Recreation helps build healthy minds. In fact, while doing some research recently, I learned that studies have shown employees who engaged in some type of regular exercise were more committed to their organizations, and their outlook improved with regards to working with their supervisor and co-workers. 

Exercise really puts a positive into employees’ lives. 

The studies also showed that employees who engaged in regular exercise had reduced absenteeism. Employees who are healthy go to the doctor less often, which saves insurance companies money. 

A big mistake employers make, however, is they don’t understand the importance of recreation. 

They don’t realize the impact it can have on the overall health and well-being of their employees. They don’t understand how it contributes to productivity. 

If they did understand this, they would see a major benefit in offering employees some kind of fitness or wellness program, and maybe also in providing an incentive for participating. 

There are three steps employers can take if they want to effectively utilize the importance of recreation in their company: 

• Educate yourself on the value of recreation for your business and your employees. There is a lot of information out there—books, online—that explains the benefits of recreation to the employer.
  
  
• Ensure you give your employees time to participate in your company’s fitness/wellness program. Allow them to slip away a few minutes early in the afternoon, or take a longer lunch, so they can get to the gym.
  
  Employees who exercise at lunch time tend to come back to work feeling more mentally alert and more energized, which makes them more productive.
  
  
• Decide what you want to do—Do you want to offer an on-site fitness facility? Do you want to reimburse your employees for their gym memberships? Do you want to create a healthy living awareness program? Do you want to encourage employees to get away from their desks for at least 15 minutes a day and walk around the building/campus?
  There are many different options available. You need to look at the costs of the initial investment and weigh that against other factors to determine the benefits of each option. 

An Example

When I was working in HR for a manufacturing company, we had supervisors who would start the morning out with their employees by stretching together. They had a little fitness routine they all used to do together before everyone went to their stations and started working for the day. 

There was a lot of value in this because most of what they did all day was repetitive motion, so the morning fitness routine would give employees the opportunity to warm up their muscles and get ready for the work day. 

In fact, the director of the entire manufacturing operation was really into fitness; he competed in triathlons. So he put together a TV show for the employees called “The Adventure Race.” 

It was a lot of fun working with him on this. What we would do was research different activities that people could participate in. Some of them were physically challenging; some were a combination of physical and mental challenges. The TV show definitely had a positive result. 

This company is a great example of how to utilize the importance of recreation. I think more companies need to have fun options like this for employees. 

In my last Insight, I talked about diversity awareness and how it’s evolving. 

There are a couple mistakes employers make when it comes to diversity awareness: 

• Having Biases—Everyone has their biases, and it’s really hard to let them go sometimes, but understand that, by letting go, it can help move you in the direction of diversity awareness.
  
  
• With Differences, There Are Conflicts—You need to be prepared to deal with any conflicts that might come up related to employee biases.  Are these conflicts related to biases/ diversity/differences? 

You also need to educate your employees around how to deal with biases and conflicts related to those biases, whether it’s re-training or doing team-building, because one of the things I often see is, when a business doesn’t train employees to deal with biases and related conflicts, the company could face a discrimination lawsuit.

That can zap a company’s time and financial resources. 

When it comes to diversity awareness, education is key. 

As I mentioned in my last Insight, for the first time ever, there are four distinct generations in the workplace. Training needs to be delivered around this. 

I think it’s important to understand because people are born in different time periods, sometimes that shapes how they look at things, or their view is shaped by what they’ve experienced and things that occurred while they were growing up. 

So each generation is shaped by different events, and by understanding the differences, you can better understand how someone else functions. Or you can at least learn what’s important to people, how they want to be treated, how they learn best, etc. 

As a result of this knowledge, you can create a work environment that supports trust and respect for all employees. 

An Example

My daughter, who is a Gen Xer, just said something funny to me the other day. She told me, “Mom, I just don’t understand these younger people who are coming into the workplace.” And here I am thinking, “They’re closer to your age than mine!” 

So even people who are close in age don’t always understand the differences each generation presents. 

A couple of months ago, I was doing some training on performance appraisals and employee coaching, and there was a question that came up about younger employees, so I had to go into a discussion about the different generations and different ways of thinking. And people just didn’t want to hear it. 

