HR Survival Tip
We see each other at work almost more than our family so it’s no wonder that coworkers become friends. Some of these friendships can even last much longer than the job itself. However, there is a difference when you are the owner or a manager.
As you mentioned, “friends” often don’t take you as seriously as other employees. This makes it much harder to be a good manager. If you neglect to discipline your friend in the same way you would another employee, two things happen. One, you potentially have a discrimination claim, and, two, your management style and policies are altered to accommodate the friendship instead of protecting the company and properly doing your job.
If you treat everyone the same when they don’t do what you say or per your policy, the friend will be upset because they aren’t getting special treatment due to the friendship. Hopefully, that would be temporary and they would come to understand. In the end, for the good of your business, you need to let employees who are friends know they will not be treated differently in the workplace and they will be expected to follow all your rules, policies, and direction. The same applies to friends and family you are considering hiring. If they don’t understand this concept, you will either lose the employee or the friend or end up in a big fight.
It’s a tightrope you’re walking. And, as the saying goes, it’s lonely at the top. You do want to be friendly and accessible… and fair. But you may need to discipline, fire, or promote these employees in the future and must be able to fully justify your actions to them and others. Choose your priority… being a good manager/owner or being a good friend. It’s tough to be both successfully.
“I have a fabulous employee who seems to want (and deserves) more than I’ll ever be able to provide. How do I handle this issue?”
Your HR Survival Tip
Is it possible for your employees to be too good for your company? Definitely. Especially when you have a small company. That may sound strange, but we’ve seen it happen several times.
You strive to hire people who are energetic, bright, and skilled. Everything works out great for a year or two and you’re patting yourself on the back about your brilliant recruiting abilities. In fact, you’ve already promoted this person once and they are ready for even more challenges.
Many companies will choose to create a new position for this stellar employee so they won’t lose them. But it’s a mistake you’ll pay for down the road. I can tell you that it’s tough to clean up a company full of employees with strange, made-up titles and inflated salaries.
Don’t promote promising employees into titles that can’t be sustained outside of your company. You aren’t doing anyone a favor by making them a senior manager with only the responsibilities of a supervisor. The title and level of responsibility should match up, both in your company and in others.
Your first responsibility is to your company. Ask yourself what positions are absolutely needed for maximum efficiency and production. If your best employees fit into those roles, great … promote them. But don’t make up roles just to placate your employees.
Small companies don’t have the number of departments and positions to allow much internal movement. Fighting this fact will only disrupt your company and lower employee morale due to perceived favoritism.
The best way to manage your stellar employee and extend the length of their employment is to find new challenges for them. Give them special projects that don’t belong to someone else. Have them help create training for others or give the training. Provide cross-training. Give them the task of coming up with ideas for expanding their position. Be imaginative.
If you are doing your job well, you need to be prepared to offer career advice that may take your best employees beyond your company. Sometimes, moving on is the only alternative for a good employee’s personal and career growth.
Many of you, like us, remember the “old” days when you only needed to buy a new employment law poster once every 2 or 3 years… and most laws went into effect on January 1st so we didn’t have to worry about those mid-year updates. Sadly, the old days are over and the poster information is changing randomly and frequently. This is why we always recommend the update service.
Since COVID, our clients have been managing more remote employees than ever before. Let’s be clear, a remote employee is someone who never or rarely comes to your facility. So even employees based out of your facility may be considered remote if they work in the field. This may make you subject to a couple of laws you never considered. Just in California, there are at least 30 different localities with different minimum wage and sick leave laws. Unbelievable, right? Even worse, your employees are often subject to those laws if they spend more than 2 hours a week at that locality.
Legally, every employee must have easy access to the information on the State and Federal employment law posters and that includes the relevant city/county posters. While it’s great that you put a new poster on the wall at your facility, you still aren’t compliant if you haven’t provided the same access to your remote or field employees. This has always been a big challenge for those with field employees and the increase in remote employees has made it more so.
The good news is we have discovered an online service that makes it easy for you. This remote service emails specific poster info and updates to the remote employees you’ve signed up for the service. Click here to learn more about it.
One word of caution: Since the service charges you per employee, remember only to count and list your REMOTE employees.
If this remote service still doesn’t work well for you because your employees don’t have access to email while working, consider putting a poster up at the facilities they service or in the company vehicle they use. You may need to get creative to ensure you’re compliant to avoid fines.
“I have a sales rep who is commission only. However, I heard something that made me wonder if I should also be paying wages. What is the rule?”
