CREATING THE PERSONNEL PAPER TRAIL: Personnel Manuals And Grievance Procedures. By Peter M. Panken and Stacey B. Babson

Transcription

1 CREATING THE PERSONNEL PAPER TRAIL: Personnel Manuals And Grievance Procedures By Peter M. Panken and Stacey B. Babson PANKEN'S FIRST PRINCIPLE OF PERSONNEL RELATIONS NO GOOD DEED GOES UNPUNISHED When clients ask what rights does an employer have? we tell them employers have: the right to remain silent the right to an attorney of their own choosing and the right to know that everything they write or say can and will be used against them in a court of law. Human Resources Professionals write personnel manuals. They believe that good human relations breeds employee loyalty and productivity. They are right. But in the few cases where disgruntled employees sue or allege mistreatment, fine sentiments generously expressed can be used unfairly to the employer's disadvantage. To avoid unexpected traps, employers must carefully draft their Personnel Manuals not only to (1) communicate their kind intentions and (2) make employees aware of the benefits to which they are entitled, but also (3) as a management tool to communicate the ground rules. When employees know what they are entitled to and receive it as expected, they are less likely to go to outsiders (unions, government agencies or lawyers). When employees know what is expected of them, employers are more likely to win lawsuits complaining about discharge or discipline. Personnel Manuals are also the embodiment of the contract between employer and employee. When employees have no real opportunity to negotiate terms of their employment, courts will construe ambiguous terms in a manual against the party that drafted it the employer. The hidden agenda is often fairness and fair warning; thus, work rules and grievance procedures become shields by which employers defend their rights. This paper will first consider the issues raised in drafting Personnel Manuals and then

2 the effective use of grievance procedures for the nonunion company. I DRAFTING THE PERSONNEL MANUAL: PR AND EMPLOYEE BENEFITS A. Overview 1. What The Parties Want Employees are interested in when they are paid, how their pay is calculated, what their fringe benefits will be and what time off (with and without pay) they will get. The government wants affirmative action and nondiscrimination statements and sets standards for communicating facts about fringe benefits. The company, on the other hand, wants to motivate proper employee conduct, protect itself from employee claims and indulge in a little PR about how wonderful it is to work for the employer. 2. Dealing With Different Grades Of Employees Top management may have individual contracts replete with gold or tin parachutes. Supervisors and managers often receive special privileges whereas the rank and file get fewer perks and are subject to more rules. Therefore, it is important to recognize and deal with these differences explicitly. One manual for all will not do the job! Employers often have different manuals for different strata. At the very least, supervisors and top management can be excluded from the main manual. The least satisfactory method is to include all levels in a single document distributed to everyone so that lower compensated workers can covet the better benefits of the executive or supervisory groups. Another method is to have separate manuals for different departments. Financial institutions, for example, may draft different manuals for branch offices, back offices and home offices, whereas distributors may have different manuals for its warehouse employees and sales staff. B. A Little PR Most employers cannot be talked out of an early dose of PR, usually taking the form of the history of the company or a CEO's Welcome. It is harmless unless it lapses into promissory material which can come back to haunt the company. The best use of an introductory paragraph adds some very important caveats: WELCOME TO THE COMPANY Our institution was founded by Simon afeller, a cotton broker in the Old South before the Civil War. Today, we have become the leading institution in the United States. Our growth has been consistent over more than a century despite the Civil, the Spanish American, and two World Wars. As

3 large as we are, our Company depends on its employee family for its success. We strive for an environment in which all members can reach their full potential as efficient and effective employees so that the Company may reach its full potential as an efficient organization and valued community resource. As an employee, you will be expected to carry out your job functions in a professional manner being ever mindful that we are a service business and that our customers are of paramount importance. This policy handbook summarizes some of the Company's employment practices and the benefits to which you are entitled as our employee [except where an applicable collective bargaining agreement provides for different terms and conditions of your employment.] Your benefits are more accurately described in our benefit manuals, which are consistently reviewed and modified as the need arises. If there are any differences between this handbook and Company procedure or benefit manuals, the procedure or benefit manual prevails. In addition, all employees are employed at will which means the Company or employee may terminate the employment relationship at any time with or without cause. The Company, in its sole discretion, reserves the right, at any time, to amend, modify, alter or terminate any statements or policies in this handbook as well as any employee benefits. Paragraphs 1 and 2 are the window dressing. It can be expanded into a history without harm, including how the company has grown and changed. PR can even be a paean of praise to management. But it is important to stress how efficiency and productivity got us here (or will get us where we want to go). It is also vital to avoid high-sounding words which promise or imply lifetime employment during good behavior if the company wants to maintain at-will employment. The third and fourth paragraphs are mindful that times do change after a manual is printed. Therefore, the manual should announce that it is not written in stone, it can be changed and if there is a difference between the actual practices, personnel manual and benefits or insurance manuals, the benefits or insurance manuals prevail. Most importantly, it confirms the company's right to change its mind. C. Letting Employees Know How They Are Paid People get angriest when you fool with their paychecks or when they do not get what they think they are entitled to when they expect it. This is why the first major topic discussed in a manual are wages how they are calculated and what deductions will be made. The following is an

