2020 and 2021 were unprecedented for the gyrations they wrought upon employers with things like ‘The Great Resignation’, remote and hybrid work, the resulting employee classification, and issues around vaccination and workplace safety. All have lingered into 2022.
This in-depth discussion between David Gabor, Principal of DGN Workplace Initiatives and Counsel to the Wagner Law Group, and Jeff Plakans, Founder and President of Commonwealth Payroll & HR, evaluates the outlook for employers in 2022. During this session they address potential obstacles companies will face with employment and make suggestions for how you can be proactive in meeting the challenges that are inevitable in today’s business climate.
This session was presented on November 30, 2021.
PRESENTERS:
David Gabor, Founder & Director, DGN Workplace Initiatives LLC
Passionate about diversity, equity and inclusion, David Gabor is an experienced employment and business attorney who founded DGN Workplace Initiatives LLC to help organizations foster the best possible employer-employee relationship. David has spent years representing employers and employees in litigation and has handled more than 200 cases as a mediator. He has also spent years providing training and guidance to employers in a wide range of industries, with a firsthand view of what works and how employers can do better.
Jeff Plakans, Founder and President, Commonwealth Payroll & HR
With over two decades of experience in the payroll and HR industries, Jeff’s experience in creating employer and employee solutions that have an efficient and user-centric focus is born of his own evolution as a business owner. As the President of Payrolls Plus from 2000 to 2005, Jeff helped guide the company’s explosive pattern of growth. In late 2005, Jeff helped oversee the merger between Payrolls Plus and software company Payroll Associates to form PayChoice, a national payroll provider. Jeff founded Commonwealth Payroll & HR in 2006 and is proud to offer a service that combines technology and service to meet clients’ varying needs. Clients come to Jeff for his depth of experience in making payroll processing complexities simple, while understanding the sanctity of the employer/employee relationship.
Webinar Transcript:
Jeff Plakans (00:03):
Hey there. Good afternoon. And for those of you on the Westcoast, good morning. For those of you who don’t know me, I’m Jeff Plakans. I’m the founder and president of Commonwealth Payroll & HR. Thank you for joining us. I’m joined today by David Gabor of DGN Workplace Initiatives. David is also an attorney, a partner with the Wagner Law Group. What we’re going to talk about today of course is my favorite subject, What Can Go Wrong in 2022, and shouldn’t? So we’re going to cover a bunch of topics today. David, thank you so much for joining us.
David Gabor (00:43):
Thank you, Jeff, for having me. And hello everybody. I hope we can come up with some information to be helpful and useful as you plan for 2022.
Jeff Plakans (00:52):
So certainly, David, 2022 seems to everybody looking forward like a year that’s maybe going to give us some relief from what we’ve had in 2021 and certainly in 2020. That might not necessarily be the case. Right now we’ve got a raging discussion over vaccinated workplaces versus unvaccinated workplaces. Certainly, the politicization of the issue created a lot of problems for folks. What are you seeing out there with some of the employers that you’re working with?
David Gabor (01:30):
I think a lot of the companies I’m working with look at it as though it’s a perfect storm between the pandemic going on two years this coming in March and then we’ve got variance. The fact that so many people have work from remotely, a lot of my clients were not prepared for it so their policies don’t address it. They’ve got challenges in how to classify their workers. Are they exempt? Are they not exempt? Should they work from home? Should they come in the office? They’ve just got so many things that they’re trying to deal with while trying to be a profitable company.
David Gabor (02:08):
And the other part of what makes it a perfect storm is this great resignation and trying to keep people in the office. So many businesses… And folks in the audience, nod your heads if you can think about businesses that used to be open seven days a week that are now five days a week. They used to be open until 9:00 at night. Now, they’re closing at 6:00 because they can’t get the help. Or if you want to buy a car or get a part for a car, you can’t find it.
Jeff Plakans (02:37):
Right. Absolutely. Well, we’ve certainly seen some rancor with some of our clients. And they have a lot of questions coming our way about how to deal with the challenges that are in the workplace right now frankly between their vaccinated employees and their unvaccinated employees. And quite frankly, they’re asking us, “How is it that I can keep my workplace and my workers safe and while still observe or at least acknowledge the rights that everyone has?”
David Gabor (03:11):
I have had a couple of clients call me up because they’ve had employees having fights, fist fights, yelling matches. You’ve got the people who are vaccinated, the people who are not vaccinated. They find out someone’s refusing to get vaccinated, but they’re coming to work. And employees are angry with each other. And this is on the heels of the republican and democratic employees being angry at each other for that period of time. And I think that employers can’t pretend the friction doesn’t exist. And you don’t want to reward one side or another, but you want to find a way to get back to what we do and why we do it.
David Gabor (03:52):
A company has a mission. It’s got a vision, it’s got principles, core values. Employees, if they can remember that they came to work because they were proud of what we were doing, then they could start to put these differences to the site. And it may be revamping how you communicate with your teams, possibly some coaching or training if you’ve got friction.
Jeff Plakans (04:15):
Well, certainly the definition of the workplace has changed over the last 18 months. And I don’t think anybody… Some of the issues that exist in the “new workplace” are very, very different. Most employers we’re talking to are only minorly ready for that and have minorly adjusted to it almost as if it’s going to go back to normal at some point. Would you like to comment on that?
