Perspectives

Building a successful team is one of the most critical aspects of running a business. Hiring the right people who are the perfect fit for your organization’s culture and goals can lead to increased productivity, innovation, and success. On the other hand, hiring the wrong people can result in costly mistakes, decreased morale, and a negative impact on your bottom line. That’s why it’s essential to adopt the strategy of hiring slow and firing fast.

Hiring slow means taking your time to carefully select and onboard new employees, while firing fast means swiftly letting go of employees who are not meeting expectations or not aligned with your company’s values. In this blog, we will explore the art of hiring slow and firing fast, and why it’s crucial for building a successful team.

The Importance of Hiring Slow

Hiring slow doesn’t mean delaying the hiring process unnecessarily. Instead, it’s about being intentional and thorough in your hiring process to ensure you make the best hiring decisions. Here are some key reasons why hiring slow is crucial:

1. Cultural fit: Your team’s culture is the backbone of your organization. Hiring employees who align with your company’s values and culture can lead to better teamwork, higher employee engagement, and increased job satisfaction. Take the time to assess not only an applicant’s qualifications but also their fit with your company culture during the hiring process.
2. Skillset and experience: Hiring slow allows you to thoroughly evaluate an applicant’s skillset and experience. You want to make sure that the candidate possesses the right skills and experience to perform the job effectively. Rushing through the hiring process may result in hiring someone who lacks the necessary qualifications, leading to poor performance and potential setbacks for your team.
3. Long-term commitment: When you bring someone on board, you want them to be committed to your organization for the long haul. Hiring slow helps you assess a candidate’s long-term commitment to your company. Look for candidates who are genuinely interested in your organization and its vision, and who show potential for growth and advancement within the company.

The Benefits of Firing Fast

Firing fast means taking swift action when an employee is not meeting expectations or is not aligned with your company’s values. Here are some reasons why firing fast can be beneficial for your team:

1. Maintaining productivity: When an employee is not performing up to par, it can impact the productivity and morale of the entire team. Allowing an underperforming employee to stay on the team for too long can drag down the overall performance and motivation of the team. Firing fast helps you address performance issues promptly and maintain a high level of productivity.
2. Protecting company culture: Company culture is fragile, and one toxic employee can disrupt the entire team dynamic. If an employee consistently exhibits behavior that goes against your company’s values or culture, it’s crucial to take action swiftly to protect your team and maintain a healthy work environment.
3. Saving resources: Keeping an underperforming employee on board can be costly in terms of time, money, and resources. Firing fast helps you avoid wasting valuable resources on an employee who is not contributing to your team’s success. It also opens up opportunities to hire a more suitable replacement who can add value to your organization.

Best Practices for Hiring Slow and Firing Fast

Implementing the strategy of hiring slow and firing fast requires careful planning and execution. Here are some best practices to keep in mind:

1. Clearly define your hiring criteria: Before you start the hiring process, clearly define the qualifications, skills, and experience you’re looking for in a candidate. This will help you assess applicants more effectively and make informed decisions. Create a job description that clearly outlines the expectations and requirements for the role.
2. Conduct thorough interviews: During the interview process, ask probing questions to assess a candidate’s skills, experience, and cultural fit. Use behavioral-based interview techniques to gain insights into how candidates have handled similar situations in the past. Also, consider conducting multiple rounds of interviews to ensure you have a well-rounded understanding of the candidate’s capabilities.
3. Check references: Take the time to check the candidate’s references to validate their skills, experience, and cultural fit. Contact their previous employers or colleagues to gain insights into their performance, work ethic, and team dynamics.
4. Onboard new employees effectively: Once you’ve made a hiring decision, invest in a comprehensive onboarding process. Provide new employees with the necessary tools, resources, and training to set them up for success. Clearly communicate your expectations, company culture, and values from the start to ensure a smooth transition into their role.
5. Set performance expectations: Clearly communicate performance expectations to your employees from the beginning. Set measurable goals and objectives and regularly review and provide feedback on their performance. If an employee is not meeting expectations, address the issues early on and provide support and guidance to help them improve.
6. Act swiftly when performance issues arise: If an employee is consistently underperforming or not meeting expectations, address the issues promptly. Have open and honest conversations with the employee to understand the reasons behind the performance issues and provide coaching and support to help them improve. However, if the employee does not show significant improvement despite the support provided, be prepared to take decisive action and part ways amicably.
7. Communicate clearly and respectfully: When it comes to firing fast, it’s important to communicate clearly and respectfully with the employee. Clearly articulate the reasons for the decision and provide feedback on their performance. Be professional, empathetic, and supportive during the process.
8. Learn from mistakes: Not every hiring decision will be perfect, and sometimes you may need to let employees go. It’s important to learn from any mistakes and use them as an opportunity to improve your hiring process. Assess what went wrong, identify any red flags or gaps in your hiring process, and make necessary adjustments to avoid similar situations in the future.

