Are Annual Performance Reviews Becoming a Thing of the Past?

by Nancy Owen, PHR

Somewhere around the middle of 2015, many large companies decided they would stop conducting annual performance reviews. These companies included Adobe, Google, Deloitte, Accenture, GE, and Red Hat; just to name a few. This change in the mindset of large employers had many other companies following suit and doing away with their annual reviews. The companies believed the reviews did not work, that they were an insult to employees, and that employees felt they were not productive. Employers who did away with the reviews believed their employees felt they were never given real, achievable goals. Instead of giving feedback throughout the year, their leaders waited until the end of the year when it was too late to do anything about it.

These companies quickly realized that simply taking away the annual review process was not enough. Without a process in place, they found that employees seemed less engaged and less productive. If they wanted to successfully eliminate the old way of managing performance, they would need to replace the old with a better system for evaluating their employees.

Performance management is not one and done. More than ever, employees are asking for real-time feedback. It is a yearlong cycle that works only when feedback comes in many forms throughout the year and only after very specific goals are put in place. Goals must be measurable, action-oriented, realistic and time-bound. Managers need to manage the performance of their employees each step of the way, not just at the year’s end.

In order to develop a performance management process that would work for their company, executives needed to spend more time collecting information related to their unique environment and culture.

First, they looked at the advantages of the old way of reviewing employees. Pros included:

  • Provided strong motivation for employees who wanted to challenge themselves by exceeding expectations.
  • Provided a document that the employees can read and refer to over a period of time and gave the company a record of employee performance and conduct.
  • Provided leaders with a structured set of goals to discuss with the employee, allowing them to point out what the employee is doing well and not so well.

Executives also considered the disadvantages. Cons included:

  • The inevitable “rater biases” that leaders can fall into when evaluating employees.
  • Employees thinking leaders are not fairly evaluating them.
  • Leaders becoming overwhelmed by the time-consuming preparation and meetings.
  • Employees becoming de-motivated when given poor feedback in a nonconstructive way.
  • Employees feeling shock or surprise because it is the first they are hearing about poor performance or conduct.

Some of the things that companies want to consider now are:

  • “First thing” stand-up meetings, conducted at the beginning of a shift to communicate daily updates and company or departmental news to employees, so that employees never feel “in the dark”.
  • Monthly one-on-one meetings between supervisor and employee, pointing out what is going well and what is not according the goals and competencies set forth at the beginning of the year.
  • Quarterly and/or mid-year reviews, when any adjustments or changes should take place.
    –  Are the employee’s goals still realistic?
    –  Has the employee moved to a different department or taken on new tasks?
  • Year-end discussions, carried out in a non-formal meeting, to review the last year and what could have been done better or needs to change for the upcoming year.

Many companies are now restructuring and defining their performance management in a way they never have before, but most likely are moving toward getting rid of annual evaluations. They are realizing that they need to increase their communication to their employees about performance and conduct, which in turn should increase the success of employee performance overall. Companies are introducing measures that include one-to-one check-ins, all in real-time.

Yearly evaluations or performance appraisals of any type are only as good as the process followed, the leaders that perform them and the ability of the organization to develop and communicate effective, realistic goals to employees. When these processes are done well, the company will have a greater chance of increasing engagement, accomplishing goals and meeting their yearly plan. It’s no surprise that new generations of employees are changing the way organizations do business. Personal development has become just as important to the new workforce as the company performance goals.

Performance management will most likely continue to see changes in the years to come. The companies that embrace the change and work to have a process that matches their employee culture will be the most successful.

Whichever way you go with performance management, be sure you know your employees and what motivates them. Do your homework and collect data to determine which initiatives work best for your culture, industry and environment.

If you are an employer with any HR concerns, please send an email to If you have any questions about East Coast Risk Management and the services we offer, please visit our website ( or call (724) 864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , ,

Stay Tuned PA… Your Wage and Hour Laws May be Changing.

by Laura Pokrzywa

Pennsylvania employers take note . . .

We are watching a proposed change to the Pennsylvania Minimum Wage Act (PMWA) that would, among other things, significantly increase the minimum salary requirements for the white-collar overtime exemptions in Pennsylvania.

Experiencing a bit of déjà vu? You may remember similar changes to the federal Fair Labor Standards Act (FLSA) that almost became a reality for employers at the end of 2016. If not for an eleventh-hour intervention of a federal judge in Texas, employers in every state would have been scrambling to reclassify many of their employees.

How do federal and state wage and hours laws intersect?

