Employee Background Checks: A look at the Fair Credit Reporting Act

Employee Background Checks: A look at the Fair Credit Reporting Act

One of C2’s government contracting clients recently called for some advice and “best practices” regarding employee background checks. Organizations often grapple with whether or not to use background checks as part of the hiring process. According to a recent survey from HireRight, 84% of employers found a lie or misrepresentation on a resume or job application – at all levels of the organization. Background checks can minimize guess work about applicants’ backgrounds and increase the efficiency, safety and accuracy surrounding applicants and employees in the workplace…but there is also a cost associated with conducting those checks. Whether the benefit outweighs the cost, is a decision each employer has to decide for itself. Let’s take a closer look at what employers need to know from an administrative perspective about background checks and the Fair Credit Reporting Act (FCRA).

      A. What Constitutes a Background Check?

 A background “investigation” or “check” is an inquiry in to an individual’s character, general reputation, personal characteristics, and/or mode of living. According to the Federal Trade Commission (FTC), a “consumer report” is any written, oral or other communication that contains any information by a Consumer Reporting Agency (CRA) bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living. A CRA is defined as “… any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.”  Background checks conducted by a CRA require an individual’s consent and are regulated by the FCRA, as well as by some state and local laws.

Background checks are designed to gather background information from a variety of sources and may include:

  • Criminal and civil record checks at county courthouses, state repositories, federal courts and/or international courts;
  • Driving records checks;
  • Verification of employment, education, professional licensure;
  • Reference checks; Registry checks; such as sex offender and child and elder abuse lists;
  • Office of Foreign Assets Control (OFAC) Specially Designated Nationals List (SDNL);
  • Export Denial List Search; Patriot Act Searches (terrorist watch lists);
  • Office of Inspector General (OIG) Search and other healthcare sanction lists;
  • Financial Industry Checks, including SEC filings, FINRA and Federal Reserve Sanctions;
  • Credit History (note – one’s credit score is not included in a pre-employment screening report);
  • Accessing the FBI’s criminal database system when mandated by law; or
  • psychological evaluations or assessments.

       B. The Fair Credit Reporting Act 

Employers must comply with the federal FCRA (in addition to applicable state or local laws) when using a CRA to conduct a background check on an applicant or employee. The FCRA spells out the rights, obligations and responsibilities for consumers, employers and the CRA’s, which includes required notices to the applicant or employee regarding the background check and its results.

Prior to performing a background check on an applicant, the FCRA requires the following:

  • Let the applicant or employee know the information may be used in decisions about his or her employment. This notice must be in writing and separate from the employment application, handbook, offer letter, or other type of document.
  • If you are asking a company to provide an “investigative report” – i.e., a report based on personal interviews concerning a person’s character, general reputation, personal characteristics, and lifestyle – you must also tell the applicant or employee he or she has a right to receive a description of the nature and scope of the investigation.
  • The applicant’s or employee’s authorized written consent must be obtained prior to requesting a background check. This can be part of the document used to notify the person that you (as the employer) will get a copy of the report. If employers want the ability to get background reports throughout the person’s employment, the written authorization must say so clearly and conspicuously.
  • Certify to the company from which you are getting the report that you:
  • notified the applicant and got their permission to get a background report;
  • complied with all of the FCRA requirements; and
  • will not discriminate against the applicant or employee, or otherwise misuse the information in violation of federal or state equal opportunity laws or regulations.

       C. Adverse Action and FCRA Requirements

“Adverse action” is a personnel action that is taken because of negative results obtained from a background check, and frequently encompasses such employment decisions as rescinding an offer of employment or terminating an existing employee. However, before proceeding with any “adverse action” the FCRA imposes certain requirements on employers:

  • Before taking adverse employment action, give the applicant or employee:
  • a notice that includes a copy of the consumer report relied on to make the employment decision; and
  • a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” which you should have received from the CRA that conducted the background check and provided the report.

By giving the person the notice in advance, the person has an opportunity to review the report and explain any negative information. After you take an adverse employment action, you must tell the applicant or employee (orally, in writing, or electronically):

  • that he or she was rejected because of information in the report;
  • the name, address, and phone number of CRA that produced the report;
  • that the CRA did not make the hiring decision, and cannot give specific reasons for the hiring decision; and
  • that he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the CRA within sixty (60) days.

      D. Revised FCRA Form

Stemming from a law passed in May 2018, the “Summary of Your Rights Under the Fair Credit Reporting Act” form was recently updated to include information about security freezes and fraud alerts, which was in response to high-profile data breaches. Previously, this form had last been revised in 2012.  The newly revised version can be used in combination with the 2012 form “so long as a separate page that contains the additional required information is provided in the same transmittal.”

      E. Background Checks Do Have Some Drawbacks

Employers certainly enjoy the additional information background checks often provide.  However, background checks come with a few inherent drawbacks.  First, reports from CRA’s are not always 100% accurate.  Employers therefore run the risk of making employment decisions on false information.  Second, if conducting checks on current employees, employers need to be prepared for the possibility that negative (and possibly termination worthy) information could be uncovered about even their best employees.  Lastly, CRA background reports can be expensive, and often make employees uncomfortable due concerns about their privacy. Employers thinking of implementing background checks in the employment process should first consider these potential drawbacks and whether proceeding makes sense for their organization as a whole.

      F. Conclusion

Background checks can often effectively weed out candidates and employees who are prone to violence, fraud, lying about their experience, embezzlement, and theft.  However, the information received from background reports cannot be used as a basis to unlawfully discriminate, and must be utilized in a fair and consistent fashion by employers. On the whole though, and when used appropriately, background screening is one tool that helps employers craft the best workforce possible. Due to the complex legal framework surrounding them, Employers wishing to incorporate background checks are well advised to review the requirements of the FCRA and enlist the services of a professional CRA to conduct the background checks to help ensure compliance.

