Hiring Focused on Character

I often hear the general perception by business owners and managers that employees under the age of 30 have a lousy work ethic or other character deficiencies. They complain about entry-level employees who aren’t interested in paying their dues and are convinced they are entitled to move into the corner office on the day they are hired. I also hear about inappropriate dress, lack of loyalty and attendance woes among young people. But I know many “kids” under 30 (my 26-year-old son among them) who are incredibly motivated, hard-working, smart and willing to pay their dues.

Throughout my 32 years of practicing employment law full-time, I’ve also heard lots of similar stereotypical complaints about women in the workplace (“they can’t get along with other women—it’s always a cat fight” or “they just quit when they have children”). And sometimes, I have unfortunately been privy to pure misogyny, racism, ageism, and other bigotry when discussing problem employees.

I have a radical observation from more than 30 years of practicing employment law: Character is not generational, racial or gender-specific. I’ve worked with some terrific young employees and some terrible older ones, some unbelievably hard-working women and some slacker men, some brilliant minorities and some completely ignorant WASPs. The real debate is not about an employee’s age, race, gender or any other data point over which the employee has no control, but the employee’s individual character. So I encourage employers to focus on character more and stereotypes less (actually, not at all).

As an employer, I know you want to fill any open position with an employee who will exhibit responsibility, honesty, loyalty, enthusiasm, flexibility, initiative, dependability, civility, judgment and a distinct sense of right and wrong, regardless of their gender, ethnicity, age, or other protected characteristic.

You won’t find nearly as many business books that focus on character instead of generational conflict or the “downfalls” of diversity. The subject of character often sounds old-fashioned and faintly religious.

But all of us have reluctantly dealt with people with poorly-developed values: gossips, drama queens, whiners, liars, cheats, etc. There is no reason to have those kinds of people working for you and it is not illegal to refuse to hire them. But you have to be able to spot poor character in your hiring process to avoid bringing this poison into your workplace.

To hire better employees, first identify the character traits that are most important to you. Think back about what really disappointed or angered you about the personalities of unsuccessful employees in the past. Were they always tardy? Then dependability is very important to you. Did they steal company time by shopping on the internet on the company computer for hours a day? Then honesty and productivity are probably high on your list. Did your former employee pot-stir, pitting employees against one another? Then you are looking for someone who treats everyone with respect and doesn’t enjoy gossip.

Design an employment process that doesn’t just focus on job skills, but also zeroes in on the character traits that matter most to you. Ask open-ended questions about values in the interview, but don’t rely solely on your ability to judge character. No hour-long interview is going to tell you everything about an applicant’s character.

But you can find out some aspects of an applicant’s character if you ask about:

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Docking A Salaried Employee’s Pay is Tricky

Paying an exempt employee on salary means that employee receives the same amount of money each week regardless whether the employee works 35 hours or 45 hours. There are benefits for both you and the employee because you don’t have to calculate overtime and the employee doesn’t have to religiously track work hours.

Interestingly, employers ask me all the time about docking that weekly salary of an exempt employee. For some reason, if a salaried worker misses a half-day for a child’s school field trip or a distant relative’s funeral, suddenly employers want to dock the employee’s salary, possibly because the reason for missing work seems trivial. But that’s legally not how salaries work within the context of the federal Fair Labor Standards Act (“FLSA”).

The FLSA requires that a salaried, exempt employee be paid a “fixed” weekly salary of at least $684 that cannot be docked regardless of the quantity or quality of work. One way to think about it is to tell yourself that a salaried, exempt employee earns her whole salary for the week by Monday morning at 8:05 a.m.

So if your marketing director is paid $1000 per week, she has to be paid $1000 even for the weeks when she goes home on two separate workdays after lunch because she is sick or when she recklessly spends $20,000 of the company’s funds on an unsuccessful marketing campaign. You cannot deduct from her pay just because she did not work the quantity of hours you expected or perform her job with the quality that you expected.

There are legal deductions you have to take from a salary when required by law (for example, income tax withholding, payroll taxes, child support) and legal deductions you can make for items that are authorized in writing by the employee (for example, health insurance premiums, retirement contributions, salary advance repayments).

But the FLSA is extremely strict when it comes to the employer deducting from an exempt employee’s salary for missed days or poor work.

Here are the absences and acts for which a Texas employer cannot dock a salaried, exempt employee:

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Can I Drug Test My Texas Employees for Marijuana?

As 2020 begins, many Texas employers are wondering if they can still drug test their employees for marijuana use. Several states have legalized recreational marijuana and most states allow medical marijuana. So what is a Texas employer to do?

