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HR Practices Revisited: Are You Within Your Rights?

Policies, procedures and HR practices. It seems as soon as you have them written in stone, the story changes. Depending on your organization’s size you may have 30 or more policies alone, on everything from hiring practices to sick leave to confidentiality. Are you up-to-date on them? What are you missing that could render some unenforceable? Here, we take a look at three areas you may need to rethink.

As Behaviors Change, Are Your Policies Keeping Pace?

“Who could have seen this coming? More than 20 years after they banned smoking in most workplaces, the whole question has come up again in the form of electronic cigarettes or e-cigarettes,” says Caroline Valentine, founder of Austin-based Valentine HR.

Trends like e-cigarettes, social media, and work-from-home flexibility are continuously threatening the validity of established policies. But they don’t need to. According to Valentine, the key to managing these ever-changing situations is to be sure those policies are broad enough to stay evergreen, no matter what issues are thrown at them in the future.

“Take a step back and look at how these new situations affect current policies. Chances are, they already fit somewhere,” she says. For instance, while the FDA has yet to rule on the second-hand health risks of e-cigarettes, they still contain nicotine and other chemicals that fail many “no tobacco” or “nicotine-free” workplace policies.

“Social media is another great example,” Valentine explains. “While many companies have yet to incorporate a specific social media policy for employees, the principles that can be called into question often do fall under traditional policies. For instance, asking to have access to an employee’s LinkedIn account could violate established privacy protection; while an employee talking about his or her company in social media may violate an existing confidentiality clause.”

If your policies don’t seem to cover these issues, they may need to be broadened or generalized in order to stand the test of time.

Bonuses Can Impact Overtime Pay

You already know non-exempt employees need to receive time and a half their regular rate for overtime. But did you know that basing this on an hourly rate of pay may still violate FLSA rules?

“If your company is considering paying an end-of-the-year or holiday bonus, you must first decide whether that payment will impact your non-exempt employees’ overtime premium,” writes Whitney M. Harmon of Baker Donelson Bearman Caldwell & Berkowitx PC. “When employers pay non-exempt employees a non-discretionary bonus and those employees work overtime during the period covered by the bonus payment, that bonus compensation must be included when calculating the employee’s regular rate of pay for the purpose of calculating the overtime premium.”

To determine whether your bonuses affect overtime pay, talk to your HR or legal consultant about whether the bonuses are discretionary (not expected or promised) or non-discretionary (expected or promised). Only non-discretionary bonuses affect overtime rates. However, if you think the difference between the two types of bonuses contain no grey areas, you’d be mistaken.

“If an employer announces a possible bonus to employees to induce them to meet certain production or goals, the bonus is no longer discretionary.  Likewise, when an employer regularly pays a specific bonus amount at the same time each year, its discretionary status could be called into question,” Harmon adds.

Confidentiality Agreements Too Often Lack the Basics

Confidentiality agreements, non-competes and other “contracts” are common features of the hiring process.  However, asserts HR Consultant Gina de Miranda of Austin HR, these documents are usually unenforceable as contracts.  Why?  Because they fail the legal test for what constitutes a contract.

She references the State of Texas’s purchasing department guide on contracts to illustrate this point. According to the guide, contracts must have these elements: An offer, an acceptance that is in compliance with the terms of the offer, a legal purpose or objective, a “meeting of the minds”/mutuality of obligation, consideration and competent parties.

“Far too many confidentiality, non-competes and, even assignments of intellectual property are lacking in the very basic definitions of contracts,” de Miranda says. “For example, if someone provides a job candidate with a confidentiality agreement and the candidate writes on the agreement: ‘I can’t remember all the things that I have learned over the years that didn’t come from your company,’ or ‘This agreement is overly broad and covers things that I won’t be working with at your company,’ then there is no agreement. Contracts, of any type, that extend far beyond the current activity being discussed probably won’t fly in court.”

Her advice: Before your company makes an offer, make sure you and your job candidate agree.

“Do not rely upon any document to protect your company’s interest before you make sure that you have actually created the elements of a binding agreement,” she cautions. “Even more importantly, if the agreement favors your company’s interests well above the candidate’s interests, the agreement may be unenforceable.”

The time to discover your agreement is flawed, de Miranda concludes, shouldn’t be when you get served with a lawsuit.  “Consider having a litigating business attorney review your agreements before you begin using them on potential employees,” she states.

Where Do Your Practices Stand?

What HR practices or company policies keep you up and night? Which ones have you neglected, perhaps for too long? And which one seems to change ad nauseam? Share your thoughts with us. We’ll expand the most popular ones into their own blog posts.

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