David Gabor (04:46):
Well, if you think about this, we’ve had a pandemic now for roughly 21 months, right? I think getting close to it. And prior to the pandemic, almost every company did not have a policy regarding how do you work with a remote workforce. Managers were not trained for remote workforce. I don’t think we’re ever going to get back to the point where everybody’s going to want to be in the office. Two of the five generations in the workforce right now like being home. And I don’t think they’re going to want to come back.
David Gabor (05:23):
So one of the things that companies I think should do is pivot, update your policy. You’ve got remote workers. What do you expect of your remote workers? “This is what a successful person in this position looks like.” Think that way. Think about your managers. Do they know how to work a remote team?
David Gabor (05:43):
Jeff, I’ll ask you a question. Have any of your clients, or with your team, when you’ve got a meeting, do you have some people live and some people come calling in on Zoom or some other platform? I don’t know if you have. Have you come across that?
Jeff Plakans (06:01):
That’s a good question, David. And certainly I think most companies, and we were not excluded from this, in reaction to the pandemic, reaction to having to send in workers home, yet we are an essential business. People needed to get paid. Checks still needed to be printed. So we sent 95% of our employees home. And we were fortunate in the sense that when we did so, we had the tools in place where companies and clients that we were interacting with on a regular basis could still call us and frankly didn’t know the difference whether we were at home. Now, introduce Zoom or GoToMeeting or any of these other tools that we now use that are very, very commonplace, that was what gave away the fact that we were working from home.
Jeff Plakans (06:51):
Now, let’s flash forward here 18 months. We’ve got a good majority of our employees back here in the office. And many of them are very excited to be back here because now they feel far more productive. Having said that, the arrangements that we have with many employees is that they are now remote or hybrid employees coming in a couple days a week. And obviously, that creates communication challenge. It creates communication challenge because you don’t want anybody working from home to feel like they’re out on an island, and as well you want to make sure that everyone feels dialed into what’s happening.
Jeff Plakans (07:31):
And so, I read an article recently that said that the potential for a remote employee to feel out on an island was so great that now that you have situations where you may have a camera, a Zoom camera that allows for and captures three or four people in a conference room or something like that. Anybody who’s by themselves and not in that conference room can again feel somewhat excluded and left out. So we actually put a policy in place ourselves that says if one person in the meeting is going to be remote and on Zoom and in the box, so to speak, that means everybody’s going to be in the box. And it just sort of equalizes or creates an equilibrium for the meeting that works. And yeah, we’d all love to be in person, but it’s just not possible anymore.
David Gabor (08:27):
Jeff, that’s a great policy. And I suggest all of you think seriously about that. Think about Thanksgiving. You got that big table and then you’ve got that small table in the corner. Well, the people on the Zoom are at that small table and they feel left out from what’s happening at the big table. So that’s a really good idea. Communication has become a real problem with so many of the companies I work with. Because people are not face to face as often as they used to be, they’re communicating by a text or by email, sometimes messages are cryptic. And I don’t think that employees have a clear understanding of what’s expected of them. Have you just noticed that as well?
Jeff Plakans (09:09):
Well, I know well when we went to remote meetings, we actually had to re-fashion. And we saw lots of clients and helped guide lots of clients in refashioning how they were communicating. The things that we used to be able to do by passing somebody in the hall or hollering over the top of a cubicle or of course the old water cooler talk, none of that existed all of a sudden. So we had to replace that. Well, how do you replace that? Part of how you replace that is making sure that everybody in a meeting has a chance to… Not only has a chance to speak, but has a chance to speak about an agenda of things that they’re working on, things that they’re concerned with, things that are working for them and things that are not working for of them.
Jeff Plakans (09:56):
We’ve even integrated a little bit of sharing gratitude because we needed to make sure it stayed positive especially during some of the darkest hours that were out there. To me, that’s now carried forward and become a big, big part of how we communicate with each other regardless of whether we’re in person or remote.
David Gabor (10:17):
That’s a good way to do it. I have found that one of the reasons why we’ve had so much turnover in the workforce, and I saw a statistic this morning that the cost of turnover in the US in the last year is going to be something along the lines of $300 billion.
Jeff Plakans (10:38):
Wow. Yep.
David Gabor (10:39):
[crosstalk 00:10:39].
Jeff Plakans (10:39):
I think I’ve heard two to three times the salary is what it actually costs.
David Gabor (10:45):
Yeah, per person.
Jeff Plakans (10:46):
Mm-hmm (affirmative).
David Gabor (10:49):
Yep. There’s some people who are leaving because they feel as though the company’s lost its way. They don’t see the vision. They don’t feel respected. So in the eyes of the people who want to work remotely, they think what they’re doing makes a lot of sense. But then because they’re remote, they’re not in the middle of what’s going on so they feel neglected at the same time. So maybe sometimes for managers, trying to appreciate or understand this person’s point of view when they’re working remotely and taking the time to nurture and train and cultivate that employee, spending that extra time and giving the managers the toolkit to succeed in that vein.
Jeff Plakans (11:35):
Well, so you get to a good point, right? One of the things that we see that is a lot of times deficient in the workplace is the evolution of a manager and the evolution of new managers. And certainly, we’re seeing that now. As a manager, it’s now far more challenging to work with employees and communicate properly with employees than it was before. So how do you teach someone who’s a traditional manager in person how to do something that’s going to maybe come off as so different?
