Incomplete Pay Stubs: Lawsuits & Big Settlements Waiting to Happen?

Failure to include any one of the nine items California requires on every pay stub may not seem like a big deal to you or your employees — until a disgruntled employee visits his or her attorney.

Here is how it works:  You have an employee who has never complained about breaks or lunch. You terminate this employee. The employee, angry over the termination, decides to visit one of the many employee class action law firms.

One of the first things that the lawyer will want to see is a pay stub.  Mistakes in pay stubs often are a signal to the lawyer that other mistakes, say in breaks or lunch, are also going to yield fruit. All the claims can be wrapped up in an attorney general class action demand letter to you.

Two small construction firms had this very thing happen to them this past year. Make sure you are not the next victim by correcting your pay stubs. If you use a third party payroll provider, make sure they are providing all the required info. You are responsible for their actions.

Check your pay stubs: Use the chart below to check your pay stubs. Confused about whether your stubs are in compliance? Give me a call at 650.518.0327. I’ll be happy to walk you through what’s required.

The Nine Items California Law Requires on Every Pay Stub

Total gross wages employee earned during the pay period	Total hours employee worked during the pay period	Number of units and rate for any piece-work the employee performed
All deductions from employee’s pay	Employee’s net pay	Dates in the pay period
Name and last four digits of employee’s SSN	Employer’s full name and address	All hour rates in effect during the pay period and the number of hours employee worked at each rate

KPMG Abandons Employee Engagement Surveys: Throwing Baby out with the Bath Water?

This month the employee engagement survey bandwagon stumbled when a long time proponent of employee engagement — KPMG— reported that all of their employee engagement efforts had not resulted in increased performance.  KPMG decided to forego the employee engagement survey.

What are employee engagement surveys?  They vary. Some HR Departments retain consultants to perform what I call the “lovey-dovey survey.” These surveys ask questions such as “Do you like your coworkers?” and “How do you feel about your employer? “

A different type of employee engagement survey asks questions like “Does your manager listen to you?” The downside of this kind of survey is that it often creates employee expectation that if managers don’t listen, the company will take action!

Some consultants implement employee engagement by looking at measurable results. One company successfully used employee engagement efforts through a pilot. The test group showed a 54% increase in comparable store sales.

So this begs the question, are companies throwing the baby out with the bath water when they abandon employee engagement including this pilot that actually has measurable results? 

KPMG is implementing a program of in the moment performance feedback. This is much appreciated by the experienced employees who don’t feel traditional annual employee reviews are motivating.

But how will the Millennial react? Millennials have been brought up with the accolade “good job” for every action they take. They received trophies in sports just for showing up and no special reward and feedback was given to the best players.  Experience with the “specialness” of Millennials has influenced some companies to get rid of any comparative feedback and they’ve abolished performance reviews all together.

Going forward, as companies like KPMG re-introduce measuring performance instead of relying solely on measures like “Great Place to Work” contests, HR and management will have to design motivating feedback mechanisms for all of their diverse employee populations. Baby boomers and Millennials are not motivated identically.

The decision making should evaluate keeping the employee engagement methods that have proven to result in measurable performance gains­ while getting rid of the surveys that focus only measure employee satisfaction without corresponding gains in productivity.

Rawhide Theme Song: A New Anthem for Zappos’ Holocracy Culture?

Zappos, famous for getting rid of all managers to form a “Holacracy” is in the news again. Apparently the “managerless” workplace doesn’t come naturally to everyone. Zappos has had to institute a three week+ training course to help new hires adjust. And there must be lots of new hires needed to replace the 200 employees who quit instead of accepting the Holacracy culture.

Even though Zappos embraces a “bottoms up” philosophy, the institutional decision to fire anyone who is late for 7 am orientation sounds pretty "tops down" to me. It’s also what brought to mind the theme song for the 60’s era Western, Rawhide.

“Keep Them Doggies Moving, Though They’re Disapprovin’, Keep Them Doggies Moving. Rawhide!” 

I’ll also be interested to see how effective the herd culled by the zero tolerance for lateness policy will be for Zappos. I’ve always found that creative problem solvers just love to be treated like naughty children, haven’t you?

Mandatory Paid Sick Leave: If you have 1 or more employees — this applies to you!

Beginning July 1, 2015 a new California law requires employers like you with one or more employees (including part-time and temporaries) to provide paid sick leave. Here are some highlights you should be aware of:

• The sick leave accrual rate is one hour for every 30 hours worked.

• Sick leave pay goes to any employee who worked in California for 30 days.

• Employers are allowed to limit an employee’s use of paid sick leave to 24 hours or three days in each year of employment.

• Employers may put a maximum cap on total accrual of 48 hours or six days. Note: The rules differ for employers who give 3 days sick leave in a lump sum in the beginning of the year.

• Sick leave may be used to care for family illness and that includes parents, children, foster and stepchildren, grandparents, siblings, domestic partners and others.

• Detailed recordkeeping and notice requirements, including a new poster requirement, are mandatory. Noncompliance with this law has penalties

As you can see, this is a complex law. I’d suggest contacting your payroll service for help figuring how to meet the pay stub requirements. For more general questions, you can contact me for a no-cost consultation.