Your HR Survival Tips
California has very specific rules about sales reps so it’s good you’re asking. We often see sales reps misclassified and this can be very costly to the company.
Inside Sales Reps are any sales reps who spend more time in your office, their home office, or on the phone than they spend meeting face-to-face with clients and prospects.
They must be paid hourly (not salaried) for all time worked.
They are subject to meal and rest break rules.
You cannot count commissions toward meeting minimum wage unless you pay that period’s commissions at the same time you are paying their wages for that period’s time. If commissions are paid, you must have a commission plan in place that meets California law. Commissions are a percentage of the sale but bonuses are flat amounts.
There is a possible exemption that would allow you to avoid overtime but it’s tricky so ask questions before implementing this.
Outside Sales Reps must legally spend at least 51% of their time out and about visiting prospects. We call this “knocking on doors.” They cannot conduct sales from their phone, home, or office; they must be hitting the streets. You can’t count time spent delivering the product, setting it up, etc. toward that 51%.
This position has no minimum salary required and can be paid commissions only.
Any paid time off benefits are calculated by the number of hours the sales rep is expected to work.
You must have a commission plan in place that meets California law.
Laws have not kept up with technology. Your sales reps may be much more productive when doing screen shares for demos or online meetings with prospects. However, based on current laws, this time does not count toward the 51% needed to qualify as an outside sales rep. Misclassifying an inside sales rep as an outside sales rep can result in a lot of penalties and fines.
Think about the difference between them this way… if they’re sitting down, that time probably won’t count toward the 51% the rep needs to qualify as an outside sales rep.
“I know the minimum wage is increasing but, when that happens, no one explains how it affects the salaries I pay.”
Your HR Survival Tips
Every time the minimum wage changes in any state, you must review exempt salaries. State and federal laws have always used the same calculation to determine the minimum amount an exempt salaried employee can be paid in each state. The calculation is:
2 X state minimum wage X 2,080 = minimum salary
There are two important things to remember about salaried exempt employees:
According to law, you must pay an exempt (salaried) employee at least twice as much as a minimum wage non-exempt (hourly) full-time employee, regardless of how few or how many hours the exempt employee works.
The minimum salary is truly the minimum. That means there can be no unpaid days or hours off if you’re only paying the minimum. So if they take a day off or run out of sick time, you must keep paying the full salary. The moment you pay less than that minimum, you automatically turn that employee into a non-exempt hourly employee. This is why your exempt positions should really be earning more than the minimum.
You need to determine if each exempt salaried position is worth more than the minimum salary to your company. Yes, there is a limit to how much a position is worth. If it is worth the new minimum, you may already be paying your employee that amount or more. If the value of that position is below the minimum salary to you, get help to start making plans to convert the position to non-exempt (hourly).
When we say pay exempt salaried employees more than the minimum, consider at least $5,000 above the minimum. This gives you breathing room if the employee needs more time off and may help you avoid another increase when the minimum wage increases again. If you are ever paying below the minimum, get professional help to correct it because there are many things to consider to avoid claims.
California’s legislature and courts have been busy making new laws and decisions. You are required to implement most of the legal changes listed below on January 1st, 2024. Some changes will affect your Employee Handbook policies so plan to have it updated.
Increased Wage and Salary – The minimum wage throughout California will be $16/hour. Local laws may increase that amount. The minimum salary will be $66,560 no matter how few hours the employee may work. The minimum wage for computer software professionals increases to $55.58/hour and the minimum salary for them will be $115,763.35. Don’t make anyone salaried (exempt) without confirming they legally qualify for the exemption.
CA Sick Leave – Sick leave has been increased throughout California to a minimum of 40 hours per plan year. The hourly accrual rate has not increased, just the maximums. If you are using the accrual system, you must allow employees to accrue up to 80 hours but can limit usage to 40 hours per plan year. The extra accrual ensures the employee will have sick time available at the beginning of the next plan year. If you are front-loading, change the amount to 40 hours for ALL employees and new hires (yes, even part-time employees).
Unlimited Vacation – Court decisions have changed how this can work and, it would appear, make it less attractive to employers. In the simplest example, if Sam uses less unlimited vacation than Joe, you may have to pay Sam the difference. It’s even worse with unlimited PTO because Joe could use it for long-term medical leaves and you might need to pay Sam an even bigger difference. If you’re thinking of any unlimited paid time off benefit, please talk with an employment attorney first.