They didn’t want to hear that people are different. 

I think part of it was they thought I was trying to give the younger generation a free pass for poor performance and that’s not what I was saying at all. 

I was trying to explain that each person thinks differently and they perform work in ways that make sense to them, and that doesn’t necessarily mean the person is a poor performer. 

Sometimes employers need to sit down and listen to what employees have to say. Both the employer and the employee may be looking at the same situation from different perspectives and that’s why listening is important. 

Positive changes can come from listening to each other. 

You never know where your next great business idea is going to come from. It could come from somebody that you’d least expect it to. But it could also come from a collaboration of two people who are listening to each other.

Creating a workplace that is aware of and respects the broad spectrum of human diversity is imperative for organizations today. 

I believe this is true for a number of reasons: 

1. We’re global now—People don’t think about it that often, probably, but we’re a multi-cultural environment.
2. Diversity has evolved—In the early 1990s, diversity training was focused on race and gender. Diversity has evolved past that. 

Diversity comes from helping employees learn to work well with each other and making a contribution to the company, giving it a competitive advantage. 

If organizations don’t take diversity seriously, they could find themselves lagging behind their competitors. 

I also think, these days, employees want to belong to an organization where diversity is valued. They want to be in an environment that’s inclusive; where everyone is respected and valued for the contributions they make. 

Common Types of Diversity

As I mentioned above, diversity has moved past just referring to race and gender. Now diversity goes way beyond that. Some new factors falling under diversity are: 

• Age
• Education
• Generation
• Job Type
• Geography (where the person grew up and where they’ve lived since)
• Tenure
• Personal Background
• Religious Convictions/Beliefs 

So I think the most important thing that employers can do is to be aware that everyone has something to contribute to the company’s success. It’s just that they may do it in a different way. 

Those differences can be used to create new ideas and strategies. 

For example, if you have a jigsaw puzzle, you have pieces that are different shapes, different sizes and different colors, and then you have to work to fit those pieces together. In the end, when you’ve fit all those pieces together, you’ve created a picture. 

How Does Diversity Awareness Affect a Business?

People come in much the same way. They come in a variety of shapes, sizes, nationalities, races, etc. and you can use those unique qualities to make a great business. 

People are unique and all have different perspectives on things. And because of those perspectives, you can accomplish things like solving problems, resolving conflict, finding new ways to do things and helping create successful teams. 

Utilizing the diversity that exists in your workplace can help you create a high-performing team. 

Diversity is a very positive thing. 

And if your company wants to operate globally, you definitely want to look at becoming aware of diversity and how it affects your business. 

In my next Insight, I’ll talk about the common mistakes employers make regarding diversity awareness.

In part one of this series, I informed you of mistakes employers commonly make and the things they really need to understand about FLSA claims. 

More about Wage Claims

Employees claiming to be owed wages under the FLSA can make a complaint to the Wage and Hour Division of the United States Department of Labor (DOL) or file a lawsuit without going to the DOL. Either way, the employee can recover back wages for two years prior to the claim being filed, unless they can show the employer acted “willfully,” in which case it is three years. And when I say something was done “willfully,” I mean the Supreme Court’s definition that the employer either knew or showed reckless disregard as to whether its conduct is prohibited by the statute. 

In addition to back wages and overtime pay for unpaid hours worked in excess of 40 hours in a workweek, an employee may also recover “liquidated damages,” which means the unpaid wages may be doubled. 

While some wage and hour records must be kept only two years, others are required to be retained for three years under the federal law. Since employees can, in some cases, recover up to three years back wages, employers need to keep pay records for up to three years. In fact, other regulations may require even longer retention. For example, the Texas unemployment tax rules require a four-year retention period for payroll records, so it is a good idea to keep all wage and hour records for at least four years. 

Steps to Avoiding Claims

The best way to avoid claims is to consult with your HR team and legal counsel, who can explain the FLSA to you and will ask the right questions to ensure that you are properly classifying your employees. Since exemption classification is based on fact-specific tests that are difficult to apply, where exempt status is not clear, the best practice is to treat the employee as nonexempt, track hours and pay overtime. Employers should take care to ensure nonexempt employees’ time sheets reflect actual hours worked, avoiding claims for “off-the-clock” work, which are common. Employers should also consult with their HR Team and legal counsel to ensure they are calculating overtime correctly, which is also an area many employers do not fully understand. 