For more information about the Fair Credit Reporting Act, including applicable forms and notices, go to www.consumerfinance.gov/learnmore.

C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only.

California’s Complicated HR Landscape

California’s Complicated HR Landscape

When envisioning California, you automatically think of warm sunny days, and happy people. However, that was not the case recently with one of our government contracting clients who called to tell us they had been awarded a new contract that would require them to place employees in California. As our client put it, “We are thrilled to have the new contract…but I just wish it wasn’t in California.” That is not an uncommon sentiment because California continues to lead the way in terms of creative (and often burdensome) HR requirements; and companies frequently struggle to meet their California compliance obligations. With that in mind, let’s tackle some of California’s interesting HR requirements.

A. California Leave Comes in Many Varieties

Today, the term “paid leave” refers to more than just the amount of company-sponsored vacation time an employee earns. California has over the years enacted a variety of leave laws (some paid, some not) that employers must navigate to ensure compliance.

Family and Medical Leave

Most everyone is familiar with the federal Family and Medical Leave Act (FMLA). California has two laws that mirror the federal FMLA. The California Family Rights Act (CFRA) requires employers with fifty (50) or more employees to provide eligible employees with up to 12 weeks of unpaid leave in a 12-month period. California’s New Parent Leave Act (NPLA), extends bonding leave rights to employees of smaller employers. As of January 1, 2018, employers with between 20 and 49 employees must provide eligible employees with up to 12 weeks of unpaid leave to bond with a new child.

Both laws have the same eligibility requirements as the federal FMLA: The employee must have worked for the employer for 12 months, have worked at least 1,250 hours in the year prior to the leave, and work at a location where the employer has at least 50 employees (or 20 under the New Parent Leave Act). But unlike the FMLA, the California laws also cover domestic partners and children of domestic partners.

Paid Sick Leave

In 2015, California enacted the Healthy Workplace, Healthy Families Act, requiring all employers to provide paid sick leave to their employees working in California, even if they work part-time. In general, employers must provide at least 24 hours (3 days) of paid sick leave a year. The days can either be accrued or available up front at the start of the year.

If accrued, employees accrue one hour of paid sick leave for every 30 hours worked and accruals must be carried over year to year. Employers can cap accruals a forty-eight (48) hours, or six (6) days, of sick paid leave a year.

Paid Disability and Family Leave

California has a state temporary disability insurance program, funded by withholding from employee paychecks. Eligible employees who are unable to work due to a temporary disability (including pregnancy) can receive up 60% or 70% of their normal pay, depending on the employee’s wages.

In addition, California also offers a paid family leave program, which allows eligible employees to collect the same benefits available for a temporary disability for up to six (6) weeks in order to bond with a new child or care for a seriously ill parent, spouse, domestic partner, child, sibling, grandparent, grandchild, or parent-in-law.

Pregnancy Disability Leave

Through the Department of Fair Employment and Housing (DFEH), employers with five (5) or more employees must participate in Pregnancy Disability Leave (PDL). This benefit allows a woman to use up to four (4) months of unpaid leave. In addition, the PDL can be used in conjunction with the 12 weeks of leave family and medical leave allowed through the CFRA. PDL eligibility requires 12 months of service with an employer, including 1,250 hours worked during the previous 12 months, and the leave request must be accompanied by medical authorization.

Small Necessities Leave

Another California leave option is unpaid small necessities leave (up to 40 hours annually) to visit your child’s school (grades 1 to 12 only). The time off must be requested with reasonable notice, and can be used for such things as finding or enrolling the employee’s child in a school, or participating in an activity sponsored by the school or a licensed child care provider. However, this benefit is only available to employees who work for an employer with twenty-five (25) or more employees working in the same location, and the leave can be no more than eight (8) hours in any calendar month. Employees must also first exhaust any existing vacation, personal leave, or compensatory time off that can be used for these purposes.

Time Off to Vote

California law requires employers to give their employees who do not have sufficient time outside of working hours up to two hours’ paid leave to go to the polls and vote. Employees must alert their employer of the intention to use the voting leave at least two (2) days prior; and the leave must be taken at the beginning or end of their shift, whichever takes the least amount of time, unless a different time is mutually agreed upon.

Domestic Violence Leave

All employers must allow employees to take unpaid leave to obtain a restraining order or seek other judicial relief from domestic violence involving the employee or the employee’s child. In addition, employers with at least twenty-five (25) employees must allow employees who are victims of domestic violence, sexual assault, or stalking to take time off to:

  • seek medical treatment;
  • obtain services from a rape crisis center or domestic violence shelter or program;
  • get counseling; or
  • engage in safety planning and/or relocate.

B. Employee Meal and Rest Breaks

California is one of only a handful of states that requires all employees to receive designated meal breaks during the day (or waive them in writing). The typical required meal period is a 30-minute unpaid break if the employee works more than five (5) hours, unless the employee’s workday is only six (6) hours long, then no meal break is required. A second unpaid meal period is required at the 10th hour of work if an employee’s shift lasts longer than ten (10) hours. The meal break is unpaid, so long as the employee is not working and is free to take care of personal matters not connected to his or her job. If the employer fails to allow the 30-minute meal break, the employee must be paid one (1) hour at their regular rate of compensation. (Note that employees in the motion picture industry are allowed a 30-minute break for every six (6) hours of work.)

