5 costly employment myths we need to discard

Everyone knows a good myth or two. And as it turns out, a lot of those myths end up being taken at face value and acted on as if they were true — and it’s costing employers. But much like the boogeyman, many of these employment “facts” exist only in our imaginations. 

During SHRM’s 2016 Annual Conference & Expo, HR consultant Hunter Lott presented on a few of these myths with the intent of stopping employers from acting on them.

They are:

“Back in my day, there was company loyalty. Now people jump jobs for personal benefit.”

Ever have a manager who wouldn’t hire a candidate because the person was only at a previous job for a couple of years, figuring the candidate is a “job jumper”?

Or has someone left your company only have the manager write off the person’s reason for leaving as “disloyalty”?

In the first case, you may have lost out on a great hire. In the other, your company may have overlooked a more serious workplace situation. Both decisions were made because job hopping is sweeping the nation like an epidemic, right?

Well, when you look at recent data from the Bureau of Labor Statistics, you see that employee tenure has actually been on the rise in the past thirty years. In 2014, the median number of years employees stayed at a company was 4.6 years. Compare that to 1983 and 1998, where the median was around 3.5.

So it’s safe to say the misconception that people are less loyal to a company these days is busted.

“We can’t punish Jill. We have to treat everyone equally.”

Providing everyone an equal opportunity doesn’t mean equal treatment. By that, Lott means you must reward good employees for good behavior and punishing bad employees for bad behavior.

You don’t have to be held hostage by bad employees, as evidenced by an Asian professor’s lawsuit against City University of New York. The university dismissed the professor due to her aggressive behavior toward co-workers and students. The employer had immaculate documentation outlining the behavior in her performance reviews, which eventually lead to its courtroom victory in the ex-professor’s discrimination lawsuit.

Bottom line: If someone isn’t acting appropriately, and refuses to or can’t change, let the person go. You wouldn’t apply equal raises to both your top and bottom performers, so why would you hold onto a bad employee when even the EEOC supports termination for bad behavior/performance? Just make sure all the documentation is there before you terminate.

“You can’t talk about salary in the workplace.”

This taboo topic is still in a few handbooks across the nation and spoken about in hushed, forbidden tones. But shutting down conversations about working conditions — which include compensation — is illegal, according to feds like the National Labor Relations Board (NLRB).

Yet, despite the NLRB’s strong stance against these sorts of confidentiality policies, punishing employees for discussing salaries still happens.

While such discussions may put employers in uncomfortable positions, you can’t stop employees from talking about pay.

“Trust your gut.”

Lott brought up a manager who only hired “Georges” or “Georgettes” because a guy or gal with George in the name had never steered the wrong before. This is an example of making a decision based on a gut reaction. It’s the emotional fallacy that what worked before is sure to work again.

As humans we’re comfortable with keeping things at the status quo. But Lott went into great detail about how dangerous these types of thought processes — or rather lack of thought processes — can be.

Turns out, when you rely more on quick-thinking and “gut-feeling,” you’re more likely to be wrong. Harvard Business Review’s (HRB) March 2016 issue expounded on the idea that the more confident a person is, the more likely he or she is to over-estimate their ability to make decisions based on their gut.

And HBR also found that people who relied on a mix of emotional and logical processes — revisiting and reassessing their data continuously — were far more likely to be accurate in the decision making process.

“It’s dangerous to be an employer. The EEOC is out to get everyone.”

Here’s some data to help ease this fear of the EEOC:

The EEOC released its Performance and Accountability Report (PAR) for 2015, and it showed that out of the 157,833,000 employees the EEOC covers, it received 89,385 formal charges in 2015 (that’s a charge rate of 0.06%). And of those formal charges, 65% were eventually found to have no reasonable cause and were dismissed.

In the end, what tends to save companies from a day in court is proper documentation and acting on facts — not biases or assumptions.

Recordkeeping: What you must keep – and for how long

The trouble with recordkeeping at a lot of companies: You don’t know how complete your records are until you get involved in litigation or an audit. But by then, it’s often too late to fill in any critical gaps.  