HR professionals are trained to understand the nuances of overtime pay requirements and guide employers in the right direction. They also have a number of resources available to them that will help with questions you may have. 

If you don’t have HR support, I would suggest you consult the Wage and Hour Division Web site or the Department of Labor Web site. Both Web sites provide extensive information to assist employers and employees in FLSA-type situations. 

Another option is to consult an attorney. Preferably one who has knowledge of employment laws and is well-versed in FLSA, as this is a highly specialized area. 

Example

A couple of years ago I worked with a customer that asked me to review job descriptions for two of their administrative support employees. I reviewed the job descriptions and after I looked at them, I felt that the client had improperly classified the two employees as exempt. And they should have been classified as non-exempt because the work they were doing was clerical/administrative-type work. 

In this particular situation, it was a significant challenge to convince the client that the employees needed to be reclassified as non-exempt. And one of the things that I think helped change the company’s mind about this is when I started showing them how much money was being awarded to employees in similar cases, and that’s when they became convinced that the change needed to be made. 

So even though it was a challenge to resolve this particular situation, I feel like it was worth the time and effort. I feel like it was the right decision and that the client felt the reclassification was really in their best interest.

A paid time off policy offers employers a variety of options. 

Sometimes with paid time off (PTO), employees end up with unused days at the end of the benefit year. When this occurs, typically the unused days can be rolled over or paid out (this all depends on the company’s policies). Many companies allow employees to roll over a set amount. Other policies allow employees to receive pay for unused PTO. PTO policies that allow employees to select between roll over and cash payout can raise serious tax issues, so employers should consult with tax counsel before implementing such a plan. Also, some state laws may not allow employees who have accrued PTO time to lose the time.   

Some employees—if they’ve had a long tenure at a company—will end up with a lot of extra PTO. This is due to the fact that companies usually increase PTO at each five-year milestone. 

I personally know some people who have five or six weeks of PTO left each year, and there’s no way to carry all that time over. 

That’s why many companies have a PTO Sharing Bank, which I think is a wonderful option to have. 

A PTO Sharing Bank is essentially a place where unused PTO hours that exceed the carryover/pay out options go. Employees are also able to donate hours to the Sharing Bank if they choose. Then if something happens to an employee (an illness or a family issue) and he/she needs to take time off, but doesn’t have any days left, he/she can apply for additional PTO hours from the Sharing Bank and take the time off with pay. You may need to consult with counsel on state law to determine if there are any limits on the ability to have such a policy. 

If your company has a PTO Sharing Bank, be sure to determine parameters and include the rules in your paid time off policy, such as who is eligible and under what circumstances.

For example, I once worked with a company to help them transition from having separate vacation, sick time and personal time to having it all rolled into one PTO policy. 

Their employees really liked having the flexibility, and the company allowed for some carry-over on more of the remaining days at the end of the year because they had an employee who had some health problems. The company knew this ahead of time and planned for it because they wanted to allow the employee to have additional paid time off from work. 

Additional PTO Facts

Employers often ask if implementing a PTO program actually reduces unscheduled absences. 

According to the Alexander Hamilton Institute survey I discussed in part one of this Insight, almost 60 percent of the companies that responded said a PTO program did reduce unscheduled absences. A majority of respondents said it reduced unscheduled absences by up to 10 percent. Two and a half percent said unscheduled absences dropped between 11 percent and 20 percent; a little more than three and a half percent said unscheduled absences dropped more than 20 percent. 

The total number of paid days off included in a PTO policy is often fewer in number than the total number of days included in separate vacation, sick and personal day policies, but employees really like the flexibility in scheduling their time off from work and being able to use it whenever they need to without feeling guilty when having to take off to care for a sick child, elderly parent, etc. 

PTO provides a better work-life balance and employees are less inclined to abuse the system by claiming to be sick so that they get all allotted sick days. 

Another fun thing companies can use PTO days for, with minimal cost, is to reward employees for reaching certain goals, such as sales goals, customer retention goals, accident free/safety goals, etc.

