Hey, Employers- Stop Playing with Other People’s Money

This gap is a glaring example of how those in power view and compensate those without as much of it. And it is just one of several examples of companies playing with their employees’ money. When it comes to employees’ compensation, many companies display a lack of awareness and care. In more extreme cases, these companies adopt a culture and system of unethical and even illegal practices. It is my naive hope that personally and professionally we strive to do the right thing for the sake of doing the right thing- while acknowledging that the right thing to do is not always clear or easy. But in the real world, it is important to recognize that money drives decision-making. So if doing the right thing isn’t enough to motivate you, feel free to examine this issue with your best and most selfish interest at heart- your bottom line.

For starters, it is largely a job seeker’s market right now which means highly-sought after talent have great opportunity and leverage when it comes to where they choose to work. Best believe that these highly-sought after people will not choose to work for an organization that plays with their money. Secondly, some of your current practices may be illegal, and you obviously want to protect yourself against any legal issues. Lastly, today’s workforce is a transient one, and fields become small while the ability to communicate broadly and quickly about them grows larger. Your positive reputation is essential to your success and it won’t last very long if you play fast and loose with your employees’ money. As a result, for your own benefit, it is essential that you regularly examine the way your company operates when it comes to employees’ money and that you remain diligent in ensuring that your practices are not only ethical, but legal. Here’s where to start:

Be transparent (and keep you word) during the job search process

Staff are introduced to your company during the job search process, and they make their impressions quickly. From the moment you post your job description, there is great opportunity for you to send potential staff the message that you are a company worth working for- or not.  This starts with the salary range you set and whether you choose to post it. There is great debate about whether or not salaries should be posted in job descriptions. I certainly have my own opinion on the matter (post them!) but this is not a legal requirement. It is a decision you need to make, and ideally one you should make with your potential future staff in mind.

Theoretically, you are looking for the strongest candidates you can find. In order to court them effectively, you need to respect them, their time and their money. An easy way to do this is to be open and honest about the compensation package you are offering, and make it an attractive one. Secondly, be open and honest about the hiring process- how many steps will be involved, what the time commitment will be on the job searcher’s part, when decisions will be made after each step and when candidates will be notified. Then stick with it. We can never know anyone’s financial situation and at what stage of desperation they may be in, but it is safe to say that everyone appreciates knowing what to expect when it comes to their money. Stringing candidates along, leaving them hanging or simply extending self-imposed timelines without warning can have dire consequences for both you and the candidates you are ostensibly trying to attract. 

To create a hiring process that works for everyone, let candidates know from the beginning what the compensation package will be, what the hiring process will entail, what the timeline will be and let them know either way the result after each round. If timelines need to be adjusted, let them know that too. Respect your candidate’s time and money,  if not because it’s the right thing, then because you want your company to maintain a positive reputation and you want to attract the best people this round and in subsequent ones.

In the same spirit, stop trying to get people for the lowest possible amount. Yes, it may save you some money in the short-term but in the long term, you are hurting your company by 1) possibly turning away stronger candidates 2) devaluing what should be your most important asset and 3) risking that your once-loyal staff finds out they were lowballed only to become a lot less loyal as a result. Pay your staff as you are able and as they deserve.  

This holds true for your contractors as well. In my business, I cannot tell you how many times I have been asked to start work without a contract or was told that something would happen on a timeline that was so far off I often had to check my own sanity (still there, thank goodness). Contractors are in a different position than staff, or course, and depending on the situation, are often in a far more tenuous one with lack of benefits and job security. Contractors are notoriously paid late and put in the unenviable position of having to chase down payments. It is time-consuming, demoralizing and just plan bad. Pay your people on time. All of your people. All of the time. 

Pay your staff what they are due.

There are laws about what people are entitled to when it comes to their pay. This includes but is not limited to laws around minimum wage, overtime, payroll taxes and equal pay for equal work. It is imperative that your HR (or whatever version of HR you have) know these laws. Ethically and legally you must pay your staff what is due to them, and you cannot ask staff to work without getting properly compensated for it. You cannot pay staff differently because of their race or gender or any other demographic factor. 

I was once asked to come in for an employee orientation before my actual start date. I had never been asked to do this before and inquired about being compensated accordingly. They seemed surprised by the question. I told them I was happy to come in if I would be compensated for it but otherwise, would see them on my start date. I gathered that this had rubbed them the wrong way. They insisted that they wanted me to shadow the person I was replacing which would have been much easier had they hired me a month prior which was the original time frame. In my back and forth with the person I was replacing, they generously offered to come in on my actual start date, then rescinded said offer, realizing that since they would no longer be on the payroll, they wouldn’t be compensated for it. Isn’t it ironic, don’t you think? 

Never ask your staff to work without compensating them for it. This one isn’t just the right thing to do- it is the legal thing to do. Pay your staff what they are due. Always. 

Pay your staff on time.