David Gabor (12:11):
Well, that’s training. We’ve done that with several of the companies we work with. And it’s role play. You’ve got to get the managers, first of all, they need to be receptive to the concept that, “Okay, maybe what they’re doing isn’t working in the new normal.” Get them to do role play. Have them spend some time in the role of the person working remotely or the person in the office and have them understand, “If they do these things, this is a benefit to them as well as to the employees and it makes them more successful in the eyes of senior leadership.” But it’s not going to happen in a one-hour program. It’s something that’s going to take time to think about 21 months worth of hiring and people being promoted into management positions who maybe have never even been in the office.
Jeff Plakans (13:04):
That is true. That is true. So what’s interesting that we’re seeing… One of the things we see a lot of right now and certainly with remote employees, there was a lot of reexamination of not only the career and not only the jobs that a lot of folks were in, but where these jobs were being done. And specific to remote employees, we were seeing folks that were disappearing, moving out of the state that they were in not notifying are bosses about when that was going to happen. And then all of a sudden, an employee who previously lived, say in Massachusetts, all of a sudden was living in North Carolina, which created some problems for the employer because it was only six or eight months later that the employer caught on that they had some requirements they needed to meet for North Carolina that unfortunately they had not yet met.
David Gabor (14:02):
That’s been a big problem. Employees who moved from one state to another, they as employees are covered both by the laws of the state that they were working at before and also the state that they’re spending the majority of the time working. So employees who let’s say left Massachusetts and went to upstate New York into an area let’s say near Syracuse or Ithaca, now you’ve got New York law. And New York law requires to know things like their paid family medical leave. In New York, you’ve got workers comp, unemployment in New York. And then, oh, by the way, New York has mandatory training and harassment prevention. And if you haven’t done that, maybe because you didn’t realize there was a requirement or you didn’t know the person is living in New York. Either way, you’ve got to catch up and take care of that.
Jeff Plakans (14:56):
Right.
David Gabor (14:57):
And then, Jeff, as you know, we’ve talked about this many times because you’re so proactive on it. New York has rules on the pay stubs that most states don’t have. You’ve got to have a compliant pay stub in New York. And I know we’ve had that conversation. So if you don’t know they’re in New York, you don’t know to have a New York compliant pay stub.
Jeff Plakans (15:20):
Well, and that’s the funny thing. So for those of you watching and paying attention, one of the first things you want to make sure you understand is where exactly your remote employees are working from. And obviously, the next thing we want to talk about and make sure you’re doing is paying attention to your managers and supervisors and make sure that you’re giving them the tools to be able to deal with the new workforce, the remote workforce and the new workplace and what that means and what sort of extra efforts you need to go through to be able to cover that.
Jeff Plakans (15:57):
Now, I want to jump David to a topic that you alluded to just a moment ago that we’re seeing. Everybody’s got lots of names for it, but the most prevalent one we see is the great resignation. People all of a sudden up and changing their employment, reexamining everything about what they’re doing with their careers and their lifestyle. We’re seeing a ton of it all over the place. And of course, it’s also leaving in its wake a number of different large holes in the workplace and unfulfilled jobs. What are you seeing with clients that you’re talking to today?
David Gabor (16:40):
You know, this is something that’s so painful because a lot of my clients, their vision of what their team looks like, their workforce looks like through their rose colored glasses, some of them have a sense of betrayal. They feel like their team doesn’t care about them anymore and they don’t know why. Others are beginning to understand that they’re going to have to change the way they’re going to do things. I know that the studies I’ve seen reflect that of course compensation’s important to employees, but a sense of being valued, being proud of what they do is equally, if not more important. But there’s also a new definition of work life balance. And there are a lot of contributing factors. The five generations in the workforce is one factor.
David Gabor (17:36):
Another factor is a lot of people have experienced an incredible toll through this pandemic. I don’t think there’s anybody I know who doesn’t know of somebody who had a wedding canceled, who had a person who died and they couldn’t attend the funeral because of the pandemic, or someone who had a family member or a friend who got sick maybe alone COVID through the pandemic. It’s been a very difficult toll. And I get that. I understand that. But I’m trying to get my clients to re-engineer, maybe come up with benefits that they can offer to employees that makes it more attractive. Now, Jeff, I’ll throw that at you in terms of what you’ve seen in terms of benefits that maybe can be offered.
Jeff Plakans (18:28):
Well, the first thing I’ll take you back to is not necessarily a benefit, but some may understand it as such. And that is really something that’s taking place, needs to take place in the workplace more than ever before which we alluded to earlier, which was communication. Now in this particular instance, what I’m referring to is communication that needs to occur between the employer and the employee. And for the employee to feel engaged and to feel valued, they need to have in many cases, a constant understanding of where they fit into the larger mix. So that means career transparency. So the days of the business owner or business manager who walks around and shares nothing and does not appear at all ever vulnerable and doesn’t really talk about the future with employees and sort of almost on a daily basis getting them understanding how their contribution is fitting into the larger picture, those days are over it. Where that happens, you’re going to see resignation, you’re going to see turnover, you’re going to see unfulfilled jobs. And then that’s going to create such a cratering economic impact on that particular business.
