Category: Human Resources Best Practices

Basics of Onboarding an Employee

Published by Brett Holubeck on July 13, 2020

Picture of a life preserver with the phrase "Welcome Aboard" written on it to demonstrate that when onboarding employees should feel welcome. — Photo by Nick Fewings on Unsplash

Onboarding a new employee is tough. Onboarding a new employee remotely is even harder. There are several considerations that every company needs to have before they bring on a new employee especially in light of the current Coronavirus pandemic.

Make sure that the Paperwork is Completed

As I mentioned in an earlier post, employers still need to complete the I-9 for all new hires, but this rule has changed somewhat:

Every employee must fill out an I-9 when they are first hired. Employers normally cannot complete the I-9 form remotely. Companies must review the applicant/new hire’s documents in person. With COVID-19 (the Coronavirus) raging, this is one rule that has been relaxed. Remote workers no longer need to present documents physically. Companies can now view the documents through video and write COVID-19 as the reason for the delay in physical inspection on the relevant part of the I-9. They will need to review the documents physically once this disaster is over.

In another post, I listed some additional information on the paperwork that an employee needs to fill out on their first day. Rather than rehash that article, I want to use this post to discuss the actual onboarding process beyond merely filling out paperwork.

What is New Hire Orientation?

Onboarding is not new hire orientation. New hire orientation is essentially showing the new employee where they will sit/work, reviewing policies, and, let’s be honest, it is mostly filling out paperwork and watching training videos. It also involves telling them the basics of how to do their job.

Onboarding goes much deeper. It is about setting the employee up for long term success and to be a member of the team.

How to Onboard Employees Effectively

You need to have a plan. When I did Teach for America, one of the most important lessons that we were taught as teachers was to backwards plan. You needed to know where you wanted to end up, so that you could understand how to get there. For example, one of the goals may have been for the students to know their multiplication tables up to the number twelve. With that end in mind you can plan a series of lessons and tricks to help students memorize these tables so that they could do multiplication with bigger numbers later.

The same lesson applies to employees. A good job description can help you keep the end in mind (I wrote about job descriptions previously here). It is essentially what you want the employee to be able to do (i.e. where you want the employee to end up).

If a company doesn’t know what their end goals are for a new employee, then the new employee definitely won’t meet those goals. Onboarding starts on day one and continues for months until the employee is fully integrated into the company. Before getting into the details of improving onboarding at an organization, I want to briefly note that onboarding is a company and job specific process (or at least it should be). Ideally, there should be a different onboarding process for every type of job at the company because the purpose of onboarding is to make a new employee a good fit for their position and at the specific company they work for. Moreover, in the times of the coronavirus there are several additional considerations and training that employees will need.

Here is a quick overview of what the onboarding process may look like for employees generally.

The First Day of Onboarding

Companies need to communicate with the coworkers of the future employee to let them know that the company has hired a new employee. The team, or several members that the new employee will work with, should be encouraged to welcome the new employee when they first come into the office. In the coronavirus or “zoom era,” a quick zoom chat with everyone to welcome the new employee at the beginning of their first day is a great way to make the employee feel that they are a part of a team and the company is a good place to work. The same is true when the employee first comes into the office or onsite work environment. Gathering the fellow coworkers of the new employee to welcome them is a great way to immediately break the tension of starting the first day at a new job.

After the initial welcome, the new employee will likely have several trainings or meetings with their manager. Management should obviously give the new employee a schedule that they will follow on the first day; there is nothing worse than feeling lost on day one. The company should also assign a mentor or supervisor that will make sure that the employee finds his or her way to lunch, has people to eat with, and can answer any questions the new employee has throughout the day.

After the First Day

Once the new hire orientation is completed. The actual process of onboarding begins. This is where a good onboarding and a bad onboarding program can be differentiated. Many times, a company’s onboarding process is just a couple day new hire and training process without a long-term plan to integrate the employees into the overall team.

The only way to do that effectively is to map out the information that the employee will need to be successful in the workplace. In other words, you need an actual, formal onboarding program rather than an informal, haphazard one where employees learn what they need to do on the fly.

As I see it, there are a few key components of the formal, long-term onboarding process. One is integrating the employee into the company or business. It involves making them believe in the mission of the company and the aims of its business. The second is integrating the employee within the team that they work with. This involves them getting an understanding of the strengths of the team, the areas for improvement, how the team communicates and works together to complete its tasks, and just generally becoming comfortable and sociable with their coworkers. The final component of onboarding is orienting the employee into the basics of their job.

