Benefits and Compensation

Alice is Smoking in the Dynamite Shack

Lott, one of SHRM’s most popular speakers, counsels employers on lawsuit avoidance from

Alice is Smoking in the Dynamite Shack

Here’s the typical progressive discipline policy that I see, says Lott:

“To insure that business is conducted properly and efficiently, you must conform to certain standards of attendance, conduct, work performance and other work rules and regulations. When a problem in these areas does arise, your Foreman or Area Manager will coach and counsel you in mutually developing an
effective solution. If, however, you fail to respond to coaching or counseling, or an incident occurs requiring formal discipline, the following procedures occur

  • Step One: Oral Reminder…
  • Step Two: Written Warning…
  • Step Three: Decision-Making Leave /Counseling Session
  • Step Four: If another disciplinary problem occurs within the next (12) month period, you will be terminated.”

The example above is laden with unnecessary guarantees and gives the employer little room to maneuver. Here’s Lott’s recommenced policy:

 “The Company has a progressive discipline procedure that may involve verbal coaching, written warning, suspension with or without pay and/or
termination. The Company reserves the right to ignore or accelerate any and all steps given the situation. The Company or the employee can end the employment relationship at any time, with or without notice, reason, logic, or cause.”

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Here’s your typical policy on unauthorized overtime, says Lott:

“Anyone working unauthorized overtime will not be compensated for the additional time worked.”

“The Firm’s time clock is used to help employer and all hourly employees track their hours worked, overtime and flexible leave time. In the event of a discrepancy, the time clock will prevail. Failure to record your time on the time clock will result in your not being compensated for all time worked.”

That’s a blatant violation, says Lott. Try this policy instead:


Failure to pay overtime will be a violation. Try this policy, Lott suggests”:

“All overtime must be authorized by management. Working unauthorized overtime may result in disciplinary action up to and including termination.”

Keeping Secrets

Here’s another policy that gets employers in trouble, Lott Says:

“Your wage rate is considered confidential information. As such, wages, reviews and raises should not be discussed with anyone other than your supervisor.”

This is a direct violation of the NLRA, says Lott. And what reasons would there be for keeping salaries secret? Only two: your system is unfair or illegal.

When Debby complains that Susie makes more than she does, say, “Debby, you’re a crummy employee and so you get crummy pay. Remember we talked about your performance? When you do as much work as Susie, you can get paid like Susie.”

All you need to avoid exempt/nonexempt classification and overtime errors, now in BLR’s award-winning FLSA Wage & Hour Self-Audit Guide. Find out more.  

Probationary Period…Before

“The first thirty (30) days of employment for all new employees is an Introductory Period. During this period, you and the Company have an opportunity
to evaluate whether your performance and skills is (sic) a good match for the needs of the position. Either you or the Company may terminate the employment relationship during this period for any reason without advance notice.”

With this policy, Lott says, you’ve just limited at-will to 30 days.

Probationary Period…After

Lott’s suggestion for a probationary period—eliminate it. Then your employees are on probation forever.

In tomorrow’s Advisor, more of Lott’s tips, plus an introduction to a unique checklist-based wage/hour audit system.