Jeff Plakans (19:51):
The businesses that are going to be very, very successful are the ones that are going to be very, very mindful of what the employee requires just kind of for their mental health, but also for their career engagement to understand more about what’s going to happen. Now, layer on top of that more traditional benefits, which is obviously an increasing level of pay and an increasing level of opportunity, and in some cases the need for social purpose within the workplace and the need to be social alone within the workplace. I know plenty of businesses… Everybody goes home at the end of the day and they all have their thing. And then there’s businesses where it is a very social place, almost borderline “family.” And that has its own challenges to start to create, but it’s really going to depend on the individual and what they’re looking for from their workplace. The most savvy employers are the ones that are making it a point to understand that on an individual level.
David Gabor (20:57):
I agree with you wholeheartedly. That communication piece is so very important and it’s worth stressing. If leadership talks to the team, demonstrates respect, caring, vulnerability, that’s a really good first step. Then instill that in your managers and make that an expectation of your managers when they’re talking to their team. Make sure you’re giving positive feedback, not just negative feedback. When you talk about a purpose and then you talk about value, employees want to be somewhere that they’re proud of. So if you get involved in a charity and not for profit, maybe a march at times, walk, or something along those lines, that gets your team excited and they’re proud of it. “Hey, this is what we’re doing.” That’s what people want to see. In terms of this social side, it’s a challenge.
David Gabor (22:03):
I redefined with a lot of my clients how they’re doing things like office parties. Some of them are just doing in on Zoom. One of them is working with a minority-owned wine company in having an event. Another has a comedian coming in. They’re doing white elephant. They’re doing things along those lines on a platform like Zoom instead of what they had done in the past that would be in person. Those things help. Flexibility also helps.
Jeff Plakans (22:34):
Mm-hmm (affirmative).
David Gabor (22:35):
“Hey, I get that. It’s difficult for you to come in the office. I get commuting is harder now. I get that you’ve got more responsibilities at home. How about a flexible work week? Maybe half the week you’re working from home, half you’re in the office. Maybe one week, Monday, Wednesday, Friday. The next week, Tuesday and Thursday. That way we have less people in the office so we have social distancing and you have half the time working from home so you’re not commuting every day.” Messages along those lines go a long way. If a person says, “I’m willing to do 9 hours in the office, but I’d rather start at 10,” if they have a job where they can do that, think seriously about doing that. Those are the things that help employees stay. And it doesn’t really cost you any money.
Jeff Plakans (23:23):
Right. Right. Absolutely. Well, so for those of you who are sitting here and paying attention, make sure you jot some of these things down. Because what we’re really doing here and quite frankly what the pandemic has done, what this actually started before the pandemic is we’re really redefining what the workplace is. Be mindful that there are blurry lines around the workplace and there’s… Oh, you talked about life and work balance a little bit earlier, David. One of the things that we see too much of and saw too much of during the pandemic and we’re not quite out of it yet, but let’s just say when you had employees that were working from home, that really was invasive to their work-life balance. And of course the reasons for it were obvious, but there’s also a darker side to that. And that is that employees have a tendency to be reactive to things that are happening and to want to respond and want to do the right thing.
Jeff Plakans (24:26):
And so, what we would see are employees that were hopping back on their email at 9:00 at night and putting a few more hours of work. And now obviously, whether that’s paid or unpaid is one question. But another thing is, is that really healthy for the employee where someone who’s working here in the office can step out of the office, go home, leave it all behind them and so forth? And I think employers these days, and certainly into 2022, are going to need to be acutely aware of that phenomena and speak to all of it in their handbooks, where as you said at the top of the hour here, most of this doesn’t even exist in the handbooks. And so, that has to be something that we need to deal with.
David Gabor (25:16):
That’s been a huge problem. I’ve seen a number of wage and hour issues where people are sending emails or calling or texting an employee off hours. And if you’ve got non exempt employees who are getting emails and looking at emails prior to the start of the workday, during the lunch hour, after hours, or the weekend because their laptop is right there and they see it and they go to it and they’re not getting paid for their overtime, you’ve got a wage claim. And in some states that could be double or triple damages. So that’s one problem. But like you said, Jeff, it’s not healthy. If you’re working at 9:00 at night and you’re working at 8:00 in the morning, you’re going to burn out. You’re not doing yourself, your family, or your employer any favors if you work like that. It’s just not the right way to be.
David Gabor (26:16):
So clarifying those expectations. So it’s not just updating your manual, but it’s also disseminating it and training on it. “This is what we expect of you. We’re going to look at your hours and if you’re putting too many hours in, we’re going to talk to you about it.” And if you say it, do it.
David Gabor (26:35):
One of the things I wanted to talk about is training. I know a lot of people, especially where there’s states provided training for things like harassment prevention, a problem with a program that’s a web-based program that’s not interactive is twofold. One, the perception of employees is you’re just checking the box. And if that’s the perception, then we go back to the statistics that show roughly 3/4 of people don’t think the company wants to know if there’s any kind of problems and they’re not going to escalate them. Second problem is you’re not teaching people what to do, how to use your voice, how to react if someone does cross the line, how to resolve issues directly with an employee and said, “You don’t even have to go to leadership with it if it’s a minor event.” You’re not teaching people these things.
David Gabor (27:31):
A program that’s not geared towards your team doesn’t help. Conversely, you do something that’s live, leadership introduces a program, HR, and some members of leadership attend the program and demonstrate that they’re doing this because they want this to be an even better place to work, that’s part of retention. That’s part of how you fight the great resignation and create a much more engaged workplace. Does that make sense?