The FLSA establishes minimum wage and overtime pay obligations for most employers across the country, while similar provisions in the PMWA only affect employers in Pennsylvania. As in any state, Pennsylvania employers must comply with the requirements of both state and federal law. So, though Pennsylvania’s current minimum salary requirement is just $250/week, Pennsylvania employers must comply with the higher federal standard currently set at $455/week ($23,660 annually).

So what exactly has been proposed in PA?

The state’s Department of Labor and Industry (DLI) has proposed the following changes:

  1. Minimum salary increases: Stepped increases in the minimum salary requirements that would make Pennsylvania one of a small group of states to establish a minimum salary requirement that exceeds the requirements of the FLSA. The first step would be implemented in 2020 and would increase the minimum salary required to meet the “white collar” exemption to $31,720 per year. Annual increases would follow, raising the minimum threshold to $47,892 by 2022, more than doubling the current federal requirement.
  2. Changes to the language regarding requirements to meet the “duties” tests: The proposal requires exempt executive employees to “customarily and regularly exercise discretionary powers” and exempt administrative employees to “customarily and regularly” exercise discretion and independent judgment with respect to matters of significance. Though the language in the Pennsylvania proposal is supposed to be similar in intent to the FLSA’s current requirements, subtle differences have legal experts concerned that PA employers will be facing confusion and frustration when trying to comply with both laws.

No need to panic just yet.

Before any changes can be made to the current law, the DLI has to officially publish the proposed rules and allow the public a 30-day comment period. We don’t expect issuance of any new rule in Pennsylvania until sometime next year and there is no predicting what the new rule may look like when all is said and done.  We will be watching this one closely and keeping you informed.

If you are an employer with any HR concerns, please send an email to If you have any questions about East Coast Risk Management and the services we offer, please visit our website ( or call (724) 864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , , , , , , ,

Who are Generations X, Y, and Z (and Why Should Employers Care)?

by Nancy Owen, PHR

Most dictionaries define a generation as “a group of people born and living around the same time as each other”. Not surprisingly, people of the same generation often have similar characteristics and values. Interestingly enough, one generation can be very different from another.

Of the six generations currently living, three are considered working generations. Employers would do well to have a good understanding of each generation’s characteristics. Why? Because if you know what motivates your employees, you will be better equipped to engage them. One way to figure that out is to have a general idea of their likes, dislikes and habits.

Most leaders struggle with the different needs and styles that each generation brings to the table. How do you engage the different generations with their different characteristics and bring them together to work in a cohesive team?

Companies that have figured out how to leverage each generation’s strengths within a team environment generally have employees that are motivated and successful in their jobs.  Successful organizations embrace the diversity in each generation. You can do the same by fostering an environment that encourages employees to participate and collaborate. Support team work by setting up team building events. Focus on the positive attributes of the team’s diverse experiences and skill sets.

At the end of the day, employees want to feel valued in their jobs and every generation has something unique and valuable to add.  To help you better understand each group, here are all six generations and the traits that tend to characterize them:

GI Generation – Born between 1901 and 1926, this group is no longer working, but you may recognize this description in a family member. They are considered to be assertive doers with a strong sense of teamwork, duty to their country, community-minded and thrifty. They grew up in an age without modern conveniences like TV or most appliances we use today, and they are grateful for and appreciate them now.

Mature/Silent – Born between 1927 and 1945, this is considered the Korean and Vietnam War Generation. They grew up in a time of rock and roll, when women stayed in the home and took care of the children and secured the household while the husband went to work. However, some women in this generation did work in positions like teachers and nurses. They listened to big band and swing music and were big readers, including the daily newspaper.

Baby Boomers – Born between 1946 and 1964, right after World War II ended, baby boomers have strong work ethics and are in demand today by employers for that reason. This generation is independent and sure of themselves. They like friendly competition and work well in a team environment. They are very resourceful, disciplined and goal minded.

Generation X – Sometimes referred to as “post boomers”, these were born between 1965 and 1981. There are 45 million of them.  This group looks for flexible work environments. They do not think about retirement the way their parents did. They shop on-line and were considered latch-key kids. They grew up with their parents working and many came from a divorced family. They have a strong desire to succeed by making a contribution. They are committed to the company not the career, but at the same time they are self-absorbed and prone to distrust organizations. They are sometimes thought of as shallow because they were raised by the TV and movies while their parents worked. They are cautious, skeptical, and unimpressed by people in a position of authority. They rely heavily upon themselves.