Reproductive Loss Leave – This is a new, separate leave for companies with 5 or more employees. It allows up to 5 non-consecutive days of unpaid time off for employees who have worked for you for at least 30 days. Eligible reasons include failed adoption, failed surrogacy, miscarriage, stillbirth, and unsuccessful assisted reproduction.
Cannabis Use – CA discrimination laws have expanded and protect employees who may use cannabis when not working. If you are doing drug testing, make sure the cannabis test is only for active impairment/THC. Building and construction trades are exempted. You can still prohibit cannabis use or impairment during work hours.
Joint Employers – The National Labor Relations Board (NLRB) has released its final rule, making it easier for workers to be considered employees of more than one company. When there are joint employers, those employers may be subject to shared responsibility for certain labor and employment matters. Simply, if one of the joint employers gets in trouble, the other might share that burden.
Employee Agreements – If you use an Employee Agreement, severance and release agreements, non-disclosure agreements, or non-compete agreements, you’ll need to have them reviewed and updated based on recent court decisions.
Minimum Wage for Fast Food Employees – As of April 1, 2024, this affects fast food chains with 60 or more establishments. Their employees must earn a minimum wage of $20.00/hour. There is movement on making the minimum $22.00/hour and that should be decided next year.
Minimum Wage for Health Care Employees – As of June 1, 2024, a wide range of healthcare facilities will have new minimum wages from $18.00 to $23.00 per hour. Please review SB525 to see where you might fit or speak with an Employment Law attorney.
Mandatory Workplace Violence Prevention – Effective July 1st, 2024, you probably need a Workplace Violence Prevention Plan (you may add it to your Illness and Injury Prevention Plan) and provide training. There are a few exceptions but it’s best to review this law with your Employment Law attorney.
You have a lot of new laws and regulations to review so you are compliant on January 1st. Now is the time to prepare for any needed changes to your policies, practices, or Employee Handbook.
“I’m low on money and would prefer to pay my employees a week late. They say they’re okay with it.”
Your HR Survival Tip
Paying late is not a legal option. If you don’t think you’ll be able to pay employees in full AND on time, have them stop working immediately. California is very clear and very protective about employees being paid in full and at exactly the same time every pay period.
Here are a few of the rules:
The employee must receive their pay within 7 days of the time worked. For example, if you are paying every 2 weeks, you only have 7 calendar days after that 2-week period ends to get a check AND wage statement (pay stub) into their hands.
If you are using semi-monthly pay periods (twice per month) of 1-15 and 16-the last day of the month, the latest you can pay is the 26th and 10th, respectively. If your semi-monthly pay periods are on another schedule, such as 10-26 and 27-9, you must pay within 7 calendar days.
You are required to post your payday and the rules about it. If the payday falls on a Saturday, Sunday, or Federal holiday, you may pay the next business day. However, you need to state what your policy is… you can’t fluctuate from month to month.
If an employee has failed to turn in a timecard, you must pay for the scheduled time and then reconcile it later.
Overtime from one pay period may be paid in the next pay period, assuming you were unaware they worked it.
Penalties for a late paycheck can be very costly. The first violation is $100 per employee in penalties. The second and subsequent violations will cost you $200 per employee, plus 25% of the wages due. Plan ahead so you don’t end up with a claim before the Labor Commissioner’s Office.
“I’m never sure on which holidays I should close or pay employees if they’re off. Are there rules?”
Your HR Survival Tip
Holidays are a true benefit and one you are not required to provide. No law requires you to pay employees for a holiday, even if you close that day. If an employee works on a holiday, they are only legally entitled to their usual hourly rate for time worked. The only real requirement is to ensure your decision is not discriminatory.
Depending on your industry and business, it may be easier to close on some holidays than others. Many restaurants may only close on Thanksgiving and Christmas; others may stay open. Consider whether employees may have difficulty being productive if nearly every other business they must contact is closed. The great news is you get to decide for your own business.
Late fall each year is the best time to think through the next year and which, if any, holidays you will close… and whether they will be a paid day off and for whom. It’s okay to have distinct groups with different eligibility, such as office staff getting paid holidays vs. field employees getting an unpaid day off, etc. But, with Thanksgiving on the horizon and more holidays coming up, look at what your policy says about eligibility so new employees will know if they are eligible.
Consider allowing employees to celebrate their own religious holidays. You can require they use personal time, unpaid time, or possibly swap for another holiday (if you need coverage during holidays). If an employee requests a day off for the religious day(s) of their choice, try to accommodate them if at all possible.