Jeff Plakans (28:00):
It certainly does. It’s a perfect opening to talk about companies’ varied, and there’ve been quite a variation of their DEI initiatives. Now, for anybody who doesn’t know what that means, could you define that for everybody?
David Gabor (28:17):
Absolutely. Diversity, equity, and inclusion. There’s a great saying that I believe it’s Verna Myers wrote/said, and that is, “It was nice to be invited to the party. It was great when I was asked to dance.” And basically, the diversity piece is bringing in a more diverse workforce. And that would be people from different racial backgrounds, religious backgrounds, ethnic backgrounds, age, gender. You’re hitting those points. And disability. And then making an inclusive environment for them. The studies show that if you do have an effective DEI initiate…. Because it’s not just a training. And it’s not a sprint, it’s marathon. It’s going to take time. It doesn’t happen overnight. But if you do a good program, you’re going to increase your profits by anywhere from 18% to 35%, 40%. You’re going to bring in talented people. And the inclusive part of it is giving these people the tools to succeed. And you don’t want a situation where you hire a more diverse workforce, but they’re segregated from other people. You’ve got to find a way that people do work well together.
David Gabor (29:43):
One of the things we talk about is implicit bias. And Jeff, you have it, I have it. Every single person on the call right now has some form of implicit bias. The reality is you’re never going to get rid of it. But what do you do to manage it so that you don’t make decisions about hiring, firing, writing somebody up, how much of a raise to give them, a promotion? You don’t make decisions on who you want to have lunch with or who you want to work with on an assignment if you can pick somebody based upon the implicit bias. You’ve got to find a way to handle it and be vulnerable in terms of recognizing that bias. And that’s what the DEI initiatives are all about.
David Gabor (30:29):
The other thing is that if you do it well, you will have again a more engaged workforce. And with younger employees, most of them want to be in a place that’s got some form of a DEI initiative. That’s what they want in the workforce, much more so than other generations. I know I’m generalizing when I say that, but I’ve seen the studies.
Jeff Plakans (30:55):
The thing that struck me the most in discussing and exploring DEI initiatives, both that we’ve seen at our clients and even things that we’ve done here, the diversity component of that is very obvious and makes a lot of sense and is very logical. The thing that completely went over my head initially was the inclusion part of that. And I went through an exercise for a business group that I was in. And I recognized after having done the exercise that the inclusion part was something that was happening or we were really bad at it. And it wasn’t anything that we knew that we were doing or even were cognizant of the fact that we were doing it. And that was that we were being somewhat excluding. And it wasn’t necessarily a diversity issue. It was just we’re kept to ourselves in such a way that we were not welcoming to outsiders. And that changed the exact tenor.
Jeff Plakans (31:55):
Now, if you think about the workplace, in the workplace if you’ve got 20 or 30 individuals that have been there for a long, long time and “Oh, we’ve been through all kinds of things together,” that new employee or those new employees that are coming in, how are they being welcomed on day one? How are they being welcomed on day two? Does that have a correlation to how long they stay and how engaged they are? Absolutely. So something that if you’re an employer and you haven’t thought about this and you haven’t thought about this in terms of your workplace because “We’re too small or we’re too remote,” you better think about it because if nothing else, there is absolutely a correlation to profitability and DEI initiatives in the workplace.
David Gabor (32:42):
So true. Those of you who follow sports, think about Jackie Robinson when he came up with the Brooklyn Dodgers and he is the only black on the team. He’s the only black in the Major Leagues. When he first came up, his teammates didn’t like him. They stayed away from him. And then he would go to a hotel room and he wasn’t even allowed to be in the hotel with the rest of his team. People made him stay in other hotels when he was in the south in some areas. He would get spiked by people. Pitchers threw at him. But over time, he persevered, he stayed the course. And eventually, the people on the team realized what a great athlete he was and the team became a better team. And all Major League Baseball became a better sport when it was acceptable to bring people in from all over the world to play. But he was in an island when he came up.
Jeff Plakans (33:47):
Absolutely.
David Gabor (33:48):
He really was in an island, and we don’t want that in the workforce.
Jeff Plakans (33:51):
Absolutely.
David Gabor (33:51):
It’s not good for that person. It’s not good for the team. So when someone does come in, take the time to get to know them and see what you have in common with people. The difference is should help you grow, enrich you. Going back to doing some of the things like getting involved in a not-for-profit and maybe a walk or a soup kitchen or whatever it is that you can do with your company in light of the pandemic, those are opportunities to pair people with people from different backgrounds. So you get to know people who maybe didn’t grow up in the same neighborhood. Maybe people from a different race or age or gender. It gives people a chance to get to know other people and realize the good. And if you get to know them when you’re involved to something that’s charitable, you’ve seen a very good side of a person. It makes a huge difference.
Jeff Plakans (34:47):
Well, certainly in the workplace that’s something that we’d like to say is always seen, but isn’t always necessarily seen. So that’s excellent. I want to turn our conversation a little bit back on some of the byproducts that we’ve seen from the pandemic and within the workforce. I want to talk a little bit about what rears its ugly head ultimately as employee misclassification. But we’ve heard a lot, certainly during the pandemic about the benefits of the gig economy and what that means and how some folks have transitioned into being a gig worker. So David, in your mind, what does that mean from a marketing perspective or from a pop culture’s perspective, versus what does that mean in the eyes of the law?