For example, if the company reaches its goals for the year, then employees are rewarded with one extra PTO day to use at their discretion. 

Having a paid time off policy truly is a win-win situation for employees and employers.

The number of lawsuits involving Fair Labor Standards Act (FLSA) claims has grown significantly over the last few years. I was looking at some statistics recently which revealed that, in 2007, the Wage and Hour division in the Department of Labor recovered more than $220 million in back wages for more than 341,000 employees.

Trends show a big increase in class action (or collective action) lawsuits. Those are actions that involve more than one employee at a company. At a recent employment law conference, an attorney stated the reason why this is happening is because plaintiff attorneys are watching for FLSA violations, and they’re willing to take these cases, on a contingency basis, due to the fact that they think they’ll have success with them. This is reflected in statistics.

During the 1990s, FLSA lawsuits ranged from 1,000 to 2,000 annually, but the cases began to rise around the year 2000. And in 2005, the number of filings increased to more than 4,000.

It’s interesting that, in 2007, FLSA collective actions were filed more frequently than any other type of workplace class action lawsuits.

Mistakes Employers Make
One of the biggest mistakes employers make is improperly classifying their employees as exempt when the employees should actually be non-exempt. I think some of that stems from a lack of understanding of what FLSA actually is and how to determine exempt vs. non-exempt employees.

Some employers incorrectly think they can classify employees as salaried exempt and they don’t have to pay overtime. They often think this is a way to keep their costs down, especially if the company has shareholders, because saving money helps satisfy their demands. Unfortunately, they’re mistaken, because, whether an employee is exempt from overtime pay requirements is determined by law based on their job duties as well as how they’re paid. If an employee’s job does not fit within the requirements for overtime exemption, the employee must be paid overtime and FLSA claims can be costly.

In addition to not understanding exemptions, some employers don’t want to keep timesheets because they think paying someone a salary is much easier than calculating time on an hourly basis, especially where employees work varying hours, or travel or have other responsibilities that make timekeeping difficult. Unfortunately, difficulty in tracking hours worked is not a valid reason not to pay overtime to non-exempt employees.  

These kinds of practices are really risky to any employer and could lead to litigation and liability. One of the things I find interesting—and when I’ve told employers this they’ve been surprised—is that a lot of non-exempt employees keep track of the hours they’ve worked, whether or not the employer is also doing it.

What Employers Really Need to Understand
When talking to companies about FLSA and possible claims, I have found that most employers don’t believe employees will file a claim against them. What they don’t understand sometimes is that claims come from employees that feel like they haven’t been treated fairly or employees who feel they’re not being paid what they’re owed. Claims may also be brought by disgruntled former employees whose employment was justifiably terminated, but see overtime claims as a way to “get back” at the employer.

In fact, claims can happen either while the employee still works for the employer or after they terminate. Employers are prohibited from retaliating against an employee who asserts an overtime claim.

If a wage claim is filed, the Wage and Hour division of the Department of Labor investigates. They’ll review the employee’s claim and often will audit all other positions at the company. Sometimes they’ll even review former employees’ information. If the employer does not have time records, the Wage and Hour division will side with the employee on the number of hours worked since the employer failed to comply with the legal obligation to accurately track all hours worked. The Department of Labor can also assess civil monetary penalties against an employer. Employees may also file suit without ever going to the DOL.

In FLSA cases, the employer can be ordered to pay back double the lost wages, as well as attorneys’ fees.  

In my next Insight, I’ll go into more detail about keeping time records and steps employers can take to avoid FLSA claims. 

According to an article on the Society for Human Resource Management’s (SHRM) Web site, a recent Survey of Traditional Time Off and Paid Time Off (PTO) Program Policies, conducted by the Alexander Hamilton Institute, showed that (of the people who responded to the survey):

• 63 percent still have traditional time-off programs (separating paid vacation and sick time off); and
• 37 percent have a PTO bank that combines all their available time off.

That surprised me quite a bit. I expected the PTO bank numbers to be higher and the traditional time off numbers to be lower.

Some organizations have turned to PTO banks because they help reduce the expense of unscheduled employee absences and I think they also help to retain and attract employees. Employees like having a PTO bank because they can use the time however they want to use it.