Generation Y / Millennial’s – Born between 1981 and 2000, this group respects authority. They are very organized and schedule everything. They grew up on computers and never knew how to live any other way. They are very tech savvy and get most of their information from the internet. They prefer to work in teams rather than as individual contributors. They work to live rather than living to work. They like a laid-back environment.

Generation Z – Also called the Boomlets, this group was born from the mid-1990s to the late 2000s, so the majority of this generation is just entering the workforce.  This generation values their privacy. Generation Z has grown up in a world of financial insecurity and tend to be entrepreneurial. They are the most technically competent and have proven to be adept multi-taskers.

If you are an employer with any HR concerns, please send an email to If you have any questions about East Coast Risk Management and the services we offer, please visit our website ( or call (724) 864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , , , ,

How to Hire a Minor

As the summer approaches, a lot of our clients have been asking about child labor laws in their areas and industries. Here are important considerations for any employer with plans to hire a teenager.

by Laura Pokrzywa

If they aren’t already done, high school students are counting the days until that last bell rings and summer break begins. The first thing on many agendas will be securing a summer job. If you are an employer planning to hire a teenager, you need to be careful to comply with federal and state child labor laws. These laws set forth specific guidelines for the hiring process, the working conditions, and the hours an underage employee may work.

It is more than just putting up a poster or getting parental consent.

In 2011, several Chuck E. Cheese restaurants were fined more than $28,000 by the Department of Labor (DOL) for violating federal child labor laws. The crime: these child-friendly restaurants had allowed their younger employees to operate trash compactors and dough mixing machines. Likewise, Build-a-Bear Workshop was fined $25,600 in 2009. The retailer, which offers customers the opportunity to create custom stuffed animals, allowed 16- and 17-year-old employees to operate trash compactors and to ride in a freight elevator that did not have an assigned operator. The lesson: when it comes to child labor, know the law and make doubly certain that safety is your top priority—even if an assigned task is simple or seems like a good learning opportunity.

How young is too young?

The Fair Labor Standards Act (FLSA) is the framework for federal child labor regulations. The FLSA mandates 16 as the minimum age for non-agricultural employment. However, the federal law allows 14- and 15-year-olds to be employed outside school hours in various non-manufacturing, non-mining, non-hazardous jobs. These federal child labor provisions do NOT apply to:

  • Children 16- and 17-years of age employed by their parents in occupations other than those declared hazardous by the Secretary of Labor.
  • Children under 16 years of age employed by their parents in occupations other than manufacturing or mining, or occupations declared hazardous by the Secretary of Labor.

How long can they work?

Federal law sets no limits on hours worked for youth age 16 and up. The FLSA does set the following time limits for 14- and 15-year olds:

  • No more than 3 hours a day on school days, including Fridays;
  • No more than 18 hours per week in school weeks;
  • No more than eight (8) hours a day on non-school days;
  • No more than 40 hours per week when school is not in session.

Many states, however, have more specific or stringent regulations. For example, in Pennsylvania, 14- and 15-year-olds may not work before 7:00 a.m., nor after 7:00 p.m., except from June 1 through Labor Day, when their permissible hours are extended to 9:00 p.m. If they are enrolled in summer school they may not be employed for more than 18 hours during a regular school week. That number increases to 28 hours for a minor 16 or 17 years of age enrolled in summer school. In Pennsylvania, minors 16 years of age and older who are not enrolled in summer school may work up to 10 hours a day and can work as late as 1:00 AM. Minors may not work more than 48 hours in a single week. Additionally, any hours worked in excess of 44 in a single week must be voluntarily agreed to by the minor. If the minor rejects a request to work more than 44 hours in a single week, the employer cannot retaliate in any way.

What can they do?

According to the FLSA, all employees under the age of 18 in non-agricultural occupations are prohibited from engaging in hazardous activities such as anything involving explosives, roofing, operating certain power tools (such as circular saws or band saws), operating large power-driven machinery (such as paper box compactors, wood-working equipment, meat-processing equipment and large mixers), or operating power-driven hoists (such as fork lifts), to name a few. The DOL may provide limited exceptions for some of these tasks if the minor is a bona-fide apprentice. If you are hiring a worker who will do job-related driving on public roads must, he/she must be at least 17 years old, must have a valid driver’s license, and must not have any moving violations.

What about work permits?

Federal law does not require work permits for underage employees. However, most states do. You will want to check your state laws regarding work permits for your teenage workers. While you are checking, be sure to find your state’s child labor poster. If you employ anyone under the age of 18, that poster must be posted in a conspicuous place. For a copy of the PA child labor laws poster, click here.