California also mandates paid rest breaks during employees’ shifts. Employers must permit uninterrupted rest periods for all non-exempt employees whose total daily work time is at least 3.5 hours. These mandatory rest breaks must be offered at the rate of ten (10) minutes for every four (4) hours worked, or “major fraction” thereof. Anything over two hours is considered by the courts to be a “major fraction” of four (4) hours. Insofar as practicable, the rest period must be in the middle of the four-hour work period.

C. An Expansive List of Individuals Protected from Discrimination

Most employers are aware of the basic “protected categories” of individuals against whom they cannot discriminate when it comes to employment (e.g., race, gender, religion, disability, etc.). However, California’s Fair Employment and Housing Act (FEHA) identifies many protected categories, including: Ancestry, Age (40+), Color, Disability (physical and mental, HIV/AIDS status), Genetic Information, Gender Identity/Expression, Marital Status, Medical Condition (genetic characteristics, cancer medical history), Military or Veteran Status, National Origin (includes language use), Race, Religion (dress, and grooming practices), Sex/Gender (pregnancy related conditions), and Sexual Orientation. The state even went one step further in specifically addressing rights of Transgender people in the workplace by creating the Gender Recognition Act. As a result, California employers may not refuse to hire, terminate, or treat differently these classes of individuals when it comes to employment; and these protected categories should be included in any handbook or company policies regarding discrimination or harassment that pertain to California employees.

D. Sexual Harassment Training Required

California has further emphasized its anti-discrimination stance by mandating that employers of fifty (50) or more employees (including employers headquartered outside California) are required to provide supervisors who work within the state of California two (2) hours of sexual harassment training every two (2) years – provided however, an employee must receive training within six (6) months of becoming a supervisor. The trainer must have knowledge or expertise regarding harassment, and the training course must include: practical guidance and examples regarding the federal and state statutory provisions concerning the prohibition against, prevention and correction of both sexual and non-sexual harassment, discrimination, and retaliation along with remedies available to victims in employment; examples of abusive conduct; and instruction regarding harassment that is based on gender identity, expression, and sexual orientation.
As part and parcel of its training obligations, California employers must also have a written harassment, discrimination and retaliation prevention policy that is distributed to all employees. The policy must meet certain state requirements, which are set out by the state Labor Code and the FEHA. California employers must also post required notices from the Department of Fair Employment and Housing, and provide each employee with a sexual harassment information sheet at the time of hire.

E. Immigration Protections

Under the FEHA, employers are prohibited from discriminating against applicant(s) or employee(s) who possess a driver’s license, but are unable to prove that their presence in the United States is authorized under federal law (This runs counter to federal immigration law, so California employers should tread carefully here). California Labor Code section 90.2 requires employers to give a 72-hour written notice to an employee’s authorized representative if a state or federal agency wants to inspect the validity of the employee’s I-9. There’s also Senate Assembly Bill (SAB) No. 450 (took effect on January 1, 2018), which prohibits employers from voluntarily allowing Federal agents without a warrant from inspecting nonpublic areas for immigration enforcement. However, this provision has been temporarily enjoined by a California federal court, as it wades through a lawsuit filed by the Trump administration challenging the validity of SAB 450.

F. Conclusion

When it comes to California, the only constant is that changes to HR laws and regulations will continue to occur with regularity. California’s requirements are not only different from many states’ regulations, they impose significant, additional responsibilities upon employers with regards to policy requirements, notices to employees, training, and education. Employers who are unfamiliar with California’s HR landscape are well advised to seek experienced guidance to help them navigate the nuances and avoid compliance lapses. Unlike some states, California takes its HR requirements very seriously…and is not afraid to enforce them.

C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only

Performance Management Matters

Performance Management Matters

According to Gallup’s State of the American Workplace report, a majority of the U.S. workforce (51%) is not engaged with their work. And according to an Engagement Institute study, disengaged employees cost organizations between $450 and $550 billion annually. By contrast, engaged employees make it a point to show up to work and do more work — highly engaged business units realize a 41% reduction in absenteeism and a 17% increase in productivity. It should then come as no shock that employees who are disengaged with their work generally perform below their employers’ expectations.  However, effective performance management can often turn around underperforming, disengaged employees.

Recently, one of C2’s long-standing government contracting clients asked for some help addressing an organization-wide performance management concern. The client’s executive team had taken it upon themselves to gather the employee reviews for all company employees from the last two calendar years and organize them into three categories based on those reviews:  (a) below expectations, (b) meets expectations, and (c) exceeds expectations.   To the client’s surprise, they discovered that almost 18% of their workforce fell into the “below expectations” category.  The client wanted C2’s suggestions on how it should begin to address this issue.  While organizational solutions take time to implement and realize improvement, the process begins with a commitment from front line managers to train, mentor, and challenge employees on a regular, consistent basis.

  A.    Frequent Performance Management is Essential

According to research by Saba/WorkplaceTrends.com, 55% of employees feel as though the annual performance management appraisal process is not effective at helping them develop themselves and their abilities at work.  The question is then, why wait?  If an employee is struggling with performance, it makes little sense to wait several months to address the issue.  Conversely, if an employee performs well, telling them they performed well on a project can ring hollow when delivered months after the fact.  That’s why the first (and maybe the most important) step in effective performance management is for front line managers to deliver both praise and constructive criticism on a day in, day out basis.  Research statistics from Officevibe.com show that 82% of employees appreciate both positive and negative comments about their performance; and 43% of highly engaged employees receive feedback at least once a week.  Here are easy ways to give employees regular performance feedback:

