Northern Nevada Human Resources & Employment Magazine

Human Resources & Employment

NNHRA February 2014

Implementing basic strategies

Workplace harassment investigations

Independent contractor or employee?

Performance evaluations

2 NNHRA Human Resources & Employment 2014 BOARD OF DIRECTORS President President Elect Secretary Historian & Hospitality Treasurer (Interim) V.P. of Membership College Relations Communication Publicity Communication Publicity Diversity Diversity HRCI Certification HRCI Certification Programs Programs Workforce Readiness SHRM Foundation Past President Administrator

Charity Felts Erickson, Thorpe & Swainston Brad Stewart Prologistix Jeffrey Benjamin Breakthrough Training Michelle Parvin, The Data Grinder Teresa Gonzales, Innotrac Student Chapter Liaison - Josh Grace Healing Healthcare Systems Haydee Acebo Click Bond, Inc. Vanessa Vancour UNR Lisa Connor Upromise Investments Karla Rice Reno Diagnostic Centers Lauri Jones NCJFCJ Elizabeth Cassidy Patagonia Becky Bruch Erickson, Thorpe & Swainston Molly Rezac Gordon Silver Cathy Norris Julie McGuire, EP Minerals, LLC Emily Ellison Prologistix Frances Farley NNHRA

NNHRA COMMITTEE CHAIRS Community Relations Community Relations Newsletter Newsletter Professional Development

Maria Maydeck Sears Holdings / K-Mark Bill Rogers Bally Technologies Tom Skelding MSC Direct Robin Carter MFG Benefits Johanna Leresche Western Surgical Group

AREA CHAMPION NNHRA - Carson Area NNHRA - Carson Area

Kevin Monaghan, PHR L/P Insurance Services Steve Blackhall, SPHR EP Minerals, LLC

Northern Nevada Human Resources Association P.O. Box 12584 Reno, NV 89510 www.nnhra.org

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3

President’s Message Charity Felts President of NNHRA

I

am very pleased to be president of NNHRA in 2014 and am excited that NNHRA and Northern Nevada Business Weekly have once again partnered to bring you the 2014 HR and Employment Guide.

As you read ahead, I am confident you will find helpful and topical information on a variety of issues that impact the many disciplines of HR. These articles are brought to you by leading professionals in the HR field and will touch on topics such as performance management, investigations, employee relations, and recent U.S. Supreme Court decisions affecting the employment relationship.

As we move into 2014, I want to mention a recent and exciting change concerning membership with NNHRA. In November 2013, NNHRA and its members voted to approve the Chapter’s transition to a 100 percent Society for Human Resource Management Chapter. As a 100 percent SHRM chapter, NNHRA is eligible for additional financial incentives and support resources from SHRM that will allow it to continue to enhance the programming and support it provides to its members. If you are not already a SHRM member, you can join by visiting the SHRM website at www.SHRM.org. When you join, please remember to select NNHRA as your primary (preferred) chapter. Even if you are not a SHRM/NNHRA member, you are still welcome and invited to attend any NNHRA function throughout the year.

If you have any questions about membership, please visit the NNHRA website at www.NNHRA.org for more information or to contact NNHRA’s Membership Director.

I would be remiss if I did not mention the many resources available to HR professionals through your local NNHRA

organization and the Society for Human Resource Management. The SHRM website provides access to guidance on evolving HR issues, legal resources and even templates and sample policies. Additionally, through NNHRA, you have the opportunity to network with hundreds of HR professionals who are experts in the many disciplines within HR. You also have the opportunity to participate in professional development through monthly chapter meetings and separate continuing education initiatives. If you are interested in a specific topic or have suggestion on future programming ideas, contact the NNHRA Programs committee with your suggestion. I encourage you to take advantage of the resources available through NNHRA and SHRM. Finally, I want to personally thank the current and past volunteers who have built NNHRA into such an amazing organization. It is the volunteers who arrange for exceptional programming at the monthly chapter meetings, spearhead events like the Best Places to Work, the Diversity Conference, and the annual HRCI Certification Study Group, and arrange for professional development and continuing education opportunities. It is impossible to name the countless individuals who have donated their time and talents to this organization, but I am grateful to all of them.

On that note, I like to encourage the readers of this fine publication to consider volunteering in a board or committee position with NNHRA. I am in a position this year to build on the good work and momentum of Presidents, board members and committee members of the past. If you’ve benefitted from the efforts of the many NNHRA volunteers, please consider giving back to NNHRA and the HR community by joining the NNHRA board in a volunteer position.

For more information on volunteering, or on any upcoming NNHRA event, please visit the NNHRA website at www.

NNHRA.org.

— Charity F. Felts, Esq. practices with Erickson, Thorpe & Swainston, LTD., in Reno, Nevada, primarily in the fields of preventive and defensive employment and civil rights defense.

Contact her at (775)786-3930, or via email at cfelts@etsreno.com

4 NNHRA Human Resources & Employment 2014

Investigations in workplace harassment

C

onducting a reasonable investigation into a claim of workplace harassment is a critical factor in providing key legal defenses to employers, not to mention helping to promote a harmonious and pleasant place to work. When I do investigation training for my clients, I emphasize to them the importance of conducting “a reasonable investigation and reaching a reasonable conclusion.” For most, it conjures of visions of retinal scanning, water-boarding and DNA testing. That is not necessarily the case. Circumstances dictate what constitutes “a reasonable investigation” and “a reasonable conclusion,” and needs to be determined on a case-by-case basis. This article will provide you with an overview of some of the issues to consider when deciding what level of investigation your company should undertake when facing a claim of workplace harassment. By considering these issues, you will go a long way to protect your company against claims of unlawful harassment and hostile work environment.

What triggers an investigation?

Company policies usually require any managers and supervisors who have direct or indirect knowledge of potential harassment or discrimination within the company to report it to the appropriate authorities. Managers and supervisors who fail to report such information are usually subject to discipline up to and including termination. While different courts have different approaches to what should trigger an investigation, the safest approach is a policy which places a reporting obligation on all managers and supervisors who have authority over any employees at the company.