Here is the process required in Pennsylvania to get an underage employee started:

  1. The student must obtain a work permit from their school district. This process will gather the required approvals from their parents or legal guardian. An important note: in Pennsylvania, graduation from high school does not exempt a minor from providing his/her employer with a work permit. It does, however, remove the requirement of parental consent and the limits on the hours they may work. Such minors must obtain a work permit from the school district where the employer is located or at the college or trade school they are attending.
  2. The minor provides a copy of the permit to the employer and retains the original.
  3. The employer must notify the issuing officer (a staff person located in the guidance office of a public school district’s high school) in writing of the employment of a minor and detail the normal duties and hours of employment within five days after the beginning of employment and include the age and permit number of the minor.
  4. The employer must keep a copy of the work permit and a copy of the letter sent to the issuing officer announcing the employment of the minor.
  5. On termination of employment, the employer must notify the issuing officer within five days of the final day of employment that the minor no longer is employed by the employer.

If you are an employer with questions about hiring a teenager, or any other HR concerns, please send an email to  If you have any questions about East Coast Risk Management and the services we offer, please visit our website ( or call (724) 864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , ,

Are You Now Required To Conduct Sexual Harassment Training?

by Renee Mielnicki, Esquire

As we all know, sexual harassment has taken the stage this past year in the HR world.  I remember saying not long before it became such a hot topic that I wasn’t seeing as many claims relating to the subject.  My thought was maybe employers had finally mastered how to deal with it and employees had maybe fallen in line with the law.  Turns out I was wrong and the reason it wasn’t coming up so much was because either employers were hiding it or employees were afraid to say anything.  It took only one or two brave souls to step out into the limelight and then the flood gates opened to the point of the #MeToo movement.

The government has clearly taken notice of the problem and some state legislators are doing something preventative about it. Following suit with several other states, last week Connecticut’s General Assembly voted on a law that would require employers to provide sexual harassment training. Though the law did not pass the House vote due to some controversial provisions, this will likely be back on their agenda in a new form in the future.  New York has already passed such a law which will go into effect soon. California and Maine already have such a law which requires certain employers to provide sexual harassment training to either supervisors, employees or both.  Some states such as Florida, Michigan and Tennessee have laws that encourage, rather than require, employers to provide the training.

Even if you are not in a state where it is or will become a legal requirement that you conduct sexual harassment training, you still should and here is why.  If you don’t provide such training, some cases on the subject suggest that you will not have a defense in the event of a lawsuit. The reason would be that you have failed to take steps as an employer to prevent harassment from occurring.  It is the legal duty of the employer to provide a workplace free of harassment.  One of the ways you do that as an employer is to try to prevent it from occurring in the first place by providing training.  It really is a small task that can result in a big reward and therefore worth it in my opinion.

If you are an employer in a state where sexual harassment training is now required by law and you want to learn more, please reach out to us at  Whether you are in one of those states or not, if you want to take steps as an employer to prevent sexual harassment, please give us a call at 724-864-8745.

Subscribe to our blog for more tips on how to keep your organization up-to-date with workplace laws and best industry practices.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , ,

Did you hear? The EEO-1 filing deadline has been extended.

by Laura Pokrzywa

Good news for procrastinators! The deadline for filing this year’s EEO-1 Survey has been extended by the U.S. Equal Employment Opportunity Commission (EEOC). The new, improved deadline is Friday, June 1, 2018, pushed back from the March 31st deadline originally required for 2017 surveys. But don’t feel like you have to wait. The survey is open now and you can file at any time.

If you find yourself asking, “What is an EEO-1 and should I be doing something about it?” we can help.

What is an EEO-1 Survey?

Since 1966, employers with federal contracts or with 100 or more employees have been required to report the number of workers they have in specific job categories, breaking the numbers down by ethnicity, race and sex. These statistics have been reported to the EEOC as part of the annual Employer Information Reports (EEO-1) filed by covered employers. The EEOC provides data collected via the EEO-1 reports to the Office of Federal Contract Compliance Programs (OFCCP) at the Department of Labor.

Who has to file?

Generally, a private employer will have to file if they have 100 or more employees. (Please note: this does NOT include state and local governments, primary and secondary school systems, institutions of higher education, Indian tribes and tax-exempt private membership clubs other than labor organizations). However, an employer with less than 100 employees may be required to file if the company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees.

In addition, filing is required for all federal contractors (private employers), who have 50 or more employees and meet one of the following requirements:

  • are prime contractors or first-tier subcontractors, and have a contract, subcontract, or purchase order amounting to $50,000 or more; or
  • serve as a depository of Government funds in any amount, or
  • is a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Notes.

