You wouldn’t expect a builder to create a structure without a blueprint. Nor would you expect your employees to succeed in their jobs without a clear picture of what you expect from them. Taking the time to ensure you’ve established a mutual understanding of expectations is actually essential if you want to employ workers who follow the rules of your establishment, get along with each other, and perform their jobs admirably.
Your employee handbook can support you in this endeavor—if you draft one that covers all the bases. Consider the following 10 policies every employee handbook should cover. Some will help your team perform at their best, while others will protect you should one of your workers ever file a claim against you.
The “At-Will” Employment Policy. This policy explains that you—or your worker—can terminate his or her employment with your company at any time and for any (lawful) reason.
The Nondiscrimination and Harassment Policy. It’s important that your employee handbook takes a zero tolerance stance on discrimination and harassment. It should state that management will always take such complaints seriously and will never retaliate against the reporting parting. Don’t forget to describe options for reporting violations and consequences should an employee violate the policy.
Immigration Law Policy. Include wording in your handbook regarding your company’s commitment to only hire individuals who can legally work in the U.S. Outline the employment eligibility verification rules your organization follows.
Employment Classification Policy. Whether workers are defined as full- or part-time, exempt or nonexempt, determines their eligibility for overtime pay and some company benefits (such as employer-sponsored health insurance). Define these categories of workers within your employee handbook.
Time Off and Employee Leave Policy. Describe the rules for accruing and using vacation time and sick time. List any holidays for which your employees will receive pay. Clearly outline the steps your workers need to take to request time off as well as note whether unused time will carry over from year to year.
Meal and Break Policy. If an employee works more than a certain number of hours, employment laws dictate they must receive breaks and meal periods. Make sure your employee handbook covers these details as well as any related restrictions.
Timekeeping and Payday Policy. Your employee handbook should describe the rules and methods for recording time worked. It should also cover paydays, ways in which employees can receive their pay (check, direct deposit, etc.), and how final pay will be handled should you need to terminate an employee.
Safety Policy. Whether you’re running a small office or a large warehouse, your employee handbook should cover important safety and emergency procedures as well as the rules your workers must follow regarding reporting on-the-job injuries and accidents.
Attendance Policy. It will be difficult to reprimand an employee for tardiness, early departure or missed days of work if your employee handbook doesn’t cover your policies on attendance and punctuality. It may also be helpful to clearly define “excessive absenteeism” and the steps a worker must take to report a possible late arrival or unscheduled day away.
Employee Conduct Policy. Outline the standard of conduct you expect from your workers when it comes to drug and alcohol use/abuse, workplace violence, confidentiality, conflicts of interest and other common issues.
A comprehensive employee handbook will cover these essential topics (and more). If you’d like assistance drafting one—or want a third-party review of the employee handbook you’ve already created—we’re here to help.
According to the Society for Human Resource Management (SHRM), 50 percent of our nation’s hourly workers will leave a new job within the first four months. Half of outside hires placed in senior positions fail at their jobs within 18 months. Both statistics describe costly situations; a review of related studies conducted by the Center for American Progress found it costs a business an average of 20 percent of the worker’s salary to replace an employee who earns $75,000 or less a year.
Fortunately, the right onboarding process—starting before that first day on the job—can decrease expensive turnover as well as improve the satisfaction, commitment and performance of any new employee. Consider the following ways to improve onboarding at your organization.
Running a business—whether large or small—comes with a lot of responsibilities. Not least among them is the duty to deal correctly with payroll taxes—from withholding federal and state income taxes when paying employees to contributing your share of FICA and ensuring unemployment taxes are paid. Unfortunately, it’s rather easy to make mistakes, and the penalties for missteps can be quite great. Here are a few of the most common payroll tax errors you should avoid.
Most businesses want to minimize their costs, and payroll taxes and employee benefits expenses can take a real bite out of the bottom line. This can make it tempting to classify some employees as independent contractors—even if they don’t actually meet the definition. If you have control over when, where or how they complete their work (requiring them to work out of your office or work set hours, for example), they are not independent contractors. You can learn more about worker classification on the IRS website.
If you regularly reimburse employees for travel, tools or other costs related to your business and their work, an “accountable plan” is the only way to avoid wasting employment tax dollars. It allows you to deduct these expenses from your business taxes while avoiding paying payroll taxes on the reimbursements. Your employees won’t pay taxes on them either. You can learn more about the requirements of these formal reimbursement plans on the IRS website.
Every business with employees—or that uses independent contractors—must maintain payroll records. This usually includes time sheets and payroll tax documentation as well as copies of W-2s and I-9s. You must store these records for at least four years and be ready to present them for IRS inspection should the need arise. You can learn more about maintaining payroll records on the NOLO website.
