Archive for January, 2012

HAS WORKERS’ COMP REALLY GOTTEN MORE EMPLOYER FRIENDLY? 10 Changes to the Michigan Workers Comp Act.

In December, for the first time in more than 25 years, the Michigan Workers’ Disability Compensation Act saw some major changes.  These changes are widely considered to be advantageous for employers.  Among the significant changes:

1.         Wage Earning Capacity is Redefined

2.         A Connection Between Wage Loss and Disability is Required

3.         Must Establish Medically Distinguishable Pathology

4.         Adds to the Definition of Mental Disability

5.         Changes the “100-Week Rule”

6.         Extends the Period When the Employer Controls Medical Treatment

7.         Expands Credit for Unemployment Benefits and Qualifying Pensions

8.         Requires the Magistrate to Take Into Account the Affect of Any Internal Joint Replacement Surgery, Internal Implant or Other Similar Medical Procedure When Determining Whether a Specific Loss has Occurred

9.         Restructured Redemptions

10.       Adjusts the Calculation of Interest

Now, I’d like to be able to tell you all that I know all about the changes, but that just wouldn’t be true. Fortunately, I work at a law firm with someone who does. Geri Drozdowski practices in the area of Workers’ Compensation law and she wrote an excellent article explaining all of this for you.  In fact, I stole her headings for this post.

So, if you need an update on this important change in the law or if you are just curious, you can find Geri’s article at http://www.wnj.com/Publications/Michigans-New-Workers-Disability-Compensation-Ac

BE CAREFUL WHAT YOU WISH FOR . . . 2 Simple Things You Need to Do to Make Sure You Get the Best Candidate or Protect Yourself if You Don’t.

I read an interesting article in Crain’s Detroit Business this morning.  Seems the auto industry is having some trouble finding qualified engineers to come to work in Southeast Michigan.  According to Crain’s, “Thousands of new jobs for Southeast Michigan were announced last week during the North American International Auto Show as part of expansions planned by automakers and suppliers.  But recruiting top engineers and others to fill those jobs remains a challenge.”  You can see the full article here.  Now why on earth, with an unemployment rate that still tops 10 percent, are auto suppliers having trouble finding talent?  Seems, according to Crain’s, that “The region and automotive industry also suffers from an image problem . . . .”

That, of course, means that some employers —  not my clients, of course, but some employers — are desperate to hire talent.  And when employers are desperate to hire talent sometimes they let good hiring practices fall by the wayside. And when that happens, employers end up with employees who may not be a very good fit. And employees who may not be a very good fit tend to be the source of problems.  So, I am going to give you two things that I think you should always do when hiring anybody.

1.  Reference checks.  I have seen this happen in the past, and it always causes trouble.  Your HR department is in a bind because you need to get someone on board now.  So you interview a candidate in with a really good résumé but he or she conveniently forgets to provide any references. Or worse yet, the candidate does provide references, or at least the name of the last employer, but no one calls to check.  Two months later, you find out you have an employee  who can’t come to work or does not get along with anyone, or does not have the necessary skills.  You might have found some of this out if you had called the  last employer or the one before that.  Or you might not have. I understand that some employers have policies about telling you stuff, but you would be surprised what people will tell you once you get them talking on the phone.  Besides, what have you got to lose? Call the references.

By the way, candidates won’t provide references or sign a release, DON’T HIRE THEM. People who won’t give you permission to speak to prior employers usually have something to hide.

There are two things to remember here. First, use common sense. Some applicants may be reluctant to have you speak with a current employer. If they do not receive an offer from your company, the inquiry could jeopardize the relationship with their current employer and therefore, you may want to honor the request.  Second, people who have done bad things for a previous employer can change, but they usually don’t.  At any rate, you are going to want to know.

That leads us to other kinds of “background” checks.  Remember, if you are using an outside agency to do this sort of thing – call references, check credit history, conduct criminal background checks, etc.  – you may have to comply with the Fair Credit Reporting Act. It would be a good idea to call us before you start doing any of that.  And one more thing on criminal background checks:  The EEOC does not like them.  In fact, in its first multi-million dollar settlement of 2012, Pepsi agreed to pay $3.13 million and provide job offers and training to resolve an EEOC charge alleging that Pepsi’s criminal background check policy discriminated against African‑American applicants.  You can see the EEOC announcement here.  So be careful if you are going to use them, and again, give us a call so we can help you put a policy in place that will keep you out of trouble.

2.  Job Applications.  You have one, right?  Make sure every candidate fills one out.  Completely.  Sounds stupid, right?  Well it is not.  I know some people think that asking an applicant to fill out a job application, particularly an applicant with a résumé, is a really nice way to consume 15 or 20 minutes while you’re trying to figure out where the first interview is.  In fact, asking employees to completely fill out your job application can be a really effective way to protect you from hiring a less-than-desirable candidate.  Make sure that every question is answered and that the job application is signed and dated by the applicant. “See résumé” should never be a sufficient answer.

Now that we’ve decided that every applicant is going to fill out the entire job application, answering all of the questions and signing and dating it, you should take a close look at your application to make sure it has a couple of things.  First of all, if you are an at-will employer, make sure your job application has a statement reaffirming the at-will status of any employment relationship for the applicant.  Something like the following will work:

I understand and agree that my employment can be terminated with or without cause and with or without notice at any time at the option of either me or the company.  I understand that no employee of the company has the authority to enter into any agreement for employment for any specified period of time or to make any agreement contrary to the foregoing.

You also want to make sure your job application has is a statement that affirms that the answers provided by the applicant to each of the questions you asked are true and that the applicant understands that he or she can be terminated or denied employment if false statements are made.  You might want to consider something like the following:

I affirm that all of the information contained on this job application is true and complete and that any falsification, misrepresentation or omission herein may result in refusal of, or immediate dismissal from, employment.

This paragraph protects you in a couple of ways.  It gives you an easy way to deny employment to an applicant who lies to you on the job application.  Second, and equally important, it might provide a limit to damages should you, at a later date, have to fire an employee and then discover that he or she made a misrepresentation on the job application.  Without getting into a lot of detail, this is called the after-acquired-evidence doctrine and it can limit your damages significantly should you be sued by someone who lied to you. I know this from experience.

Another way to potentially limit your exposure to litigation is to put a paragraph in the job application that shortens the time during which an employee can bring a lawsuit against you. A statute of limitations sets out how long a person has to file suit.  In Michigan and in many other states, people can agree to a shorter period of time.  In Michigan, it can be as short as six months.  A paragraph like this in your job application should suffice:

I agree that I will not commence any action or suit relating to my employment with the company (or termination of the employment) more than 180 days after the employment action at issue, and I agree to waive any statute of limitations to the contrary. I understand that this means that even if the law would give me the right to wait a longer time to make a claim, I am waiving that right, and any claims not brought within 180 days of the action at issue will be barred.

You should make sure that this paragraph stands out from the rest of the application by using bold print or requiring that the paragraph be initialed separately.

These two simple things may keep you out of a lot of trouble.