Training for those employees is critical so they recognize their obligations and the scope of the duty to report conduct.

What if the complaining party changes her mind?

It is not unusual for a complaining party to change his or her mind about pursuing a complaint. In other situations, a third party may notify a manager or supervisor that a coworker is being subjected to harassment, but the victim does not want to pursue a complaint. With rare exceptions, it may be legally fatal for a company to abandon or ignore an investigation. Failure

protecting the report in the event a decision is made to keep it confidential.

Rebecca Bruch to respond to a complaint condones illegal acts. Notwithstanding that situation, keep in mind that an employer’s obligation to conduct a reasonable investigation and reach a reasonable conclusion is limited by the information it has available. So if an employer through its investigation is not able to discover information which either corroborates a claim or absolves a complaint, the conclusion it reaches is likely going to pass legal muster, assuming all viable issues are addressed and evaluated.

Who should investigate?

One of the first decisions to be made is who should investigate? The answer is fairly simple: If the complaining party or the accused has any authority over the investigator or the final decision-maker, including a sphere of influence, an outside investigator should be called in. It may or may not necessarily be an attorney. But the whole idea of a reasonable investigation is that it is conducted by a neutral person who has no stake in the outcome.

So if there is an argument that an internal investigator’s credibility is questionable because of his or her relationship with either the accused or the victim, call in a qualified outside investigator.

To whom should the investigator report?

Most likely, a company should anticipate waiving attorney-client privilege or work-product protection in order to use affirmative defenses it has available. Nevertheless, because you never know where a situation is going to take you, you may decide to not raise those defenses, so all precautions should be taken to protect the investigation and report. You most likely will not be able to do that if it is not conducted under the direction of an attorney.

The attorney should make the arrangements with the investigator. All communications should be directed to the lawyer.

The lawyer should make the decisions about the scope of the interview, and who to interview. These practices will be key to

How soon should an investigation start?

Delay in getting started jeopardizes the reasonableness of the investigation. Time is of the essence.

How long should it take?

There is no easy answer to this question.

There are many factors that can affect how long it takes, including but not limited to the scope of the investigation, the number of witnesses, availability of the witnesses, new areas of information discovered during the investigation, and intervening circumstances. In some cases, a two-month investigation was determined to have taken too long; in other cases, a seven-month investigation was ruled to be reasonable.

Sometimes an investigation only involves questioning two or three people, and can conclude in an hour or two. Sometimes an investigation can involve more than 50 interviews. Sometimes it may require the retention of an outside expert to review computer data, or obtain other information from outside sources. Those factors and everything in between will go into an assessment of whether the length of time was reasonable. That is why it is critical that the investigator be qualified and experienced, so that he or she is aware of what the expectations are for the investigation.

How should the interviews be conducted?

As discussed above, the scope and breadth of the interviews are determined on a case-by-case basis. But whether long or short, formal or informal, some common practices need to be followed. If possible, there should always be a witness, who could also act in a role as a note-taker.

The person being interviewed should be given an opportunity to review the notes, and in a different colored ink, make comments about the content. The person being interviewed should be instructed to add anything he or she would like; to correct anything that is wrong; and to provide the names of other people he or she believes should be interviewed. The person being interviewed should initial and date every page of the notes, so as to avoid a later argument that the notes are not accurate.

Provide a way for the interviewed person to contact the investigator should he or she

Northern Nevada Business Weekly • www.nnbw.com

need to provide more information. And importantly,inform the interviewed person about protection from retaliation, that it is prohibited, that it could lead to termination, and how to report it.

What’s the goal of the investigation?

In some situations, an investigator is retained only to gather facts. If so, he or she should avoid reaching any conclusions.

That determination will be made by the supervising attorney. In the event that the supervising attorney does want the investigator to reach a conclusion, it is crucial to be aware of the scope of those conclusions.

Judges and juries determine whether the law has been violated. Investigators determine whether policies have been violated.

An investigator acting in the capacity of an investigator, should never reach a legal conclusion, such as, “Road Runner was subjected to sexual harassment.” Rather, a proper conclusion would be, “I believe that Wile E. Coyote violated the Acme Rocket Company’s policy against sexual harassment.” Just because a policy may have been violated, does not mean it rises to a level of a violation of law. This parameter may

be the one most important practices for an investigator to keep in mind. Do not reach legal conclusions. Of course, the exception to that is if the investigator is an attorney who is trained in the law, and is specifically tasked with discussing legal liability.

Is the information confidential?

No. The information provided in an investigation is rarely if ever confidential, and confidentiality should never be promised.

What should be contained in the report?

The organization and structure of the report will vary widely, and the investigator should clarify with the supervising attorney what the expectations are. But the most useful reports contain the following: ■ Chronology of events ■ List of allegations ■ List of potential policies involved ■ How many employees were interviewed, and their position ■ Credibility assessment and comments ■ Provide conclusions of credibility as well as the allegations based on what information you received, also listing

limitations on those conclusions ■ Conclusions should always be drafted separately from factual findings so that they can be addressed separately in legal issues which may arise What happens after the investigation?

Provide the report to the supervising attorney or whoever has retained the investigator. It is up to the attorney or his or her designee to inform the complaining party and the accused that the investigation has been concluded, and to determine what information will be shared and with whom.

The common element in all of these points is that it is important that an attorney be involved from the time there is a hint of a complaint. The investigating team can then work together to best protect the company, as well as addressing any harassment or discrimination issues that may exist.

Rebecca Bruch is an attorney with Erickson, Thorpe & Swainston. Contact her at rbruch@etsreno.com or 775-786-3930, ext.