Let’s look at these three areas in a bit more detail.

1. Making the Employee Truly a Part of the Company

A new employee cannot integrate into a company’s culture in a week, but they do get a picture of what they believe the culture is. Within the first week the employee will have seen how different people interact with each other. He or she will see what issues his manager places their focus on and whether those issues come from the company or are something that the manager makes up on the fly.

Over the course of several months, if onboarding goes well, the employee will adapt to the culture of the company. If the company has a poor culture, then the employee will obviously try to work within that culture. A good culture or foundation is important for the new employee. A workplace culture is really what drives the employees at the company. Many companies have high morale because they care for employees and respect their ideas. Other companies have poor morale because of management or other problems at the company.

An employee learns about the culture of the workplace by watching and following what other employees are doing. If the workplace has a dog eat dog culture, then the employee will notice that the first time that they get stabbed in the back or when people do not share credit for some project or task. The new employee will likely adapt to whatever culture is already present in the workplace rather than changing it.

2. Becoming a Member of the Team

This is probably one of the most critical, but often overlooked elements of the onboarding process. The social interaction and getting comfortable with the team that an employee will work with is important. Companies can aid this process by doing a few basic things. They need to create opportunities for the team to interact with the new employee. Usually, this means taking the new employee out to lunch or having them sit with a certain assigned person in the lunchroom so that the employee can avoid that awkward moment of not knowing where to sit that may take some of us back to high school.

Good companies create opportunities for the person to feel a part of the team throughout their time at a company. That means that employees are encouraged to share ideas and feedback with each other. It also means that employees encourage each other and support each other in their work. A good manager, proper training, and feedback are necessary to create this culture.

3. Helping An Employee Adjust to Their Job

This is the reason that the employee is there: to do their job. A long onboarding process helps them become more effective and brings them up to speed quicker. There should be regular checks with the employee to see how they are doing. Ideally this would be done on a formal basis at one month, three months, six months, and a year. On an informal basis, management should check in with the employee on a multiple time a day basis during their first few days, then a daily basis through the one-month period, and perhaps weekly after that.

Every job has specific requirements. Companies need to conduct their own analysis to see what skills they need to develop within the new employee and what the employee needs to know in their specific job to be successful. Some jobs have only a few skills that a new employee needs to know, and these can usually be learned quickly. Other jobs have a variety of skills and tasks that need to be completed. Sometimes the job will even have tasks that will only occur once a year or sometimes once every other year (like planning a conference). A good employer will help employees understand what they need to do to complete these tasks and train them so that they can do them effectively.

Some Quick Notes about Remote Onboarding

With remote onboarding, companies need to be even more intentional than they are with employees that they see on a day-to-day or week-to-week basis. Managers must check in with their employees and their work to see how they are doing. Every coworker must aim to make the new employee feel welcome and part of the culture. There needs to be a specific plan and agenda in place to help the new employee integrate into the company. It needs to be thought out and time must be blocked off for the various parts of the first day. As I mentioned before, a quick zoom call at the beginning of the employee’s first day is a great way to make the employee feel welcome. Buying the remote employee lunch on their first day and having a lunch meeting over zoom is another way.

Throughout the first week the manager and other coworkers should check in with the employee. Employers need to create an intentional plan to interact with the employee so that they don’t feel like they are an outsider or completely isolated from the company. Companies can be successful in making remote employees fully part of the team and feel like they fit within the company. It just takes a lot of preparation and a plan.

Conclusion

Around one-third of employees leave a job within the first six months. The more a person is integrated into the company, their team, and their job the less likely it is that a person will leave. Remember, hiring is expensive. The cost of a bad hiring decision according to the Department of Labor is 30% of their first year earnings. Onboarding is an opportunity that employers have to help their employees and their business grow. It is too important to leave to chance or do without a well-developed plan.

The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.

The information provided is my own and does not reflect the opinion of my firm or anyone else.

