Employment Law: Training Deters Damages Carla Joinson

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The U.S. Department of Labor (DOL) administers over 180 federal laws covering more than 100 million workers. An alphabet soup of laws pertaining to fair labor standards (FLSA), disability (ADA), family and medical leave (FMLA) and discrimination (EEO) dominate most compliance failures--the Equal Employment Opportunity Commission (EEOC) alone filed over 80,000 charges in FY2001--but even a less visible agency like the Pension Welfare Benefits Administration (PWBA) garnered 137,000 inquiries from workers last year.

According to DOL, the same sorts of problems crop up over and over: failure to pay time and a half for overtime, misclassification of workers as exempt, and failure to pay for all time worked, as happens when employees need donning and doffing time for protective clothing. Supervisors may allow or force employees to work through breaks without compensation, or permit discrimination and harassment.

And if federal employment law is confusing, try adding embellishments from fifty states. For example, federal law doesn't set limits on overtime, but Maine law does. Federal law doesn't require lunch breaks, but California law mandates breaks unless employees work for less than six hours during the day. Federal law doesn't set pay frequencies for employees, but state laws often do. Businesses operating in more than one state have plenty of opportunity to trip up.

"If you have one sales rep or one researcher in New York City, for instance, the terms of that person's employment will be governed by New York law and New York City law," says John D. Rapoport, Esq., an attorney practicing in White Plains, New York and author of The Employee Strikes Back.

"New York City has a human rights law that covers all the sorts of things that federal law covers, in terms of age, sex, race discrimination, and so on," says Rapoport. "The only thing is, this particular law allows for unlimited punitive damages-and many in HR wouldn't know that the law even exists. When you have employees in other states, have someone local go through state laws for you-do a survey for each state."

The consequences of ignorance are huge. The challenge for HR is to stay on top of both the laws and their interpretation, and to educate employees about them. Here are ways to make sure your company doesn't wind up surprised by a gap in compliance.

Educate everybody

"Training is an investment in people and the company," says Ann Kiernan, a New Brunswick, New Jersey attorney and trainer associated with Fair Measures Corporation in Santa Cruz, Calif. "The alternative is years of time and lots of punitive damages in court cases."

She says she often sees shortfalls in documentation. "Managers simply do not document performance difficulties to support demotion, discipline, and layoffs," says Kiernan. "My tip is to teach them to do a 3 - 5 minute "mini brain dump" at the end of the day."

Kiernan says managers should spend this short amount of time before they go home, to make quick notes on employees. "These should be about anything--coaching, counseling, correcting or praising that the manager has done that day," she stresses. By writing notes on everyone in a timely, regular, and consistent manner, an employee can't say that the manager is only documenting negative things about him or her, Kiernan explains.

"The notes also act as a great refresher for reviews, and help the manager see trends develop early on," adds Kiernan.

Joy Gaetano, SPHR, senior vice president, corporate human resources, at Palm Desert, Calif.-based USFilter, a comprehensive water services provider for commercial, industrial, municipal and residential customers, states that managers can sometimes wait until a workplace situation becomes a matter of exasperation. "If problems or patterns are identified early on, they can be addressed quickly and more forthrightly," says Gaetano. "When they aren't, the problems get elevated to more senior levels in the organization because employees feel they're not being treated fairly, or the supervisor is, literally, at wit's end."

Education helps address these and other problems. Five years ago, the company introduced a LEAD supervisory training program, which covers interviewing, performance appraisals, conflict resolution and other common workplace situations. The LEAD courses train supervisors in basic management principles, positive employee relations practices, and key company policies.

USFilter's Compliance and HR departments also completed a project last year, in which they looked at jobs and determined what compliance courses employees needed to take. They looked at what courses were pertinent to each position and relevant to the company at large. The company now uses Internet-based courses to teach more than 40 topics, says Kevin Duffy, vice president for corporate compliance and assistant general counsel for USFilter.