David Gabor (35:44):
That’s a mouthful. All right. Thanks, Jeff. I’ll remember that. Here’s the deal folks. When you talk about gig workers, independent contractors, that kind of thing as being someone that’s evolved, you have two things here. You have the way people do things. And then on the other hand, you’ve got the law. And the law lags behind. And we’ve got this thing called the Department of Labor at the federal level, and the states have their own agencies, they don’t like people who are not getting paid a salary with withholdings. Why don’t they like that? Well, they say it’s unfair to the employee because if they’re not getting paid a salary, there’s not the contributions for social security. They’re not getting the benefits like health insurance, life, dental, things along those lines. Maybe a retirement plan.
David Gabor (36:39):
But there’s another thing. If the state has a state income tax, the federal government likes to get withholdings because that’s how they pay their bills. So whatever the motivation on the government side, they don’t like people who are independent contractors very much. They’ve created tests to determine whether somebody is an employee or a contractor. And it’s very difficult if a person’s going to be with you for any length of time and you’re going to be telling them what you expect of them, what success in this role looks like, controlling their hours, where they work, provided them with the tools for the job, things along those lines. The more control you have over them, the longer they work with you, it’s much more likely that they are employees and not independent contractors.
David Gabor (37:31):
Now, somebody out there right now wants to say to me, “Yeah, but I’ve got an agreement with that person. And they’re fine with being an independent contractor.” Well, there were a bunch of cases involving a small little company on the Westcoast called Microsoft that went to the United States Supreme court several times. They had a whole lot of people who were working as independent contractors, doing a lot of data input jobs. They had contract. They agreed. “I’m an independent contractor.”
David Gabor (38:03):
Ultimately, the court’s determined. It doesn’t matter whether they agreed to it. It matters what they were doing. And they were doing what is the core business of Microsoft. They were doing data entry for this high tech computer business. They should have been paid as employees. “Here’s the cost.” Dependent upon what state they’re in, double to triple damages, unpaid overtime, restoration of the benefits they did not have, if you have a retirement plan and they were not participating in it, you’ve got to make them a whole health insurance, dental, life, all those different things. Vacation. All those things that they were not getting, you’ve got to pay them. Plus interest. And interest varies state by state. That’s one problem.
David Gabor (38:49):
Jeff, there’s another one. You’ve got people who are exempt because they’re outside traveling sales, but they haven’t gone anywhere. Because of the pandemic, they weren’t traveling to clients, to prospects. If they’re not traveling to clients or prospects, chances are, they are no longer outside sales and they’re no longer exempt. What if you have somebody who’s a manager who in the office was managing two or three or four people, but they’re working remotely and they’re not managing anybody? They’re no longer exempt. And if they’re not classified properly, you’ve got a huge risk. So it’s important that you take the time to determine whether or not you’re exempt people are still exempt.
David Gabor (39:34):
One of the things you may want to do is look at the job description that created the conclusion that this person is exempt and see if they’re still doing the same thing that’s in their job description. Take out your writing sticks. I call them writing sticks, not pens. And make a note on that. Double check those descriptions in what they actually are doing. It could save a lot of trouble down the road for you.
Jeff Plakans (40:00):
Absolutely. Absolutely. Well, and remember that at the state level and the federal level, sometimes the definitions of the tests are just a little bit different. So what might fly on the federal level isn’t necessarily really going to fly at the state level. And we see employers all the time, who they violate the law at least as it’s written. I’ve had employers say to me, “We’re not sure about this new person that we’re bringing in. This new…” They always use the word employee. “We’re going to make them a 1099 and then we’ll see if they work out. And then if so, we’ll make them a permanent employee and bring them on.” Unfortunately, I think their personal logic on that is correct, except for it’s incorrect because the employees an employee from day one regardless of whether they may or may not work out.
Jeff Plakans (41:02):
And when we bring that up, oftentimes the employer will say… They’ll go consider the fact that they will rarely get caught. And they need to understand that for any employer, you’re a single disgruntled employee away from being reported to whatever agency needs to hear about what’s wrong, whether it’s a wage and hour violation, whether it’s misclassification. And all of these things not only are going to come back on the employer from a financial perspective, but also from a reputational perspective. And so, if you want to be an employer of choice and the first thing that happens when somebody Googles your name is that the court cases come up where you’ve been stealing overtime from employees, that’s obviously going to be a bad thing. That’s going to run contrary to trying to attract employees. So something to think about there. Not to mention the fact with all of this COVID relief re-legislation, one of the things that got voted through is an absolute ton of money to go towards enforcement.
David Gabor (42:16):
Yep. And it’s so important. It’s so very important. I think a couple of suggestions. And this goes back to the topic of the program What Can Go wrong, is especially for those of you who may be new to your company, don’t assume that just because this is the way the company has been doing it for the last couple of years, they were doing it the right way. Take the time to ask the questions. Kick the tires, poke at it and make sure they’re doing things correctly.
