Human Resource Management and the Law

Way back in 1965, I assumed my first management position – managing a grand total of four people. I was young, naïve, inexperienced and anxious to learn. Back then, there were only a handful of laws that governed personnel management (human resource management). You could ask literally any question you wanted during an interview, and if you wanted to fire someone, you just did!

Oh my, how things have changed!

I'm tempted to comment on this, but I won't because it would serve no purpose. The fact is, like the situation or not, we have to learn to live with the human resource management laws of today.

Over the past 40 years, I've learned that good human resource (HR) management is a learned skill. And there's a lot to it.

In past columns, I've stated that if you hire the best, train the best, communicate the best, motivate the best and compensate the best, then you'll enhance the probability that you'll be the best.

My experience in traveling the U.S. and Canada tells me that many small business owners – and that's who makes up the kitchen and bath industry – are poor HR managers. Many kitchen and bath dealership owners evolved into their current roles. They never really planned to be owners or bosses. It just happened!

The typical kitchen and bath dealer does $1.5 million in annual sales and employs six to eight people. Kitchens represent 80% of their total revenue; the owner works 60 hours a week (on a good week) and represents between 75% and 80% of total sales.

Owners usually wear more management hats than should be expected. There's financial management – budgets, P&L statements, balance sheets, job costing, cash flow management and the like. There's also marketing management – advertising, promotion and public relations. And then there's HR management, with all the many areas of responsibility that go along with it.

Wow! No wonder so many owners of kitchen and bath design firms are stressed out!

In this column, I'll simply touch on several of the laws you need to know. If there are any of which you don't have at least a basic understanding, do your homework! You can save yourself and your business a lot of heartache – and money – if you understand the legal landscape.

I know you've heard about the multi-million-dollar employee lawsuits currently broadsiding American businesses. As a business owner or manager, you're continually faced with the challenges of hiring, appraising, motivating, disciplining and occasionally firing employees. All these activities can catapult you headlong into a law, regulation or court decision that may put you and your company on the wrong side of an employment issue – and in harm's way.

Inadvertently, you could become the target of a government agency. Or, you could find yourself bearing the brunt of a costly legal action by a disgruntled former employee – or even an individual who never made it past the initial employment interview.

That's why it's so important to take a close look at the employment laws by which you must abide. You should be fully aware of the major ones. And you should seek professional counsel before you get bogged down in expensive claims.

Here are the key areas to examine, and for which to prepare your business:

  • State and Local Laws. It seems like everyone is getting into the act these days! What to do? First, call the local and state offices that handle labor matters in your area. They may have different names across the country, but they're easy to identify in phone book listings of government agencies.
    Ask for information on wage and hour, fair employment practices and whatever other issues about which you seek information. You can also consult with local attorneys who specialize in HR issues.
  • The Four Posters. All companies must post at least four notices to their employees: Federal Minimum Wage (Fair Labor Standards Act); Equal Employment Opportunity (this covers civil rights and age discrimination); Job Safety and Health (Occupational Safety and Health Act – OSHA); and the Employee Polygraph Protection Act.

You can get these posters from the Department of Labor just by asking. They must be clearly displayed in every location in which you have employees. In some states, they may have to be in both English and Spanish. Most states require that you post their minimum wage law notices regardless of whether you have posted the federal poster.

  • Wages. If there's any law that's almost universally known among employees, it's what's popularly known as the Federal Wage and Hour Law – and officially known as the Federal Labor Standard Act (FLSA).

If a locality has a higher minimum wage than the federal one, then that wage must be paid. If your state or local area has a lower minimum wage than the federal rate, you must adhere to the federal minimum wage.

You also need to be fully knowledgeable about the following issues as they pertain to the FLSA:

  1. What's included in the calculation of minimum wage?
  2. Who's entitled to overtime pay and who's not?
  3. Are any employees exempt from minimum wage and hour requirements?
  4. Does FLSA set standards for benefits such as vacations, severance pay, holidays, perks and the like?
  5. What employee wage, hour, pay and personnel records must be kept?

There isn't space for me to address these important questions – so please take it upon yourself to discover the answers to them.

  • Title VII, The Civil Rights Act of 1964. Few employers in this modern era intend to discriminate with respect to employment practices among individuals based on age, race, religion, gender, color or national origin. Still, habits, customs, mores and prejudices still impact today's workplace, resulting in discriminatory practices.

That's why the government passed the Civil Rights Act of 1964 (since amended a number of times). The Act also includes Title VII and Equal Employment Opportunity (EEO). An enforcement body for the laws banning discrimination in employment, the Equal Employment Opportunity Commission (EEOC) was also created. Be aware that many states and some cities have similar statutes, often under the labels of "fair employment practices" law.

The activities for which discriminatory practices are banned include hiring, compensation, promotions, discharges, lay-offs and other conditions of employment.

  • Interviewing. One of the biggest problems for many kitchen and bath design firms occurs in the initial stages of the hiring process. The most troublesome area, in fact, is pre-employment – both in the employment application and in questions typically posed during pre-employment interviews. I have a list of Lawful Job Application Questions and a Lawful Interview Questions form. If you'd like these, just send me an e-mail (cod5@juno.com) requesting them.

Once again, space doesn't allow for additional details. Don't stop here! Find a good source of information and study it.

  • Sexual Harassment in the Workplace. Title VII did not address this issue specifically, but EEOC guidelines and many court cases have established guidelines pertaining to unwelcome sexual conduct in the office and factory. You should keep in mind that sexual conduct becomes unlawful when it is unwelcome. It can include the following forms of harassment:
  1. Verbal: Sexual innuendos, suggestive comments, threats, insults, jokes about gender-specific traits, as well as sexual propositions.
  2. Non-Verbal: Making suggestive or insulting noises, obscene gestures, whistling, leering.
  3. Physical: Touching, pinching, body brushing, coercing sexual intercourse, and assault.

With what seems to be an open door for claims of sexual harassment, you may have to learn what you can do to end its practice and to protect yourself and your organization.

Lastly, what I am listing here are the key areas where various laws and regulations apply. I don't have the space to go into detail, but you have an obligation to be familiar with them and to be sure you manage your business in a completely lawful manner. Here they are as follows:

A. Equal pay for equal work.
B. Basic OSHA record-keeping requirements.
C. A self-inspection safety and health program.
D. Worker's Compensation.
E. Unemployment Insurance.
F. Employee Polygraph Protection Act.
G. Age discrimination.
H. Older Worker's Benefit Protection Act.
I. Hiring the handicapped.
J. Pregnancy on the job.
K. The Family and Medical Leave Act.
L. Immigration Reform and Control Act.
M. Benefits (non-cash compensation).
N. Reporting and disclosure for ERISA.
O. Employment at will.
P. Terminating an employee.

Now, if all that doesn't give you a knot in your stomach, I don't know what will! All I can say is that you're working hard to grow a well-run and profitable business. Don't let ignorance of HR management law be your, and your firm's, downfall!

Read past columns on Personnel by Hank Darlington, and send us your comments about this article and others, by logging onto Kitchen & Bath Design News' Web site, located at www.kitchenbathdesign.com.

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