  • Managers should correct mistakes or problems in employee work as they happen, and not wait until later;
  • Create a “carrot”: Challenge employees to meet certain metrics or goals and reward the highest performing employee(s) over a short period of performance (say, one month) with a “bonus” such as additional pay, time off, a gift certificate, etc.  This process can engage multiple employees at once and inherently requires regular performance feedback from managers;
  • Create a “stick”: Some employees respond better when faced with negative consequences.  It is ok to deliver the threat of negative consequences for employees who fail to meet expectations.  Obviously, the threat of termination always exists.  But smaller, yet meaningful sanctions can sometimes be effective at motivating employees to do better.  Detriments such as less desirable schedules or less desirable projects can often serve as motivation to improve;
  • Managers should “check in” with all their employees no less than weekly and spend a few minutes discussing with each employee what they have accomplished, and what the employee has yet to complete on his or her “to do” list. Just the act of having the discussion with an employee can motivate them to perform well because they know that someone is watching and is interested in their progress;
  • Be sure employees know and understand their assignments. It seems axiomatic, but managers must ensure that they are giving frequent and sufficiently detailed guidance to ensure employees understand their responsibilities; and
  • Do not wait six months or a year to engage with new hires. Early and frequent performance management can lay the groundwork for success.

  B.    The Annual Performance Review is Still a Useful Tool

According to Gallup, 26% of employees say their performance is evaluated less than once a year, while 48% say they are reviewed annually.  More frequent performance management is obviously needed, but that does not mean organizations should simply eliminate the once-a-year performance review.  Such reviews have developed into a formal, written process where all company employees are generally critiqued using the same set of criteria.  The annual review process is an opportunity for organization to provide employees with valuable feedback about their work, an opportunity (perhaps) for an increase in pay, and a chance for the organization to “take the pulse” of how all its employees are performing. However, annual reviews should never be a substitute for more frequent performance management communications.

In recent years, the annual review process has gotten a bad reputation as being a burden for managers who treat the process as rote, administrative paperwork rather than a meaningful opportunity to engage with their employees one-on-one about their performance.  That may be why according to Gallup analytics, only 14% of employees strongly agree that the performance reviews they receive inspire them to improve.  And the consensus among large employers is that the annual review process costs them millions of dollars each year, due to the time managers spend on the review process and the deminimus returns in increased employee productivity the review process creates.  In short, to provide value to both the employee as well as the organization the annual review needs to be a meaningful assessment of performance that is tailored to each employee’s role.  Here are a few tips to keep in mind:

  • Using a single form for all employees is fine; however, filling out the form with the same descriptive phrases for all employees is not productive. Managers need to meaningfully evaluate employees based their respective strengths and weaknesses;
  • Be honest in the feedback to employees – even if the feedback is negative. Many managers want to avoid conflict and tend to “sugar coat” the performance challenges.  That helps neither the employee nor the company;
  • Do annual reviews on employees’ respective anniversary dates, as opposed to doing them all at the end of each calendar year. Spreading out the reviews will decrease the chances that managers will feel pressure to complete them and rush through them without giving employees meaningful performance feedback;
  • Use the review process to deliver both praise and criticism – but be specific. Avoid relying on common adjectives (such as “great”, “poor”, “untimely”, etc.) and instead deliver fact-specific praise and criticism so that employees can clearly understand what they did right and how they can improve; and
  • Use the annual review as a guide that both manager and employee can revisit throughout the year to help manage performance and focus expectations.

  C.    Employee Discipline Compliments the Performance Management Process

 Employee discipline also plays a valuable role in the performance management process.  Employers typically view “performance management” as encompassing the annual review process, goal setting, coaching, training, mentoring, etc.  However, disciplining employees for rules violations, poor performance, behavioral challenges, and the like are an important part of the performance management process.  According to a study of more than 80 U.S.-based executives, failing to give poor performers appropriate corrective feedback costs organizations thousands of dollars per day.  And according to the research and advisory firm, the Center for Creative Leadership, studies show that employees actually appreciate constructive criticism of their performance – in some cases more so than they appreciate praise.  Thus, employers should not shy away from disciplining employees whose performance or behavior needs improvement.

During the disciplinary process the manager should explain to the employee in specific terms what needs to be improved.  The manager should also ask the employee what might be causing them to underperform. They may find that the employee does not have access to the tools they need or may need additional training.  Not all poor performance is attributable to an employee’s lack of diligence or effort.

The manager and employee should meet regularly to discuss the progress.  At the end of each progress meeting the manager should prepare a summary memo or email so that both sides can keep track of progress being made and shortfalls that still need to be addressed.  The disciplinary process should also allow a reasonable amount of time for the employee to improve as well as identify the consequences if the employee’s performance does not improve (i.e., written warning, Performance Improvement Plan, suspension, termination, etc.).

At the end of the disciplinary process period, if the employee is meeting expectations, the manager should give them a letter/memo to close out the disciplinary process but make it clear the employee’s performance will need to remain in good standing. In the unfortunate event the employee was not successful in improving their performance and disciplinary action or termination is warranted, the company can feel comfortable that it undertook its best effort to help the employee succeed.

  D.    The Bottom Line

Performance management is not just a once-a-year activity – it should be part of all managers’ regular responsibilities to his or her employees.  As far as C2’s client is concerned, it decided on a two-prong approach to address its survey findings.  The first step was to have managers meet with each of the employees in the 18% “below expectations” group and determine a plan of action for each to try and improve their performance within thirty (30) calendar days.  The second step was to implement a requirement for front line managers to engage with all of their respective employees on at least a weekly basis to discuss performance issues or answer employee questions about their assignments.  To ensure their managers’ compliance with this aspect, the client asked its managers provide a quarterly report about their employees’ performance and progress to the executive team.  This process should provide good results for the client moving forward.  But there is no one-size-fits-all solution.  Your organization’s size and structure will help inform the best type of performance management process to implement.  But the only sure way to succeed is to start the performance process now and not wait until you realize (as C2’s client did) that a large chunk of your workforce is underperforming.

