Unerderstanding The Types of Termination For Unemployment Purposes

June 29, 2009

We get a large number of separation reports indicating “Inability to meet company standards” as the reason for termination. You have to understand that this language, as the reason for termination, is not a protestable claim! The bigger problem is when to use this terminology because it is not being used properly. Let me explain. When an employee simply cannot do the job (can’t walk and chew gum) the reason for separation is inability to meet company standards. It’s merely poor work performance and the employee would be eligible for unemployment insurance benefits.

Employers have a tendency to use the inability to meet company standards category when the employee violates an established rule (or from the employers perspective-a company standard). If it is truly a violation of a company rule, then the employee should be warned using progressive discipline unless the infraction is so severe it does not warrant a warning.

Another terminology that is misused (once again) is the “At-will” statement. Employers continue to use this as the reason for separation. NEVER use this on a separation report. When our staff receives this as the reason for separation it forces us to contact you for the additional information as to the underlying circumstances surrounding the reason for discharge.  The At-will statement is a legal definition not having anything to do with unemployment benefits. The unemployment offices could care less. It only applies, as a concept, to wrongful termination claims that are based upon a breach of the covenant of good faith and fair dealing (as an example, an employer violating their own policies found in or out of their employee handbook) and not violations of public policy (discrimination claims, retaliation etc.). As you can see it is used for a very limited purpose and only applies in a limted set of circumstances.

It’s important to understand how we process unemployement claims. When the claims come in we separate out the claims that are not protestable and merely enter them into the system for auditing purposes only. Included in that process would be the separations that indicate inability to meet company standards. If you want us to take a second look at the reason why the person was discharged never put inability to meet company standards. We have had circumstances where the employer really wanted us to protest a claim but because of how the information was conveyed to us it didn’t happen. If anyone needs any further clarification on any of these points please contact me or Maria.

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Court Rules Employer Owes No Post-Termination Commissions!

June 22, 2009

Can you believe it! Wait, hear the WHOLE story first before you start cutting out the commisions to former employees.  Here’s the deal, a recent California appeals court made a decision about the importance of a carefully drafted commission pay agreement. The case was based out of Los Angeles and the company was a web hosting business who had hired a sales representative. At the time of hire, the sales person signed a commission pay agreement that basically stated that commissions would only be paid during employment and that there would not be any post termination commissions paid. 

Not long after the salesperson began working for the company, he began negotiating with communications giant AT&T for his company to take over providing web-hosting services for some of AT&T’s small and mid-sized business clients.  Two years later, upper management finalized an agreement with AT&T to take over the work. However, a little over a month before the deal was completed the sale representative was terminated.

The former employee sued, arguing that he was entitled to a commission on the AT&T transaction because he’d initiated the negotiations with AT&T and remained involved in the activities leading up to the deal. The court disagreed, finding that the commission agreement with his employer “clearly” stated that he was only eligible to receive commission pay while he was employed AND that the agreement RULED OUT the possibility of post-termination commisson payouts.

Understand that the key to success for this employer was a carefully and clearly drafted commission pay plan. Previously, as many of you know, the Department of Labor Standards Enforcement (Labor Board) has held that sales representatives are entitled to commissions based upon a proportionate share dictated by their involvement.  Now, to be consistent with this holding, you must make the changes noted above. This will only work for your current employees and yes you can have them sign new commission agreements effective immediately. If they refuse to sign, it does not change the nature of the agreement but document their refusal and practice the policy with every sales representative that leaves.  

I will be available to review any agreements that are forwarded to me.


Workload Burnout-A Few Suggestions In The Midst Of Layoffs

June 15, 2009

As we are all well aware, employers have been experiencing layoffs over the last year or so. Many of the employees who are left behind (although glad to have made the cut) are being burned out because of the workload. One employee may have to carry the burden of one or two former employees. In addition, they may also still be worried whether or not they will be next. Add these concerns together and you have employees who may be feeling somewhat overwhelmed, frustrated, and burned-out. Consider how these feelings translate into low work production and poor customer service.

You might want to think about doing some small things that may give you a bigger return on your investment and give the burned-out employees much-needed stress relief and improve their overall productivity.

1. Implement an “e-mail curfew.” Exempt employees who are tied to PDAs and laptops, the pressure is always on them to respond to messages and this can create a feeling of always being at work (although we know that exempt employees can be!). Consider making an announcement that after a certain time each day, employees will not be expected to respond to electronic commuincations until the next day. For employees in sales this may be tough especially in the automotive industry but if they are burned-out they are not operating at peak efficiency anyway.