After all, Texas sort of, kinda, decriminalized weed in the 2019 legislative session. When they legalized hemp because it is a drought-resistant agricultural crop, the Texas Legislature effectively said that cannabis with less than 0.3 percent concentration of THC, the psychoactive ingredient that gets you high, is “legal hemp”, while anything above that threshold is illegal marijuana.

However, making the determination of THC concentrations takes sophisticated equipment that the police departments and private testing labs don’t have yet. Many Texas police departments and district attorneys have announced they are not even bothering to prosecute possession of use of small amounts of marijuana. Therefore, it is, for all practical purposes, very difficult to determine if your employees are engaged in legal or illegal activities when it comes to weed.

In addition, the Texas Legislature expanded “compassionate use” (medical marijuana) in Texas, so that specialty doctors can prescribe medical marijuana to treat multiple sclerosis, Parkinson’s disease, ALS, terminal cancer, autism, and many kinds of seizure disorders. Past state law only allowed those very few patients diagnosed with intractable epilepsy to be prescribed medical cannabis products, which in Texas may only contain low levels of THC. Now, many more of your employees may be legally prescribed medical marijuana and you have to worry about violating the Americans with Disabilities Act when testing for marijuana.

Finally, CBD oil, which is a hemp-derived product, is legal in Texas and is being sold on every street corner. Unfortunately, there is little regulation of CBD products, so they may contain surprise ingredients like THC. The Fort Worth Star Telegram recently reported on lawsuit filed by a CBD consumer against a CBD oil manufacturer because he lost his truck-driving job after testing positive for marijuana when he used CBD oil for his aching back.

So do you as a Texas employer still test for marijuana? Yes, legally you still can. Think of weed like alcohol. It is may be more legal than it was before, but it can still impair your employees’ job performance and judgment, so you are entitled to know if your employee is stoned.

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Employer End of the Year Tasks: W-4 and Salary Minimum

Employers must address two important employment law issues before the end of 2019:

  1. Changing the exempt status of employees making a salary of less than $35,568 per year, and
  2. Adoption of the new W-4 form.

I’ve previously explained the new salary minimum for exempt (salaried) employees. In summary, for you to legally pay an employee on salary, that employee must perform exempt duties (such as running a division of the company, performing professional work such as a CPA, or performing non-profitable office duties requiring independent discretion and judgment, such as human resources, benefits coordinator, safety director, marketing director, and others, but not secretarial or bookkeeping) and make at least the new salary minimum per week of $684.00.

If an employee of yours does not meet both of these criteria (exempt duties + salary minimum), you must pay that employee by the hour and pay overtime if the employee works more than 40 hours in any one workweek. In other words, you must change the employee to a non-exempt status under the Fair Labor Standards Act and make that person an hourly employee.

There are a few exceptions to this new salary minimum rule: teachers, doctors, lawyers and outside salespersons are not subject to the salary minimum test. There are also some very  industry-specific, narrow exceptions for taxi drivers, truck drivers, fisherman and some other strange exemptions from overtime that don’t have salary minimums. But the vast majority of workers paid on salary are affected by the requirements of the exemptions.

If you are having any difficulty deciding whether to change an employee to hourly or determining if their duties meet the tests for executive, administrative or professional jobs, please call your employment lawyer immediately to get you into compliance for the January 1, 2020 effective date on the salary minimum rule.

The other big change you as an employer should be aware of is the new W-4 form that the government released on December 5, 2019. It is supposed to be easier to use for your employees.

Here are the things you need to know about this new W-4 as you start the new year:

  • You must use this new W-4 form for any employee you hire beginning on January 1, 2020 and thereafter.
  • Any employee who wants to adjust his/her withholding on January 1, 2020 or after must use the new W-4 to make that adjustment.
  • Current employees do not have to fill out a new W-4 if they don’t want to make any changes, but should consider filling out a new one if they faced an unexpected penalty of bill last year or will have a change in 2020 such as marital status, a new baby or a change in income.
  • Employees filling out the new W-4 must complete steps 1 and 5 on the new form, but may complete steps 2, 3, and/or 4 if applicable. So if you have a new employee fill out the W-4 after New Year’s Day, just check that steps 1 and 5 are complete.
  • Because it is an unfamiliar form and because it encourages people to use the IRS’s new online Tax Withholding Estimator, you should allow employees to take the new W-4 form home so they can have some time to understand and complete it.

DOL Finalizes New Salary Minimum

Update: This post from March 2019 has been updated as of September 24, 2019, because on that day the DOL issued the final salary minimum rule, which changed a couple of important items from what was proposed six months ago.

A new federal overtime rule that has been finalized by the U.S. Department of Labor will become effective on January 1, 2020, and employers need to start preparing now to get into compliance.

