Check Mate!

1. How To Win With Employees Who Know How To Play The Leave Entitlement Game Check Mate! David T. Barton, Esq. david.barton@quarles.com 602.230.5526

2. Introduction: The Leave Problem • Employees are valuable only when they work

3. Introduction: The Leave Problem • Employees are valuable only when they work • Studies show that employees work better when they get some time off

4. Introduction: The Leave Problem • Employees are valuable only when they work • Studies show that employees work better when they get some time off • The government wants to regulate time off

5. Introduction : The Leave Problem • Employee Absences cost you money • Direct Costs • Sick, holiday and vacation pay • Disability benefits • Indirect Costs • Work delays • Impact on other workers • Floater and coverage costs Source: How Much is Absence Costing You? Michael Klachefsky, Mercer, August 2010

6. Introduction : The Leave Problem • What do absences cost your company? 35%

7. Introduction: The Leave Problem • In real Numbers: • 1,000 Employees, $50,000 a year = $17, 500,000 • In Comparison: • Health Care Costs average 13.6% of payroll • For those same 1,000 employees = $6,800,000

8. What do you get? • More Customers • First Tennessee Bank estimated that as a result of its new “family responsive” leave program it has retained 7% more customers leading to a 55% gain in profits over two years = $106 million.

9. What do you get? • Decreased Turnover • Aetna Life & Casualty extended its unpaid parental leave to 6 months and saved an average of $1 million per year in hiring and training costs.

10. What else do you get? • Higher Productivity • Improved Safety • Improved Morale

11. The Problem • The Abuser

12. Introduction – Case Study 1 • Employee applies for FMLA leave which is denied because he has worked only 800 of the required 1250 hours during the previous year. He files a claim that he should be eligible based on: • Vacation pay, • Option pay, • Sick pay, • Hours awarded in a grievance settlement; and • Personal time spent at home researching and building his case for an EEOC claim and FMLA lawsuit.

13. To Begin - Examine the Board • Do the rank and file not come to work for a reason? • Bad managers

14. To Begin - Examine the Board • Do the rank and file not come to work for a reason? • Bad managers • Health and safety concerns

15. To Begin - Examine the Board • Do the rank and file not come to work for a reason? • Bad managers • Health and safety concerns • Harassment and discrimination

16. To Begin - Examine the Board • Do the rank and file not come to work for a reason? • Bad managers • Health and safety concerns • Harassment and discrimination • Intimidation

17. What’s the norm? Emergency services and healthcare, both known for their stressful working conditions and high rates of overtime, also have the highest rates of absenteeism Source; Absenteeism: The Bottom-Line Killer, 2005.

18. Examine the Board • Are good employees leaving or are bad employees swindling? • Are leave problems the exception or the rule? • What is your employee turnover?

19. High Absenteeism, why? • Safety issues. Absenteeism is 7.8% per year in facilities with few fatigue related severe accidents, and 8.9% in facilities with more fatigue problems • Poor morale. Absenteeism is 7.5% per year in facilities with good morale, and 9.4% in facilities with poor morale. • Poor health. Employees who work too many hours of overtime tend to get less sleep, and have a greater prevalence of cardiovascular and gastrointestinal disease, diabetes and musculoskeletal conditions • Poor union relationships. Absenteeism is 7.4% per year in facilities with good union relationships, and 10.8% in facilities with poor relationships Source: Absenteeism: The Bottom-Line Killer, 2005

20. Opening Move - Know the Rules of the Game • FMLA • ADA • Workers Comp • USERRA • Policies and Benefit Plans • Quirky State Laws • Parental Leave • Meet the Teacher Leave

21. FMLA Abuse “Employee use of FMLA has grown considerably in recent years, with more employees taking leave, a higher use for chronic (repeated) illness, and in smaller increments of time. For 50% of FMLA absence, the employer has no advance notice of leave.” Source: Employment Policy Foundation, The Cost and Characteristics of Family and Medical Leave, 2004.

22. Benefit Abuse

24. Middle Game - Keep Score • Attendance • Time records • Leave designations • Vigilant monitoring

25. Attendance • Key Components of the attendance Policy: • Good attendance is essential to every job. • The 4 Rules for Absences: • Your direct supervisor should be informed of all expected absences as soon as possible - 30 days notice is preferred; • Notice of unexpected absences should be given as soon as possible, but at least one hour before your shift is to begin; • If prior notice cannot be given, the reasons for the failure to give notice must be submitted in writing to the supervisor and the personnel office upon return to work; and/or • If you fail to return to work when scheduled, or are absent without notice for three consecutive work days, you will be deemed to have abandoned your employment.