2. Increased meal periods and breaks may be another consideration for both exempt and non-exempt employees. If you have a 10 minute break period consider 15, a 15 consider 20. With respect to lunch periods the law requires a 30 minute break for every 5 hours of work. Some employers give 30 minutes and other give an hour. Consider extending those by 15 minutes and leaving the break period as they are. Either way it only takes away 10 or 15 minutes from the work but gives them some much needed relief.

3. Offer work-from-home for those employees who, based upon their particular job, are able to do so. Especially those who may have a longer commute. This may not work for everyone and could cause some of the non-qualifiers to become upset. Exempt employees can easily qualify and some of them may already be working 6 days a week in the office. They need a break as well!

Look, the above suggestions are just that–suggestions! This may or may not work for your particular business but put on your thinking caps! Employees will appreciate (hopefully) anything the employer can do to relieve the stress that many of them may be under.


EEOC Issues Discrimination Guidelines For The “Swine Flu”

June 8, 2009

Well, they must have read my Blog discussing the swine flu! Anyway, the Equal Employment Opportunity Commission (EEOC) has issued two “guidance memos” to employers on “H1N1 flu” formerly called “Swine flu” (yep, its has a new name!). The first memo they issued reminded employers not to discriminate against employees on the basis of national origin. This also will apply under California law (Fair Employment & Housing Act).

 As you probably already know, the news media carried the stories that the H1N1 virus may have traveled to the United States from Mexico. Some employers began to inquire if they could mandate that employees had to inform their manager when they would be traveling to Mexico and request a doctor’s clearance before they could return to work. We informed those “inquiring minds” that they should not implement any such policy. That advice now appears to be consistent with the new guidelines as noted above (whew, glad that advice was correct! LOL).

The second memo addressed several factors that employers need to keep in mind regarding when an employer can ask employees about health conditions. Under both state and federal law, employers can ask questions about an employees health status or disability  under the following conditions:

1. Pre-employment: During the pre-employment appplication and interview process, employers are not permitted to ask questions about a candidate’s health status or disability;

2. Post-offer: Once an offer of employment has been made, but before the new hire starts work, employers are permitted to ask for disability-related information and require medical examinations, so long as all incoming employees in the same job classification are required to answer the same questions or undergo the same examininations;

3. Employment: Once an employee has begun work, employers are permitted to make inquiries into an employees health status or disability only if doing so is for business necessity, or in response to an employee’s request for accommodation or medical leave. California employers can ask for a certification that the leave is necessary but cannot ask for a physician’s diagnosis.

Finally, keep in mind that a person who informs the employer that they have in-fact contracted H1N1 virus may qualify as disabled under both state and federal law, and the employer at that point should apply their normal disability policies and procedures as an accommodation.


The Best Way To Fire Employees

June 1, 2009

As downsizing, layoffs, and restructuring continue throughout the country former employees are coming after their former employers with a vengence. I am fighting off attorneys who are sending letters threatening litigation if the employer does not accept the opportunity to head to mediation. Managers must remain focused! If you have to separate an employee from employment you must be consistent with your employment practices.

Now is the time to make sure your employee handbooks are up to date. Mediations focus on a number of practical things that the employer overlooks. Consistency with policies, proper documentation for disciplinary actions, performance appraisals (you can still do these even though money may not be available and is also considered another form of documentation), and finally the conduct of managers.

If you have to fire an employee consider if the reason for termination is consistent with policy and former terminations for a similar offense. Don’t just use the “opportunity” in place of a layoff. In addition, stay away from the “At-will” concept. Employers never get that concept right! Yes, it’s true, that under the California Labor Code all employers in the state are “At-Will” employers but that should never be used as the reason for the termination. We still have a number of clients who put down the reason for separation as “At-will.” Stop and think! Whatever infraction drove the determination that the employee was going to be terminated should be the indicated reason on the separation notice (if’ it is not you can expect a call from us!). The EDD as an example does not accept the at-will concept as a reason for termination.

If you are moving in a direction to layoff an employee do so based upon economic necessity and not because you do not want to confront the employee with the harsh reality of the real reason for the separation. If you indicate “layoff” and they see their job posted on the internet or in the newspaper it can subject the organization to a wrongful termination lawsuit.

As always, if you have any questionable terminations please do not hesitate to call us.