This case study focuses on a Business to Consumer retail and services company that faced a significant challenge when a former employee raised concerns regarding their previous employment details, specifically related to exemption classification and payments. Recognizing the potential risks and financial liabilities involved, the CEO sought the assistance of Rising Tide HR to navigate the situation, minimize business risks, and ensure compliance.

Problem

The CEO, who primarily focused on managing back-end operations and maximizing sales and client opportunities, lacked the necessary HR expertise. They had been relying on free support and internet searches to handle employee hiring, onboarding, and management. However, when faced with an employee dispute regarding exemption classification and payments, they realized the need for professional guidance and support.

The CEO's challenge was to effectively address the employee's concerns, mitigate potential risks, and ensure compliance with employment laws and regulations. Rising Tide HR was engaged to provide expert advice and assistance in managing the situation while allowing the CEO to concentrate on core business operations.

Actions Taken

Detailed Review and Exemption Audit: Rising Tide HR conducted a comprehensive review of employment and contractor agreements, followed by an in-depth analysis of job descriptions and responsibilities. An exemption audit was performed to determine if roles were correctly classified as exempt (salary) or nonexempt (hourly).

Mitigating the Employee Dispute: Rising Tide HR conducted meetings with the former employee to address their concerns regarding exemption classification and payments. The objective was to mitigate the situation, reduce potential exposure and liability for the company, and find a mutually agreeable resolution. Through careful analysis, Rising Tide HR determined that the employee was owed back wages and worked with the CEO to rectify the situation promptly.

Implementation of Updated Employment Practices: To ensure compliance and improve employment practices, Rising Tide HR facilitated the implementation of new employment agreements, revised job descriptions, updated time tracking policies and procedures, and enhanced onboarding trainings for both existing and newly onboarded employees. Additionally, separate processes and experiences were developed for contractors, allowing them to remain connected to the business while adhering to individualized contracts and specialized arrangements.

Results

The implemented actions yielded significant positive outcomes for the company:

Legal Compliance: Employment standards, policies, and paperwork were all brought into compliance with state and federal regulations, mitigating potential liabilities and legal risks.

Financial Risk Reduction: By promptly and diligently managing the situation, the company significantly reduced its exposure to employment law-related liabilities, resulting in substantial cost savings, and avoiding back wages, fines, and legal fees.

Improved HR Practices: The company now operates with updated employment agreements, accurate job descriptions, and robust time-tracking policies, ensuring better management and classification of employees.

Enhanced Onboarding Experience: Implementing improved onboarding training and procedures has resulted in a more streamlined and effective onboarding process for new hires.

Through the partnership with Rising Tide HR, the Business to Consumer retail and services company successfully addressed the challenges associated with exemption and employment classification. By leveraging professional expertise, the company achieved legal compliance, reduced financial risks, and enhanced its HR practices. This case study exemplifies the importance of prioritizing accurate classification, effective employment processes, and proactive HR management to mitigate risks and ensure the success and sustainability of a business.