The only exception for such federal contractors is if they are exempt as provided for by 41 CFR 60-1.5.

Yikes! I need help!

If you’ve been putting off filling out the report because you aren’t sure where to begin, the EEOC has provided detailed guidance and instructions for completing your survey in their guidebook called “How to File an EEO-1 Report”. If you still need help, you can send your questions about EEO-1 filing directly to the EEOC via their technical support email

Subscribe to our blog for more tips on how to keep your organization up-to-date with workplace laws and best industry practices. If you are an employer with questions on any HR-related issues, please feel free to contact us at or call 724-864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , , , ,

Struggling to find good candidates in a tough job market?

by ECRM’s HR team

If you are feeling the pain of trying to find qualified candidates in a tight labor market, you are not alone. Our team has heard from countless clients across multiple industries and regions that are struggling to find the employees they need. The unemployment rate is holding at a record low of 4.1% according to the latest data from the Department of Labor’s Bureau of Labor Statistics. With a limited number of qualified applicants, we recommend employers take a creative approach to recruiting. It would also be wise to take another look at retention efforts.

In order to help get you started, our HR team huddled to discuss techniques that we have seen work for other employers.  We put together the following list of ideas that may help you meet the challenges of hiring in the current job market:

  1. Offer (or increase) referral bonuses for employees who refer a successful hire. Add a subsequent bonus if that new hire remains with the company for a year (or however long you set).
  2. Form a committee of workers from across all levels to discuss how your organization can attract new employees.
  3. Carefully review your compensation plan. Make sure the wages you offer are competitive, meeting or exceeding the market rate.
  4. Consider hiring less qualified candidates with potential and then training them in the skills they are lacking.
  5. Look at adding benefits such as short-term disability, life insurance or retirement planning. If you can’t afford more group benefits, call in vendors to offer supplemental benefits.
  6. Offer flexible scheduling, if possible. This is especially important to younger applicants and employees.
  7. Keep a close eye on industry news feeds. Watch for regional layoffs for similar employers in your area. You can target those newly unemployed, skilled workers.
  8. Visit the chamber of commerce and include a small gift in the welcome baskets given to new residents.  Be sure it includes your hiring information.
  9. Have an open house for the community. Put up the “now hiring” signs in the lobby and give tours of areas that can be seen by the public. Offer interviews on the spot.
  10. Put a sign in the most popular places around town that says something like “HERE WE GROW AGAIN!” This way you do not come across as desperate for help, but as a growing company.
  11. Don’t forget about social media. Post openings on your own pages and ask employees to spread the word by sharing it on their pages. Ask trade schools to post your opening on their pages, too.
  12. Consider using temporary help to fill an opening. This will take the time pressure off of your recruiter and may even lead to a long-term employee.
  13. Rent a kiosk in the mall to educate the community about your company.
  14. Ask current employees to consider posting an employer review on sites like Glass Door.
  15. Think about rehiring people who have left.
  16. Reach out to vocational schools. Talk to the students who will be graduating this year and not moving onto college.
  17. Organize or participate in a job fair.

Reducing turnover:  Attracting and hiring the right candidate is just the first step. If you can’t keep that new employee, you will be right back to the hiring starting line. Retention of your best employees is essential to keep your operations running at optimal speed.  It will also save you thousands of dollars since turnover can cost up to 200% of an employee’s annual pay, depending on the role.

Consider these ideas to further boost your retention rates:

  • Develop compensation pamphlets to show people what they really make after all the tax and benefits are paid. This will allow employees to compare apples to apples if they are considering employment at a company offering a few more cents per hour.
  • Instead of conducting exit interviews, meet with current employees and ask them why they stay.  (Watch our blog for more details about “Stay Interviews” coming soon.)
  • Along the same lines, you can conduct an employee engagement survey to find out what your employees like and what they don’t like about working for your organization.
  • Coach supervisors and managers to become more effective and approachable leaders. Train them on communications and management skills to help them engage with their teams.
  • Offer clear career paths, if possible, by promoting from within. Professional development could include reimbursement for outside training and educational opportunities that will help them develop skills in their field. They gain skills and you gain a more skilled workforce.
  • Consider offering bonuses including gain sharing or profit sharing.
  • Strengthen your onboarding process.

For even more ideas to help you attract and keep good employees, see our previous articles:

Subscribe to our blog for more tips on how to keep your organization up-to-date with workplace laws and best industry practices. If you are an employer with questions on this topic or any other HR-related issues, please feel free to contact us at or call 724-864-8745.

