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A Necessary Evil: 3 Policies to Reduce Risks

Here are  3 policies that we put in place after we had encountered problems in our own service business; but hey, like I said in a post not too long ago, we learn from our mistakes!

If you haven’t already read that post, you can check it out here: Mistakes: A Short Essay to Live By

So, let’s highlight a few policies that are often overlooked, but oh-so-simple to implement. You can do this on a policy-by-policy basis or they can become part of your companies’.  Even a short, simple Employee Manual can protect you, your clients and your employees, ensuring fair treatment for all.

Employee Non-Compete Agreement

The first policy we’ll talk about is the employee non-compete agreement.  This agreement usually outlines the basics of what an employee can and can’t do in regards to engaging in activities that could potentially be competition for the company.  It is generally written in what I like to call “lawyer speak” such as:

The term “not compete” as used herein shall mean that the Employee shall not own, manage, operate, consult or be employed in a business substantially similar to, or competitive with, the present business of the Company or such other business activity in which the Company may substantially engage during the term of employment.

Now, just because you have an employee non-compete agreement in place does not mean that your employees will follow it!  But it sure can be a good deterrent and it’ll cover you should you decide to take legal action against an employee.  To see how it might hold up in court you should check with your state and local labor laws.

Even Jimmy John’s, a sandwich chain, has a non-compete!  I mean…they. make. sandwiches!  You should read a story about why two employees tried to end their non-compete here. 😉

Alright, so let me tell you about what happened a few years back….We hired a cleaning team, they came in together (they were sisters), and when they were hired they said they would only work with each other (red flag).  Within three short weeks, the rumor-mill was starting to turn and we heard some sort of buzz in the office that the team was leaving their personal cleaning company business cards behind at our clients’ homes.  My first reaction was to fire them on the spot, but the truth is, we didn’t have any evidence and not one of our clients had mentioned anything to us. So we decided to alter our quality control schedule a bit and we arrived at the home after the team had packed up and pulled away.  And there it was, their business card proudly left behind by our own employees.  We’ll never know how many clients they took during those three weeks, but the team was fired and the non-compete was born.

Had we had the policy in place prior to this chances are the team would have:

a. not accepted the position or
b. taken the position, but not used it as a scouting agency for their own business

Either way, the non-compete agreement has been a policy that is included in our employee manual ever since that incident, and it has helped us to save time and money on training as well as protecting our client base. We have not had another incident like it since, which I think is pretty great.  Knock on wood.

Employee Payroll Deduction Authorization

This is just what it says it is.  The form authorizes your company to deduct from an employee’s payroll for things other than the standard taxes.  Reasons you would want to do this:

  1. You provide company uniforms, and you are taking a deposit for them.
  2. You accidentally overpay an employee and need to deduct it from the next payroll.
  3. You make a bulk purchase for employees, such as non-slip shoes in order to get a discount, and your employee chooses to have it taken out of their paycheck rather than pay cash (it is easier to track this way as well for bookkeeping purposes).

Those are the main reasons that we do deductions for our teams, but I know there could be much more.

Again remember to check with your local and state labor laws to ensure that it is in compliance with the law.  There are so many resources out there! I am in Texas, so whenever I have questions or concerns, of my own, I look up the legal jargon on my state’s website.

Employee Authorization for a Background Check

In order to run a background check you need, at a minimum, a name and a date of birth (Info you can easily obtain from an employment application).  So why should you bother with another form?  Great question!  Certain states have laws that require an employer to notify a potential candidate that you are screening them as part of your hiring process.  If you run a background check without their authorization and find something, they could have grounds for a discrimination suit.  An Employee Authorization for a Background Check form will normally have a section where you can gather a drivers’ license number as well as a social security number so that you can run a more thorough check!

The other reason not to run a background check without authorization is that it just isn’t a good way to start a relationship with a potential new employee.  When job candidates know up-front that you will be conducting a background check and that this information will be used in the decision-making process, it tends to keep candidates honest, and it weeds those that aren’t.  You’re also opening up the lines of communication so that they can tell you, in advance, if there is something that you might find in the background check, and perhaps give a clear explanation. Things as mundane as a ticket for “dogs-at-large” (an unleashed dog) can show up on a background report.  Although, you are just as likely to come across a candidate that has been charged with check fraud or theft…a huge red flag for any hiring manager!

Remember, your hiring decision will come down to whether an applicant meets your criteria, you feel they will be a good fit, AND it should be contingent upon any information found in their background check. You should consult your local labor laws to ensure that running a background check is done within the limits of the laws to protect yourself, your clients, and your business.