Employer’s Guide to COBRA

Published by Brett Holubeck on May 22, 2020

Picture of a person holding a stethoscope to represent an employee electing to continue COBRA coverage to keep their doctor. — Photo by Online Marketing on Unsplash

Cobra. No, not that Cobra. Not that one either. The employment law one that sounds like it has absolutely nothing to do with employment law. The Consolidated Omnibus Budget Reconciliation Act of 1985. You know COBRA. The law that, among other things, requires companies that lay off or terminate employees to provide employees the option to continue their health insurance coverage for a period of time.

What Triggers COBRA Notice

Employers with 20 or more employees are subject to COBRA. First, group health insurance plan administrators that are covered by COBRA must give a general COBRA notice to employees within the first 90 days after their group health insurance coverage begins (when they first join the employer health insurance plan). A model notice is available on the DOL website.

COBRA also requires any employer that uses a group health plan to offer employees the choice to continue coverage for themselves, their spouses, and any dependent children when certain events occur. As stated by the Department of Labor (DOL), the following are the qualifying events that trigger COBRA coverage:

Termination of the employee’s employment for any reason other than gross misconduct;
Reduction in the number of hours of employment [(if it causes employees to lose coverage)]
Covered employee becomes entitled to Medicare;
Divorce or legal separation of the spouse from the covered employee; or
Death of the covered employee.
Loss of dependent child status under the plan rules. Under the Affordable Care Act, plans that offer coverage to children on their parents’ plan must make the coverage available until the adult child reaches the age of 26.

FMLA leave (for example for maternity leave) is not a qualifying event under COBRA.

Employers must provide notice to the plan administrator within 30 days of a qualifying event. After it receives notification, the plan administrator will provide an election notice to employees within 14 days. Many employers are also the plan administrators of their health insurance plans and are thus responsible for providing notice to their employees. A model COBRA election notice is available on the DOL website. Using the DOL’s election notice may be preferable to avoid lawsuits for an insufficient election notice. Employees then have 60 days to elect to coverage under COBRA. In the coronavirus pandemic, it is especially important that employers give this notice as soon as possible to initiate the process and allow the employee to obtain the coverage that they need.

Employees and their dependents must have been previously enrolled in the employee’s health plan coverage to continue coverage after the qualifying event. Employees and other qualified beneficiaries can remain on the health insurance for 18 months “when the qualifying event is the covered employee’s termination of employment or reduction in hours of employment….”Guidance from the DOL also states that “[w]hen the qualifying event is the end of employment or reduction of the employee’s hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee’s spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare.”

Knowing when to provide notice is often the most important step to avoiding liability. Many employers fail to provide timely notice and/or fail to include all the necessary items in the notice.

Penalties for Failure to Comply with COBRA

There are severe penalties for employers that fail to follow the requirements of COBRA. My Cobra Plan has a good outline of the penalties for violations. They state:

Plans that violate COBRA’s provisions may be subject to a non-deductible excise tax penalty equal to $100 per day, per affected individual, per violation. In addition, ERISA provides notice penalties of up to $110 per day from the date of the compliance failure. A violation is anything that can cause a company to fall out of compliance with COBRA regulations. The minimum tax levied by the IRS for non-compliance discovered after a notice of examination is generally $2,500. The maximum tax for “unintentional failures” is the lesser of 10% of the amount paid during the preceding tax year by the employer for group health plans, or $500,000. In addition, employee/COBRA administrators can be held personally liable for COBRA non-compliance.

In short, failing to comply with COBRA is expensive.

Texas’s COBRA Law

Texas has its own mini-COBRA law. The Small Employer Health Insurance Availability Act grants employees insurance continuation rights if the company has 2 to 50 employees. The law grants employees up to nine months of coverage if the employee did not qualify for COBRA and up to six months of additional coverage once the continuation under the federal COBRA law expires (if they qualified for COBRA). As noted by the Texas Department of Insurance, the Texas state law does not apply to self-funded plans and employees must have had coverage for 3 months before the job ended to be eligible for the additional coverage under the law.

Conclusion

COBRA used to be more frequently used before the Affordable Care Act/Obamacare became law. Many employees now choose to go on the Healthcare Exchange/Obamacare rather than continue COBRA coverage as the exchange is much cheaper. However, some employees will choose to remain on COBRA to retain the same doctor that they have been using, to keep certain medications covered, if they have already hit their deductible and if other factors are present. Regardless, it is a law that employers need to be careful to follow to avoid potential penalties.

The information provided is my own and does not reflect the opinion of my firm or anyone else.

