Sunday, September 18, 2011

Job Descriptions are Money in the Bank for Your Business

I know:  talking about job descriptions is like watching paint dry; and reading job descriptions may well be the cure for insomnia.

However, it's when your business or nonprofit organization lacks job descriptions that the excitement can begin.  And I'm not talking fun excitement.  I'm talking about a body blow to your bottom line.

Submitted for your disgust:  the audit conducted by the New York State Comptroller of the Charlton Fire District, located here in the SmAlbany, NY area, entitled Internal Controls Over Treasurer's Activities:  Mismanagement Allows Theft, which describes in detail the multi-year financial field day (a.k.a. theft) the Fire District's Treasurer (who is married to the Fire Chief, by the way) had with the District's finances, spending and paying herself to the tune of $500,000.

Aside from the complete lack of leadership oversight and commonly accepted financial controls, what caught my eye was how the Treasurer paid herself an additional hourly rate in addition to her Board-approved salary for "work in addition to regular duties."  As the Comptroller's Office noted, this is an unusual arrangement for someone who is already paid a regular salary.

What really set the stage for the theft of wages by the Treasurer to occur was the absence of a written job description prepared by the Fire District Board, as well as the lack of a written list of "work in addition to regular duties" approved by the same Board.  Nothing was documented by the Board.

That wage theft amounted to nearly $325,000.  I don't know any business or nonprofit organization that can justify or absorb a bottom-line hit like that.

So if the cautionary job description tale of the Charlton Fire District isn't enough to scare you straight about the financial importance of having current and compliant job descriptions on file for your business or nonprofit organization, here are a few additional financial parting gifts to seal the job description deal for you:
  • Audit by the Department of Labor:  if DOL pays you an unannounced visit and you don't have current / compliant job descriptions, how will you prove which of your jobs are exempt from overtime and which are nonexempt?  In these tight government budget times, DOL's fines to businesses and other organizations are a key funding stream, not to mention the multi-year back-wage repayment requirements if DOL discovers Wage & Hour violations at your workplace.
  • Worker's Compensation Injury / Liability:  If your employee sustains an injury at work and there is no job description, how will you prove to your Worker's Comp carrier that you've done your diligence in informing your employees about what safe conduct is in your workplace? Can any business or nonprofit organization afford a big increase in your Worker's Comp insurance coverage?
  • Unemployment Insurance and Discrimination Claims:  If you don't have job descriptions, you have no ability to provide acceptable documentary proof of employee performance issues, because you never set the minimum standards of performance via current and compliant job descriptions.  Can your business or nonprofit organization afford an unplanned hike in Unemployment Insurance premiums, or worse:  an unplanned discrimination lawsuit settlement totaling thousands of dollars?
Job descriptions on the surface may be great sleep aids, but in this HR geek's reckoning, compliant and current job descriptions are money in the bank.  And that should help any business leader sleep well at night.

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