Posted in Human Resources | Tagged , , , ,

Dating in the Workplace: Fiancé or Fired?

by Derek Ross

It’s no secret that dating in the workplace has been a topic of much controversy and debate for years leaving employees and their respective employers unsure of how to define this gray area in the workplace. According to CareerBuilder’s 2018 Valentine’s Day survey, 36% of employees have dated a coworker with a staggering 30% of those relationships involving employees who were at different levels within the organization. Furthermore, the national survey conducted by Harris Poll on behalf of CareerBuilder showed that 31% of these office romances lead to marriage.

If you consider that employees spend an average of 8-10 hours together in the workplace, the percentage of office romances is not surprising. Though these relationships are common and often inevitable, organizations are not left helpless. Measures can be taken to address the risks that come from office romances, no matter how the story ends. Whether small or large, organizations should consider all options when creating a policy about dating in the workplace.

Some employers choose to ban romantic relationships all together because of past experiences including:

  • Employees not hitting production numbers because they are concentrating on the relationship rather than the duties of their job.
  • Low morale because team members fear favoritism when it comes to leaders dating their employees.
  • Sexual harassment claims that have resulted from relationships gone bad, especially when one of the two has authority over the other.

Though it is legal to fully prohibit employees from dating, it is important to check state and local laws before adopting a policy. For example, California courts have ruled that the state constitution provides broader privacy protection in employment matters.

On the flip side:

Some companies allow dating in the workplace since banning any romantic involvement can come with its own consequences. After all, it’s not uncommon for individuals to meet their significant other at work. Prohibiting employees from becoming romantically involved could create issues, including:

  • Decreased morale;
  • Loss of a good employee who wishes to date a coworker but cannot due to the company policy; and
  • Awkward moments for management as well as great difficulty actually enforcing the policy.

Short of banning all workplace dating, there are other options for employers:

  • Consider limiting the prohibition to only those relationships in which one romantic partner has a role of authority over the other.
  • Consider prohibiting couples from working together directly.
  • Consider policies that do not ban dating, but instead merely discourage it.
  • Consider requiring disclosure of relationships so that you can take steps to minimize problems. Those steps might include special counsel and a signed acknowledgment from both employees, to verify they understand the company’s expectations for professional conduct.

What should the policy include?

One thing is clear. Without a solid policy, a company can open itself up to potential sexual harassment claims as well as legal consequences. The policy should address the following:

  • Whether or not romantic relationships will be allowed
  • Whether or not a supervisor/manager may engage in a relationship with a subordinate
  • Reporting requirements for any employee engaging in a workplace romance
  • Confidentiality responsibilities between the two employees
  • Written guidelines that apply to all employees in the organization, regardless of sexual orientation
  • Expectations of professionalism in the workplace, such as the appropriate behaviors of interaction while on the clock or while at any work function.

When creating the policy, it is important to keep in mind the general mindset of the entire workforce. Although a study shows that most workers do not mind when their unmarried coworkers engage in a relationship, they tend to object when the relationship is between a supervisor and subordinate, assuming it will lead to favoritism. In addition, public displays of affection in the workplace, regardless of who is involved, may cause discomfort for those who witness it.

This same study revealed that permissive policies may lead to an increase of extramarital affairs. When inter-office dating is allowed, some married employees may feel less taboo when pursing a coworker. This can have an adverse effect on morale and cause personal distress if coworkers feel the need to cover for those engaged in the adulterous relationship.

Ultimately, it is essential to determine which guidelines best fit your organization and the culture you would like to establish.

Subscribe to our blog for more tips on how to keep your organization up-to-date with workplace laws and best industry practices. If you are an employer with questions on this topic or any other HR-related issues, please feel free to contact us at or call 724-864-8745.

Posted in Human Resources | Tagged , ,

Are Unemployment Claims Affecting Your Bottom Line?

by Nancy Owen, PHR

Every unemployment claim that gets paid out to your former employees has the potential to raise your unemployment insurance tax rate over the course of several years following that claim. The better you understand the process, the better your chances of minimizing the inevitable costs that follow any separation from employment, whether voluntary or involuntary.

What is UI? Unemployment insurance was created to provide limited compensation for employees who have lost their jobs through no fault of their own. It is funded almost exclusively by employers.

The Federal Unemployment Tax Act (FUTA) together with state unemployment laws imposes taxes on employers to fund unemployment compensation. Most employers pay both a federal and a state unemployment tax. The employer is responsible for paying this federal unemployment tax; however, a few states do assess unemployment taxes on employees, as well.