 

C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only.

 

Addressing Absenteeism in Your Workforce

Addressing Absenteeism in Your Workforce

A client recently contacted us and wanted to discuss employee absenteeism. The client, a government contractor, had experienced a recent surge in employee absenteeism (for various reasons such as PTO, sick leave, call off’s, LWOP, etc.). Although the client did not want to broadly discourage employees from taking time off, such absenteeism directly affected their bottom line because when the employees missed work, they were not billable to the contract. The client wanted guidance on how to best address this conundrum and how to handle employees who had a pattern of unscheduled, excessive absences.

A)   All “Absenteeism” is Not Created Equal

Managing employees’ time away from work is a fact of life for any business; it is to some extent an unavoidable overhead cost that can vary from year to year.  However, not all absenteeism is avoidable.  By learning more about the causes of absenteeism and by better understanding employees’ motivations for missing work, employers can gain an understanding of how to reduce absenteeism among their workforce.

What is Absenteeism? Absenteeism is regularly used to describe employees’ absence from the workplace – sometimes planned, but often unplanned and unannounced. Most employees miss work on occasion, but it’s important to be able to identify a pattern of unscheduled absenteeism in the early stages. There are two basic types of absenteeism; scheduled absences and unscheduled absences.

  • Scheduled absences include things such as vacation, holidays, and foreseeable absences like maternity leave or surgical recovery. These absences are usually allowed by company policy (or state or federal law). They are scheduled in advance, and easier to prepare for so the effect on the company’s productivity is minimal. Even extended employee absences can be less impactful if managers and affected employees have an opportunity to properly prepare for the employee’s absence.
  • Unscheduled absences, also a form of absenteeism, is defined as chronic or habitual absences that are not protected by Federal and/or State regulations. These absences often do not comply with company policy and are not pre-approved. Unscheduled absences also include habitual tardiness or employees leaving work early on a regular basis without authorization.

Both scheduled and unscheduled absences can have a negative impact on your organization’s productivity. While some absenteeism is unavoidable among your workforce, minimizing its effect on your organization’s operations requires some preparation.

B)  Strategies to Mitigate the Effect of Employee Absenteeism

One of the most effective strategies to manage absenteeism is to clearly set attendance and leave of absence expectations among your employees by implementing a clearly defined attendance and leave of absence policy and communicating that policy to all new hires – and even periodically thereafter to current employees, as a friendly reminder. Your attendance policy should provide concrete attendance expectations, including a definition of the workday and hours; the amount of sick, personal, and vacation time allotted to employees; procedures for using the leave; whether employees are allowed to “go into the negative” on their paid leave; and whether the company allows employees to use leave without pay (“LWOP”).  The procedures should outline how far in advance employees must notify their supervisors of their intention to take time off, and that those requests will be approved (or not) based on the business and operational needs of the company. For example, the need for work coverage during the summer or over holidays means that not everybody’s leave request may be granted.

The policy should also explain the procedures for calling in sick, including whom to contact, by what means (i.e., phone, e-mail, text) and by what time on a given day. Finally, note which absences will be paid and which ones will be unpaid.

In larger organizations, immediate supervisors are often the first to become aware of employee absences – particularly if they start to become excessive. Supervisors are in the right position to understand the reasons regarding an individual’s absence and to catch any problems at an early stage. Therefore, their active involvement in the company’s absenteeism procedures is pivotal to the overall effectiveness of an absenteeism policy or program. To ensure that supervisors are comfortable and well versed in their role of managing absenteeism, they need to have the full support of senior management. Therefore, they should be fully trained on the company attendance and leave policies.

Another option supervisors can employ to combat Absenteeism is to conduct a return to work interview. Recent national surveys indicate that these interviews are regarded as one of the most effective tools for managing Absenteeism. Return to work interviews are designed to welcome the employee back to work, get a general idea of the employee’s well-being, and to have the employee or supervisor fill out any required paper work that may be required to restore the employee to active status. Some companies have found that an established procedure through which it can directly discuss absences with an employee can, on its own, act as a deterrent to absenteeism.

Some companies choose the “carrot” approach, and reward good attendance. For example, a company might give employees a bonus for having no unplanned absences for a defined amount of time. Good attendance can also be incorporated into the annual performance appraisal  process and be one of the metrics used to evaluate whether a merit increase is warranted.

Lastly, let’s not forget that absenteeism is sometimes legitimately due to a hardship in an employee’s personal life.  Offering the employee support, through an EAP program for example, may help the employee deal more expeditiously with personal issues that are affecting their attendance. While EAP’s or other types of company programs are traditionally viewed as a benefit for the employee, they also have the added benefit to the company of returning absent employees to the workplace sooner than they might have otherwise without the assistance program.

C)  Be Proactive, Not Reactive

In order for an organization to address absenteeism, it needs a committed and engaged workforce.  One way to foster commitment and engagement is by setting clear expectations and providing a support system. With regards to our government contracting client, C2 was able help the client improve its existing attendance policy so that all employees and managers were “on the same page” about attendance expectations and the types and amounts of leave available to employees.  Another great proactive approach is to provide your supervisors training on how to handle employee absenteeism, including making sure that all supervisors are familiar with the types of leave available to company employees, and that they are educated on some best practices to help them navigate absenteeism issues with more confidence and in a manner that promotes employee attendance.  Although there is no magic bullet to eliminating unwanted employee absenteeism, there are certainly steps that companies can take to help mitigate its frequency and affect on their overall operations.

 

C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only.