David Gabor (42:45):
And Jeff, what a great point with a person you bring them on as a 1099 to see if they work out. And then it could be that six months later, a year later, yeah they worked out okay but you weren’t paying them properly for that period of time. I think Montana may be the only state that’s an exception. We’re employees at will. Unless you’ve got an employment contract, you’re an employee at will. And even in Montana, for the first year you could let someone go for any reason or no reason at all. So hire them as an employee and give them every chance to succeed in their roles. But the problem with the wage and hour and claims of discrimination or harassment in the workplace and you’re spot on, that becomes a headline. The EEOC, whenever it sees a charge and they believe that there’s been some form of harassment or discrimination, they do press releases. And you really don’t want to be the person in your office that was sleeping on the job that day. And that could go into the CEO-
Jeff Plakans (43:51):
Right, is featured on a social media post.
David Gabor (43:54):
Yeah. You go to the CEO’s office and you bring that piece of paper with a copy of the press release and say, “I got to talk to you.” That’s not a good look.
Jeff Plakans (44:03):
Exactly. Exactly. So one last thing I want to touch on just a little bit before we go out to questions and answers. By the way, if you haven’t had a chance to and have a question for David or I, go ahead and send that to us through the question’s function here on the go-to webinar dashboard. But David, can we talk a bit about pay equity. Not an issue in every single state just yet, but I feel like we’re going to get there.
David Gabor (44:35):
Sure. I actually disagree with you. I think it is an issue in every single state. Title VII of the Civil Rights Act of 1964, basically in more general terms than some of the legislations like Massachusetts that came out what about? Maybe five years ago was it?
Jeff Plakans (44:54):
Yeah.
David Gabor (44:54):
Roughly. Was pay equity. It says you can’t pay differently because of a person’s gender. What I do advise clients, and this is so very important because if there is a pay equity issue whether it’s gender, whether it’s race, or some other basis, if you do have a problem, plaintiff-side employment lawyers salivate for those cases. Because if they’re going to represent a group of people, they make a lot more money than if they represent one person and there’s not that much more work for them. So they love finding those cases.
David Gabor (45:37):
Here’s the deal. If you have two people who are doing the same job and they have roughly the same experience, they should be making the same amount of money. So what Massachusetts said when it came up with its pay equity law, number one, “You cannot ask what a person is earning as compensation or benefits until after you’ve offered them a job and laid out the terms for the position in the offer.” You can’t ask compensation, history. You can’t ask about benefits. But that also means that if you’ve got an online portal for people to apply for jobs or you’re working with a recruiter, that recruiter cannot be asking that. And you can’t request that information in your online portal, which some companies do.
David Gabor (46:25):
Second is, there’s six exceptions in Massachusetts. Others states have four or five exceptions when you don’t have to pay the same if people are doing the same job, roughly the same experience. One of them would be a bonafide seniority system. Two would be geographic. A person who’s in a much more rural area versus a person who’s, let’s say in Seattle or San Francisco or Boston or New York City where the cost of living is much higher, you could pay differently in different areas if the position requires a lot of travel. I’m not talking about traveling a one-hour drive to a meeting and you’re home by dinnertime, but overnight travel, you could pay differently. If a person’s got an advanced degree that relates to the job, you can pay differently. A bonafide system that’s a merit based. If one person is bringing more money in or they’re in a sales job and they’re making more money that way, they may make a different amount of money.
David Gabor (47:27):
But otherwise, pay equity is a major issue. It is something that under the Biden administration is being focused on at the EEOC. Several states are focusing on it as well. And like I said earlier, you’ve got the lawyers who are looking to represent plaintiffs. So what do you do about it? Well, on top of everything else you’ve got to do, it’s worth an audit. And it’s not nearly as complicated as it seems. You can do an audit. You can do an affirmative action plan. An affirmative action plan basically is the input of data. You’re determining what your employees are making, looking at what is the demographics in the area where they work. And then if you’re out of whack at all, you come up with a plan to change it.
David Gabor (48:17):
One other thing by the way that Massachusetts said is if you see a difference in pay by gender, the male is making $90,000, the female is making $70,000, the way you fix it cannot be that you lower the man’s salary to $70,000. You have to raise the female’s salary to $90,000.
Jeff Plakans (48:37):
Well, what’s interesting is we run into folks who regularly not only are unaware of those but also specifically unaware of what behavior changes need to take place in the workplace on the part of the employer, but also on the part of the employees around that. And so, while we’re on the theme of What Can Go Wrong in 2022, that’s going to be something that I believe is going to be seeing a lot more daylight both at the federal level and at the state levels and something that most organizations are going to need to be paying attention to, again, especially since there’s a focus on it.
David Gabor (49:18):
Yeah. Jeff, one other thing that can go wrong in 2022, and I’ve noticed on email on some of the listservs I’m on, that there are some people who sit at home on their computer, their laptop and they’re firing out all kinds of messages and things. And they feel more empowered when they’re at home than when they’re face to face with people. So because of that, there is a heightened risk of harassment, gender-based, race-based, religious-based harassment. That is going to lead to claims made. I think that employers can protect themselves if they think back on either cases like Faragher and Ellerth. Do some training. Update your manuals and make it very clear where that line is. And if it’s crossed, what employees can do about it. Because there is going to be harassment. And I just hope that companies take the time to do some proper training to mitigate that risk.
Jeff Plakans (50:32):
Excellent. Well, thank you, David. And thank you for all of you who’ve decided to join us today and to listen to our little chat. Hopefully you’ve gotten something out of it. What we do have out of it is a couple of questions, David. So I’ve got a good one here which actually is sort of a nice little segue and wrap up for us. Which is, given the current environment with hiring so difficult, if employers could only do one thing to help retention, what would it be that’s the most valuable?