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6 NNHRA Human Resources & Employment 2014

Implementing basic strategy for your employment matters

N

avigating the sometimes unintelligible and often convoluted landscape of human resources and employment matters can be a challenge, especially for small businessCindy es. This becomes even more of a daunting Davis task when the company manager or owner is ultimately responsible for handling the employee relations issues, which can be seen as detracting from the revenue-generating operations of the business. To add to this, Nevada was one of the hardest hit states during the recession, and your business may still be traversing the period before regaining previous levels of profitability.

However, now is the perfect time to reassess your goals and strategies that will help position your company for success and allow you to invest in long-term employees.

Effectively integrating employment strategies and processes can strengthen your company’s position, while creating a working environment where both managers and employees want to contribute. Now, this does not mean that it’s going to be all sunshine and rainbows at the office just because you came up with a plan, wrote out guidelines, and made a motivational speech about change. Full implementation may take months, if not years to achieve. Yet, having the plan in place will give you a clear direction on which to set out. A basic strategy may look obvious, but fundamentals build foundations. To start, ensure that you have formalized employment documents and processes; this can increase stability, mitigate problems, and protect the company. Then recruit and retain talented professionals through the use of total compensation packages and alternative benefits. Finally, develop employees and engage in effective succession planning.

So you only have five employees. Do you really need all that stuffy, corporate HR paperwork? To put it candidly, yes. From an internal perspective, the creation and utilization of employment-related materials could provide stability for both employees and management. Policy handbooks and job descriptions clearly outline company rules and establish expectations of every employee, including managers. This can positively affect the working environment and dispel areas of uncertainty, which can impact employee productivity and create unwanted problems.

No matter the size of your company, your employee policy handbook is one of the most important documents to have. From presenting essential information, such as shift times and pay periods, to more critical processes and topics, such as discipline and benefits, the handbook should serve as an understandable, how-to guide for working at the company. If a complaint were to arise regarding misconduct, the manager or employee could simply review the sections of the handbook that are applicable. The majority of the expectations of the employee should be found in their job description. By outlining the essential job tasks and necessary skills, under-qualified applicants can be avoided.

After your foundation has been laid, it’s time to look at recruiting talented individuals. With a clear picture in mind of what is required of the position, since we can now reference job descriptions, qualified candidates can be found to fill the necessary roles of your company. In addition to skills, potential candidates for positions should also fit the culture of your company. For example, if a relaxed atmosphere with ample job independence is more your style, then finding a responsible and self-motivated candidate would be a better fit than one that needs regular direction and hands-on management.

In your quest to find the perfect employee, competition for talented individuals may be tough, despite the seemingly flush pool of

candidates. A strategic and often influential approach is to look at compensation from the perspective of total compensation, and not just base pay. As managers and small business Jeromy owners are well aware, the cost of employing extends beyond what the employee may receive Manke after taxes. As the required level of experience and qualifications of candidates increases, professionals expect greater compensation. This often leaves smaller businesses fighting for what’s left after larger companies have taken their pick. Through the use of a total compensation program, benefits can be tailored to employees based on personal needs that may further motivate performance. Smaller companies, in fact, may have a competitive advantage when they develop an atmosphere of familiarity, which is often lost in big organizations. Clear and concise depictions of total compensation for employees should be used as a communication tool to reinforce the company’s commitment to total compensation. Many low-cost software programs and services are available to produce this information. The cost of which can be soon realized in reduced turnover and increased output.

As many companies continue to feel the strain of remaining compliant with current labor laws, reductions in employee benefits have become more prevalent. Not only has the Affordable Care Act (mandatory health insurance) placed additional strain on larger employers, but employees of smaller companies have had to swallow the costs associated on their own. By providing alternative forms of benefits, certain positions may appear more appealing to talented professionals. For example, instead of offering health insurance, offer employees a monthly insurance stipend to help defray the costs that they incur. Alternative benefits should be tailored to the employee’s motivational factors in order to maintain productivity and increase the likelihood of retention.

Employee development and training can contribute greatly to employee satisfaction, which often translates directly into productivity and retention. Small businesses can fall into the trap of becoming complacent regarding advancement, as once the job is filled the perception is that there is little need to develop employees further. Sometimes the thought is that employees will leave if they become better qualified. Especially when considering younger employees, opportunities for growth may weigh heavily on job choice. By developing employees, businesses can remain at the leading edge. In addition, higher-educated and better-rounded individuals can contribute more to the success and profitability of a business. This additional development and training leads to the goal of proactively planning for succession. As employees leave over time, the company can position itself to move existing employees upward with minimal training.

To recap, the stages of effective strategy implementation are as follows: Formalize employment documents and processes; recruit and retain talented professionals through the use of total compensation packages and alternative benefits; develop employees and engage in effective succession planning. Detailed and in-depth processes can be implemented under each, and reassessing goals and strategies along the way can account for mistakes and prevent repeating them. Implementing these basics can help managers and owners of small businesses to plan for the future and increase profitability.

Cindy Davis, SPHR, is the owner of Strategic HR Partners. Contact her at cindy@strategicpartners-hr.com or 775-722-0514.

Jeromy Manke is an HR associate at Strategic HR Partners. Contact him at jeromy@strategicpartners-hr.com or 775-722-0514.

Northern Nevada Business Weekly • www.nnbw.com

7

Coaching or correcting: Don’t do both at the same time Bradley Harris

W

hen a supervisor sits down with an employee for a conversation aimed at improving performance, the outcome is rarely a success. One reason failure is so common: Supervisors try to coach and correct at the same time. This doesn’t work because learning and memory are hampered when we’re under stress. The helpful, supportive tone of coaching is lost in the fear we feel when we’re corrected by the boss.

Very different techniques Supervisors should understand the difference between coaching and correcting and know how to use both. Let’s start with a couple of definitions: Coaching is the art of enhancing the performance of another. Coaching uses relaxing conversation, primarily active listening and

supportive questioning, to help a person find a solution.

Correcting is the act of informing another of an error or fault. Correcting uses fear of consequences to change a person’s behaviors.