The Alexander Hamilton Institute survey also stated that employers were asked if implementing a PTO program reduced unscheduled absences. Of those surveyed, 56.5 percent stated that it did. Of that number:

• 54 percent said unscheduled absences were reduced up to 10 percent
• 2.5 percent said unscheduled absences dropped between 11 percent and 20 percent
• 3.6 percent said unscheduled absences dropped more than 20 percent

Of the companies surveyed, 78.4 percent said their PTO program met their expectations; 14.6 percent stated that it exceeded their expectations.

In order to determine if PTO could work for your company, you first need to know the differences between PTO and traditional time off.

The Differences
The major difference between PTO and traditional time off is the flexibility.

With traditional time off, you would have separate vacation time, sick time, personal days and some companies even include holidays in with traditional time off.

With PTO, instead of having different programs for each type of time off (vacation, sick, personal, etc), all the time is incorporated into one bank. Because of this, sometimes the company gives fewer days, but people can use the days the way they want to use them.

For example, with a traditional time off program, an employee might have 14 days of vacation, five sick days and one personal day. With a PTO program, an employee might have 20 days (or some companies do it by hours) to use for any reason.

A Paid Time Off Policy
Paid Time Off policies need to be written so employees are informed of and understand them. A policy should include:

• The number of PTO hours that employees receive.
• What (if anything) the PTO is based on, such as length of service or industry experience.
• Who gets PTO; most companies only give PTO to full-time employees, but sometimes employers allow part-time employees to participate on a pro-rata basis.
• What the maximum accrual is. Some policies call for a maximum amount allowed and if the person reaches the maximum, PTO stops accruing until PTO is used. Other policies limit what can be rolled into a subsequent year. These types of provisions are subject to state laws.
• How PTO is approved. Supervisor approval is usually needed to take time off, at least where the need for time off is known in advance.
• What happens to PTO if an employee gets terminated? Terminated employees are usually paid for accrued, unused hours. If they have a negative balance when they terminate, the negative balance may be deducted from their final paycheck, depending on state laws.  
• How PTO can be taken. For example, many companies require PTO to be taken in blocks, such as two, four or eight hours at a time.
• Leave of absence information. If an employee takes a leave of absence, they are usually required to use all the PTO they’ve accrued at the beginning of the leave. Also, employees usually don’t accrue PTO when they’re on leave.

Interesting PTO Facts
Some other things I found interesting in the Alexander Hamilton Institute survey was there are some companies out there that make their PTO programs “use it or lose it” plans, so if employees don’t use all of their time off by the end of the year, they lose it. As noted above, there may be state laws that affect these types of provisions.

Some companies allow employees to carry over their unused hours as long as they’re used by a certain date in the new year.

Some companies provide a payout for the unused hours. This type of provision may have tax consequences, so speak to your tax advisor if you are contemplating this.

Some companies include holiday hours in their PTO (or in a separate holiday hours bank), and employees get a specific number of holiday hours to use throughout the year. For example, I used to work for a company that gave employees 80 hours of holiday time every year and we could use that time for whatever holidays we celebrated. Tracking holiday time like this allows for more flexibility, which is great for employees who, for example, may celebrate holidays other than those designated by the company. Note that some states may treat these types of policies as vacation policies for certain purposes, so be sure to check with a human resources specialist.  

Another interesting thing regarding PTO is that some companies even allow employees to donate their PTO into a pool for other employees to use during times that they may be going through some sort of emergency or crisis and might not have enough of their own PTO left.

As described in this Insight, a paid time off policy can give employers a variety of options to offer employees. Such a policy allows some flexibility in scheduling time off, which can be a way to attract and retain employees.

In my last Insight, I talked about a manager’s vital role in improving employee relations. Management is a very important part of improving relationships with employees at your company. 

Steps to Improving Employee Relations
One of the things I do when I have a new client come on-board is try to sit down with them and get a good understanding of what their business is about and what their goals are. I also like to find out how they see themselves meeting those goals. 

I want to build in the human factor of employee relations, so a lot of times I’ll recommend setting up policies and procedures for their company. This practice sets the tone for the company culture and helps employees know what is expected of them. 