In conclusion, adopting the strategy of hiring slow and firing fast can be a valuable approach to building a successful team. By taking the time to thoroughly assess candidates, onboard them effectively, and set clear performance expectations, you can increase the likelihood of hiring the right employees who align with your company’s culture and values. At the same time, addressing performance issues promptly and parting ways amicably, when necessary, can help maintain team productivity, protect your company culture, and save valuable resources. Remember to always communicate clearly and respectfully throughout the process and learn from any mistakes to continuously improve your hiring practices.

If a non-exempt employee must travel for work, how much of that travel time is compensable?

Since states do not have laws regarding non-exempt employee travel, this blog covers the federal Fair Labor Standards Act (ACT) and the Department of Labor’s regulations.

When travel requires an overnight stay, any time spent traveling as a passenger that falls within the employee’s “normal work hours” is to be paid, regardless of what day of the week the travel takes place. Therefore, the time spent waiting at the terminal until departure, through the subsequent arrival at the destination, needs to be compensated, when it falls during those normal work hours. However, similar to when an employee is at home, the time spent traveling from home to an airport or train station is considered commute time and is not treated as hours worked, thus not compensable.

For example, if your employee normally works Monday through Friday, 8:00 a.m. to 5:00 p.m., and they are required to travel by plane on a Sunday for business in another state, their travel time on Sunday between 8:00 a.m. and 5:00 p.m., is compensable. Therefore, if the employee arrives at the airport on Sunday at 3:00 p.m. and at their destination at 8:00 p.m., the employer is required to pay only form 3:00 p.m. to 5:00 p.m., the hours that correspond with their normally scheduled work hours. Alternatively, if the employee drives themselves or other (at the direction of the employer) rather than traveling as a passenger, all the time spent driving is payable work time, regardless of the normal work hours.

However-one caveat to those “normal work hours” is that an employee must be paid for any time they are performing work. This includes time spent working during travel as a passenger that would otherwise fall outside normal hours. For instance, if that employee from the above example works on a presentation during their flight until 6:30 p.m., the employer would need to pay them from 3:00 p.m. (arrival at airport) to 6:30 p.m. (turning off computer for the remainder of the flight).

A good practice is to require any traveling hourly employee to record all hours worked and the corresponding times throughout the duration of their trip. The employee needs to be paid for all hours worked even if outside of the normal hours.

Another factor to consider are the costs your hourly employees will incur during business travel-such as food and beverages, hotels, transportation, or incidentals. If there is not a company issued credit card the employee can use, another option is providing a stipend to your employees. Stipends are commonly used to either pre-pay, or pre-approve, the employer designated costs per day during business travel. Pre-paying the employee in this way helps reduce the daily financial burden of a business trip up-front when the employee doesn’t have a company issued credit card. Or, requiring pre-approved costs/rates allows for budgeting control if the employee is booking their own hotels, etc. For example, here is a link to per diem rates in each state that apply to traveling government employees. Many private business follow these rates as well because they are standardized by the cost of each location. The website contains current rates in the continental United State for any reference you might need.

