Food Protection Trends - May 2009 - 284

GeNerAL INtereSt PAPer An Ounce of Prevention ou’ve heard it before—an ounce of prevention is worth a pound of cure—but prevention is the proactive side of human resources administration that is often neglected and sometimes forgotten. Most business owners in the food services industry are so focused on what they do best that they forget about employment law compliance. Food services represent one of America’s largest employers, so business owners must make it a point to know what compliance entails. Whether the business is manufacturing and packaging or catering and hospitality, employees have certain rights. • The Family Medical Leave Act (FMLA) regulates and ensures protection of the employees’ benefits and position while employees are on leave for qualifying events (such as the birth of a child). Documentation and confidentiality are essential, and the paperwork involved can be a challenge for a small business. While there are some very large companies in the food services industry, there are also thousands of smaller ones that can be daunted by the red tape. The Fair Labor Standards Act (FLSA) outlines classification of employee status. In other words, this is the law that sets the minimum wage and regulates overtime pay, recordkeeping and child labor. Again, food and beverage companies employ people of various ages and demographics. Regulations must be followed. Y • paying their employees correctly. This includes such areas as correct classification of employees (which determines whether an employee is entitled to overtime pay) and paying employees for breaks. One recent example of this involves Wal-Mart. In December 2008, Wal-Mart Stores Inc. agreed to pay as much as $54.25 million to settle a class-action lawsuit claiming that it forced its employees in Minnesota to work through their breaks without pay. If the lawsuit had continued into its penalty-setting phase in January, Wal-Mart could have faced up to $2 billion in punitive damages.1 To protect yourself from employment-related lawsuits, it is a good idea to educate your staff on Wage & Hour laws, sexual harassment, legislation and discrimination policies, and to distribute a legally-compliant employee handbook that outlines other federal and state policies and your expectations of your employees. You also need to be sure that your hiring managers are properly trained on these issues, and that they provide the appropriate training to their employees, when applicable, to avoid any fines, penalties and/or employment-related lawsuits. These preventive measures can help reduce the risk of fines—and ultimately costs—for your business. Verification is Crucial Although keeping abreast of federal and state regulations is an excellent way to prevent employmentrelated lawsuits, business owners in the food services industry must also take steps to prevent penalties and fines associated with failure to complete new hire paperwork correctly. Non-compliance can lead to big problems for small business owners in this industry. Whether it is food service contracting, distilleries or equipment, the consequences are serious. When hiring, it is imperative to ensure that you are hiring people who are eligible to work in the United States; otherwise, your company may face penalties and fines for employing illegal workers. In December 2008, IFCO Systems North America, the nation’s largest pallet management services company, agreed to a $20.7 million settlement of claims alleging that they had knowingly hired illegal aliens. This settlement agreement resolves only the corporate liability and does not encompass pending criminal cases against IFCO managers and employees. The settlement also includes $2.6 million in back pay and penalties relating to overtime violations under the Fair Labor Standards Act. IFCO also agreed to enroll in and use E-Verify for all new hires companywide.2 Under the Immigration Reform and Control Act of 1986, employers must review original documents required for employment authorization validation and record The cost of not protecting your company is far greater than the cost of taking measures before a problem arises. The 2004 Small Business Economy: Report to the President, from the Office of Advocacy of the Small Business Administration, says that in 2001, firms with fewer than 20 employees paid nearly 60% more to comply with federal regulations than their larger counterparts with more than 500 employees. Consider these facts: • Non-compliance with FLSA regulations may cost the employer two years’ back pay and liquidated damages. If the violation is determined to be willful, the fine can be up to three years in back pay. In 2003, companies paid out $236.2 million to the Equal Employment Opportunity Commission (EEOC) to settle charges of some kind of discrimination. (Compare this to 1993, when companies paid $126.8 million to settle charges.) • In addition, companies that do not follow Wage & Hour laws can face costly fines and penalties for not 284 FOOD PROTECTION TRENDS | MAY 2009

Food Protection Trends - May 2009

Table of Contents for the Digital Edition of Food Protection Trends - May 2009