Is Telecommuting The Key To An  Improved Workforce?

Is Telecommuting The Key To An Improved Workforce?

Recently “Emily”, an HR Manager at one of C2’s government contracting clients implemented an anonymous “suggestion box” to obtain employees’ ideas on how to enhance the company’s benefit offerings.  She discovered that a majority of respondents wanted the option to telecommute at least part of the time.  But before going to her management team to present the idea, Emily came to C2 for guidance on some of the benefits and pitfalls of telecommuting.

A.     What Does it Mean to Telecommute?

 Telecommuting, working remotely, work-at-home, or being a “virtual” employee are all terms that companies use somewhat interchangeably across a broad spectrum of industries. As a general matter, all of these terms mean the act of working at a location other than the company’s office or worksite, often at home, rather than commuting everyday to and from an office.  A growing number of companies are allowing employees in certain positions to telecommute on a full-time basis.  However, on average, companies allow employees to telecommute one to three days per week and report to the office the remaining days.  Obviously, the nature of a company’s business plays a tremendous role in the feasibility and amount of telecommuting that makes sense.  For example, non-exempt employees at a manufacturing company will be far less able to telecommute than salaried, exempt office employees of a software company.

B.     What are the Potential Benefits to Telecommuting?

Companies across the board have experienced mixed results with telecommuting practices.  But there are some potential benefits that continue to peak employers’ curiosity about its viability at their organization, including the following:

  1. Employee productivity increases with flexibility in work hours and location;
  2. Flexible work options reduce absenteeism;
  3. Telecommuting is eco-friendly and cost-effective, because less office space is needed; and
  4. Flexible work options increase employee retention and is a positive recruiting tool.

Improved Productivity. Employees have reported that they are more effective at home than when they work out of the office.  The primary reason they cite is that the seemingly endless interruptions at the office create a work pattern that is subject to repeated restarts, which increases the time it takes to complete tasks.   The additional aspect of socializing with other employees is also frequently cited as having a negative effect on productivity.

Reduced Absenteeism.  Telecommuters may be more productive because they have increased flexibility to schedule their actual working time. They have some flexibility to work during their most effective periods or navigate around other demands in their lives that would normally require them to be out of the office.  For example, some individuals are morning people, others are more productive at night.  A telecommuter may be able to better balance their work with personal demands in their lives (e.g., children, school).  And while telecommuting should not be a substitute for child care, it can afford employees greater flexibility in scheduling this type of care.

Telecommuting is also useful in minimizing the impacts of other occurrences, such as extremely inclement weather, highway construction, or special events (e.g., the Olympics).  In the Snow Belt, “snow days” at local schools force many parents to stay at home, rather than go to work, in order to supervise children usually at school.  And even employees without children can find it difficult to even get to the office.  These interruptions play havoc with deadlines and deliverables.  Organizations with telecommuting programs in place often find that employee productivity remains high during these times.

Overhead Savings.  Organizations with well-planned telecommuting programs have found they are able to reduce the size of their office and furnishing requirements for employees.  In addition to utilizing less square feet (and paying less rent), some companies have adopted office sharing arrangements whereby two or more employees share an office because they work outside the office part of the time.  This does require the company to schedule the use of office space, but the cost savings on office space often makes up for this additional administrative task. Some companies have chosen to create revolving work stations.  Employees are not assigned to a work station but may choose their work space upon arrival at the office.  As such employees are not “married” to their desks, office, or cubicle. Instead they “check-in” on days when they commute to work.   Some organizations have reported up to 30% reductions in overhead by allowing some personnel to telecommute.

Improved Retention and Recruiting.  Employees who have tried telecommuting tend to prefer it and tend to seek out similar opportunities at other companies when looking for new employment.  Employers are also realizing that telecommuting is a way to keep talented employees from “jumping ship” or who, for various personal reasons, find that they can no longer commute to the office.  A common example is when the spouse of a valuable employee is forced to relocate.  Companies are learning they can often retain the employee through the use of telecommuting.

Telecommuting is also a mechanism for recruiting persons with disabilities.  These may be individuals who are excluded from the work force solely on the basis of their inability to commute to and from an office.  (Companies who have employees with disabilities as telecommuters should take care to provide for some social interaction among all their employees.)

C.     There are Some Drawbacks to Telecommuting

Not every company sings the praises of telecommuting.  Contrary to employees’ assertions, some companies feel productivity actually decreases among telecommuting employees.  Also, allowing employees to work remotely (particularly on a large scale) can create unintended problems and raise concerns that companies need to adequately resolve before deciding to make telecommuting an option for their employees.  Some of the potential drawbacks include the following:

  1. Employee productivity actually decreases;
  2. Working remotely allows for abuse of vacation and sick leave;
  3. Supplying office equipment, and worker’s compensation insurance; and
  4. Telecommuting is too difficult to implement for non-exempt, hourly employees.

Decreased Productivity.  Some companies disagree that telecommuting creates increased productivity among employees.  One common problem that many companies point to is that employees who work remotely tend to get distracted by outside demands on their time that they would otherwise put off until after work or their day off if they were coming into an office every day.  Everything from kids, to pets, to doctors’ appointments, to appliance repairmen are thought to detract from employees’ productivity by creating distractions that are not present at an office.

Abuse of Paid Leave.  When employees work from home, they are able to incorporate into their day some things that they would have otherwise had to take vacation or sick time to cover.  Doctor’s visits, school meetings, home repair visits, car service appointments, etc. are just some of the tasks that telecommuting employees can do during their day without taking paid leave.  An employee who works from the company’s office would ordinarily have to take vacation or sick leave to accomplish these things during the business day.  While companies can try to make telecommuting employees use their PTO for such things, monitoring their whereabouts when they are not in the office is not always easy.