Coaching: Self-directed, solution-focused Neuroscience has proven a happy brain is a smart brain. (For an entertaining introduction to the effect of happiness on the brain, watch Dan Gilbert’s TED talk, “The Surprising Science of Happiness.”)

A happy brain Coaching and correcting are very different: outperforms a sad brain, a COACHING CORRECTING stressed brain, Long-term focus Short-term focus and even a Positive consequences for change Negative consequences for not changing neutral brain.

Avoids fear Uses fear A happy brain Employee-driven solution Supervisor-driven solution shows more intelligence, resiliency, speed, creativity, and accuracy than a neutral brain.

Let’s look at what happens in your brain Obviously, it’s best to have a happy brain during coaching and correcting. when you are being coached. How can your Done well, coaching stimulates your dopaboss make your brain happy? By adding dopamine system, making your brain happier, and mine to activate your brain’s pleasure system. therefore smarter. With a smarter brain, you There are many ways to add dopamine, includhave a better chance of finding a solution. ing money, romance, and narcotics. Chances When you’re corrected, you produce horyour boss is not going to use these. mones that trigger a fight-or-flight response.

Fortunately, there is a way to add dopamine You can only focus on the threat, but the learnthat fits perfectly in a coaching setting – talking ing is deep, often permanent. about yourself. To your brain, having an enthuThe reason coaching and correcting don’t work together is that fear and relaxation cannot co-exist. siastic listening audience is as good as getting Fear has such a strong impact on your brain, it COACHING, 8 overrides any positive message the boss delivers.

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8 NNHRA Human Resources & Employment 2014

COACHING

From page 7

a bonus. If your boss gets you talking about yourself for five or 10 minutes in a low-fear setting, your brain will be primed to perform at its problem-solving best.

Correcting: Supervisor-directed, problem-focused Correcting introduces the threat of disapproval and failure, both powerful fears for most people. When your boss points out a problem with the way you do your job, it activates your brain’s fear circuit, centered in the amygdala. Your fear circuit has two jobs: Reacting to threats you encounter and learning from those threats.

When you perceive a threat, the amygdala causes your body to generate adrenalin and cortisol, putting you in a heightened state of alertness and preparing you to react to the threat.

This is called the “fight or flight” response. Your brain is distinctly unhappy.

Now you have a decision to make. Punching your boss in the nose is against company policy and running out of the office would make you look foolish. Neither fight nor flight would be considered attractive options. The only acceptable behavior in this setting is to freeze, stuck in your chair. All that cortisol and adrenalin has nothing to do, so it just percolates in your brain, making you that much more alert and fearful, which focuses your brain that much more on

the threat.

Fear triggers intense, but extremely limited, learning. You can only absorb the simplest messages. Your focus is too strong for problem solving because you only see the threat. You can’t analyze information; you can’t consider alternative solutions, so your boss has to supply the solution.

Once you have reached safety – left the boss’s office – your amygdala sends information about the threat to your prefrontal cortex. A powerful message is stored away there, “If I don’t change what I’m doing, I’ll fail.”

Doing both doesn’t work Now imagine your boss has asked you to a coaching session and primed your brain with dopamine, the happy brain hormone. You’re working on a solution to a difficult problem you’ve encountered when the boss criticizes you for not submitting your expense report on time.

Here comes adrenalin and cortisol responding to the threat, however small.

Thanks to that little bit of criticism, the coaching session is a waste of time – your brain is focused on the expense report. You may ruminate about how unfair the comment was, try to remember the last time your expense report was late, or wonder if it will affect your performance review, but you won’t be thinking about a solution to your problem. Your unhappy brain has you preparing for fight or flight.

It will take hours for your body to process the

adrenalin and cortisol.

Take aways Now imagine you’re the boss – one of your employees has a performance issue you want to discuss. You don’t want to repeat the mistake your boss made with you. What have you learned?

■ You can’t coach and correct at the same time; you have to decide which to do. Is this a serious performance problem or an opportunity for a good employee to get better?

■ If you choose correcting, the employee’s brain won’t be in solution mode, so you’ll probably have to deliver the solution yourself.

■ If you choose coaching, set a low-fear atmosphere, get the employee to talk about him or herself to get the dopamine flowing, and avoid criticism. You’ll have a happier brain to work with and a happier brain is a smarter brain.

Interested in further reading? See David Rock and Linda Page, “Coaching with the Brain in Mind” and Srinivasan S. Pillay, “Your Brain and Business: The Neuroscience of Great Leaders.”

Bradley Harris, MBA, SPHR is the coowner of NeuroSense Consulting, a firm specializing in business coaching, executive development, training design and delivery, and performance management. Contact him at bradley.g.harris@gmail.com

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9

Independent contractor or employee?

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ou know the drill: Something needs to be done so you hire an independent contractor (IC) to come in and do it. Everything seems fine but then you receive a letter from the U.S. Department of Labor or the Nevada Labor Commission saying they believe that worker is actually an employee. Your accountant, your business coach, and maybe even your business lawyer assure you that you are fine but when everything is said and done, you are anything but fine. You’ve wasted money on legal fees, owe back wages, penalties, and if you offer your employees benefits, you owe the misclassified worker those as well.

So, what happened and why were the professionals you consulted wrong?

The regulations surrounding the use of ICs are both simple and complex. Every federal and state organization has created its own set of rules defining who is and isn’t an IC. The objective is to prevent businesses from skirting legal responsibilities to an employee by pretending the employee is an IC. The varying definitions and regulations can make a difficult maze to navigate.

Sherry Griffin The reason the professionals misadvised you is because their world is quite narrow.

