Do I Have To Offer My Employees COBRA?

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act and it's a federal law that allows employees to choose if they want to continue their group health insurance after they've lost the benefits for certain reasons like job loss, reduction of hours, death, divorce, or other life events. Here's how to determine if your company has to comply with COBRA:

What Is FTE and How Do I Calculate It?

Full-time equivalent or FTE is a method of determining how many full-time employees you have based on total number of hours worked, not the raw number of employees. Full time is usually defined as 40 hours a week, so calculating FTE is based off a 40 hour week. In other words:

             8 hours/day                                                *One employee working 40 hours a week = 1 FTE

             5 days/week                            so....     

          x 52 weeks/year                                            *Two employees each working 4 hours/day for 5 days/week = 1 FTE

          2080 hours/year = 1 FTE

Knowing your FTE is very important for a number of reasons. It allows you to calculate your current and future staffing needs, decide if you're making enough revenue to justify your workforce, and determine if you need to comply with certain state and federal laws that are based on FTE (like Obamacare).

There are three main ways to calculate FTE:

1. By the day:
Total # of Labor Hours for 1 Day ÷ 8 = Total # of FTE

If you have 2 people working 8 hours a day, 3 people working 4 hours a day, and 1 person working 2 hours a day, then....
          (16 + 12 + 2) ÷ 8 = 3.75 FTE

2. By the month:

Total # of Labor Hours for 1 Month ÷ 173.33 = Total # of FTE

If your labor hours for the month of April were 758, then...
          758 ÷ 173.33 = 4.37 FTE

3. By the year:

Total # of Labor Hours for 1 Year ÷ 2080 = Total # of FTE

If your labor hours for 2012 were 26,935, then...
          26,935 ÷ 2080 = 12.95 FTE

Measuring by the day allows you to compare staffing needs throughout the week, while measuring by the month lets you compare busy months to slow months. If you recently initiated a new technique to increase productivity, measuring by month will also give you an idea of how effective the technique has been. But, if your staffing needs change depending on client needs, then the most accurate way to determine FTE is by the year because it captures both your busy and slow seasons. It's also the formula you want to use when determining if you have to comply with state and federal laws that are based on FTE.

Leadership Thoughts :: Volume 1

The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep from meddling with them while they do it. 

Theodore Roosevelt

#1 Rule of Firing: The Person Should Know They're Fired

I was sitting in a coffee shop the other day when I overheard the guy at the table next to me trying to break up with his girlfriend. I say trying because he wasn't very good at it. In fact, he was awful. The problem was he was desperately trying to be the nice guy, telling her how much he liked her and how much he enjoyed their time together. He regretted that they were going in different directions and how much he wished they could spend more time together. She was smiling and nodding like crazy, telling him how special he was to her too. She thought he wanted to take their relationship to the next level and at one point even thought he was asking her to move in with him.

After about 45 minutes she finally realized what was going on. She stopped him mid-sentence and asked "Are you breaking up with me?" He replied, "Yes, but you're really special and so beautiful and this is really hard for me." Not surprisingly, that didn't go over well. Not only was she hurt from being dumped, she felt humiliated for not realizing it sooner. Hurt quickly turned to anger and she started screaming "Hard for you?!?" He looked shell-shocked as she stormed out; it was obvious he hadn't expected her to be so upset. And, if he had been upfront and honest, she probably wouldn't have been. Sure, she still would've been hurt and angry, but she wouldn't have spent almost an hour telling him how much she loved him and thinking he felt the same way. She could've skipped the embarrassment and moved on. The entire situation was heartbreaking to listen to, but as I did, I couldn't help but think about how many managers do the same thing when they're firing an employee.

©Twentieth Century Fox

The best way to fire someone is to be direct. Sit them down, close the door to your office and tell them you're letting them go. Tell them the reasons why and then go over what happens next (cleaning out their office, returning company property, etc.). Some people will cry, others will get angry, and some will take it well. Be kind, but firm. Don't rationalize or justify, explain what led to their termination and wish them luck in the future.

At the end of the day, an employee should know they are being fired. Don't drag it out and don't spend the time telling them how valued they are or how much you enjoyed working with them. Even if it's true, it won't sound sincere because they're still being fired. Above all, don't tell them how hard this is for you. It just adds insult to injury because after all, you still have a job and they don't. 

Firing someone (like breaking up) is hard to do. But, if you do it quickly and directly, it will always turn out better than if you beat around the bush. Dragging it out will just cause you and your employee a lot of embarrassment and confusion. 

Top 5 Things Most Employees Think Are Illegal...But Actually Aren't

I often get asked questions that start "Is it legal for my employer to...?" And, 9 times out of 10, my answer is yes. Most things employers do are completely legal, although they aren't always ethical or a smart business move. Here are the top 5 things most employees think are illegal, but actually aren't.

1. Workplace bullying

Unfortunately, even though 37% of employees report being bullied at work, there are no federal or state laws protecting workers from it. This means that employers are under no obligation to protect or prevent their employees from being the victims of bullying. I have often witnessed bullies being tolerated and/or protected by their company because they are exceptionally talented at their job and are a "top performer." However, 9 states are currently considering legislation that would make workplace bullying illegal.

2. Discrimination because of sexual orientation or gender identity

There are federal laws preventing discrimination against a person because of race, religion, national origin, sex, age, pregnancy, or disability, but there are no federal laws making it illegal to discriminate based on sexual orientation and/or gender identity. Fortunately, 22 states (including D.C.) do have laws preventing discrimination based on sexual orientation and 17 states (including D.C.) have laws preventing discrimination based on gender identity. But, that still means that employers in over half of the United States can openly discriminate against the LGBT community.

3. Firing someone without cause

Most employees are considered "at-will" which means they can be fired for any reason as long as they aren't being discriminated against based on a protected class, like race, religion, or disability. So, your boss can fire you for any reason at all, even if it's just because he doesn't like your hair cut. Employees that can't be fired for frivolous reasons usually include union members or employees with a contract.

4. Treating employees unethically or unfairly

Should everyone get treated fairly? Absolutely. But, there's no law forcing employers to be fair. People in the same job positions can get paid different rates and can have different schedules. Employers can show favoritism and can provide different benefits to employees as they see fit. It may not be a best practice, but it's not illegal.

5. Not giving employees break time or enough time to eat lunch 

There are no federal laws requiring employers to give their employees breaks. In the absence of federal law, 9 states have passed laws requiring paid breaks for workers and 20 states require employers to give employees time to eat a meal.


Since there are very few laws that restrict how employers treat their employees, it's very important to pay attention to any red flags that come up during the interview process. Job applicants should be just as picky about who they work for as the company is about who they hire. The last thing you want is to be working at a place where you are discriminated against, taken advantage of, or bullied. Find a manager and a company that has a culture and policies that are in line with your beliefs and don't settle for a company that makes unethical decisions just because they can.