As told by Melissa Monay
Written by Nisha Sharma
OAX Imports
In July 2015, Melissa Monay and her husband Ivan started a company called OAX Imports. Within a short time frame, this small business flourished and became a successful joint venture between Melissa and Ivan.
OAX Imports is a four year old importing business of dry foods from the Southern Region of Mexico. Some of the goods include beans, tortillas, chocolate, and spices. The business is very close to their heart, as Ivan is from the particular region of Oaxaca, Mexico, and understands how important these goods are that cater to a very specific Latino market.
During this time, Melissa happily handled the finances and bookkeeping, while Ivan handled administrative responsibilities such as hiring personnel. He was also the head of sales.
OAX Imports was doing as well as any growing small business, streamlining their importing processes, growing their employees, and becoming better at what they do through marketing, quality, and customer service.
Although the business was flourishing, admittedly some policies were not in place. OAX Imports operated under ten employees as a tightly knit group – so, the staff carried out many of these processes in good faith.
Additionally, as the business was small, Melissa and Ivan did not necessarily have the resources at first to put professional policies into place.
What Happened
Last January, as the company continued to rapidly grow, Melissa found herself in need of accounting and tax help. Using the QuickBooks ProAdvisor database, she was able to get in touch with David at SoCo Tax & Cloud Accounting who helped her clean up her books and file taxes.
David also soon got them setup on Gusto Payroll to formalize the payroll process away from cash and also to simplify the workflow. The delay in implementing these payroll policies by OAX would turn out to be one of the more profound mistakes that would cost the company later.
Melissa’s brother Geovanni, who was also a close friend of Ivan, worked as a driver and warehouse worker at OAX Imports. Just like all the other employees, Geovanni was paid on a weekly basis, and in cash. The payroll was not hourly; there was simply an established workload and then the pay was determined.
All the employees were family members and close friends so as mentioned above, processes were carried out in good faith.
About a month later, Melissa and Ivan ran payroll for the first time using TSheets time tracking software, where employees clocked in and out using the mobile application.
Shortly after, they implemented the GPS tracking system so Ivan and Melisa could analyze delivery time spent per client to better understand their input costs.
TSheets became a life saver in terms of location verification, calculating routes, and minimizing wasted time.
Power Struggle
It was during this time that Melissa’s brother Geovanni and a family friend who worked at the company, got into an intense altercation with each other. The argument evolved into a power struggle, as the family friend was overbearing with Geovanni.
Geovanni was younger in age so he felt oppressed and angry. He got upset over the argument and shocking Melissa and Ivan, immediately quit OAX Imports.
Geovanni then asked Melissa and Ivan for his last paycheck. Melissa asked Geovanni to come visit her at the home office but he refused.
Within a week, Geovanni hired a workplace fairness lawyer and sued Melissa’s husband Ivan, demanding $65,000 in unpaid wages and emotional damage for stress.
The close friend of Ivan who started the argument with Geovanni, ended up leaving the company two weeks after the lawsuit was filed.
He did not even show up to testify and Melissa and Ivan were unable to locate him – it had appeared that he had caused a huge problem and disappeared.
This made the argument that started the lawsuit seem trifling and pointless.
Melissa and Ivan were in dismay, as Geovanni had only been with the company for six months and the amount being sued for was substantial. It was the first time anything like this had ever happened and because a family member was involved, the situation was intensified.
Taking Action
Melissa called David right away. TSheets had only been in place at OAX Imports for one week, so it was clear that any documentation regarding Geovanni’s work history (specifically, hours worked) would not be accessible, if it even existed at all.
This was a perfect example of why TSheets would have been a lifesaver.
Had the system been in place already during the hours in question, documentation would be apparent. With just a click, Melissa and Ivan could’ve printed the time sheets and even used the GPS Tracker as a second set of evidence. It would show that Geovanni had been paid for the hours he worked for the company.
Nevertheless without TSheets, the lawsuit had to take its course.
The Nightmare
As Melissa was the one to lead the investigation, she made the decision of hiring an employment attorney right away.
Both Melissa and her attorney and Geovanni and his lawyer, negotiated for two long months.
Although Melissa and Ivan were absolutely certain he was not shorted any pay for his hours, Geovanni had claimed a multitude of time that he was not compensated for.
Starting with Day 1 of Geovanni’s work history and using a manual excel spreadsheet, Melissa and Ivan attempted to track the past six months of his work hours and locations.
This method was highly unsuccessful.
Excel is simply a manual spreadsheet and since it was not used during the actual dates of employment, it could not be used as factual evidence. It was just for Melissa and Ivan to observe and know that they had paid out their employee accurately.
Again, since TSheets was not in place, there was virtually no evidence during these negotiations – it was Geovanni’s word against Ivan’s word.
Furthermore, Melissa and Ivan discovered that California law is biased toward the employee. Owning a small business in this state is far from easy.
Melissa and Ivan wanted to avoid the daunting task of heading to court.
From research and common sense, Melissa knew that critics of the profession have long argued that lawyers have an incentive to try to collect fees contingent on winning in court, or simply bill for so many hours required to prepare and go to trial.
OAX Imports while successful, is a small business and they obviously could not afford to pay steep attorney fees.
Waiting for the Aftermath
There were so many sleepless nights for Melissa and Ivan during the lawsuit. The lawsuit caused considerable amounts of stress and it physically drained the two.
Despite this, they managed to continue their routine business operations. In addition to those two factors, Melissa was in shock at the betrayal of her brother.
Hiring and working with a close family member or friend in itself can be a challenge – there are the obvious precautions to take, such as not showing favoritism while also not being unreasonably tough to avoid it.