It doesn’t matter if your business is incorporated or is legally classified as a limited liability company; as the business owner, you are liable for the money withheld from your employees’ wages for the payment of their state, federal and FICA taxes. You should never use these funds to pay rent, utilities or any other business expenses—even if your company is in a dire financial situation. If you do so, you will incur the Trust Fund Recovery Penalty. Learn more about it on the IRS website.
Sure, hiring an outside payroll company to handle all the details of withholdings and payroll taxes can help you save time. However, should the company you enlist make an accidental or deliberate error, you’re still the liable party. For the best protection review your payroll account monthly and monitor tax payments to ensure the company has made them in a timely manner and for the correct amount.
When you think of employee “wellbeing,” what comes to mind? Many employers associate the word with physical health, i.e. how many sick days their employees take, how much they have to pay for their healthcare, and how both of those factors impact the bottom line. But wellbeing actually encompasses a whole lot more. According to Dictionary.com, it means “A good or satisfactory condition of existence; a state characterized by health, happiness and prosperity.”
Some organizations have begun to recognize the difference and are capitalizing on it. A recent article on the topic quoted Tom Rath, co-author of the bestselling book “Wellbeing.” “The most successful organizations are now turning their attention to employee wellbeing as a way to gain emotional, financial and competitive advantage,” he said. While physical wellness is one aspect of wellbeing, these organizations are focusing on myriad factors including the cognitive and psychological needs of their workforce.
If you’d like to improve total wellbeing in your organization, consider these six dimensions as well as how you can design a program to address them.
You don’t have to make huge, sweeping changes to your workplace to promote these essential dimensions of wellbeing. Even small adjustments can have a big impact on job satisfaction, employee retention, productivity and physical health. If you’d like additional information or assistance, contact me today.
Engaged employees are enthusiastic about their work. They do their best to contribute positively to their employer’s reputation and the achievement of company goals. They don’t make excuses, take excessive time away from the office, or often say, “That’s not my job.” Unfortunately, engaged employees are also fairly rare. According to a study conducted by Dale Carnegie Training, 71 percent of employees are not fully engaged. Employment experts consider the following the five biggest causes.
Since the Great Recession, many employees feel they no longer have job security. They’ve seen staff cuts, and their managers have asked them to work harder to compensate—generally without any additional earnings. There is a sense that their employer is holding all of the cards, and they have little to no room to bargain for what they want. They may jump ship to a competitor for a minimal increase in pay or decrease in workload as a result.
According to a study by Towers Watson, less than 40 percent of employees have any confidence in the senior leadership at their employing organization. Executives have told them too many lies (such as “our company is doing great” right before mass layoffs), and they have developed a wait and see attitude as a result. It’s difficult to feel engaged in the future of the company when you no longer trust or believe in the individuals leading it.
Today’s workplaces are in the midst of a demographic shift. Baby Boomers are retiring, Generation X employees are struggling to balance their work and home life under increasing pressures, and Millennials are moving in. They’re bringing their impatience with them. Many Millennials expect to move up the corporate ladder quickly, and they will move on if an employer does not meet this expectation. In fact, they spend an average of only 3.2 years in any one job.
Corporate organization has changed little since the 1950s. Most of the decision-making still happens at the top—with the c-suite executives and company owners—and employees on the ground floor rarely have any control over the way the business runs. When an employee who has an idea for improving workflow or another aspect of the company feels powerless to affect change—or sometimes even get their idea to someone who can—it easily leads to disengagement.
Many companies operate with a 24/7/365 mindset. Their employees are always on the job and never quite feel like they can shut down to unwind. This increases stress, affects their health, undermines their relationships and basically obliterates any work-life balance they could have. It also causes them to feel disengaged. In one study, 80 percent of employees said that a flexible work schedule is essential to achieving a positive work-life balance.
You hire a graphic designer to work in your office on a short-term project and pay him as an independent contractor rather than a temporary employee. Your bookkeeper—whose workflow you also direct and control—asks to work from home, so you pay her as a freelancer. You’re now guilty of employee misclassification—whether you intended to break labor laws or not.
Since the onset of the Great Recession, the Department of Labor (DOL) and the Internal Revenue Service (IRS) have seen a surge in worker misclassification. With the rollout of the employer-sponsored insurance mandate under the Affordable Care Act (ACA), they expect to see even more—as companies deliberately misclassify employees as independent, temporary or contingent workers in order to come in under the full-time employee limit requiring coverage.
According to the National Employment Law Project, 10 to 30 percent of employers—possibly even more—misclassified employees as independent contractors in 2012. This is equal to millions of misclassifications and billions of dollars in lost tax revenue for state and federal governments. They want that money back, and they’ve stepped up their litigation and enforcement efforts as a result. But that’s not all; in addition to various federal and state penalties an employer may have to pay, there is the potential for expensive individual and class action lawsuits.
