Cost Club Human Resources Controversy

Scenario One: Cost Club Memo

INTER OFFICE MEMORANDUM

TO: PAT CARDONA

FROM: CLUB COST

SUBJECT: PROBLEM SOLUTION SUGESTIONS

DATE: APRIL 30, 2013

The purpose of this memorandum is to respond of your request in addressing variety of e-mails with long-range and integration issues involving the entire region of Cost Club Human Resources Controversy .

Message 1: Discharges at the Anderson Cost Club store.

The general manager (GM) had fired two employees without giving them any reason for the discharges.

Suggestions

1. For this matter the discharges happened in an "At Will State" by definition According to the At-Will Employment doctrine "employment is presumed to be voluntary and indefinite for both employees and employers. The employees may generally quit their jobs at anytime and for any, no or even unfair reasons. Likewise the employers may generally fire or layoff employees at anytime and for any or no reasons" (US Legal, 2013).

2. Under At Will Doctrine, we are covered. As a part of the company policy we have to always to document any situation. We can be cover under the "At Will Employment Doctrine" but Cost Club will not be cover if the employee claims any kind of discrimination discharge under Title VIII. "Title VII protects applicants and employees against discrimination based on race, color, religion, sex or national origin. It does not cover age discrimination or disability discrimination, which are covered by the Age Discrimination in Employment Act and the Americans With Disabilities Act" (elinfonet, 2013). Title VII is also the federal statute which makes sexual harassment unlawful. For that matter Cost Club can be suitable and if we don't a have any documentation to support the discharge is a possibility we can lose.

Message 2: Labor Costs Reduction

The Regional CEO sent a memo that contemplates the idea of hiring more independent contractors and temporary employees as a way to reduce the 40% in labor costs. Each worker type will be outlined to discuss any legal implications involving the use of each worker.

Suggestions

1. Employees should be classified as exempt or non-exempt, according to the Fair Labor Standards Act (FLSA), law that does not covers exempt employees. Non exempt employees are entitled to a minimum wage and all benefits under the FLSA. Exempt employees may receive a weekly salary of not less than $ 455 an hour and the salary is not subject to deductions for absences of personal issues. Both workers are protected by the Title VII of the Civil Rights Act against discrimination.

2. Seasonal employees may be temporary for some time (Christmas period) or a certain project and have fixed start and end dates. Regular employees are indefinite. The employee at-will are the employer can be discharge when the employer need to and the employee can leave the employer at any time none of them have to give any explanation to each to end the labor relation. Like any other legal contract, there are some exceptions to the doctrine of employment at-will like we explained before. And finally we have the Independent contractors, according to the IRS, are not regular employees of the company, but work per project under a contract, manage their own time, pay their own taxes, use their own supplies and expect a steady paycheck (Bennett-Alexander & Hartman, 2007).

3. To reduce the 40% of labor costs, 55% of the workers could be either full time or part time, (34% full time, 21% part time) and 45% split between 19% temporary employees, 15% independent contractors, and 11% employees at-will. Some of the full time employees that perform the same tasks can be reduced to 30 to 35 hours weekly. According to this principle of freedom of contract, there are no laws preventing employers to reduce their working hours to their employees on part-time working hours, allowing us to reduce payroll expenses and payments for fringe benefits. Nor is there any distinction in the applicability of a plan to reduce working hours and fringe benefits to employees who are exempt from labor laws, such as managers, professionals and executives. It will notify the Human Resources Department (HRD) that the company will adopt a new strategy to increase competitive advantage and reduce costs by hiring part-time employees only from now on until further notice, for regular tasks; independent contractors can be hired for tasks that can be performed outside the company such as accounting and some HR functions (pensions, Social Security benefits, legal advice); and temp employees can be hired to cover some employees for special occasions or when

4. Each employee should be advised within 60 days in a six months period of the hour adjustments and other changes. An annex to their contracts will be added for them to review and sign, if they are willing to. HRD communicate privately in advance that its