That’s why it’s essential to know — before you find yourself in some kind of legal dispute — what documents you need to hold onto and what you can trash without putting your company at risk.

To be on the safe side, many employment law attorneys recommend you keep everything for at least five to seven years after an employee has left.

That’s sound advice — if you’ve got the storage and personnel to keep track of all those docs for that long. But it may be overkill, and often isn’t necessary to comply with many employment law record retention requirements.

Here’s a rundown of document retention rules under laws such as the FMLA, COBRA, FLSA, ERISA, HIPAA, ADEA and Equal Pay Act, courtesy of the employment law experts at the law firm Lindquist & Vennum:

Employee leave

The FMLA requires employees to hold on to a slew of employee leave-related paperwork for at least three years, including:

  • Identifying data regarding the employee on leave, which includes name address, occupation, pay rate, terms of compensation, days worked, hours worked per day, and additions or deductions in pay
  • Dates and hours of FMLA leave
  • Copies of employer notices to employee(s)
  • Documents describing employee benefit and premium payment info
  • Docs describing any disputes over FMLA benefits, and
  • Copies of the company’s FMLA policy.

Benefits plans

A slew of laws (ERISA, COBRA, ADEA, HIPAA) layout what benefits plan-related documents companies must hang onto, and the length of time docs must be saved varies by the enforcing law. Here’s a summary of the essentials:

  • Employee benefit plan governing documents — keep indefinitely
  • Summary plan descriptions and notices — keep indefinitely
  • Records backing up the information reported on Form 5500, such as vesting and distribution info, coverage and nondiscrimination testing data, benefit claims info, enrollment materials, election and deferral data, and account balance and performance data — keep for six years after the Form 5500 filing date
  • Evidence of fiduciary actions — keep indefinitely
  • HIPAA privacy record documents — keep six years from the date it was created or the date it was last in effect, whichever is later, and
  • COBRA notices — no required retention period, but it’s recommended these documents be kept for at least six years from the date they were given.

Compensation

Most compensation-related documents, with the exception of Certificates of Age (keep those until termination), do not need to be kept longer than three years, including:

  • Records containing employees’ names, addresses, dates of birth, occupations, pay rates and weekly compensation — keep for three years
  • Collective bargaining agreements and changes/amendments to those agreements — keep for three years
  • Individual contracts — keep for three years
  • Written agreements under the FLSA — keep for three years
  • Sales and purchase records — keep for three years, and
  • Basic employment and earnings records, like wage rate tables used to calculate wages; salary, wages and overtime pay info; work schedules; and additions to or deductions from wages — keep for two years.

Hiring

There are a number of hiring and recruitment-related materials employers must hold on to, including:

  • Hiring documents, like job applications, resumes, job inquiries and records of hiring refusals — keep for one year from date of action
  • Job movement docs, such as promotion, demotion, transfer, layoff and training selection info — keep for one year from date of action
  • Test materials, including test papers and employee test results — keep for one year from date of action
  • Physical examination results — keep for one year from completion, and
  • I-9 forms — keep for three years after the date of hire or one year after the date of termination, whichever is later.

Litigation changes the equation

Once you’re on notice that any matter may become the subject of litigation or an audit, you must keep all documents related to that matter until the case has come to a conclusion — no exceptions.

In addition, you must anticipate litigation when you receive a notice that a lawsuit is being filed, notice of a DOL or EEOC charge, an attorney demand letter, or an internal complaint.

What you must keep in those instances includes:

  • the personnel file of the complainant
  • all documents related to his or her application, hiring, promotions, transfers, disciplinary actions, evaluations, training, pay and medical records
  • job postings
  • job descriptions
  • complaint records of other employees
  • investigation notes and documents
  • supervisor notes and records, and
  • anything related to an alleged harasser or wrongdoer.

Bottom line: The best way to successfully fend off litigation or an audit is to be able to produce strong, comprehensive documentation.