Accountants live in the world of the IRS and state tax boards. The IRS does a very good job of educating CPAs and their cohorts on their definition of ICs and the IRS consequences for misclassification. hat means when your accountant says that your worker is an IC, he is basing that on the IRS’s criteria. Similarly, his understanding that as long as you are consistent there won’t be any penalties is also based on how the IRS handles misclassification. Unfortunately, most don’t realize that the IRS rules only apply to the tax agencies and unintentionally mislead their clients. They don’t realize that the Department of Labor and various state agencies evaluate workers differently and regularly classify workers as employees that the IRS considers ICs. Furthermore, other agencies really don’t care how

consistent you are – if you’re wrong, open your checkbook.

Business coaches and business lawyers live in a world of contracts and view everything through that lens. Typically, when someone decides to go into business for herself, she forms a company and starts working for others as an IC. The business becomes its own entity and its formation shields her personal assets from the business’s failure. Anyone wishing to engage the new business, contracts the new company effectively removing individuals from the equation.

There is no argument that you should always contract businesses and individuals.

A contract with a business significantly helps your case but sole reliance on this to keep you out of trouble is folly. To quote U.S. District Judge George A. O’Toole, Jr when granting summary judgment to the plaintiffs in December 2013 regarding a Massachusetts’ case where the defendants claimed that because they (the defendant) had contracted with LLCs and S-Corporations the IC regulations didn’t apply, “… argument depends on the appropriateness of choosing to honor form over

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INDEPENDENT

From page 9

substance … The inquiry is whether in substance the worker is an employee or a person (or entity) acting genuinely as an independent contractor.” In other words, was the worker actually functioning as an IC or was the worker an employee who completed the paperwork in order to keep his job? In this case, Judge O’Toole determined the defendants were really employees.

The conclusion made by Judge O’Toole reflects the spirit of the rules being put into place by agencies such as the US Department of Labor, state labor commissions, and other agencies. Simply put, they are looking to ensure that worker’s rights are protected. Employment laws don’t apply to ICs and there are businesses out there trying to take advantage of the regulations by classifying employees as ICs – this is the definition of “misclassified worker.”

Companies also neglect to realize is that misclassification challenges are often initiated by the worker. Many times they are making legitimate claims; they really are an employee, misclassified, and being cheated out of wages they’ve earned. However, sometimes the worker is working the system. For example,

you hire an IC who gets injured on the job and can’t work but doesn’t have workers compensation insurance; the IC files a workers comp claim saying he is really an employee who was misclassified. Workers compensation begins its misclassification investigation assuming that the worker is an employee and you can’t support your position.

Any savings seen by using an IC comes from them being able to do what is needed in a shorter amount of time, their expertise reducing potential exposure, or ...

This presumption that the worker is an employee is very common and makes sense when you consider that most of these agencies were put into place to protect workers from bad employers. That brings us to the question how do you a) make sure you are actually hiring an IC and b) protect yourself from a legitimate IC who files a false claim later?

Before engaging an IC, determine if it is

really a contractor or an employee that you need. Keep in mind that a true IC will cost you more per hour than an employee. Any savings seen by using an IC comes from them being able to do what is needed in a shorter amount of time, their expertise reducing potential exposure, or in just being needed for a single project. If you already have someone doing similar work, it’s an employee and not an IC. When engaging an IC, only contract with a business in good standing, require a copy of its insurances, keep a copy of the reps’ business card and marketing materials, take a screen shot of the company’s website, and require a list of references. Update the file and review your relationship regularly. If at any point, you question how your IC can have other clients due to their engagement with you or if you’ve started telling them how to do their job, they’ve become an employee.

If you are currently engaging ICs, schedule to have a third-party audit conducted by someone that specializes in worker classification to identify potential exposure allowing you to proactively reduce your liability risks.

Sherry Griffin, SPHR, is co-owner of Elucidate Inc, a software and business consulting company. Contact her at sgriffin@elucidateinc. com or 775-826-9933.

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Recent Supreme Court discrimination holdings and what they mean for your workplace

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mployment law is constantly changing and employers must keep up with those changes in order to protect themselves from claims.

Recently, the United States Supreme Court handed down some landmark decisions in the area of employment discrimination and retaliation that should prove useful for employers: Vance v. Ball State University and University of Texas Southwestern Medical Center v. Nassar. This article explains these cases and what they mean for employers.

Vance v. Ball State University

In any harassment claim, the status of the alleged harasser is critical to the analysis of the case and potential liability of the employer. If the alleged harasser is a co-worker, the employer will only be liable if it was negligent in handling the working conditions of the plaintiff. However, when the alleged harasser is a “supervisor,” employers will be strictly liable for the supervisor’s harassment if it results in a tangible employment action or

Molly Rezac “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” Burlington Industries, Inc. v. Ellerth, 524 US 742 (1998). Therefore, given the different rules that apply depending on whether or not the alleged harasser is a “supervisor,” the definition of “supervisor” is extremely important.

Luckily, in the recent case Vance v. Ball State University (“Vance”), the Supreme Court provided us with that definition. A “supervisor” is one “empowered by the employer to take tangible employment actions against the victim.” This means that only

the right PEOPLE

those employees who can make hiring, firing, demotion, promotion, or other decisions that cause a direct economic harm to the employee will be found to be “supervisors” and able to subject the employer to vicarious strict liability. In Vance, the plaintiff was a catering assistant for Ball State University.

During her employment, she made numerous complaints of racial discrimination and retaliation. Some of these complaints centered on Vance’s interactions with another Ball State employee, Saundra Davis. Davis was a catering specialist. Vance referred to Davis as her “supervisor” in some statements; however, the parties agreed that while Davis did occasionally direct Vance’s work, she did not have the decision-making authority to hire, fire, demote, promote, transfer or discipline Vance. After defining “supervisor,” the Court found that Davis did not have the requisite authority, and therefore, was not a

DISCRIMINATION, 12

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12 NNHRA Human Resources & Employment 2014

The value of a multi-generational workforce

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n recent years, the emergence of four generations in the workplace has attracted a great deal of attention. A fairly recent phenomenon in American history, the growing field of the multi-generational workforce is generating numerous studies. It presents us with a challenge to understand the members of each generation. Effectively applied, this understanding can uncover the most diverse and powerful workforce ever seen.