Generally, offering either the stipend or company credit card can remove the reimbursement waiting period for the travel expenses afterwards, which is a common procedure to benefit the employee. Companies are not required to pay travel stipends to employees like they are require to reimburse business travel expenses in general, so the reimbursement process may look different for the individual companies.

The Fair Labor Standards Act (FLSA) is a federal law in the United States that sets minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in both the private and public sectors. The FLSA also establishes exemptions from these standards for certain employees who meet specific criteria.

One of the most common exemptions under the FLSA is the “white-collar” exemption, which applies to certain executive, administrative, and professional employees who earn above a certain salary threshold. The salary level threshold for this exemption is currently set at $684 per week or $35,568 per year, meaning that employees who earn less than that amount are generally entitled to overtime pay under the FLSA.

In 2019, the Department of Labor (DOL) announced a new final rule that would have increased the salary level threshold for the white-collar exemption to $913 per week or $47,476 per year. This rule was set to take effect on January 1, 2020, but was later blocked by a federal court and subsequently withdrawn by the DOL.

Now, the House and Senate have both introduced the Restoring Overtime Pay Act which, if signed into law, would immediately increase the salary threshold to $865 per week or $45,000 per year.  After the initial bump, the salary threshold would automatically increase by $10,000 in each subsequent year until the threshold reaches $75,000 in 2026.  Starting in 2027, the salary threshold will increase to an annualized amount equal to the rate of the 55th percentile of weekly earnings of full-time salaried workers nationally, which will be determined by the Bureau of Labor Statistics using data from the second quarter of 2026.

The stated purpose of the act is to strengthen overtime protections by increasing the number of workers who would be eligible for overtime pay.  For companies that employ exempt workers, we recommend keeping your finger on the pulse of these laws as you may need to raise salary thresholds in order to continue classifying these employees as exempt.  Stay tuned. 

Minnesota lawmakers have advanced a bill that would create a new state-backed family and medical leave program, which guarantees paid time off for the roughly 75% of MN workers that currently don’t already have access to the benefit. This new law aims to take some of the cost and risk associated with employee leave off of employers, but what does that mean for your business?

What would the new policy entail?

The law proposes providing up to 12 weeks of partial wage replacement for medical leave (including pregnancy). The law also proposes providing up to 12 weeks partial wage replacement for family leave, including for a new baby or seriously ill relative.

What would the benefits be?

The law would replace wages on a progressive scale at 90%-55% of an employer’s salary (66% on average), while protecting job healthcare benefits.

Who would foot the bill?

The cost for providing leave would be handled by creating a large statewide risk pool to attempt to equally share costs between employers and employees, with both contributing 0.31% on employee earnings.

Who is going to do the paperwork?

The Minnesota Department of Employment and Economic Development would handle payments and administration on behalf of employers.

Who will be entitled to this benefit?

All working Minnesotans, including small business owners and those who are self-employed would be eligible for leave. The leave would be job-protected, including a right to be reinstated after the completion of leave, and retaliation is prohibited.

Key Components of MN’s proposed family leave policy:

This proposed policy has NOT been passed by Minnesota law makers yet, so there is no need to make any changes to your employee policies at this time. The information here is not legal advice, and you should not take, or refrain from taking action based on information here. If you have additional questions about this policy, or would like to work with the WFJ Employment Law and Human Resources team to develop your internal policy now-visit our Support Services page to request a consultation, or give us a call!

What is a home seller disclosure law?

A home seller disclosure las is a law that requires home sellers to disclose or reveal known defects regarding the property that is being sold. Every state has their own unique disclosure laws and timelines. Many states also require a specific disclosure form, which should be provided by your Realtor.

What defects should be disclosed?