26. Attendance • Objective vs. Flexible “No definite rule can be established to govern discipline for excessive absenteeism or tardiness. Individual circumstances and job demands differ. Therefore, we reserve the right to discipline you for excessive absenteeism or tardiness any time we determine that your absences or tardies, if not protected by law, are unreasonably disruptive to our work or detrimental to efficient operations or employee morale.”

27. The Nazi Policy To encourage more consistent adherence to our attendance rules, we are adopting the following policy: 1. If you arrive late (even if it is just a minute or two) or miss scheduled shifts (even with an excuse) more than 3 times in a 30-day period, you will be placed on probation for 30 days. 2. If you arrive late or miss a shift during this probationary period, a $15.00 deduction will be made from your pay for each offense.

28. The Useful Policy • Talk about it: Only 64% of employees surveyed know if their employer has a disciplinary attendance policy. • Enforce it: 48% said it is not enforced consistently. • Publish Results: Rather than expressing relief that mangers are failing to enforce attendance policies or are looking the other way at tardiness, 60% of respondents said their work performance is negatively impacted when attendance policies are not fairly enforced. Employees say they are less motivated. They only do what they have to do, and nothing more. Source: Working in America: Absent Workforce, Kronos Incorporated Survey, December, 2004

29. Time Records Give managers the tools they need to evaluate attendance in real time. Source: Shiftwork Practices, Circadian, 2005

31. Attendance for Exempts • Do I track exempt employee attendance? • Evaluation and Discipline • Leave entitlement (FMLA) • Shame, Guilt and Recognition

32. Leave Designations • Improve accountability • Put a limit on time off • Create a record

33. Make them talk to you • In 2004, The Missouri Dept. of Transportation set a goal of increasing productivity by reducing sick-leave absences. • In fiscal 2009, sick-usage in the 6,300 employee department decreased by 25,621 hours from the previous year. • The average hours per employee fell from 69.9 in 2008 to 64.9 in 2009, or the equivalent of the productivity of an additional 12 full-time employees. • Since 2005, total sick leave has dropped by 130,000 hours, or about 60 full-time equivalents.

34. Make them talk to you • HR staffers accentuated the positive. They encouraged workers to better manage their sick leave so that they had a safety net for health emergencies, rather than wasting sick days to extend weekend and holidays. • The effort also involved tough love. Supervisors met individually with employees who had patterns of unscheduled absences. The message was firm and clear: 'You're either going to be put on the road to success or you’re going to be put on the road to the door. But it's up to you” • The agency set new rules for making leave requests. It now took more than a voice-mail message, an employee was required to talk directly to supervisors. It turned out to be harder to justify a sick day to a live person than to an answering machine. • The crackdown actually improved morale. The vast majority of workers are dedicated and look askance at colleagues who play hooky and effectively increase everyone else's workload. Source: Workforce Management, December 14, 2009

35. Vigilant Monitoring • 31% of employees surveyed are unsure if their supervisor would even know when they arrived late to work. Source: Working in America: Absent Workforce, Kronos Incorporated Survey, December, 2004

37. Castling - Call it Teamwork • Talk it over • Get C-level support • Adopt an approach that works for you • Leave it to employees

38. Talk it over • Talk to employees about the impact of absences

39. Get C-Level Support

40. Do what works for you

41. Leave it to Employees Studies show that allowing employees to select their own schedules reduces absenteeism and turnover. Source: Absenteeism: The Bottom-Line Killer, 2005

42. Leave it to Employees • CEO John C. Parry, president of Solix Inc., decided his employees weren't happy. Turnover was 15% to 20% a year and workers were absent an average 5% of the time. • Parry responded by meeting individually with each employee to figure out what was wrong. Then, he overhauled the company's scheduling practices, ending the rigid 8 am to 6 pm workday. Instead, he opened the office 24 hours a day and allowed people to set their own flexible hours. “If we trust the employees to make complex decisions on multimillion-dollar contracts, they can also be trusted to work on their own.” • Solix has grown to 1,100 employees from 850, turnover has dropped to less than 4% and absenteeism to less than 1% When the Boss Gets Fed UpWall Street Journal, December 3, 2010

43. The Fork Move - Communication • The myth of the readable policy • Provide entitlement notices • Warnings that work

44. Readable policies • Read your leave policy • How does leave accrue? • Maximum accrual or forfeiture? • What can leave be used for? • What verification before and after? • How much notice is required, and to whom? • What happens when employment ends? • Would your 5th grader understand it?

45. Entitlement Notices • You have only so much leave • Your leave is about to end • You overstayed your leave - so sorry.

46. Warnings that work 1. Contemporaneously recorded In 2011 the US Navy initiates it’s new “Terrorist Catch and Release Program”

47. Warnings that work 2. Specific as to error

48. Warnings that work 3. Thorough

49. Warnings that work 4. Clear as to consequences

50. Warnings that work 5. Mean what you say