You can’t deny the era when you were born, and the life-defining events that occurred within that time frame. From the Great Depression to the Civil Rights Movement, Desert Storm to the Terrorist attacks of 9/11 — events shape our values, identity, motivation and work style.

Following are some highlights about generational life-stage information.

Traditionalists 50 million; 65-88 years old 7 percent of today’s workforce Characteristics: loyal, value respect, courteous, self-sacrificing, value order, respect authority, disciplined

DISCRIMINATION

From page 11

“supervisor.” As such, there could be no strict liability against Ball State for any alleged harassment by Davis.

What it means for you

So, what does this mean for employers?

This case clarifies who can subject employers to strict liability and thus reminds employers to review employees carefully before giving them supervisory authority. Employers may want to think about their overall organization structure is and who should be supervisors.

Be certain that if you are delegating supervisory authority, that employee understands the potential ramifications of all their conduct.

However, be cautious before you decide to simply limit the ability to make tangible employment decisions to a small group of individuals. The Supreme Court foresaw such strategy and found that if that group relies upon substantial input from the employees that actually interact with the affected employee, the group may be found to have delegated their authority to those employees whose recommendations they relied upon, and, therefore, those employees will be found to be supervisors regardless. A better approach may be to determine who your “supervisors” are and to make sure they are properly trained on all issues related to workplace

Cindy Saunders Motivated by: being respected Prevalent stereotype: old fashioned, behind the times, rigid, autocratic, change averse Baby boomers 80 million; 46-64 years old 42 percent of today’s workforce Characteristics: optimistic, workaholics, social reformers, competitive, involved, collegial Motivated by: feeling valued and needed Prevalent stereotype: workaholic, self-centered, political, power driven, unrealistic Generation X 46 million; 30-45 years old 29 percent of today’s workforce Characteristics: independent, entrepreneurial, competent, informal, fun, skeptical, value harassment. As you know, all employees should be trained on your anti-discrimination and anti-harassment policies. However, supervisors’ training should also include the “what to do” in the event that they receive a complaint or witness something that would be a violation of the employers’ policies. As always, training your employees is one of the best ways to prevent discrimination. It also is a great fact in your defense in the event you ever find yourself facing a discrimination claim.

University of Texas Southwestern Medical Center v. Nassar

Retaliation claims are the claim most sought after by plaintiffs’ lawyers and often the most difficult to defend. When an employee opposes, complains of or sought remedies for alleged unlawful workplace discrimination or harassment, they are protected under Title VII against any retaliation for their opposition or complaint. These retaliation cases are often he-said, she-said cases and that always creates more difficult claims.

However, in University of Texas Southwestern Medical Center v. Nassar, the Supreme Court sided with employers and made it a bit easier to defend these cases. The court held that in order to prove such retaliation, the employee must show that but-for their protected activity of opposing or complaining of unlawful workplace discrimination, they would not have suffered from the adverse

balance, tech savvy Motivated by: freedom and removal of rules Prevalent stereotype: slackers, selfish, cynical Generation Y 80 million; 10-29 years old 22 percent of today’s workforce Characteristics: social, ambitious, close to family, confident, inquisitive, tech experts, value serving community Motivated by: working with other bright and creative people Prevalent stereotype: short attention span, spoiled and disrespectful, technology dependent How do you interpret the differences?

If you are like me, you read through this information and may have immediately started labeling yourself and others. We want to see something we understand, a common thread, a shared understanding, a validated assumption.

What about the stereotypes? Did you fit any, or, contradict some? Are you a 32-year-old Gen Xer that actually thrives on structure and rules?

How about a 48-year-old boomer that gave up

employment action (ie, termination, demotion, etc.). Employees will no longer be able to win on a retaliation claim by asserting that discrimination or retaliation for their protected conduct was one of the reasons for their termination; instead, they have to show that it was the reason for the termination. That is difficult to do.

What it means for you

First, this case will make these difficult retaliation claims easier to defend for employers — always a plus! It is also a great reminder that we always need to go back to basics — document, document, document.

By properly and consistently documenting all your employment decisions from a simple verbal counseling to a suspension or termination, you will show legitimate, business-based reasons for any adverse employment action you take. If you can show that, the employee will have a hard time showing that retaliation was the reason for the employment decision.

In addition, the more objective bases you have for any employment decision, the better you are in showing the non-discriminatory reason for that decision. This will go a long way in helping you defend any discrimination claim.

Molly Rezac, Esq., is a shareholder at Gordon Silver, where she focuses her efforts on employment litigation matters. Contact her at mrezac@gordonsilver.com or 775-343-7500.

Northern Nevada Business Weekly • www.nnbw.com

the “work-to-live” creed long ago? Maybe you’re the traditionalist in your company who is the primary leader of change?

It’s likely that you did not fit into just one stereotype at all. It’s equally as likely that the people you subconsciously assigned a stereotype also did not actually fit. Yet, we tend toward labeling and limiting, instead of understanding and respecting.

The truth is, stereotypes or false beliefs about others limit the contributions of people of all ages and organizational levels. Collaboration, productivity and individual self-perception suffer beneath these restrictive beliefs. If we can learn to understand and consider the differences, we are on our way to appreciating the value each generation contributes.

“Differences can be the source of judgment, misunderstanding and tension. Awareness followed by understanding however can breakthrough all of that. If you appreciate an approach that’s different from your own, you can leverage it.”

— Carolyn Turner, Difference Works As a speaker, consultant and author, Carolyn Turner helps leaders achieve greater business results by creating work environments where people thrive. Some of her training focuses on the subject of multiple generations working together. When I asked Carolyn what she finds to be the most effective tool in helping people see

the value in different generations, she said that it seems to help if we can understand the way each generation was parented.