The amount any employer is taxed depends on the taxable earnings of your employees and the history of unemployment claims against the company. Each claim assessed to your account can result in future tax rate hikes for your company that can impact the company for years to come.

What qualifies as “good cause” to leave a job? Many people are under the impression that when an employee quits their job they are no longer entitled to unemployment benefits, but that is not always the case. Even employees who quit their jobs may be eligible to collect unemployment if they left with “good cause”. Each state varies as to how they define “good cause”. Generally, an employee has good cause for quitting their job if the employee is experiencing problems within the workplace which leaves him/her with no other option than to leave their job. This is known as “constructive discharge”. Here are a few examples of situations that may amount to constructive discharge:

    • Harassment or Discrimination
    • Lack of pay for work completed
    • An unsafe workplace or conditions of work that the employer refuses to correct
    • A significant change in the job and its duties

There are other good cause reasons that may have nothing to do with hazards in the workplace. Even though the employee may have violated your attendance policy, for example, if the situation for leaving the job is beyond an employee’s control, the employee may be eligible for unemployment benefits. Here are some examples:

  • Relocation due to a spouse’s employment.
  • Leaving the job due to a medical condition that the job may aggravate.
  • Leaving the job to care for a seriously ill family member.
  • Leaving the job to relocate for reasons relating to domestic violence.

Sometimes a current employee may be eligible for unemployment compensation while working. Some states will award partial unemployment benefits for a worker whose hours have been cut from full-time to part-time. However, if the employee voluntarily chooses to cut back on hours or work part-time, they would not be eligible for partial unemployment benefits.

What can you do to reduce the impact of unemployment claims on your business’ bottom line? Here are some best practices that reduce the likelihood of a successful unemployment claim against your company:

    1. Hire carefully! Train your hiring managers how to select the best candidate.  That starts with careful screening, including proper interview techniques.  If you have hired the right people, you are less likely to lose them.
    2. Train your employees. The better they know their jobs, the more likely they are to succeed.
    3. Clearly communicate expectations. Every employer should have a good employee handbook with a clear attendance policy, code of conduct, safety rules, etc.  Every employee should be given a copy of the employee handbook (or have access to it) and sign an acknowledgement of receipt.  Be sure to give them opportunity to ask questions about any policy they don’t understand.
    4. Listen to your employees. You should have a clear policy for reporting of harassment, discrimination, unsafe work conditions, the need for an accommodation, and any other serious issues an employee may have in the workplace. Your supervisors should be trained on how to properly assess and address all employee complaints and concerns.
    5. Discipline when needed. If your employee is not following your policies, talk to them about it! Never let unacceptable conduct go unaddressed. And DOCUMENT, DOCUMENT, DOCUMENT. If you have evidence to show that your employee knew of a policy (handbook acknowledgement), but still chose not to follow it (note to their file of counsel or warnings), that documentation will give you a better chance of winning an unemployment claim.
    6. Request a signed letter of voluntary separation from the employee who chooses to leave the organization. If one is not given, document the details of the resignation and file it in the ex-employee’s personnel file.

Contesting or appealing an unemployment claim: It is important to always respond to unemployment claims and to be sure you provide all the facts that surround the termination of employment when you receive a Claimant’s Separation Statement from the Employment Security Commission. It is also very valuable for you to contest or appeal unemployment claims when the employee left your company through a fault of their own, because every unemployment benefit claim paid out to former employees affects your tax rate. As previously mentioned, your rate is based in part on the number of claims made against you by former employees.

Another benefit of contesting or appealing a claim is that, if you win the unemployment hearing, the employee is less likely to try to sue you for wrongful termination, and, if they do sue, is less likely to win.

Remember: Take unemployment claims seriously. You don’t want it to come down to your word versus the employee’s word. That well-written employee handbook, which includes a signed acknowledgement form, will be a great advantage for you. You can increase your chances of successfully contesting and winning unemployment claims by keeping good records of all disciplinary actions so that you can prove the validity of your defense. You can help control your unemployment insurance rates by taking these steps now.

If you are an employer that would like help creating an employee handbook, improving your disciplinary procedures, implementing better record keeping, or any other employment issue, please contact our HR professionals by calling us at 724-864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , , , , ,

What Constitutes Gross Misconduct When it Comes to COBRA?

by Nancy Owen, PHR

First, let’s first look at what COBRA is and which employers must provide it.