Creating a Viable Remote Office.   Companies who allow employees to work from home are still obligated to provide them a safe environment from which to perform their duties.  Furthermore, employers should check with their insurance carrier as to whether their workers’ compensation coverage will apply to their employees’ home office.  Companies often utilize a formal agreement to iron out employee safety and insurance issues – sometimes even requiring the employee to attest in the agreement that her home work space contains certain items (i.e., ergonomically sufficient desk and chair, sufficient lighting, a room or space designated solely as an office, etc.).  Another oft cited concern by companies is that supplying office equipment to telecommuting employees can be a hassle and often results in loss of the items when an employee departs the company.  In other words, it is far more likely a company will recoup all the company property from an employee’s office that is located at the company’s worksite as opposed to being located in the employee’s home.

Monitoring Non-Exempt Employees’ Time.  By all accounts, telecommuting seems to work better for exempt employees than non-exempt employees.  Exempt employees do not necessarily need to punch a “time clock” and their pay is not driven by the precise number of hours they work during any given day or week.  By contrast, non-exempt employees only get paid for hours they actually work – and therein lies the rub.  Many companies find it difficult to monitor the hours “actually worked” by non-exempt employees who telecommute.  Certainly, many companies today have electronic time keeping systems where employees can “clock in” and “clock out” using a computer or even a cellphone.  But some companies believe that allowing non-exempt employees the option to telecommute invites “time card fraud,” because there is no consistent means to monitor whether a non-exempt employee is working when they are not in the office.

D.     The End Result for Employers

There are undoubtedly pros and cons to allowing employees to telecommute.  Whether it makes sense for any particular organization to implement a telecommuting program for some or all of its employees requires an individualized assessment of many factors, including the type of work the company performs, the makeup of its workforce, the practices of its competitors in the market, and whether the company thinks it can reap any overhead savings or other tangible benefit (as opposed to simply providing the employees an additional benefit program). Those companies that decide to utilize some form of telecommuting arrangement for its employees are well advised to create appropriate handbook policies, agreements, and other written parameters so that both the company and the employees are all on the same page.

C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only.

 

Workplace Violence – Is Your Company Prepared?

Workplace Violence – Is Your Company Prepared?

Workplace violence is a major concern for both employers and employees. Not only does it adversely affect the victims of violence, but it can undermine employee morale, cause good employees to leave, adversely impact employee performance, and even negatively affect employers’ bottom line. Unfortunately, since workplace violence can occur in any workplace, all employers should understand how best to prepare for and respond to this impending threat.

C2 recently confronted this issue when an employee of one of our government contracting clients complained that a co-worker in her workplace was exhibiting aggressive behavior. The employee was concerned because the co-worker had shown a short-fuse during recent encounters, had slammed his hand in frustration a few times, and the employee was feeling nervous and upset on a continuing basis.  Both the client and the employee wanted to know what could be done.

  A.  What is Workplace Violence?

 According to the Occupational Safety and Health Administration, workplace violence consists of any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at the work site. It can range from verbal threats and abuse to actual physical assaults and even homicide; and can involve not just employees, but also clients, customers, or visitors.

Each year, nearly two million American workers report having been victims of workplace violence.  Researchers have identified factors that may increase the risk of violence for certain workers and worksites. Working alone or in isolated areas may contribute to the potential for violence. Additionally, the time of day and location of work, such as working late at night or in areas with high crime rates, are also risk factors that should be considered when addressing issues of workplace violence. Jobs or worksites with a high stress level also appear to be contributing factors that increase the risk for workplace violence.

According to the National Institute for Occupational Safety and Health, workplace violence falls into four categories: Criminal intent, customer/client, worker-on-worker, and personal relationships, which overwhelmingly affects women. Statistics for workplace violence-related injuries and deaths occurring during 2013, categorized by industry, include the following:

  • Government: 37,110 injuries, 128 deaths
  • Education and health services: 22,590 injuries, 35 deaths
  • Professional and Business Services: 4,460 injuries, 65 deaths
  • Financial activities: 1,100 injuries, 37 deaths
  • Transportation and warehousing: 840 injuries, 71 deaths

  B.  What can my company do to be prepared for workplace violence?

It is not enough for employers to simply know whether their worksites are statistically more likely to suffer an incident of violence. Employers should educate and train their managers on how best to handle violent situations if they occur.  Employees should also receive education and training on how to avoid, recognize, and if necessary report violence in the workplace.  While every company and worksite are a little different, the following is a good starting point for any employer:

  1. Educate employees about the organization’s zero tolerance policy. A good zero tolerance policy clearly establishes that violence or threats of violence will not be tolerated at the workplace. Make sure you communicate the policy to your employees. It is critical that employees understand that they should report any concerns regarding incidences of workplace violence. Additionally, train supervisors and employees that reporting unusual behavior to Human Resources is the best initial step.
  2. Enforce the organization’s policy and report violations. Treat everyone the same. For example, if you write up one employee for a questionable outburst at work, that should be your practice for other employees who commit similar infractions. Consistency and fairness in enforcing policies will help illustrate to your employees that your zero tolerance policy is more than just words on a page.
  3. Secure your workplace. Make sure to keep your employees as secure as possible. This may mean checking that all doors are properly locked or that security cameras are functioning. If you are aware of any malfunctioning security equipment or any potentially vulnerable areas at the workplace, you should immediately report your findings to the appropriate person. In today’s world, keeping unwelcome intruders out of the workplace has become increasingly important.  Other good security related practices include: publishing to employees the location of safety equipment and first aid kits, designating specific person(s) to account for members of their work group or department, providing easy access to a phone to contact emergency personnel, and making the list of contacts readily available for employees to refer to in case of an emergency.
  4. Create a culture of respect and tolerance. Make sure your managers set the example. If you become easily outraged or yell at employees, then you may unwittingly inspire other managers or employees to emulate you. A climate that tolerates or fosters needlessly aggressive behavior can increase tensions and thereby increase the risk of violence. Strive to create the type of environment that cultivates goal-oriented creativity and a shared sense of business purpose.
  5. Identify and Reduce Stress. Review employee qualifications to ensure they match job requirements; and make sure employees are not overworked vis-a-vie their co-workers.  Employees experiencing a build-up of workplace stressors may be at increased risk for acts of aggression or violence.  Managers should routinely talk with their employees about their job tasks and make sure that work is distributed in an equitable fashion across their team.