“Many in Generation X were raised in two-career families, single-parent families or rotating households. This generation became the ‘latchkey’ generation. This is one reason why they are characterized as independent and self-directed. It is also why they reject the workaholic choices of their parents and seek life/work balance.

“The youngest group, Generation Y, was raised by the ‘latchkey’ generation and by Baby Boomers who delayed parenthood. They received highly attentive parenting, and, due to technology their helicopter parents were rarely out of reach. They are confident but not necessarily self-directed. They need a lot of praise.”

With these insights, we could reframe both Gen X and Gen Y stereotypes into more positive images. Instead of labeling Gen X as slackers, selfish, cynical, and pragmatic, we could see stronger, more acceptable attributes, such as informal, self-sufficient, autonomous and realistic. Gen Y could be viewed as energetic, relational, resourceful and fearless.

Something powerful occurs when we understand others from a different perspective. What seems negative can become positive. What could be considered a weakness can be viewed as strength. What might appear as an obstacle

suddenly becomes a bridge.

Can it be as simple as respect? Respect crosses generational boundaries. An Achieve Global study found that respect from peers, superiors and direct reports is the top-rated workplace need of all generational groups. Conversely, expressions of lack of respect have a distinctively depressive impact on workplace productivity, creativity, and relationships.

We’ve all experienced it, the dismissive response, sarcastic reply, or cynical retort. Being ignored, receiving the brunt of mocking comments, rolling eyes or exclusion from conversations… sardonic remarks about age, culture, height, weight, race, gender, or profession.

Choosing the alternative is by far the better choice. Taking the time to focus on others, and considering the impact of your words goes a long way toward promoting respect.

Respect appreciates the separateness of each person and recognizes their distinctive characteristics. Respect is careful to affirm people for their intrinsic value as human beings. Respect cuts through stereotypes and assumptions and assigns value instead of labels.

Cindy Saunders, SPHR, GPHR is human resources manager for Tahoe Resources Inc. Contact her at csaunders@tahoeresourcesinc. com or 775-453-8907.

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14 NNHRA Human Resources & Employment 2014

Recent guidance from Nevada’s Labor Commissioner

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ast year, Nevada’s Labor Commissioner, Thoran Towler, issued advisory opinions clarifying some often confusing Sandra wage-and-hour issues under Nevada Ketner law. While the Labor Commissioner’s advisory opinions do not constitute binding legal authority, they nevertheless reflect the view of the Office of the Labor Commissioner for investigation and enforcement purposes. A Nevada court may also accept the Labor Commissioner’s advisory opinions as persuasive legal authority when rendering a determination on Nevada wage and hour laws.

On June 21, 2013, Commissioner Towler issued an advisory opinion concluding that the use of time clock rounding to calculate employee pay is appropriate under Nevada law. Apparently reversing his previously-held position indicated in an article last year, the Labor Commissioner now asserts that “time clock rounding is appropriate so long as the rounding policy is used in a manner that does not result, over a period of time, in a failure to compensate employees properly for all the time actually worked.” Nevada does not have a statute or case law permitting or prohibiting the practice of time clock rounding. However, the Labor Commissioner concluded that the practice was appropriate by relying upon the facts that: (1) federal law permits time clock rounding; (2) other states follow federal law; and (3) time clock rounding is not inconsistent with Nevada law.

The Labor Commissioner explained that the Fair Labor Standards Act (FLSA) permits employers to use time clock rounding under certain circumstances. In fact, the applicable federal regulation specifically states that time clock rounding is permissible “provided that it is used in such a manner that it will not result, over a period of time, in a failure to compensate the employees properly for all the time they have actually worked.” 29 C.F.R. §785.48(b). The Labor Commissioner noted that, pursuant to this regulation, courts will not find a violation of federal law if an employer uses time clock rounding, “as long as the time clock rounding policies do not result, over time, in a failure to compensate employees for all time actually worked.”

In addition to the FLSA’s authorization of time clock rounding, the Labor Commissioner noted that several other states allow the practice despite the absence of a state-specific statute, regulation, or case law regarding this long-standing practice. However, these states, such as California and Arizona, relied on the FLSA when interpreting their wage-and-hour laws. Finally, the Labor Commissioner found that time clock rounding is not inconsistent with Nevada’s wage and hour laws. For the reasons set forth above, the Labor Commissioner held that employers that “utilize a time clock rounding policy that will not result, over time, in failure to compensate employees properly for all time worked will not be in violation of Nevada law.”

On July 25, 2013, Commissioner Towler issued an advisory opinion addressing what is commonly known as the “four 10s” exception to Nevada’s overtime law under Nevada Revised Statutes 608.018 and 338.020. Under Nevada law, an employer is required to pay 1.5 times

an employee’s regular wage rate when an employee works more than 40 hours in any scheduled week of work or more than eight hours in any workday (if the employee Randall Grandgenett earns less than 1.5 times the applicable Nevada minimum wage rate), whichever occurs first. However, Nevada law provides an exception to the requirement for daily overtime. Specifically, if the employee and employer mutually agree to a schedule wherein the employee works a scheduled 10 hours per day for four days within any work week, the employer is not obligated to pay overtime for the two hours exceeding eight in a workday.

The Labor Commissioner noted that there are several benefits to the “four 10s” exception, such as providing a flexible work week alternative for employees while at the same time ensuring that employers can still operate efficiently and effectively. However, despite the “four 10s” statutory exception codified by Nevada law, there are several scenarios in which an employer may be required to pay overtime — for example, when an employee does not work a complete 10-hour shift on the employee’s fourth 10-hour scheduled day of work. A strict interpretation of the law would require the employer in this situation to pay two hours of overtime for each of the three previous days of work thereby defeating the purpose of the “four 10s” exception. The Labor Commissioner noted that, in this situation, the employer incurs an additional and unexpected expense, which is often absorbed by the employer and/or passed on to the employer’s customers. Furthermore, this type of situation often negatively affects the employer-employee relationship.

