What seems like a lifetime ago, a colleague explained organizational risk in a way that was simple for me to understand yet memorable: Organizational risk is like driving a car with deep ditches on either side.
While it is best practice to drive in the center of the lane, sometimes leaders veer close to the ditch due to organizational culture, their personality, business needs, business climate, or their risk tolerance. It’s usually okay as long as we “stay out of the ditch.”
Human Resources professionals play a key role in helping organizations “stay out of the ditch”. Others depend on us to make recommendations that are legal, compliant, and ethical, and that keep the organizational culture and risk tolerance in mind. HR professionals that are viewed as business allies understand the difference between best practices vs illegal practices and can discern when a best practice is not the best fit in a particular circumstance.
Below are some very basic examples of areas that are often confused:
Best Practice: If a company closes for all federal holidays but does not pay employees for the time off, this is generally not federally illegal (your state may have different requirements). It may not be a best practice, but likely not “illegal”.
Illegal: Holiday deductions from Salary Exempt employee (assuming properly classified) due to company being closed on a holiday. Exempt employee must be paid the “full salary for any week in which the employee performs any work, regardless of number of days worked.”
Best Practice: It is generally best practice not to share someone’s health information or medical leave status with others unless expressly given permission. Usually, a simple “HRDeptof1 is out with migraines” is not illegal.
Illegal: HIPAA’s Privacy Rule does not apply to most employers. However, if as an employer you have a self-funded plan or self-administered plan, the Privacy Rule does apply since as an administrator, you’d have access to Private Health Information . You then are considered a covered entity. If you only learned of HRDeptof1’s health condition when reviewing the invoices submitted for payment, it may be a violation to disclose that to others.
REQUIRING OVERTIME WORK
Best Practice: When overtime is necessary, it is best practice to ask for volunteers first and/or give as much notice as possible. However, from a federal standpoint, “the FLSA does not limit the number of hours per day or per week that employees…can be required to work”.
Illegal: The Fair Labor Standards Act (FLSA) covers federal wage issues and sets federal minimum wages for exempt and non-exempt employees. Setting up a non-exempt employee as "salary" is acceptable as long as worked hours are tracked and compensated at the appropriate rate if over 40 hours are worked in the workweek as defined in your organization and based on state and federal guidelines. It is not acceptable to pay a non-exempt employee a salary in order to specifically avoid paying overtime. Some states have their own provisions regarding overtime pay. Organizations covered by a collective bargaining agreement may also have provisions around overtime pay.
Best Practice: Federal law does not require lunch of coffee breaks. However, short breaks lasting about 5 to 20 minutes must be paid. It is best practice to allow short breaks for employees to refresh.
Illegal: Although federal law does not require “coffee breaks”, it does require breaks for workers who want to express breast milk in the workplace.
NOTE: Always check for specific state/local guidance (and collective bargaining agreement if applicable) since they may have rules in place regarding all of the above.
When considering best practices and specific laws, it is important we take into consideration federal, state, and/or local regulations, public policy, type of industry, whether an organization is publicly traded, private, or non-profit, and whether a collective bargaining agreement is in place. Carefully evaluating all this information will help us stay out of the ditch. HR professionals and other leaders can and should influence the decision makers, but in the end, risk tolerance is set with the top leaders.
One of the most effective ways to gain creditability and enhance our influence is to refrain from stating “that’s illegal” as a reason not to do something. Granted, this is a great reason not to do something but it’s not always the best motivator. Instead, propose an alternative that makes sense for the business and share the pros and cons of the why behind it. It’s helpful to quickly determine the business problem the leader is needing to solve. Business allies, regardless of the role, are problem solvers.
I had to come to terms with “it’s okay as long as we stay out of the ditch”. My role is to advise and make recommendations but I don’t always have the final say. With time, and as we build credibility, when we strongly object to a plan of action, we are taken seriously and our recommendations implemented, or at least a variation.
And this is how we stay out of the ditch together!