I worked for one company whose payroll got all wonky when payday fell on a holiday. The company created a policy that stated clearly when staff would be paid should payday fall on a holiday. On one occasion, this policy was not adhered to, so instead of getting paid on the Friday before the holiday as we were all told, we ended up getting paid on the Monday after the holiday. The response from management- far too late- was essentially, an “oops, our bad. Have a nice weekend.” This, of course only served to incense staff even more. Who knows who had certain bills scheduled to be paid or checks that needed to be cleared with the expectation that the pay would go through as promised. But even if that wasn’t the case, the situation was made so much worse by the dismissive reaction and lack of accountability on the company’s part.

This same company often had its health insurance lapse due to lack of payment. Often, when staff would go to an appointment they would be told their insurance had lapsed and they had to pay out of pocket. Again, nonchalantly, the response from the company would be for staff to pay out of pocket and to later be reimbursed. What a gross assumption that staff had the ability to pay out of pocket. Pay your staff on time. I honestly can’t even believe this needs to be said. 

Pay your staff. Period.

When I first started my business, I was getting (very little) income from 8 different part-time gigs. Keeping track of my schedule and invoices and bills was stressful to say the least and I had to get really creative in how I made ends meet. During one particular pay cycle, one of the part-time jobs that had previously been timely with payments sent us an email stating that our pay would be late. No further details. We didn’t hear from them again for nearly a month (when another check should have come) with what was essentially a “nothing new to report”. This went on FOR MONTHS before the CFO informed us that the company was going under and that he would do absolutely everything he could to make sure we would all get paid. Another month and nothing. I reached back out and got out-of-officed several times before finally connecting with the company’s attorney, who quickly informed me that I would not be getting paid. I can’t say for sure that the higher-ups got their pay but I’d bet my bottom dollar on it (and I was nearly down to it). The contractors at my level, I could only imagine, were the ones who so desperately needed it. Should your company ever encounter financial straits, remember this. Do what you can to ensure that all of your staff get paid what they are due, not just the ones in the fancy suits. 

Be transparent (and keep your word) about raises and bonuses.

Your staff should know exactly how raises and bonuses work at your organization- what they can do to get them, how much they are eligible for and when they go into effect. Often, this coincides with annual evaluation time. Whatever the case may be for your company, staff should understand the process. If anything changes, staff should be notified accordingly.

At one place I worked, staff received an annual COLA increase that had been the same for the past 10 years. This particular year, there were increased financial strains on the organization and they would not be able to give these increases. The boss felt confident, however, that the money would be available in a few months. As we prepared for the evaluations, I asked how we would share the information with staff, and the boss thought it best not to broach the subject at all. Being new to the organization I wanted to be careful but also knew this was wrong. Staff were expecting this increase and not letting them know what was going on was simply not right. Finally, reason won the day, and we let the staff know the situation, promising them that we would check back in the next quarter. Despite my frequent pleads to my boss, however, we never did. We literally never brought it up again. They never knew if they were going to get the increase and eventually never got the increase. Double whammy. Double awful. In short, be transparent about how bonuses and raises work at your company, give staff the information on how they can get them, how much they can be and what the timeline is. Easy peasy. 

Reimburse. For everything.

Every school year, there are stories about teachers spending their own money on their respective classrooms. As a teacher, I completely understand, empathize and sympathize with this. It is important to recognize, however, that teachers are not the only ones who experience this. Too often, employees use their own money for work-related expenses and it’s not okay. Ever. Whether it’s mileage or supplies or cupcakes for Linda’s retirement party, staff should never- ever- be told they must do something work-related and pay for it themselves. 

At one previous job, my boss asked me at the very last minute to attend an out-of-state conference. It was a great opportunity, to be sure, but the last minute nature of it complicated things and made them significantly more expensive. As I scrambled to make arrangements for my dog and reconfigure my schedule, I started looking at flights that were both expensive and awful. I found the cheapest one I could and sent the information to my boss. Who quickly came to my office to ask if I could cover some of the cost because it was so high. Thank goodness I had the audacity – and good sense- to say no. Granted, I was excited for the conference and ended up getting a lot out of it, but it was not my idea to go. My boss, through his own fault, waited until the last minute and then basically begged me to go. There was no way in hell I was going to pay for it. 

In the nonprofit world, this shows up a lot and it is never okay. If your staff wants to bake cupcakes for Linda’s retirement party, that is a wonderful gesture on their part, but if you tell them they need to, you are then obligated to reimburse them for it. Do not assume staff have the time or money for anything extra. 

Similarly, if staff are expected to stay late or work off-hours, be considerate of this and adjust their time and money accordingly. Never, ever ask part-time staff to work even one minute without paying them. If you call them on the weekend or anytime they’re not on the clock, they are now on the clock. This one, for sure, is not just wrong, but illegal. 

Let staff know when compensation changes.

One of my friends recently got promoted from part-time to full-time at his company. He assumed (wrongfully as it turned out) that he would be informed of what changes this would affect. He wasn’t. I encouraged him to talk to his HR proxy (since he didn’t have an HR) and get all the information he was due regarding his new pay and benefits. He was due health insurance, short-term disability and increased time off, but it was not offered to him. It was only given to him once he asked for it. I shudder to think how many other people never know to ask and never receive what is righfully theirs. When positions change, be proactive and let your staff know what this means for their pay as well as their benefits. I should probably know if this is a legal matter or simply an ethical one but let’s not split hairs. Do it anyway.