Fail Safe Tips for Creating Overtime Sick Pay and Vacation Time

We are now at the end of all of the topics regarding the area of "administration" that is one of the five areas that make up every business in the world. As you know, the other areas are "customers" or "clients," "getting the work done," "billing," and "getting the bill collected."

The last topic to deal with the area of "administration" is the topic of office overtime, comp. time, sick days, vacation days, and a system of keeping track of all of this information regarding all of the people in the law firm. Let's try and deal with each one of these concepts one at a time and then we can generalize about all of them at the end of my comments.

I feel that I need to give everyone a disclaimer before I tell you all of my "tips." I am not a tax lawyer, I have never pretended to be a tax lawyer. Everyone knows that there are lots of tax laws and employment issues on these topics. I am not going to give any tax advice and I am not going to give any human resources employment law advice with regard to these issues. Well, you might be asking me then why are you even bothering to give any information at all, and the answer is: you need to conceptually understand these areas, find out from a reliable source what the tax laws are and what the human resources employment law issues are, and then try to structure a system that will most take advantage of the laws that apply to these areas. Simply put, the concept is try to minimize the amount of overtime pay you pay, try to minimize the number of people who work with you who are actual employees and that you need to withholding and matching of parts of their payroll.

Let's start with the topic of office overtime. I believe I am correct when I state that employees that are not paid by the hour that are management employees, and that are professional employees, do not need to be paid overtime. In my office, every employee is salary. No one is paid by the hour. Every employee has an incentive package where they get a percentage of what they bill and collect for the law firm.

Every employee is considered a professional employee. Every non-lawyer employee is at least an administrative assistant or a legal assistant. In short, we try to minimize the amount of office overtime and thus limit the amount of overtime pay that we have to pay to people. Another way that we avoid overtime pay is to allow what is called compensation time. If a person stays a longer period of time than an eight hour day, they are allowed to accumulate this comp. time, and to take time off to compensate for the times that they have stayed later. All of us work because we have to. We might as well make the job as pleasant as possible if that is the case.

We scrupulously keep track of sick days and have a written policy that says that you accumulate up to two weeks sick leave per year. This two weeks consists of ten working days. You accumulate one sick day per month per year except for two months which are June and July. You cannot carry over sick days from year to year, so the maximum time that you are going to accumulate is going to be ten days. We never have had anyone ever abuse our sick day policy because we are always pretty liberal with the comp. time concept.

Our vacation days are accumulated the same as our sick days, one day per month for every month except for June and July. In order to accumulate two weeks vacation you must be at the office for twelve months. I highly encourage employee vacations, and often times will give employees an incentive to go on vacation including sometimes paying for part of their airfare or hotel when they go on a special vacation. We give people full credit for a partial month that they work as an accommodation to the employee to be sure that they can accumulate as much vacation and sick time as possible, as soon as possible.

All of this is kept track of by the office manager and bookkeeper. If someone abuses the system they are probably not someone you want on your staff. Expect people to be honest, treat them honestly, and they will be honest.

I promised you a diagram that I picked up recently at a seminar that will let you know exactly how to determine if everyone on your team is playing as a team player. Let me tell you about the diagram and then explain to you how to use this diagram in your office to make some pretty quick decisions about who is on board the team and who is not.

Here is how you use this diagram. You draw a line on the diagram horizontally between four and six and vertically between four and six. You now have a grid system that has four boxes. Let's talk about each of these quadrants as though they are part of a compass.

The section from zero to five we will call the southwest quadrant and each other quadrant will in turn then be the northwest quadrant, the northeast quadrant and the southeast quadrant going clockwise around the quadrants.

Obviously, the more knowledge and skills and abilities a person has the higher they will score and they will then either be in the northwest or northeast quadrant.

Additionally, the better the person's attitude, desire and commitment, the higher they will score and they will then be in the northeast or southeast quadrant. Again, obviously, the most desirable people all are going to end up in the northeast quadrant. They are people who can communicate, and that you can communicate with. They are people that need to be rewarded and recognized.

The lowest quadrant, as I stated, is the southwestern quadrant. People in this quadrant need to be disciplined, you need to document their lack of performance, and where necessary, you need to terminate them.

People in the southwest quadrant get in the way of the other people getting the job done. If you have someone in that quadrant, you probably should not have hired them in the first place, and now that you realize your mistake, you need to terminate them immediately.

Don't give them two week's notice, they will just create more problems during that two week period.

People that end up in the southeastern are people that you can work with. Through on the job training and formal training whether it is through course work seminars, these people can be trained and can gain the knowledge skills and abilities to do their job. People that are in the southeast quadrant can be moved into the northeast quadrant with time and attention.

I believe that you can place every single person in your office somewhere on this performance assessment grid. As I said when I introduced this topic last week, "don't deny your life's experiences!"

There are many cliches with regard to describing employees who are problem employees. I will not repeat any of those here, because you are probably rattling them off in your mind even as you read about this assessment concept. Just like everything else I have talked about over the last year, you need to be organized with regard to performance assessment of everyone in your office. Don't hesitate use this diagram, put everyone in your office, and do the following, now:
1. Fire everyone that shows up in the southwest quadrant.
2. Evaluate the benefit of everyone who shows up in the northwest quadrant, and terminate those who are not almost indispensable to your operation;
3. Work your tail off to train those people who show up in the southeast quadrant; invest in them, work with them, and get them trained!
4. Invite everybody in the northeast quadrant out to dinner and drinks to celebrate how luck each of you are to be able to work with each other on a day to day basis. (Bring those in the southeast quadrant to see what they are in for when they get trained and become a star!)

Well, there you have it — all of my tips on "administration." Next week we will show you how to do an assessment of your own office with regard to the " administration" are to find out how you are doing. Hopefully not somewhere on the low end of the "stone ages", but hopefully on the high end of being on the "cutting edge." We will set out all of this criteria for you next week and make it easier for you to go over all of these topics we have been dealing with in the area of "administration" and you will be able to add up your score and see how you are doing. After next week we will introduce the subject of "getting the work done."

Talk to you next week!

Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.