Issue link: https://www.e-digitaleditions.com/i/92325
Errors continued mentation to support the decision, the Unemployment Commission will list it as a "Discharge Without Cause" and the employee will be eligible to receive a minimum of 26 weeks of unemploy- ment benefits and could receive up to 99 weeks. That is $45,000 in some states. When you dip into your unemploy- ment account, your tax rate will rise as your reserves go down. If you are cur- rently paying 3 percent of the first $8,000 for each employee ($240 per employee), you may receive a revised rate of 5 percent. The cost of each employee will be $400.00. Your deci- sion with one employee will affect the cost of every employee. It is far less expensive to develop a performance management system that allows you to meet with employees regularly and have an honest discussion about per- formance issues that you can docu- ment. Creating such a system is with- in the expertise of every business owner and senior manager. It is the key to protecting the unemployment account balance. Terminating "at-will" is not free. No Restrictive Covenants When a small distributor explained to me one month ago that his sales manag- er and sales representative left suddenly, took all of the company's price lists and customer lists, then set up a business and began selling to his customers, I asked the obvious question, "Did you have a non-compete and confidentiality agree- ment?" The answer was, "no. " In addi- tion, there was no handbook. Why? He explained that he has a small company with no HR Department and he couldn't afford to have all of the things big com- panies have. He is wrong, of course, and he was also in panic mode because he also had no technology policy about downloading company information onto personal computers and both employees left with all of the company 's information. He no longer has a human resources issue; he has a legal problem. The non-compete and confidentiality agreements are neither difficult nor expensive. THEY ARE NOT A WASTE OF 44 FEDA News & Views When a small distributor explained to me one month ago that his sales manager and sales representative left suddenly, took all of the company's price lists and customer lists, then set up a business and began selling to his customers, I asked the obvious question. TIME. They are not as easy as fill-in-the- blanks, but close. Once you know the ground rules, you can make them stick and protect what you have worked for all of your life. The following are a few tips to follow when creating non-com- pete and confidentiality agreements: 1. Create a confidentiality policy that applies into perpetuity. It applies to everyone, even when they leave your company. 2. Make certain your non-compete is reasonable. I have seen non-competes enforced that cover a reasonable geo- graphic area (500 miles), or a specific list of customers, and are for a reasonable period of time (one year). If you try to create a non-compete that prevents the employee from getting a job, you can expect the court to throw it out. 3. Be certain the non-compete is signed before the employee starts work- ing. If the non-compete is signed after the employee starts working, and there is no incentive to sign it (such as a cash bonus), then it may be challenged later. After all, it is a contract and there must be "consideration. weapons, sexual harassment, violence, threats, theft, reporting time, etc. Be cer- tain to have every employee sign for a copy. Use a template if you need to— we have them at our website www.hrenterprise.com. They are very inexpensive and they have exactly what you need to meet the basics. While creating policies and proce- dures is not completely free, the cost is greatly reduced if you have a template to get you started and it is much less expensive than the alternative. Ignoring Pay Practices Laws There were 30,000 wage and hour complaints filed with the US Depart- ment of Labor Wage and Hour Division last year. This is more than all other dis- crimination complaints combined. The number of wage and hour complaints has grown by 400 percent over the last five years. There are two major areas that managers ignore when making pay deci- sions—employee status and overtime. Both are expensive to fix. The law covers whether you pay " In non-legalese, it means there must be something gained by both sides. If the company gets the promise not to compete, then the employee gets something in return. If the employee is already working, we can't say the employee gets a job. A few employers brag and say they told their employees they get to "keep" the job, but I would not count on getting a judge with a sense of humor. Some lawyers will boast of their ability to break a non- compete. My response is, "Go for it; lawyers cost money. We do not intend to make it easy for you to take our business just because you had someone tell you they can break a non-compete. " 4. Create a handbook. It does not need to be an all-inclusive document. Be certain to include the things that matter most—confidentiality, ethics, technology, attendance, drugs, alcohol, overtime to an employee and it is not flexible. Basically, it is based on the "scope of the work. " There are many rules, but the decision can never be based on whether the employer and the employee agree that the employee will be placed on a salary without overtime or whether the employer decides the employee will be placed on salary to avoid overtime pay. If the employee does not qualify to be exempt from overtime under the law, then the employee must be paid overtime. The Department of Labor will investigate, make a decision and demand overtime for as much as three years, plus dam- ages. They may also check the records of every employee in the company— even if only one employee complains. Frequently, they look at two positions very closely: administrative assistant continued on page 46