Are your employees entitled?
y the time you read this, the Christmas and New
Year’s holidays will be over. Were you closed on
Christmas Eve? Was that Thursday or Friday? How did you end up
paying your employees?
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Legally, most could do anything they
wanted to do. There is no legal requirement to give holiday
pay, and only a few states have any laws dealing with holiday
work. Even in those states, there is no requirement that
holiday time be paid time off. So, legally, my clients had no
obligation to close, pay, or otherwise bend to the pressure to
give more paid time off.
Of course, that was not the end of the
discussion. It is perfectly legal to require each of your
employees to address you as “Your Majesty,” but is
it a good idea? It is perfectly legal to come up with a
rational solution for the Saturday holiday problem, but
don’t we have to consider the issue of
“fairness.” Or as I like to call it,
“employee entitlement.”
It is an unwritten rule of management
labor relations that no good deed goes unpunished, and that
once a benefit is given to employees, there is no way to take
it back or modify it in any negative way without facing the
wrath of your employees. Of course, if business is bad, there
is no rule against the owner taking a pay cut or foregoing pay
altogether until economic conditions turn around. The problem
of take-backs or negative modification of benefits for
employees will always be difficult to resolve. Employees expect
a raise every year, even if the business does worse than it did
the previous year.
In resolving 2004-2005’s holiday
problems, I advised my clients to do the right thing for their
businesses. If they needed to be open, they should remain open.
If paying the employees additional compensation for the
holidays was too much of a drain on the cash flow of the
business, I told them to offer employees a paid personal day
for use in 2005 for each day of holiday pay that the employee
would not see.
In other words, I recommended a solution
that could not be attacked as stingy or a take-back. Most
agreed that their employees had to view the solution as fair.
One recommendation I would make is for
employers to have regular (quarterly) meetings with employees,
if only for 10 minutes, to discuss the health of the business,
business plans, business concerns, and upcoming issues.
There’s a chance, though perhaps a slim one, that
employees asked to come up with a solution for the Saturday
holiday problem might have suggested something fair and
reasonable to the company. Well, it could happen.
Regular communication, as well as sharing
of good and bad news, can go a long way toward helping
companies to deal with business downturns and the need to take
away “employee entitlements.”
In fact, you may want to buy back such
entitlements if only to stop them in the future. For example, I
know some companies that have discontinued Christmas bonuses in
return for additional pay, vacation, or some other benefit.
Search for creative solutions to avoid an employee revolt.
By talking to your employees, attempting
to arrive at fair solutions to difficult problems, and
otherwise involving employees in your day-to-day business, you
may avoid problems of poor employee morale. In turn, you
won’t have a manager come to you to say: “the
employees are revolting,” and you will not have to
respond, Groucho Marx style, “they certainly are.”
Happy New Year!
Frank Kollman is a partner in the law firm
of Kollman & Saucier, PA, in Baltimore, MD. He can be
reached by phone at (410) 727-4300 or fax (410) 727-4391. His
firm’s web site at www.kollmanlaw.com has articles, sample policies, news and
other information on employee/employer relations.
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