The final rule requires employers to pay a higher minimum salary to those employees who meet certain white-collar exemptions to the overtime rules of the Fair Labor Standards Act (“FLSA”). Right now, an employer can pay a salaried exempt employee as little as $455 per week ($23,606 annually) and still claim the exemption (and not pay that person overtime) as long as the employee is performing exempt duties, such as executive work or professional work.

On January 1, 2020, the final minimum salary threshold for exempt employees is going to increase to $684 per week ($35,568) annually)(the proposed rule was $5 per week less, so we thought that the annual number was going to be $35,308). That means that if you have any employee whom you are paying on salary in an amount less than $35,568 per year, you as an employer need to spend the rest of 2019 deciding if you will provide that employee with a raise or reclassify that employee as non-exempt and move him to an hourly rate and pay him overtime when he clocks more than 40 hours in any one workweek.

In addition to meeting this increased salary level to $35,568 per year, anyone you are paying on a salary must also actually perform the duties of an exempt employee (the white-collar exemptions: executive, a professional or an administrator). These duties tests are much more difficult to meet than most people think, so don’t just assume that all of your salaried employees are actually exempt. For example, not every “manager” is an “executive exempt employee”, who under the FLSA must have the power to hire and fire and must supervise at least 2 full-time employees, as well as being in charge of a recognizable store, division or branch of your business.

During the rest of 2019, you have time to audit your pay practices to know who you are paying on salary, review their actual job duties to assure that they actually qualify for one of the exemptions, and then confirm that those salaried employees are making at least $684 per week. As you are going through this process, remember that the Equal Pay Act also applies to your salary decisions and you must not violate it when trying to comply with the DOL’s new salary minimum.

And yes, the DOL does measure the salary basis in weekly increments, so the employee must make at least $684 every week, not just averaged out over the year. The final rule does provide employers the ability to make up 10% of the salary basis test with non-discretionary bonuses and commissions. So, if you pay an executive, administrator or professional employee no less than $32,011.20 in yearly salary (divided by 52 weeks) and then the employee earns another $3,556.80 annually in non-discretionary bonuses and commissions (paid on at least a quarterly basis), you will not be in violation of the final rule.

If this proposal gives you a sense of déjà vu, that’s because we went through this process in 2016 when the DOL proposed an increase of the minimum salary for exempt employees of $913 per week ($47,476 annually). That rule was enjoined by a federal judge in East Texas just before it was to take effect and then died in the courts and under the new administration. No such messy reprieve is expected this time with this lower salary threshold, so businesses need to start talking now about properly paying their salaried employees in 2020.

Employer should also be aware that the “highly compensated employee” exemption under the final rule for 2020 has slightly increased. That exemption currently says that any employee making a salary of at least $100,000.00 per year is exempt as long as the employee is performing non-manual work and that employee performs at least one other exempt duty customarily and regularly. The final rule raises that salary threshold for highly-compensated employees to $107,432 per year (the proposed rule was to raise the highly-compensated employee salary minimum to $147,432, which was universally criticized and so reduced by $40,000).

Obviously, if you have to move an employee from exempt status to non-exempt status because of this salary minimum change, you should find a way to clearly communicate that this change is not a demotion, but simply a change in a governmental regulation. You’ll also need to train anyone moving from exempt status to non-exempt status on your timekeeping rules so that all time worked is properly recorded.

“Go Back” Comments Are Unlawful in Workplace

Telling a person in America to “go back to where you came from” has been considered racist and bigoted for decades in this country founded and built by immigrants, and if you as an employer allow this sentiment to ever be expressed at your business, you can expect a racial or national origin discrimination lawsuit to quickly follow.

Regardless of how the current occupant of the White House talks, the Equal Employment Opportunity Commission (“EEOC”), which actually investigates and prosecutes discrimination/harassment claims, has long told employers:

Ethnic slurs and other verbal or physical conduct of nationality are illegal if they are severe or pervasive and created an intimidating, hostile or offensive working environment, interfere with work performance, or negatively affect job opportunities. Examples of potentially unlawful conduct includes insults, taunting, or ethnic epithets, such as making fun of a person’s foreign accent or comments like, “Go back to where you came from,” whether made by supervisors or by co-workers.

Facts About Employment Rights of Immigrants Under Federal Anti-Discrimination Laws, U.S. Equal Employment Opportunity Commission.

The EEOC didn’t come up with this guidance on its own. It followed dozens of court opinions that examined cases in which an employee was harassed with statements like, “Go back to Africa” addressed to a black worker or “Go back to where you came from” addressed to an employee who appeared to the bigot to have been born somewhere other than America.