Consider the case of Vizcaino v. Microsoft. Initially, the IRS discovered that Microsoft was misclassifying temporary employees as independent contractors and ordered them to correct this error. Microsoft complied, reclassifying its workers according to the law—and in some cases, assigning them to temporary staffing agencies. The term “temporary” implies a short duration of time. However, many of these so-called temps had worked with the organization for years. They decided to sue Microsoft for equal treatment with the “permanent” employees—including the benefit plan with stock purchase options. Microsoft ended up settling the case for $97 million dollars. This was in addition to the millions they had to pay in back payroll taxes.
According to the National Council on Compensation Insurance, the frequency of workers compensation lost-time claims saw a 2 percent decline in accident year 2013 when compared to 2012. However, these claims still create a financial burden for employers. In fact, according to the National Academy of Social Insurance, workers comp insurance paid out $60.2 billion in total benefits in 2011—and total costs to employers reached $77.1 billion. While workers compensation insurance laws vary by state, most require business owners with employees to purchase coverage. Fortunately, there are actions you can take to reduce the chances that your own workers will file costly claims.
If you have not yet done so, develop a comprehensive written safety program. When you improve the safety of your workplace, fewer accidents will occur. This means there will be fewer claims increasing your workers compensation insurance rate.
Your program should include regularly scheduled safety meetings, periodic retraining plans and a clear description of the disciplinary actions you will take if employees violate the workplace safety rules. It’s essential that your managers and supervisors commit to enforcing the program and reinforcing its importance with your employees.
If one of your employees sustains an injury on the job, complete an accident report as soon as possible. Include as much detail as you can, including photographs of the scene and witness accounts. Send this report to your workers comp insurance agency within 24 business hours.
Consider asking the employee to submit to a drug test as well. While a positive test may not result in claim denial in most states, it can help your case. Random drug testing of all employees is another option. If you clearly communicate this as a requirement for employment, it should result in fewer potentially drug-related accidents and claims.
If you suspect an employee has filed a fraudulent workers compensation claim, notify your insurance company as soon as possible. While these do not always indicate fraud is occurring, potential warning signs include:
According to the Aflac Workers Compensation Report, employers who provided their workers with access to accident or disability insurance experience declines in workers compensation claims. Among large companies, 55 percent reported a decline, followed by a 34 percent decline in claims at small- and mid-sized companies.
Whether you’d like more information about reducing workers compensation claims, want to review your insurance policy, or need assistance creating a workplace safety program, contact your insurance agent or workplace safety advisor today.
According to HubSpot, an inbound marketing software company, nearly 40 percent of U.S. businesses have a blog for marketing purposes. If you’re not among them, it’s time to think about joining the ranks of business bloggers. Not only will it provide a vehicle for sharing engaging stories about your business, products and services, a well-maintained blog can also improve your search engine ranking and ultimately lead to more customers in the form of inbound leads. Consider the following steps to get started:
While your ultimate goal will be to promote your business, you need to do so subtly. The best blogs are not overtly promotional but instead provide readers (customers and potential customers) with articles and tips they will find helpful. The purpose of your blog should be to present your company as the best source of information in your industry. This purpose will drive your content creation strategy.
There are many platform options available for building and publishing your business blog—from free programs to fee for service platforms. WordPress, Blogger, Tumblr, Svbtle and HubSpot frequently appear on lists of the best. To maximize your results, experts recommend choosing one that you can install on your domain and integrate with your website.
You should fill your blog with relevant content, updating it with new posts regularly. Once you’ve brainstormed a list of suitable topics, create an editorial calendar that includes who on your team will write each blog post, the date the content is due, and the date you intend to publish it.
In their 2013 Marketing Benchmarks study, HubSpot found that companies that blog 15 or more times each month got five times more traffic to their website than those that don’t blog at all. Companies that increased their blog frequency from three to five times a month to six to eight times a month almost doubled their leads.
Your blog will be of little use if your customers and potential customers don’t know about it or cannot find it. Great ways to generate blog traffic include:
According to Social Media Today, an independent online community for professionals in public relations, marketing and advertising, small businesses with blogs generate 126 percent more leads than those without. Why is this so? The answer may lie in the popularity of blogs with U.S. consumers. In fact, surveys have found that 81 percent of them trust the advice and information they find on blogs. Sixty-one percent have purchased a product or service based on a blog post. Starting your business blog will require a time investment; however, the new customers you gain will be well worth the effort.
Despite the rise of social media, email is still the marketing mainstay of many businesses—and the numbers show us why. According to the Radicati Group, a technology market research firm, worldwide email accounts will increase 27 percent between 2014 and 2018, from 4.1 billion to more than 5.2 billion. Additionally, the number of worldwide email users—both business and consumer—will increase 12 percent during the same period. Whatever your industry, chances are excellent that most of your customers are on email and willing to subscribe to communications from your company.
