Why There's Monetary Value in HR


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They say that HR doesn't impact the bottom line. I say that a well run HR keeps the bottom line from going lower.

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Why There's Monetary Value in HR

  1. 1. The concept that HR doesn’t add to the bottom line is basically flawed. HR keeps the bottom line from reaching a lower bottom.
  2. 2. Law suit settlements  Whistle-blowing tobacco settlement $206 billion
  3. 3. Sex Harassment Lawsuits  Morgan Stanley $40M  Mitsubishi $34M  Astra $9.85M  Ford Motor Co. $7.75M  Long Prairie Packing Co. $1.9M  Yellow Freight Systems $1.05M  Chevrolet dealership $500K  Bechtel Corp. $90K
  4. 4. Law suits - race  S&Z Tool & Die $1M  R.R. Donnelly & Sons $610K  Las Vegas cabinet maker $600K  FedEx $500K + EEOC continual oversight  Home Depot will pay $5.5 million to current and former employees, as well as significant injunctive relief.
  5. 5. Pay related law suits  Merrill Lynch $37 million  Caribou Coffee Co. $2.7 million  Passport Services $306K  $22.4 Million FLSA Settlement for contract janitors (Fair Labor Standards Act)  Federal Law Enforcement Officers Association Prevails in $261 Million FLSA Settlement
  6. 6. Wrongful Termination Settlements  Prill v. Peerless Tube Co. $700K  Kluzcyk v. Tropicana $971K  Fortune 500 Personal Products Company $600K plus stock options and other benefits  Property Management Company $200K  Automobile Dealership $300K
  7. 7. OSHA Fines  W. Virginia metal manufacturer $288K
  8. 8. Saks Pays for Age Bias  11/21/2008 By Business and Legal Reports, Inc. A Miami federal jury awarded more than $600,000 to two female sales associates who claimed that their former employer, Saks Fifth Avenue, moved them to the “back room” because they were “old.”  According to a report in the South Florida Business Journal, the two women, who had worked for Saks for 14 and 18 years, said that Saks was trying to push them out of their jobs. In their view, the store would not allow them to represent lucrative manufacturers’ clothing lines and gave those coveted assignments to younger employees. The women said that Saks ultimately fired them for offering the same discounts on merchandise that other employees were permitted to offer.The $600,000 jury award represents lost wages and benefits, punitive damages, and compensation for mental anguish, loss of dignity, and intangible injuries.
  9. 9. Restaurant Employees Receive Back Wages 3/24/2009  The operators of three Florida Asian-style buffet restaurants recently agreed to pay back wages of $233,234 to 55 low-wage employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division.  According to a report in the Fort Lauderdale Westside Gazette, Labor Department investigators found that the restaurants, New China Buffet of Lake Worth, Kamado’s Japanese Seafood Buffet of Pembroke Pines, and Dragon Gourmet Buffet of Plantation, had violated the minimum wage, overtime, and recordkeeping provisions of the Fair Labor Standards Act. The employees worked as waitstaff, bus staff, cooks and dishwashers. Twelve New China Buffet employees will receive $97,231; 18 Kamado’s employees will receive $58,849, and 25 Dragon Gourmet employees will receive $77,154.
  10. 10. 11th Circuit: $35 Million Judgment for Managers Affirmed  1/9/2009 The 11th U.S. Circuit Court of Appeals recently ruled that a chain of discount stores willfully violated the Fair Labor Standards Act (FLSA) by classifying employees as retail store managers in an effort to deny them overtime pay. Family Dollar Stores is a nationwide retailer that operates over 6,000 discount stores that sell a wide assortment of products. A class of 1,424 store managers sued Family Dollar for unpaid overtime wages under the FLSA. The district court jury determined that Family Dollar failed to prove that the plaintiffs were exempt executive employees. The district court awarded the plaintiffs roughly $17.78 million in overtime wages and an equal amount in liquidated damages as a result of the jury’s finding of “willfulness.” Family Dollar appealed on a number of grounds.  The 11th Circuit affirmed.
  11. 11. Employer Jailed for Comp Violations  5/29/2007 By Business and Legal Reports, Inc. Donald Robert Estlund, the owner of Don Estlunds Tree Service of Englewood, is facing a charge of operating without workers compensation insurance, Florida Chief Financial Officer Alex Sink recently announced. Estlund admitted to operating for eight years without the state-mandated coverage, until an employee, Bryan Aicher, suffered a catastrophic injury when his left arm and hand were crushed by a falling 12-foot section of tree. Aicher incurred $255,759 in medical expenses. State investigators said that because Estlund had not obtained coverage, Aicher was solely responsible for all injury-related bills. Estlund was arrested and booked into the Sarasota County Jail. If convicted, he could be held responsible for all expenses that would have been covered by the workers compensation insurance, including Aichers medical bills, rehabilitation expenses, and loss of wages.
  12. 12. Miscellaneous costs/fees  Civil rights violations $300K if more than 500 employees  HIPPA discrimination up to $250K  Absenteeism can cost $$$  Turnover and churn can cost $$$  Unhappy employees can bring Unions  Unhappy employees are not productive employees
  13. 13. Joint Responsibility  HR has to train managers in cost prevention techniques  Pay laws  Discrimination laws  OSHA compliance  Once trained, HR and managers must work together to head off costs that lower the bottom line.
  14. 14. How do we avoid these costs?  Regulatory Compliance  Pay & overtime laws  Anti-discrimination laws (ever evolving)  Remove the glass ceiling  Promote/recruit minorities/women to continuing higher level positions  Include HR in strategic planning  Learn the potential consequences of planned management actions before they are taken  Treat Employees with Respect  Tap employee knowledge to become more efficient
  15. 15. Steven R. Freedman www.TampaBayHR.com Steve_Freedman@hotmail.com www.LinkedIn.com/in/SteveFreedman007