David Gabor (51:07):
If you can do one thing to keep people on board?
Jeff Plakans (51:10):
Yep.
David Gabor (51:10):
Communication. Have several layers of the communication, but communication. Have leadership and HR and the managers meet with each other, come up with a plan of how they’re going to reach out to the team. And then FaceTime. Whether it’s the pretty bunch squares on your computer or in person, it depends on where you’re located, have open, honest, frank discussions about where we are, where we want to be, and how we want this business to be run.
David Gabor (51:50):
Jeff, you talked about that earlier. Get in those meetings where everyone has a chance to talk. So if you’ve got 500 employees, you can have a couple of town hall style meetings. And then each of the teams have meetings. But get people talking and listening and caring. And by the way, take out that writing stick. You’re talking to an employee and they mentioned something about their wife being pregnant, make a note about it. Follow up. “How is she doing? How is she feeling?” Show you care. If you want your employees to care about you, you’ve got to show that you care about them. And there’s two ways to do that. One is words. The second is actions. You got to nail both of them.
Jeff Plakans (52:34):
Right. Let me see. What do we have? Oh, yes. For employers that are trying to balance the vaccinated and non vaccinated folks in the workplace and the rules, the mandate that had just come into play, do you think they’re going to uphold it or do you think it’s going to fully get struck down?
David Gabor (53:02):
I’m glad you mentioned that, Jeff. I owe you an apology because I didn’t talk about that earlier. And that certainly is on everyone’s minds. It’s hard to say what the Circuit Court of Appeals and maybe the Supreme Court is going to do with the executive order from Biden. But I can say that yesterday, and if you’re doing this recorded, that would be November 29th, there was a state issued involving Medicare certified facilities for Alaska, Arkansas, Iowa, Kansas, Missouri, New Hampshire, Nebraska, Wyoming, North Dakota, and South Dakota. So the state means that it’s not going to be enforced in those 10 states at the moment.
David Gabor (53:54):
But here’s what I’m going to recommend to folks. Instead of worrying about whether or not the executive order is going to eventually come into play, I think what you do is, if you think having a vaccination requirement is right for your business, do it. Lay out the plan. Explain why you’ve got the plan and do it. And for those who either for medical reasons or a sincerely held religious belief are unable to get vaccinated, have a mandatory testing program for those employees. They’ve got to test every week.
David Gabor (54:40):
So far, what the courts have said and what’s been said by the agencies is you can have the employees pay for the testing themselves, but have them tested and force them to wear a mask when they’re in the workplace. Those are things you can do. But don’t wait on what the government’s going to do, but create your own program right now that you think is right based upon your sense of social responsibility, your sense of what is safe and appropriate in your workspace, and what do you think would be the impact to your team if you have a vaccination program. Think it through carefully. But I would not be waiting on the courts to figure out what to do with the executive order because that’s going to take a while, and all the while we’ve got variants that are raging and we’ve got people who are scared.
Jeff Plakans (55:35):
All right. Well, I think we’ve got time for one last one. I think this one’s a great one. We talked a little bit about it earlier, which is, that burnout’s nothing new in the workplace, but we’re certainly hearing a lot about it here kind of post COVID. Is it new or is this a new version of burnout? Or is it just an excuse that might be getting used more popularly?
David Gabor (55:59):
Okay. That is an incredibly hard question. And thanks a lot, Jeff. I’ll remember that one. I think that it’s a little bit of both. I mean, I would think back to 9/11. I was living on Long Island at the time. I used to do a lot of work in the World Trade Center. In fact, I had trials over in the court of claims. The EEOC was in the World Trade Center. And after that happened, we were shocked. We were dismayed. Four months later, five months later, six months later, lawyers said to judges, “Oh, I can’t get my stuff done in time because of the World Trade Center bombing.” And at first it was a real excuse, but after a while, people have use it as an excuse of convenience.
David Gabor (56:48):
I think that with the pandemic, there are a lot of people who have had adverse effects of the pandemic. I know there’s been an increase in alcoholism and some drug dependency. I know there’s been issues with depression. I know that their families have had real losses and families with kids have had to struggle with, “How do you raise your kids if they can’t be outside with others or they can’t go to school?” This was so many things that happened.
David Gabor (57:20):
I think as an employer maybe the focus shouldn’t be on is the person’s excuse legitimate if they’ve got issues with burden, with burnout. But going back to what you said, Jeff, earlier, make sure people aren’t expected to log in at all hours of the day and night even if they’re exempt from overtime. Make sure you put into play a clear message that you care about work-life balance in your company. That goes back to that communication piece. The first question that one of our listeners had. Make it clear. Work-life balance matters. [crosstalk 00:57:58].
Jeff Plakans (57:58):
Excellent. Well, David, thank you so much. For those of you who joined us today, thank you very much. For those of who may not have had a chance to, we have recorded the session. So we will be distributing the session and will also be available on our website at www.commpay, C-O-M-M-P-A-Y-H-R.com. We look forward to hearing from you later. And of course, again, thank you for giving us your hour today. Have a great rest of the day.
David Gabor (58:30):
Take care and happy holidays everybody.
Jeff Plakans (58:33):
Thank you.
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