Material defects, anything that has an impact on the home’s value or safety. Water or flood damage (basement), leaking roof or ceiling, foundation cracks or issues, structural issues, insect infestations, mice infestations, toxic conditions such as asbestos, mold, lead paint, mechanical issues with the HVAC system or otherwise, electrical issues, deaths that occurred on the property in the recent few years, zoning issues or proposed changes to zoning, property line disputes-and depending on the state, naturally hazardous conditions such as location in a flood zone or near an earthquake fault line, tree roots impeding the plumbing lines, etc. The seller has a duty to report all defects they are aware of. If you can, paying for a detailed home inspection may help spot latent defects (defects not visible and not always detected by a general home inspection) and help you provide a comprehensive disclosure.

Does an issue have to be disclosed even if it was fixed by the homeowner?

Yes-disclose it in case the issue reappears for the buyer. Avoid a misrepresentation, negligence or fraud claim. Sometimes home issues that are repaired/fixed are perpetual problems. When in doubt, disclose.

What are your legal options if a problem wasn’t disclosed before you bought the home?

The buyer may have a claim against a seller when it can be proven that the seller knew about the defect and intentionally failed to disclose it. Typically this must be something that existed prior to the buyer taking possession of the home, a defect that is not obvious or visible to the buyer, and there is monetary damage resulting from the defect (buyer has out of pocket costs to fix or repair the issue.) The value of the claim is typically the cost to repair the defect. In some cases, there may be an attorney’s fees provision in the purchase contract.

What can a buyer do to make sure they aren’t buying a home with issues?

Pay for a thorough home inspection by a qualified professional that comes recommended to spot/reveal any issues. Read the entire disclosure form provided regarding the property, follow up with questions to the seller if you have any. Buying a home is a large investment, and you should take the time to understand what you are buying, and the contract you are signing-it is worth hiring a competent realtor or attorney to review the documents regarding the sale. Homeowner disputes can be lengthy and costly, so if you notice any red flags regarding the property, purchase agreement or disclosure, ask your realtor to ask the seller additional questions, and ask for them in writing.

In times of economic stress, there is too much money on the line to not review your large projects for red flags. Failing to act quickly when a customer is in distress could cause you to lose some of the remedies available to you-and can leave large sums of money left behind.

In our latest webinar, our employment attorneys reviewed the most recent changes to employment law in each of the 50 states. Here are some of the trends we noticed for 2023-

Hair Discrimination – Illinois: Illinois amended the state Human Rights Act. The Act prohibits employers from engaging in discrimination based on numerous protected characteristics, including race. This amendment expands the definition of “race” to include traits associated with race, including but not limited to hair texture and protective hairstyles such as braids, locks, and twists.

Wage Transparency – New York: New York City amends the city wage transparency provisions to clarify the positions for which a pay range must be provided. In addition to employers, 134-A specifies that employment agencies, and employees or agents thereof, must also include a salary range or hourly wage range in each advertised position, promotion, or transfer opportunity. Job advertisements for “temporary employment at temporary help firms” are still exempted from the law.

The new law also establishes a private right of action for employees. (Effective date to November 1, 2022.)

Rhode Island: Rhode Island prohibits wage discrimination; prohibits an employer from requesting or relying on an applicant’s wage history; requires an employer to provide a wage range for a position.

Washington: Requires employers to disclose hourly or salary compensation and a general description of benefits of postings for job openings.

Noncompete Limitations – Washington 2023 Non-Compete Enforceability Thresholds

Increases the amount an employee must earn to meet the non-compete enforceability threshold to account for inflation using the consumer price index.

Reproductive Health Decision-Making – Beginning January 1, 2023, California employers will be prohibited from discriminating against an applicant or an employee based on their reproductive health decision making— defined as “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”

Employers will also be prohibited from requiring applicants or employees to disclose information relating to their reproductive health decision making.

Staying up to date on HR trends can help save your company headaches, hassle, and money in the long run. Follow Wagner, Falconer & Judd on LinkedIn to receive updates on ever-changing laws and regulations.