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Legacy Matters
BlogsPublications | April 12, 2018
4 minute read
Legacy Matters

10 Common Employment Mistakes Family Office Managers Make

In March, Warner attorneys Jon Kok and DeAndre’ Harris presented at a Family Office Exchange (FOX) webinar for their Human Capital Network. The topic was common mistakes that managers, including family office managers, can make that could leave the office or families open to employment liability.

Employment mistakes have been big in the media lately, and family offices are also at risk for these mistakes, as their staff members often wear many hats for the office and are not always specifically trained on employment issues. Because the repercussions from employment mistakes can be damaging, we have posted the webinar to our site and are providing some information from it to assist our clients who manage employees.

Common Employment Mistakes Managers Make

#1: Focusing on Individual Characteristics Instead of the Job

  • When hiring or promoting, focus on the job that needs to be done and the person’s skills to do the job, not on a person’s individual characteristics (e.g. personality or accent).
  • Do not discriminate on the basis of a protected category (race, color, religion, nationality, age, disability, gender, etc.) or fail to provide accommodations for a qualified person with a disability.
  • Provide written policies and conduct training with managers and family members.

#2: Allowing Potential Harassment to Go Unchecked

  • Look for warning signs, such as employees that wish to be reassigned or who do not want to work with/for a specific person, and intervene/investigate when necessary so you do not end up in a #MeToo situation.

#3: Misclassifying Employees

  • Understand that just paying someone a salary does not make them exempt from overtime—learn the criteria for exempt.
  • Understand what makes someone an employee or an independent contractor. Just because someone wants to be an independent contractor does not make him/her one.
  • Understand which employees are entitled to overtime for travel and “on call” time (see lawsuit against Lady Gaga by personal assistant). 

#4: Blurring the Lines of the Employment Relationship

  • Treat employees as employees, and do not make promises that would imply additional compensation or that could undo an employee’s at-will status (such as telling them they deserve a raise or they will always have a place on your staff).
  • Do not share your personal opinions about family members or confidential family information with employees in a “casual conversation between friends.”
  • Train managers, employees and especially family to understand and respect these boundaries.

#5: Not Having Proper Employment Documents

  • Have employees complete an employment application, along with a confidentiality and a conflict of interest agreement.
  • Run a background check which includes criminal, financial and license checks if appropriate to the position.
  • Have a signed employment agreement and provide an employee handbook to spell out the position and explain items such as perks, hours and expectations.

#6: Failing to Protect the Family

  • Enforce confidentiality and conflict of interest agreements for employees (and their families), which generally include provisions such as no speaking to the press, no posting of family on social media, no use of camera phones and no accepting gifts or favors from those trying to do business with the family.

#7: Failing to Document Performance Issues

  • Document issues in a professional manner with an intent to guide employee behavior.  
  • Document all issues clearly, thoroughly and as though your notes could appear in front of a judge and jury one day.
  • Documenting is important because if you do not document issues, and later you are sued, it is like the issues didn’t happen.

#8: Creating Physical Evidence

  • Think before you send emails and text messages about employees—avoid assumptions, exaggerations, references to legally-protected characteristics and legal labels (like fraud, harassment or liability) in writing.
  • If you have concerns, start with a phone conversation rather than an email or text.

#9: Failing to Consider Jurisdictional Issues

  • Know the specific state and local laws regarding antidiscrimination, wages, hours and protected categories, as some areas have stronger laws or more protected categories (for example, unemployed persons are a protected category in New York City).

#10: Conducting Performance Reviews Incorrectly

  • Reviews are only useful (to employees and in court) when they are done correctly.
  • Reviews should be honest and consistent across all managers—an average employee who meets requirements should receive average scores (not superior).
  • Reviews should have measurable expectations, employee involvement and should be timely, realistic and conducted with fair notice.

Obviously, these are important issues that everyone wants to get right, and we have only included some basics for each issue to get you thinking about your office’s employment situation. If you need employment documents drafted, have concerns about your current procedures or would like additional training for the office or family in any of these areas, please contact attorneys Jon Kok, DeAndre’ Harris or your Warner attorney for assistance.

View this webinar at