Here are some steps toward improving employee relations: 

1. The Importance of Having Good Management--For example, I had a client call me the other day and said he wanted to do harassment prevention training. He said he felt like it’s very important for his employees to understand what’s acceptable and what’s not acceptable in the workplace. He was in the process of hiring new employees and he wanted to prepare his current employees as role models for the new employees, especially since new employees will affect the current employees’ work environment.
   
   He said his company was getting ready for a lot of changes and he wanted to set the right tone and address issues proactively.
   
   Being proactive is also very important. When a company has a clear vision of where they want to take their business, they often recognize that changes come with that and so they should do everything they can to prepare for those changes ahead of time.
   
   
2. Walk the Talk--One way to do this would be to hire a Human Resources (HR) specialist who is well-versed in performance management to come in and do some training to help managers deal with change. Make sure you are also involved in all of the training, that way you’re setting an example for everyone as well as setting the tone for your company’s future.
   
   One thing I’ve learned during my time in HR is if you don’t have support from the top, then almost nothing work. So walking the talk, so to speak, will make all changes go a lot smoother now and in the future.
   
   
3. Hire the Right People for the Job--I think it’s especially important to make sure you have the right people in the right job at the right time and with the right skills. And this is one of those things that sounds a whole lot easier than it actually is, but when you give your managers and employees the proper training, you can accomplish this.
   
   Training and coaching your managers and giving them some tips on how they can be more effective is really to their benefit.
   
   
4. Put Yourself in Their Shoes--I mentioned this in my first Insight, but treating employees with respect, dignity and fairness is also very important to improving employee relations. If you just put yourself in their shoes and see things from their perspective, it will help you to become more understanding of their viewpoints.
   
   I think that’s exactly what my client that I mentioned above does. He puts himself in his employees’ shoes, and from that perspective he is able to be proactive rather than reactive when it comes to improving employee relations.
   
   If you don’t think about how something will impact your employees, then you’re just inviting problems.

Employee Relations Affects the Bottom Line
Everyone has probably heard the term “employee relations.”  Intangibles and “soft” skills are involved, while employee relations can also be affected by laws and regulations. To help business owners avoid costly mistakes, I want to emphasize the intangibles or the behaviors that positively affect a business and its employee relations. 

Managers play a vital role in developing and sustaining productive and positive employee relations. Basically, this role is a delicate balance as managers serve as a liaison between employer needs and employee needs. 

With all the daily distractions that managers face, they can often forget how important it is to foster good employee relations. A manager’s role is important, too, because employee relations impact morale. Morale impacts business results, including productivity, excellence in customer service and, ultimately, the bottom line. 

Relationships Should Not be Taken for Granted

Employee relations, like any other relationship in life, is an ongoing process. People need to constantly work at and nurture their relationships. In any context, relationships should not be taken for granted; in today’s business climate of constant changes and uncertainties, employee relationships are particularly vulnerable. More than ever, maintaining quality employee relations takes time, effort and skill. 

As people, we approach relationships in a variety of ways depending on our needs, values and goals. In the business world, we want our managers to effectively serve a dual role as: 1) an employer advocate; and 2) an employee advocate. As human resource professionals, we partner with managers to succeed in this important role. 

How Do Successful Managers Succeed at Employee Relations?

In my work, I help guide managers to adopt the following behaviors in order to be successful at developing lasting and meaningful employee relationships:

1. Communication: ongoing, active, two-way process that results in a positive relationship.
2. Trust: like communication, it works both ways to be effective.
3. Ethics: their ethics must be understood—otherwise employees question their motives.
4. Fairness: treat all employees the same, with no favoritism. This doesn’t mean, however, that superior performance isn’t rewarded.
5. Expectations: employees want to understand what their managers expect of them. If they don’t, undue stress is put upon them which obviously affects productivity.
6. Conflict Resolution: where there are people, there are bound to be conflicts. Be a good role model and manage conflicts so they don’t get out of hand.

No Jerks Allowed

Finally, I encourage managers to be compassionate and treat employees with respect and dignity. I always ask them, “How would you feel if the situation were reversed? How would you want to be treated?”  This approach helps a manager to be more effective at being proactive, rather than reactive. Your managers and your business will be rewarded in the long run by taking the time and effort to develop and maintain long-lasting and positive relationships.