4 example of a salary section for a Personnel Manual: YOUR SALARY WHEN YOU ARE PAID The payroll week runs from Monday to Sunday of each week. You will be paid each subsequent Thursday following the completion of the work week. Your check will reflect your compensation for the prior work week less required payroll deductions. DEDUCTIONS FROM YOUR PAYCHECK Deductions will be made from your paycheck as required by law (including your federal and state withholding taxes, and your portion of Social Security contributions as well as any garnishments, or any other deductions required by law) or, where applicable, as you request for contributions to Company programs such as pension or health insurance. Your deductions will be itemized on your payroll stub. You should review your paycheck stub carefully each payday. If, at any time, you have any questions about the amounts shown on your paycheck or how they are calculated, you should contact the Payroll Department. Tax withholding is based on the number of dependents you claim on the W4 form which you completed. Each employee is responsible for the accuracy of that form and for updating the information when necessary. W4 forms are available in the Human Resources Department. 1. Payroll Week The When You Are Paid provision is necessary to comply with wage/hour legislation which requires overtime compensation to be calculated on the basis of a regular work week. State laws will have to be consulted to see whether wages may be paid by check, how often wages must be paid and how much time must be allowed to cash a paycheck. 2. Deductions Most states limit the deductions employers may take from a paycheck. Deducting employee debts or advances from an employee's paycheck is often problematic. In New York, for example, other than in very limited circumstances, the Department of Labor bars such deductions from salaries.

5 The federal wage garnishment law states that the maximum garnishment of an employee's net weekly pay (after taxes and other legal deductions) may not exceed the lesser of either 25% of the total net pay or the amount by which the net pay exceeds 30 times the federal minimum wage. (15 U.S.C. 1673) This law is enforced by the Wage and Hour Division, U.S. Department of Labor. Employers who violate it are subject to criminal prosecution and may incur fines of up to $1,000 and/or imprisonment of not more than one year. State laws may also cap the maximum garnishment from an employee's paycheck. 3. Overtime the subject lightly: Overtime is a tricky subject with many variations. Most manuals merely skim Overtime may be required when necessitated by business operations. If asked to work, you will be expected to cooperate. Certain employees will receive pay at the rate of 1½ times their regular rate for all hours worked in excess of 40 hours, in any work week, excluding meal periods, unless otherwise required by law. If you are entitled to overtime pay at 1½ times your regular rate, you will be notified by your supervisor. If you have any questions, ask your supervisor or the Human Resources Department. Wage and hour provisions requiring the payment of one and one-half (1 ½) times the employees' regular rate of pay under the Fair Labor Standards Act, 29 U.S.C. 207(a)(1), and similar state laws, only apply to nonexempt employees. Employees who are not in an exempt classification must be paid the minimum wage (federal or state, whichever is higher) and at a rate not less than one and one-half (1 ½) times the employee's regular rate for all hours worked in excess of 40 in a weekly pay period, or if state law mandates, for all hours worked in excess of 8 hours each work day. Employees exempt from overtime payments under federal law include those who hold an executive, administrative, or professional position, whose primary duty (50% or more of their time) is such work and who earn a salary of $250 per week (regardless of the number of hours worked that week, inclusive of board, lodging, or other allowances and facilities) and regularly exercise discretion or are outside salesmen. (29 U.S.C. 213(a)(1); 29 C.F.R ). There is also an exemption for highly but hourly-paid computer personnel. To be classified as an executive, one must regularly direct the work of two or more other employees and primarily manage, at the least, a recognized subdivision of a department. 29 C.F.R (a), (b). The executive must have the authority to hire and fire, or to effectively recommend the same, and must regularly exercise discretionary powers. 29 C.F.R (c), (d). None of these terms is easy to define and a mistaken classification can cost two or three years of back pay.