  C.  Impacts to Government Contractors

 Workplace violence has the potential to impact federal government contractors in a couple of unique ways.  First, an employee who verbalizes threats or actually commits an act of violence against someone else (even if it is outside of work) may jeopardize his security clearance level or may be asked by the government to not return to the worksite, which can leave the employer in a serious staffing bind.  More significantly for the company’s bottom line, prime and subcontracts may contain cancellation or termination provisions that may be invoked by the client or the prime contractor in cases where crimes are committed or violent acts threaten the integrity of the work being performed on the contract.

  D.  Conclusion

With regards to our client, we were able to walk them through the process of reinforcing their zero-tolerance policy, training their employees, and counseling the co-worker who was exhibiting aggressive behavior.  But unfortunately, there is no one-size-fits-all solution to eliminate workplace violence. At a minimum, employers should do more than assume it could never happen to them and, instead, craft a reasonable plan to educate, train, and support their employees so that workplace violence has less of an opportunity to rear its ugly head.

C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only.

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Gertie

Kevin McCoy

General Counsel

 

Mr. McCoy serves as C2’s General Counsel, managing the overall legal needs of the company. Mr. McCoy also works closely with the company’s HR teams who provide strategic advice to clients on a myriad of human resources related matters. Mr. McCoy came to C2 as an experienced labor and employment attorney, having served as a Partner in two different D.C. area law firms that specialize exclusively in management-side labor and employment law. Mr. McCoy likes to problem solve, and enjoys helping his clients work through the legal challenges of operating a large multi-jurisdictional HR outsourcing company.

After graduating with a degree in Philosophy from Emory & Henry College in Southern Virginia, Mr. McCoy earned his law degree from Valparaiso University School of Law. Mr. McCoy began his legal career as a judicial law clerk to judges on two different intermediate courts of appeal before settling in the D.C. region.


Gertie

Gertie Fields

Director of Payroll & Administration

 

Ms. Fields manages C2’s Payroll Services team, charged with ensuring that all client payroll processing is timely and accurate. She is responsible for all aspects of client payroll accounting and financial reporting functions, including preparation of payroll audits. She manages the processing of multi-state payrolls, new hire reporting, and transmission of ACH files, and ensures that payrolls are accurate and fully compliant.

More importantly, Ms. Fields and her team pride themselves on proactively identifying potential payroll issues for clients before they become a problem. She has been with C2 since 1998, and has directed all aspects of Payroll Services. She holds a bachelors’ degree in Business Administration with a concentration in Acquisition and Contract Management.


Sharon

Sharon Liotta

Chief Financial Officer

 

Ms. Liotta brought her 20-years of accounting management experience to C2 when she joined the company in 2000. As CFO, she directs and oversees all financial activities of the corporation including preparation of financial reports as well as summaries and forecasts for future business growth and general economic outlook. She is responsible for business and financial strategy and planning, monitoring, and management and reporting, including management and development of policies, systems, processes and personnel involved. Ms. Liotta directs the accounting staff to ensure that exceptional internal auditing and financial controls are maintained.

Ms. Liotta earned a Bachelor of Science degree in Business Administration from George Mason University with undergraduate studies at Clemson University.


HR-CEO

Jackie Asencio

President & CEO 

 

Ms. Asencio is President and CEO of C2 Essentials, Inc., one of the region’s leading human capital management service providers. With more than 30 years’ experience, Ms. Asencio has been a major influence in helping small to mid-size government contractors grow and compete in the federal marketplace. C2 Essentials has successfully provided clients with a competitive edge through cost-effective HR outsourcing. Ms. Asencio recognizes that federal contractors are increasingly forced to reduce their costs due to pricing pressure. C2 Essentials becomes a strategic partner to its clients to help reduce their overhead and fringe dollars, while providing a robust HR expertise that enables clients to achieve HR compliance in an increasingly complex regulatory environment. HR outsourcing solutions are focused on the client’s mission, both CONUS and OCONUS.

As a seasoned trainer and coach, Ms. Asencio works closely with business owners ensuring their human capital management strategies are aligned to their business goals. Ms. Asencio has extensive experience in full life cycle recruiting, talent management, succession planning, career development, reward and recognition strategies, performance management, regulatory compliance, compensation, benefits, risk management, and outplacement services. Prior to founding C2 Essentials, Ms. Asencio provided human capital management support to Department of Defense and various civilian agencies.

Ms. Asencio believes in giving back to the community, her philanthropic activities have included supporting Operation Homefront, Wounded Warriors, Boulder Crest Retreat, The National Veterans Institute for Procurement, and local families in need. Ms. Asencio has received the Sister Eymard Gallagher Award for Corporate Social Responsibility and was a finalist for The Dr. J.P. London Award for Promoting Ethical Behavior for the Human Resources Leadership Awards (HRLA) of Greater Washington.


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