The Consolidated Omnibus Budget Reconciliation Act, also known as COBRA is a law that was passed in 1985 by the United States Congress and signed by President Ronald Reagan. This law makes it mandatory for covered employers to give eligible employees the ability to continue health insurance coverage for a limited time when coverage under the plan would otherwise end due to certain qualifying events, including termination of employment.

COBRA administration is shared by three federal agencies. The U.S. Department of Labor (DOL) handles questions about notification rights under COBRA for private-sector employees. The Department of Health and Human Services handles questions relating to state and local government workers. And finally, the Internal Revenue Service, Department of the Treasury, has issued regulations on COBRA provisions and shares jurisdiction for enforcement of these provisions with the DOL.

COBRA compliance applies to almost every business that has 20 or more employees and offers a group health care plan. However, COBRA does not apply to group health plans maintained by small employers (fewer than 20 employees) or churches. There are also special coverage rules for governmental employers, although, most governmental group health plans are required to offer continuation coverage.

There may be an exception to this rule for many small employers. Many states have their own laws that are similar to COBRA that apply to fully insured group health plans; however, unlike the federal law, these state laws may include plans maintained by churches and by employers with fewer than 20 employees. These are usually referred to as “mini-COBRA” laws. That means even though an employer may not be subject to federal COBRA, it may nevertheless be required to provide continuation coverage under their state insurance law. Self-insured health plans maintained by private-sector employers are typically not subject to state continuation coverage requirements. A group health plan is not subject to COBRA for a calendar year if the employer maintaining the plan normally employed fewer than 20 employees on typical business days during the preceding calendar year.

Now that we know what COBRA is, do you also know that you don’t ALWAYS have to extend COBRA to a terminating employee? One exception would be when the employee is terminated for gross misconduct. When that happens, the termination is not considered a COBRA-qualifying event and the employer does not have to offer COBRA continuation coverage to the ex-employee, or the ex-employee’s covered spouse or  dependent child(ren).

The COBRA statute does not specifically define the term gross misconduct, so the courts have taken the lead on deciding whether to apply it on a case by case basis. That means it’s up to employers to determine whether their gross misconduct definition meets the standards that were previously ruled on from past court cases as well as regulatory and legal developments.

Courts that have faced the gross misconduct case generally refer to the two questions below when deciding if the conduct is truly gross misconduct.

  1. Was the conduct intentional, willful, deliberate or reckless, and was that conduct performed with a conscious or reckless disregard of the consequences of one’s acts for the very purpose of causing harm or with knowledge that harm would result in the employer’s best interest?
  2. Did the conduct have a connection or series of connections or physical presence linking the gross misconduct or performance directly to the employer, a co-worker or a current or former client or customer?

To minimize their risk, many employers have decided not to apply the gross misconduct exception at all, but, instead, to extend COBRA to all terminated employees regardless of the reason for the termination. Another way employers can limit their risk is to clearly communicate to employees the type of behavior the company considers to be gross misconduct. This can be done by adding your policy to your your employee handbook or to the employee’s contract of employment. When you identify gross misconduct in advance, you are informing your employees what you consider to be significant and this will assist you later should you find you have a claim against you for not providing COBRA to an employee who was terminated for this cause.

Here is a list of conduct that most employers would consider to be gross misconduct:

  • Fighting, physical assault, abuse, or threatening behavior
  • Blatant disregard for the safety of others or serious breaches of health and safety rules
  • Deliberate acts of vandalism or sabotage
  • Any attempts to financially defraud the company or theft
  • Significant levels of insubordination
  • Dishonesty, falsification of documents, or other forms of misrepresentation
  • Offensive or unlawful behavior (such as discrimination, harassment, or bullying)
  • Working under the influence of illegal drugs or alcohol

Should you decide to deny COBRA to an ex-employee on the basis of gross misconduct, be sure you keep detailed records of the process used to determine the gross misconduct along with any notices or correspondence to the ex-employee.

Just remember, COBRA mistakes can be costly whether they were intentional or not. Employers may be liable for a penalty of up to $110 per employee or family member for each day of noncompliance. The Employee Retirement Income Security Act (ERISA) provides for additional penalties and gives affected persons—as well as the Department of Labor—the right to file a lawsuit. Be sure you are sending timely notifications to your plan administrator when a qualifying event occurs, including terminations or a reduction in hours, such as a leave of absence or a layoff. For more information about COBRA compliance, see Derek Ross’ recent article, Should We Continue Health Insurance When an Employee is on Leave?

Employers with questions about COBRA compliance, or any other HR concern, can contact our HR professionals by calling us at 724-864-8745.

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

Posted in Human Resources | Tagged , , ,