The Basics of Layoffs and the WARN Act

Published by Brett Holubeck on August 13, 2019

A window with the words "closed down" written on it to show what happens when layoffs occur and to serve as a reminder to follow the WARN Act. — Photo by Marco Bianchetti on Unsplash

Layoffs are terrible! A lot of employees are caught unaware that a company is not doing well while others cannot understand why they rather than someone else were let go.

Why are we talking about layoffs and reductions in force when unemployment is 3.7%?

Let me give you a couple of reasons.

Store closures may top 12,000 in 2019 as 7,062 store closures have already been announced this year compared to an all-time high of 8,139 in 2017. The retail apocalypse may be accelerating.
The ongoing trade war which many believe will result in a recession within a year or so.
Profitability of oil and gas (at least in Texas). There is some speculation that the shale oil boom may be over.

What to Consider When Layoffs Approach

There are a couple of things that all employers must remember when conducting layoffs. Employers must consider the legal elements of a layoff, and to conduct the layoffs in a way that allows the business to stay open and does not make the other employees angry. Of course, the best option, if possible, is to follow in the footsteps of Nintendo when the Wii U failed. In that case, the CEO took a 50% pay cut, and members of the board took a 20-30% pay cut.

He said:

If we reduce the number of employees for better short-term financial results, employee morale will decrease. I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world. Keeping employees can often be better than letting employees go if a company believes that the employees will be needed later.

Legal Aspects of Layoffs

Employers that layoff employees may have obligations to alert their employees.

As the Department of Labor explains:

The Worker Adjustment and Retraining Notification (WARN) generally covers employers with 100 or more employees, not counting those who have worked less than six months in the last 12 months and those who work less than 20 hours per week, or those employers with 100 or more employees, including part-time workers, who in the aggregate work at least 4,000 hours per week, exclusive of overtime.
WARN protects workers, their families, and communities by requiring employers to provide notification 60 calendar days in advance of plant closings and mass layoffs. Advance notice gives workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain other jobs and, if necessary, to enter skill training or retraining that will allow these workers to compete successfully in the job market. WARN also provides for notice to state dislocated worker units so that they can promptly offer dislocated worker assistance.
A covered plant closing occurs when the permanent or temporary closure of a single site of employment or of one or more facilities or operating units within a single site of employment results in an employment loss as defined by WARN regulations. A covered mass layoff occurs when 50 to 499 employees are affected during any 30-day period at a single employment site (or for certain multiple related layoffs, during a 90-day period), if these employees represent at least 33 percent of the employer’s workforce where the layoff will occur, and the layoff results in an employment loss for more than six months. If the layoff affects 500 or more workers, the 33 percent rule does not apply.

Many states have their own mini-WARN Acts, so you need to review your state law as well to comply with the law. Texas does not have its own WARN Act.

There are 3 important exceptions to providing 60 days notice as required by the WARN Act:

Faltering Company Exception (applies to closing but not mass layoffs) which requires that the employer 1) sought capital or business at the time that the 60 days’ notice would have been required, 2) there was a realistic opportunity to obtain finance or business, 3) it would have been sufficient to avoid the shutdown (the employer must objectively show this), and 4) the employer must have reasonably and in good faith believed that the required notice would have precluded the employer from obtaining the business or capital.
Unforeseeable Business Circumstances Exception, which applies when business circumstances were not reasonably foreseeable at the time that 60 days’ notice would have been required. The circumstance must be a dramatic change outside of the employer’s control like losing a major contract or a dramatic economic downturn.
The Natural Disaster Exception only applies if a plant closed or mass layoffs ensued because of a natural disaster.

As noted above, another exception (or at least a situation where the law does not apply) is when a mass layoff will last less than six months. For example, suppose you send 400 out of your 500 workers home for 2 weeks while you conduct necessary maintenance at your plant. The WARN Act would not be triggered in that case because the layoff is temporary.

When conducting a layoff, it is also important to ensure that it is done in a way that does not discriminate against individuals because of their age, race or other protected characteristic. Essentially, layoffs should be conducted in a way that it does not have a disparate impact on any protected class.

Who Receives Notice of a Layoff or Plant Closing?