Some of the education is targeted to specific groups, like their anti-trust course for salespeople or their proper e-mail usage course for employees with e-mail. However, Duffy says that some material is a responsibility for all employees. "Last year, 15,000 employees took a course on preventing workplace harassment," he says.

"Within a month, new employees are online and can take any appropriate courses," says Gaetano. "They have until the end of the year in which they were hired to complete them, and HR monitors their progress." So far, 97% of their employees have completed their required coursework with only minimal logistical complaints noted.

"We try hard not to go into information overload," Gaetano says. "We're always trying to understand how much information and how much detail need to be filtered down-both to the supervisor and to the employee."

HR prevents the punitive damages

"One of the most important things for HR to recognize is that they cannot buy insurance against punitive damages," says Kiernan. "Employment Practices Liability Insurance (EPLI) covers compensatory damages and lawyers fees only. And though federal law has caps, damages can go sky high with state laws."

"The Supreme Court made a decision in 1999 (Kolstad v. American Dental Association) that companies could be protected against punitive damages if they made good faith efforts to comply with laws," says Kiernan. She adds that though the Supreme Court didn't detail the specifics of good faith efforts, more than 200 state and federal courts have weighed in on what they are.

"The courts say, 'you've got to have good policies that are comprehensive'," says Kiernan. "You have to give updates and distribute them to employees-don't keep the information a secret. You need to train managers."

The alternative to these efforts may be a court ruling of "corporate indifference", which opens the company to punitive damages.

Kiernan says that it's important to have complaint procedures that are well publicized. "And managers need to know procedures as well. They may need to report an incident to HR," says Kiernan, "and perhaps not investigate themselves. They need to know they shouldn't discourage employees from reporting something to HR."

Kiernan adds that a hot issue today concerns retaliation claims-which are both rising in frequency and preventable. "Supervisors must know how to handle complaints: treat the employee respectfully, don't retaliate, and don't let other employees retaliate," she says. "That's why complaint procedures are so important."

Walk with employees

USFilter emphasizes communication as a way to help both supervisors and employees understand relevant laws. The company uses newsletters (appearing six times annually) and other communications to highlight key issues, says Duffy. The company intranet features new developments in HR and health and safety, along with compliance information. "We find that this works well and is cost effective," says Duffy.

"We have a strong, 24-hour compliance help line, as well as an open door policy and an open line into our corporate offices," says Gaetano. "Employees can e-mail or phone highly placed managers if they need to." She adds that in addition to training for supervisors and managers, HR comes together annually to update and refresh their knowledge. "We also have monthly HR conference calls to talk about current matters that arise."

When those steps aren't enough and a situation does occur, Gaetano says that front line supervisors are taught to get in touch with HR and a second level supervisor. "We almost have a committee approach," she says. "The appropriate people get together and carefully discuss the matter: 'if we take such and such a path, then this risk may present itself, and so on'. Then there's buy-in to the decision that's made."

Always, HR visibility and direction are essential. "It's difficult for us as professionals to stay on top of ever-changing federal and state laws," says Gaetano. "For a front line supervisor to be knowledgeable is difficult--and in reality--shouldn't be expected. That's why we emphasize to supervisors the need to rally a team around the situation when one presents itself."

Prevention is best

Many employment law problems occur because supervisors either don't understand the law or don't have these issues "top of mind" during a hectic day, say experts. The only solution for a company is strong HR compliance programs.

DOL and the organizations within it offer compliance assistance to employers. HR can visit the DOL Web site or call a local office for brochures and pamphlets, training sessions/seminars, and on-site or telephone consultations. DOL also has extensive Web-based information on laws, and a good overview of the differences in state laws under its Employment Standards Administration section.

Kiernan compares the benefits of training and its preventative effects to health care. "Is it better to keep your cholesterol under control, or to get the best triple bypass ever done?" she enquires. "The bypass--or a lawsuit--is something you'd never want to experience."

Carla Joinson is a Stafford, Va.-based writer specializing in human resources and management topics.