Are you pushing the limits on your labor?

Pushing

One of the first things I learned in Industrial Psychology was the breakdown and distribution of labor. I learned what it meant to have a full-time equivalent (FTE), part-time, temporary and per-diem/on-call staff. Each of these components serves a different and essential purpose to your workforce planning.  In fact, you cannot actually get any work done without first deciding what work needs to be done, how much time it takes to get the work done and how many people you will need to do it.

There has been a shift                     

Over ten years since my first Industrial Psychology class, I see labor distribution and allocation looking very different and even nonsensical.

Let’s take per diem staff for an example. Traditionally, per diems were used as workforce fillers. They were a subset of the workforce that you kept handy to cover peak times, special projects, surplus or leaves. Per-Diem staff did not have regular schedules and were often paid a higher hourly rate for their ability to be flexible and/or be called in at the last minute. They were just-in-time labor and we never treated them as anything but.

Fast forward to now, there is something very different going on with per-diems.  Not only are they expected to be flexible as they have always been – they are also working the equivalent of full-time hours on a consistent basis.

I worked in Healthcare for 8 years. Many of my friends and colleagues are still in that field. One friend in particular has repeatedly worked as a per-diem nurse for various facilities. As a per-diem nurse, she has been expected to be flexible with her scheduling. She has also worked upwards of 40-50 hours per week in these roles.

Here’s the breakdown of labor:

  • 32 hours of actual on-the-job labor
  • An additional 8-10 hours off the clock answering phone calls, emails, and charting because of the insurmountable workload.

This schedule is consistent and is also considered what they call fee-for-service which means she gets paid for individual services provided to a patient. The issue is she has worked all of the hours above and is paid infrequently due to minor errors like an incorrect year being listed on the final chart. She uses her own car for this mobile position and although she was offered cases in close proximity to her home they consistently assign her an hour or more from her designated area. Even the expenses like her gas and the like have not been paid.

Why do I share this?

This company is pushing the limits on her labor. It is not reasonable for anyone to be classified as per-diem and be working as much or more than a full-time equivalent on a consistent basis. You can cite any rule you can find to support this from DOL – it makes no sense.

Secondly, if you are going to implement a point-of-service model for paying a subset of your workforce, you need to pay when the service is rendered – not when you choose or even when you get paid. There is absolutely no ROI on her working, because every time she thinks she is getting paid there is an issue pushing her payment further and further into the realm of unreasonableness. To date she is still waiting to be paid for three weeks worth of work. She’s basically working for free. The bills wait for no one.

Last but not least (and this applies to FTE’s, part-time, temp and per diem), there are reasonable and unreasonable limits for off-the-clock labor.  One call for clarification on something is reasonable. An expectation of your employees being on email at all times and/or requiring after-hours calls is unreasonable. She receives calls and emails all times of the day and night and when she returns the phone calls there is no one there to receive it. This turns into hours of calls and returned calls and emails on a day when she isn’t officially on-the-clock.

I have witnessed the abuse of labor both as a practitioner and now as a consultant. Businesses have gotten really good at utilizing the loopholes in what DOL provides and they are using it against the workers. If you are a new business owner, established business owner or work in HR, here are some suggestions:

1) Work needs to start and end. Just because you have penchant for working excessive hours and wear that as a badge of honor- doesn’t mean others should do the same. Establish reasonable start times for work and encourage your employees to end at a designated time. The only purpose for extra hours of work is when there are tight deadlines and surplus. You should be training your people to be efficient. not over-worked zombies.

2) Respect your employees time off-the-clock. You many think your question or issue is pressing, but did you really take a moment to decide if it is more important than what your employee may be doing on their day off. No one wants to be disturbed at dinner, in the middle of family time or while out running errands. Be sure that your concerns are worth the interruption of their life.

3) Be careful how you are classifying your people. As I illustrated above, there are many abuses of per-diem staff going on. If you have that much of a need for additional assistance with getting work done, these workers need to be re-classified and offered all of the benefits, compensation and perks that come with part-time and full-time status. You will decrease your risk as the employer and appease the employee who will understand that you value their time and efforts.

Our job in HR is to be the moral compass for the organization among other things. Over-extending your workforce not only leads to turnover, but to absenteeism and wellness issues. It’s time we stop trying to cut corners and be good to the people that keep the business humming.

 

Why Self-Auditing Matters

Courtesy of Flickr.com

Courtesy of Flickr.com

 

For you among the crowd that have been involved with audits whereby an infraction was found and you had to pay up- it cuts deep. It stings even worse when in hindsight you recognize that you weren’t proactive and missed something that has now cost the company money. The ultimate question from the top will always be:  “how did this happen?” How will you answer: “I don’t know”, “I’m sorry”, “It was a mistake”. Mistakes happen. However, when your mistakes are preventable and they cost your company money that could have been used for other endeavors-HR is going to take some heat and rightfully so.

Take a small to mid-size business (SMB) for instance. You are a business that makes a specific coating for tanks used by the US Military and your federal contract is worth 2.5 million dollars. You have other clients too and they keep you solvent, but this federal contract keeps you afloat. Now consider this: you have not run a pay equity analysis in a few years. As such, one of your mid-level employees has just had a compensation discussion with their boss that turned ugly and in return alerts both OFCCP and DOL of discriminatory compensation actions. You (HR) receive a notice from DOL asking for your entire compensation history for the past three years. Their review of females and minorities corroborate the narrative supplied by your employee- which leads to an onsite audit. Over the course of a year, they find there are plentiful pay equity violations that result in a fine of $700,000. Ouch! Fines of this magnitude can sink a business or at a minimum leave an indelible wound.

Do you remember the Astra-Zeneca DOL Settlement of 2011? Women were found to make at least $1,700 less than their male counterparts doing the same job at AZ. 124 women were awarded a $250,000 settlement. In return, AZ promised to review pay practices and fix any problems.

Could Self-Audits have helped Astra-Zeneca?

Yes. Had they been reviewing their compensation policies and practices regularly they would have seen issues warranting attention and revision before this became a class-action lawsuit. Self-auditing or mock audits can save you and the company from hefty fines, awkward conversations and/or having to close your doors.

Here are some tips on implementing self-auditing as a practice:

  • Depending on how often you can expect to be audited by outside agencies, set up an internal audit schedule.
  • Create an internal audit team to review your practice against your policy and procedures. Where possible, it is ideal to have someone outside the group being audited conduct the audit for objectivity purposes and for a fresh pair of eyes.
  • Summarize findings and create a threats and opportunities analysis to see where you need to improve. “Threats’ in this context would be items that are inconsistent with your policy and violate the law. “Opportunities” are areas where you do well in complying with policy, but there is potential for violating the law.
  • Get your team involved. Ask them to conduct their own random spot checks. This holds everyone accountable for the consistency of following procedure and allows you to get ahead of potential issues.
  • Train your team on communication during an audit. Saying the wrong thing or too much during an audit can be detrimental your success. Ensuring that each of your team members understands what to expect and how to respond can be helpful for when they are faced with a real auditor.

When it comes to your business, ignorance isn’t bliss. Don’t be afraid to self-audit. It is far better for you or your peers internally to point out your faults than any regulatory agency. Become informed about where your fall short and tighten up your practices. You will thank yourself and the executive team will thank you for saving their money.

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