As detailed by the Department of Labor:

The employer must give written notice to the chief elected officer of the exclusive representative(s) or bargaining agency(s) of affected employees and to unrepresented individual workers who may reasonably be expected to experience an employment loss. This includes employees who may lose their employment due to “bumping,” or displacement by other workers, to the extent that the employer can identify those employees when notice is given. If an employer cannot identify employees who may lose their jobs through bumping procedures, the employer must provide notice to the incumbents in the jobs which are being eliminated. Employees who have worked less than 6 months in the last 12 months and employees who work an average of less than 20 hours a week are due notice, even though they are not counted when determining the trigger levels. The employer must also provide notice to the State dislocated worker unit and to the chief elected official of the unit of local government in which the employment site is located.

What the Notices Must Contain

There are different items that must be in the notice for any union that represents employees, the employees, and the State Dislocated Worker Unit and chief officials of the local government entities. You can view that information here or in the regulations.

If employees are represented by a union, then the notice must contain the following information:

The name and address of the company that will have a plant closing or mass layoff and a person and telephone number from the company that can be contacted for more information.
whether the closing is permanent or temporary and whether the whole facility will be closed.
The expected date when the first employees will be laid off and the schedule for laying off the rest of the employees.
The job titles of any positions that will have people laid off and the names of those workers that hold each affected job title.

As stated by the DOL, notices to individual employees (if they are not represented by a union) must contain the following information:

whether the closing is permanent or temporary and whether the whole facility will be closed.
the “expected date when the plant closing or mass layoff will begin and the date that the individual employee will be” laid off.
whether any bumping rights exist (employees with more seniority will be able to take the positions of people with less seniority in the layoff, which means that the most senior people that qualify for any position in the company, even if it is not their current position, will be kept or at least will be the last people to be laid off).
“The name and telephone number of a company official to contact for further information.”

Companies must also provide notice to the State Dislocated Worker Units and the chief elected official of the local governments. This notice must be provided separately and should contain:

The name and address of the company that will have a plant closing or mass layoff and the name of a company official and telephone number that can be contacted for more information about the layoff or plant closing.
whether the closing is permanent or temporary and whether the whole facility will be closed.
The expected date when the first employees will be laid off and the schedule for laying off the rest of the employees.
Job titles of the positions that will be laid off and the number of employees in each position.
Whether any bumping rights exist
The name of any union(s) that represent the employees and the “name and address of the chief elected officer of each union”

Notices must be carefully drafted especially if the layoff is intended to be temporary. Any mistakes in drafting the notice can result in penalties. Employers can be liable for backpay and benefits for each employee for every day of the violation. Penalties are capped at 60 days of backpay and benefits for each employee, civil penalties of up to $500 per day, and reasonable attorney’s fees.

Maintaining Morale in a Layoff

Don’t be like Michael Scott in the Office announcing that the branch is closing (especially when it turned out that the branch was not closing after all).

Employers need to prevent a panic when laying off employees. You need to meet with the employees that are remaining quickly (within 30 minutes or so) to let them know what is going on. You need to give employees a reason that the layoff occurred. Was it to eliminate a portion of the business that was not profitable? That is a different conversation than laying off journalists in the news industry. Journalists are one of the main components of the news business. Many of them may be wondering whether their job is next.

Companies must acknowledge the emotions of the employees that are staying. Some of them will have lost close friends and colleagues that they have worked with for years.

Employees need to understand that there is a plan to move forward. Companies need to communicate about the business’s future. How is the work going to be redistributed now that there are not as many people working for the company? Is there a way for employees to privately ask questions? What is the long-term plan?

Managers need special training to ensure that they can address the concerns of employees that are staying. They need to make everyone as productive as possible and support the employees that remain with the company. Managers essentially need to rebuild the culture of the company. A bad manager can make a layoff worse by driving people away, being unresponsive to questions, or not showing any understanding to what employees are experiencing.

Productivity will fall after the layoff occurs. However, after employees see that the company is moving forward, and their jobs are secure, these employees will settle back into their jobs and will again become more productive. Eventually, work will return to normal, but until it does, all supervisors and members of senior management need to help with this transition to ensure a productive, profitable and secure future for the business.

Conclusion

Layoffs are awful, but not following the correct protocol in the event of a layoff is detrimental to the company and its employees. Keeping in mind the specific legal elements of a layoff, along with the cultural implications within the company, will allow employers and their employees to make the best of a bad situation.

The information provided is my own and does not reflect the opinion of my firm or anyone else.