Of course, any email subscriber list you use—whether prospects you’ve purchased from a vendor or generated from your current customers—is only as good as the data it contains. If it’s outdated—leading to repeated emails sent to bad or non-existent email addresses—it’s more than a waste of time; it can potentially damage your reputation with email service providers. Fortunately, a few simple steps can help you keep your email subscriber list in great condition. Consider these three ways to clean it up today.
1. Eliminate any distribution email addresses. These are generic addresses that distribute received emails to multiple parties within an organization. They often begin with “sales,” “support” or “questions” and are rarely beneficial from a marketing standpoint because they distribute your message to individuals who did not ask for it and who may report it as SPAM.
2. Review your bounce reports. Emails may “bounce” for numerous reasons. A “non-existent” bounce may be due to an email address that no longer exists or has a typo within it. Go through the emails with this designation in the report and see if there are any you can correct. If not, discard them.
An “undeliverable” bounce means that the server that houses the email address is either temporarily down or not found. A “blocked” bounce means that the server that houses the email address is not allowing the email to enter. Review your bounce report for emails with undeliverable and blocked designations. If the report repeatedly labels them as such, discard them.
3. Look at your email “opens” and “clicks.” If you’re sending communications through an email marketing service, you should be able to review a list of the prospects or customers who opened your latest missive as well as those who clicked on links within it. If you notice individuals in your list who consistently fail to open or click links within your marketing emails, consider reaching out to them with a special offer to encourage re-engagement.
You might extend a special discount, a free eBook or anything else that’s of value to the reader of this “We Miss You” message. Make sure your unsubscribe link is prominently displayed so those who are truly no longer interested in your product or service are prompted to opt out.
Before you abandon your email marketing efforts in favor of social media, try cleaning up your subscriber list. The minimal time spent is likely to be well worth the results—according to McKinsey & Company, a global management-consulting firm, email is almost 40 times better at acquiring new customers than Facebook or Twitter.
Created by Congress after the September 11, 2001 terrorist attacks that resulted in $40 billion in insured losses, the Terrorism Risk Insurance Act (TRIA) is set to expire in December 2014. According to RAND researchers, the results could be devastating to businesses, significantly affecting the cost and availability of workers compensation coverage.
After September 11, 2001, deemed by many the most expensive manmade catastrophe in insurance history, the reinsurers that absorbed most of the losses began to exclude acts of terrorism from their policies. This resulted in an extreme scarcity of terrorism reinsurance and led to issues with availability and affordability in a number of commercial property and casualty (P&C) insurance lines.
Congress passed the Terrorism Risk Insurance Act of 2002 to guarantee the availability of commercial P&C insurance that covered acts of terrorism. The act requires that these insurers offer policyholders coverage that includes losses due to terrorism—and that they do so on the same terms as their non-terrorism coverage. The act also established the Terrorism Insurance Program, which they designed to protect the insurers from catastrophic losses due to another major terrorism event.
Since its enaction, terrorism insurance has been widely available. According to RAND, 62 percent of U.S. businesses in 2013 had property insurance that covered losses due to terrorist attacks. Unfortunately, with the potential expiration of the TRIA at the end of this year, the private insurance industry is once again concerned about its ability to cover terrorism risk.
Employers are required to provide no-fault compensation for medical expenses and lost wages to employees who are victims of work-related injuries or illnesses. Workers compensation insurance assists them in meeting this obligation.
While an act of terrorism is unlikely to relate directly to an employee’s job, one injured at work during such an act may file a workers compensation claim under the “positional risk” doctrine. Covering cases where the employee was in harm’s way though the cause was not related to employment, this doctrine encompasses most terrorism scenarios (including everyone in the World Trade Center on 9/11).
In the event of a large conventional terrorism attack, RAND estimates workers compensation losses could be more than $10 billion. Losses increase to more than $300 billion in the event of a nuclear attack. Under the TRIA, much of the risk of these catastrophic losses has been transferred to the federal government. If congress allows the act to expire, workers compensation insurers will have to reabsorb these risks on their own. According to RAND, they are likely to raise premiums for high-risk accounts, decline policies for high-risk accounts, or withdraw from the market altogether as a result.
If considered a high-risk employer, a business might find its premiums so high that it has to reduce its labor force to compensate. This could reduce incomes nationwide and inhibit economic growth. And should another terrorism attack occur after TRIA expires, businesses and taxpayers within the attack area would likely find themselves on the hook for financing workers compensation losses.
At present, the future of the TRIA is uncertain. You may want to plan ahead for any eventuality by discussing your workers compensation insurance coverage with your business insurance professional.