Add your policy to your Employee Handbook, plus post a list of coming holidays as a reminder for employees. It’s best to have a full year’s holidays listed so employees can plan their personal time off better. Review your list every year and determine if you’re going to allow the same or different holidays the next year.
“I have a couple of employees who continue to occasionally disregard my rules. When it happens, I talk with them and they work harder for a while, then slip back into bad habits. What should I be doing to avoid this?”
Your HR Survival Tip
As you’ve already noticed, just having the same conversation time and time again doesn’t work. They aren’t changing because they know the worst you’ll do is have yet another conversation with them. If you aren’t documenting each conversation (and giving them a copy), you aren’t taking it any more seriously than they are.
Ideally, the personnel file is a record of each employee’s work life. No, this isn’t a minute-by-minute replay, but it should show the highlights. For example:
2022-11-12 – Sam was 30 minutes late to work and said traffic was bad. I told him he should leave earlier so the traffic doesn’t affect his arrival time.
2022-12-19 – Sam volunteered to work late to help me finish the Acme project so I met the client’s deadline.
2023-01-07 – Sam was 60 minutes late to work and said he forgot to set his alarm. I warned him this wasn’t an acceptable excuse.
2023-01-29 – Sam left 15 minutes early without permission. The next day he told me he was done with his work and thought it would be okay. I told him he must always talk with me first.
2023-03-02 – Sam was 45 minutes late to work and told me he had a flat tire. However, another employee commented that Sam told him he was hungover. I met with Sam later that day and asked him and he admitted to the hangover. I warned him the lie and the reason was unacceptable.
2023-03-17 – Sam was helping Joe and Betty with their work because he finished his project early. I complimented him on his teamwork.
As you can see, these notes are very short but there are a few key points. (1) Full dates (YYYY-MM-DD) so they are easily organized; (2) keep it short unless there is a full-blown event you need to explain; (3) be specific so anyone reading it can understand it, and (4) the outcome: what did you do about it?
When you write documentation like this, we can see Sam has a pattern of tardiness with weak excuses. If you want to officially put him on notice, you can cite the actual days he was late and why. That’s very powerful. On the other hand, if you’re doing an evaluation on Sam, you have the information needed to give examples of the area(s) he needs to work on but also specifically when he went above and beyond your expectations.
Your notes shouldn’t be all positive or all negative. Any disciplinary action or pat on the back will carry much more weight if you can be very specific with dates and events.
Don’t make this cumbersome. Figure out the best method to make notes that easily works for you and can be kept confidential. If you’re not sure your notes are usable, pretend an attorney is reading them… can s/he understand the notes without asking you questions?
“I have employees who have been with me for quite a while and I’d like to give them raises… but can’t afford a higher payroll. What are my options?”
Your HR Survival Tip
It’s been years since employees realized a noticeable increase in wages. Unfortunately, those 1-3% increases are just as likely to shift your employees to a higher tax bracket so they actually see less on their paycheck. As companies have struggled to survive, employees are also struggling to live on static wages.
Giving an employee a raise has a rippling financial effect. Your payroll taxes and your workers’ compensation insurance premium will go up because they are based on overall payroll. It’s also hard to reduce those wages if times are hard again… you can do it legally but it’s hard to retain employees when a pay cut is necessary.
Now is the time to think of what other options you have. “Perks” have always been a standard in management positions and it’s time to consider what perks you might implement for the rest of your staff. This is becoming a popular method for rewarding employees when raising wages isn’t an option. Here are a few things we’ve heard about:
If you don’t offer any paid vacation time, develop a bonus program that rewards employees with paid days off instead of cash.
Give out an occasional discretionary bonus. Even if it were equal to what they might earn with an increase for the year, it still costs you less overall.
Cover a higher percentage of health insurance premiums or add an additional insurance.
Pay for a gym membership.
Provide commuting subsidies.
Create a monthly bonus plan where the “bonus” is their choice from a group of items you have available. These are typically items for personal use and could be a $25 gift card to a local restaurant or even an electric toothbrush.
Provide tuition reimbursement if your company encourages continued education.
Give out $25-100 gift cards for outstanding performance.
Provide a turkey or ham and a $300 grocery store card just before the holidays.
Add another holiday just for this year.
Arrange for a dry cleaner to come to your facility to pick up and drop off cleaning.
Deciding which perks to offer is a matter of testing to see what will work best and be most appreciated by your employees. Just because you love a particular perk doesn’t mean they will. Make sure this is a positive experience for them.