Therefore, in an effort to rectify this unintended consequence under the “four 10s” exception, the Labor Commissioner provided much needed guidance and clarification in this area. Specifically, the Labor Commissioner opined that “[i]f an employee does not work a scheduled ‘four 10s’ due to a decision made by the employee or for reasons within the employee’s control or to the employee’s benefit, the employer is only required to pay the employee’s regular wage for the hours the employee actually worked during that work week.” However, employers should be aware that the key to this opinion is the factual premise that the employee, rather than the employer, decided not to work the “four 10s” schedule. The Labor Commissioner’s opinion is clear that, if the employee is unable to work the “four 10s” schedule due to the employer’s actions or for reasons outside of the employee’s control, the employer is required to pay overtime for any day during the work week where the employee worked more than eight hours.

The Labor Commissioner noted that this guidance reflects his effort to find a solution that is fair and beneficial to both Nevada employees and employers.

Sandra C. Ketner is of counsel at Littler Mendelson. She can be reached at sketner@littler.com or 775-348-4888.

Roger Grandgenett is an attorney with Littler Mendelson. He can be contacted at rgrandgenett@littler.com or 702-862-8800

Northern Nevada Business Weekly • www.nnbw.com

15

Dangers of employee performance evaluations

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am often asked by supervisors and managers: How many times can I say “good job” or How can I describe the job performance of a long-term employee without sounding repetitive? Do these questions sounds familiar?

Have you ever been tempted and have actually used employees’ performance reviews word-by-word from past years? If so, you are not alone. However, be aware of the dangers of writing a poor performance review as it could conclude in discrimination and retaliation. Poor performance reviews include non-work related performance reviews, false positive reviews, and cookie-cutter reviews.

This article explains a court case that relates how a poor job performance evaluation could harm your company.

Reasons for job performance evaluations Performance evaluations are popular feedback tools for companies. This is one opportunity for managers to reinforce employees’ good behavior and/or rectify any issues. Performance evaluations are often tied to compensation, promotion, disciplinary actions, termination, etc. According to Forsyth (2009), there are many positive reasons to give performance evaluations to employees: ■ review individuals’ past performance; ■ plan their future work and role; ■ set and agree on specific individual goals for the future; ■ identify development needs and arrange for development activity; ■ provide on-the-spot coaching; ■ obtain feedback; ■ reinforce or extend the reporting relationship; ■ act as a catalyst to delegation; ■ focus on longer-term career progression; ■ underpin or increase motivation.

Performance evaluations are important for both the company and the employee, so writing them should not be taken lightly.

It is significant to support performance evaluations with examples of what the employee is doing wrong, so these problems can be corrected or properly documented if these are not resolved. On the other hand, cookie-cutter type reviews should be avoided. Employees do notice when the same language is used over and over again, and doing so could particularly cause a legal

Haydee Acebo impact when done to protected groups as explained on Vaughn v. Edel.

Vaughn v. Edel In Vaughn v. Edel, a supervisor was advised by the legal department not to have any work-related confrontations with Ms. Vaughn, a black attorney and associate contract analyst, after she had previously been reprimanded about her low productivity and frequent, non-work related office visits with other employees. Thus, the employer decided to report false positive performance evaluations in fear that the truth could be construed as retaliation, discrimination, or that a truthful appraisal could lead to termination. The reviews did not give the employee an opportunity to rectify her work performance and in the process, this action was seen as discriminatory, “In neither criticizing Vaughn when her work was unsatisfactory nor counseling her how to improve, Texaco treated Vaughn differently than it did its other contract analysts because, as the magistrate found, she was black.”

Similarly, those employees who are given rehashed evaluations could claim the lack of effort or the absence of new information is a way to treat the employee differently because of race, age, sex, or religion, as claimed on the mentioned court case. Later on, Vaughn was fired from her job as a cost-saving measure for the company. Ms. Vaughn was found to be one of the lowest company performers, even though her performance evaluations were satisfactory and guaranteed her a raise and promotion.

Giving false positive reviews to a bad employee in order to avoid confrontation is not a solution. Managers should provide corrective feedback and progressive disciplinary action if necessary. Charity Felts, a Reno employment attorney, advises caution when rating appraisals, particularly when giving false positive reviews to employees, “If an employee is consistently reviewed as a “satisfactory” or [an] “exceeds” employee and then the employee is disciplined or passed over for a promotion and decides

to file a charge of discrimination, then the employer will have a much more difficult time demonstrating why the decision was nondiscriminatory.”

Equal Employment Opportunity Commission best practices The U.S. Equal Employment Opportunity Commission suggests constant monitoring to avoid discrimination when performing employee evaluations, “Monitor compensation practices and performance appraisal systems for patterns of potential discrimination. Make sure performance appraisals are based on employees’ actual job performance.” For instance, saying an employee is emotional is not relevant until this behavior is strictly related to work performance. Similarly, human resources professionals need to constantly read performance evaluations that are distributed to employees to check for language, performance, and potential issues. Additional performance issues should be followed up with disciplinary actions, such as performance improvement plans.

Likewise, a performance review should not be used as a collection of everything the employee did wrong for the entire year. It is more appropriate for managers to meet with employees periodically if a problem exists prior to meeting for a performance review.

Furthermore, retaliation and discrimination cases are on the rise. There were a total of 99,412 work discrimination charges with the EEOC in the U.S. during 2012, over 500 more cases than in 2011. In Nevada, a total of 1,267 were filed in 2012. These statistics suggests companies should increase preventative actions to decrease the probability of related litigation. Such measures can include training on best practices for handling performance reviews, local and federal employment laws, supervisory training, etc.

Performance evaluations can create a great impact for your company, so think how your writing could be upheld in court next time you write an employee’s performance evaluation.

(Further reading: http://openjurist. org/918/f2d/517/vaughn-v-edel) Haydee Acebo is a human resources manager at Click Bond. She can be reached at Hacebo@clickbond.com or (775) 283-4619.

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