Perhaps the most difficult challenge is not being overly sensitive or biased when issues arise. Sometimes an argument or conflict can occur and family members or friends expect certain outcomes based on their relationship but end up being greatly disappointed.
In Melissa’s and Ivan’s scenario, they made a different mistake.
Company members were generally friends and family, so Melissa and Ivan had an unspoken and inherent trust. They documented everyone’s hours in good faith and never suspected any conflict with family members.
With this unsuspecting and easy-going attitude, it was the perfect setup for the tense argument and legal disaster that ensued.
With the ordeal wrapping up, eventually a settlement was reached and OAX Imports had to pay Geovanni a lump sum. Although Melissa and Ivan knew that they didn’t owe Geovanni any more money beyond what they paid him as an employee, they still had to pay.
Melissa and Ivan are now setup on a payment schedule for the settlement toward Geovanni.
Melissa learned greatly from this experience.
Small business owners must protect and prepare their companies. So many policies and procedures are in place for a reason – to ensure employees don’t sue companies for lack of organization. Another realization for Melissa is that it’s better to hire people that you don’t know.
As an employer, there is always an unbiased point of view when it’s a stranger that you’re dealing with.
At OAX Imports, there is only one employee that remains who was employed at the time of the incident. To this day, Melissa tries to keep his viewpoints a bit separate from the new group of employees. The new group is only familiar with OAX Imports after TSheets was already in place, so they have a fresh outlook.
As Melissa handles the administrative side of the business, she operates cautiously and the company is more formal now.
She is slightly weary of employees these days, so now whoever she hires starts on a 3 month probation. Employees begin at minimum wage and then work their way up slowly.
Ivan is a generous employer and knows that monetary compensation is important for making a living.
Regardless, Melissa and Ivan seek out employees that are specifically reliable and dependable. It’s not easy finding these types of workers, as graveyard and weekend shifts are challenging to fill in the first place.
A Lesson Learned
This experience has severed the relationship between Melissa and Geovanni since he left the company. As soon as they implemented legal representation, Geovanni, and Melissa and Ivan had not contact with each other.
It was unfortunate that Melissa lost communication with her brother over this experience.
Despite OAX Imports operating on a more formal basis, business policy has never been better.
Procedures and policies are more straightforward. The lawyer who assisted Melissa and Ivan with the case has stayed with the company to perform internal audits and ensure everyone is adhering to policies. This ensures that the company will remain protected if a future incident arises similar to what happened with Geovanni.
Clocking in has become mandatory at OAX Imports and the company has implemented a zero exceptions and zero tolerance policy in order to rely on trace-ability. If an employee’s phone battery dies, Melissa is able to clock in or out for the employee. In this sense, the company can always rely on the trace-ability of clocking in and out for record keeping.
There are no more written hours so that way there is accountability at all times.
TSheets Saves Businesses
With TSheets, you pay per user – and to Melissa and Ivan, you can’t put a price on what it will save you in the long run.
The price surely justifies what you can prevent in a labor or unemployment lawsuit.
One of Melissa’s favorite features is the new TSheets Kiosk, which the company added recently.
The kiosk is located at the OAX Imports warehouse and takes a picture of the person clocking in and out of the system. Melissa and Ivan appreciate this policy as they can both see exactly who is clocking in and out.
With the photo kiosk, even if an employee doesn’t have his/her phone, the kiosk takes care of that. Both the tablet and the camera are set at a strategic level so it doesn’t matter what your height is.
They are taking these types of measures because employees can be sneaky!
One of the OAX Imports drivers is frequently offsite and drives the company van – he has to clock in and out using his mobile device. He has provided routes throughout the greater Los Angeles area. For this reason, Melissa performs spot checks as TSheets is constantly pinging his location. She can follow his route easily and track the timing of it as well.
In one incident, the employee turned off his GPS because he had noticed that Melissa was utilizing this feature. Melissa brought it to his attention immediately.
There is also a camera system in place if a supervisor is absent. This verifies the validity of the person who clocks in or out of the system.
Employees must sign a waiver agreeing that they acknowledge that there is a camera in place. Policies like this are so important for liability and transparency.
OAX Imports staff love using TSheets because they offer great customer support – chat is available so that you don’t even need to pick up the phone to speak with someone.
The photo kiosk is awesome.
With TSheets, you can run the payroll report so easily, as it tallies normal, overtime, and even double-time.
Small businesses can now say goodbye to dry erase boards and printed Excel spreadsheets with scribbled-in names. TSheets scheduling software has made it faster and easier than ever for business owners like Melissa. You can build and share schedules with employees, assign jobs and shifts, and keep the workforce in-the-know while running like a well-oiled machine.
One of the best parts is that with TSheets, you get time tracking and scheduling together, as it should be.
As OAX Imports is located on a dock, its a greater risk of liability, so Melissa and Ivan decided it would be smart to get workers compensation.
They set the company up on TSheets, Gusto Payroll, and their attorney continues to perform internal audits.
The incident had triggered these corrective measures.
OAX Imports is far more organized now. As a small business owner, if you have employees, the measures are so important.
To Melissa, one of the biggest lessons was that anyone will do what they need to do, and unfortunately even family members can be liable. At this point had Geovanni stayed the straight track at work, he would be a lead by now and earning much more money.
While it’s a cautious outlook, Melissa and Ivan know now that employees can get angry and feel resentment. If an opportunity arises, some will take what they can get from you.
It’s just so important to clock in and out and keep a valid record of hours worked.
At the end of it all, Melissa and Ivan were left thinking, was it all really worth it in the end?
OAX Imports has since doubled in sales and is doing so well now.
When your business is growing, never stop making adjustments. Never stop learning.
image credit: TSheets