For example, our own conservative Fifth Circuit Court of Appeals ruled in a summary judgment appeal in EEOC v. WC&M Enterprises, Inc., 496 F.3d 396 (5th Cir. 2007) that an employee born in India (“Rafiq”), who happened to be Muslim, was entitled to prove he was harassed in a severe and pervasive way when his coworkers and managers said, “Why don’t you just go back where you came from”, started calling him “Taliban,” after September 11, and repeatedly referred to him as an Arab (he was Indian).

Rafiq was told, “This is America. That’s the way things work over here. This is not the Islamic country where you came from.” Rafiq’s supervisor even put in a written warning that Rafiq was “acting like a Muslim extremist” and said he could no longer work with Rafiq because of his “militant stance”. The Fifth Circuit found that a jury could “easily infer that [the coworkers’ and supervisor’s] actions were taken on account of Rafiq’s religion and national origin.”

One way the company tried to defend itself was by saying that it couldn’t have discriminated against Rafiq on the basis of national origin, since the workers were apparently too clueless to understand the difference between India and Saudi Arabia or whichever other Muslim country they mistakenly believed Rafiq was from. “The fact that the coworker ignorantly used the wrong derogatory ethnic remark toward the plaintiff is inconsequential.” LaRocca v. Precision Motorcars, Inc., 45 F. Supp.2d 762, 770 (D. Neb. 1999). The Fifth Circuit agreed and concluded in Rafiq’s case, “It is enough to show that the complainant was treated differently because of his or her foreign accent, appearance or physical characteristics.”

As the Sixth Circuit Court of Appeals has said, telling someone to “go back to where you came from” is “insensitive, ignorant and bigoted.” Williams v. CSX Transportation Co. Inc., 643 F.3d 502 (6th Cir. 2011). It is your responsibility as an employer to make sure that words to that effect aren’t uttered in your workplace, particularly, but not exclusively, if they are said by anyone in management. “The employer is presumed absolutely liable where harassment is perpetrated by the victim’s supervisor.” Nader v. The Brunalli Construction Co., 2009 WL 724597 (D. Conn. 2002).  

So how do you as an employer assure that this kind of discriminatory and harassing talk isn’t heard in your workplace?

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Paid Sick Leave Required in Some Texas Cities

Do you as an employer provide your employees in Texas at least six to eight days of paid sick leave every year? If you have employees who work in Dallas or San Antonio, you are about to be required to do so. You should be immediately adding a paid sick leave policy that complies with municipal ordinances that take effect August 1, 2019 in those two cities.

If you have an employee who works at least 80 hours per year in the city limits of Dallas or San Antonio, the new ordinances require you as the employer (if you employ five or more people anywhere) to provide that employee with one hour of paid sick leave for every 30 hours that the employee works within those city limits. It doesn’t matter if your business isn’t based in one of those cities, just whether your employee performs work there.

Of course, offering this paid sick leave only to your employees who work in San Antonio and Dallas could create workforce animosity and claims of discrimination among your other employees, so employers making changes to their policies need to carefully consider whether a company-wide sick leave policy revision is the smartest move at this point.

Here are the general details of the two municipal paid sick leave ordinances in Dallas and San Antonio. You should ask your employment lawyer to help you include the specifics in your revised written sick leave policy if you have Dallas and San Antonio workers:

  • If you have 15 or more employees, then you must allow your Dallas and San Antonio employees to accrue at least 64 hours of sick leave per year. For smaller employers (5-14 employees employed anywhere), the total amount of paid sick leave required per year is 48 hours.
  • The paid sick leave laws apply to full and part-time employees, so those of you who don’t provide benefits to part-time employees in Dallas and San Antonio will need to revise your policies.
  • These ordinances say that employees can use their paid sick leave as soon as it is accrued. So if you require an initial probationary or orientation period in which paid time off can’t be used, you’ll have to rethink your policy in that regard.
  • This paid sick leave can be used for more than employee’s own mental or physical health problems. The employee can take the paid time off for a family member’s illnesses, any family member’s victimization (such as domestic violence or sexual assault), and for doctor’s appointments for the employee or a family member. “Family member” is defined broadly and includes blood relatives as well as anyone who has such a close association with the employee to be considered family (such as a live-in partner).
  • You have to allow carry over of accrued but unused paid sick leave to the next year if you use the accrual method. However, if you provide all of the paid sick leave the employee will be entitled to at the beginning of the year, then you don’t have to allow carry over (this is also much easier to administer than the accrual method).
  • You can’t retaliate against an employee for using the sick leave he/she is entitled to.
  • Enforcement won’t go into full effect on these ordinances until April 2020, but you should be amending your policies now to comply with the August 1, 2019 effective date.

These ordinances have not been without controversy. The business lobby in Texas is fighting hard against these paid sick leave laws. A similar one in Austin is currently enjoined by a court battle, headed to the Texas Supreme Court, and won’t be taking effect as scheduled. But the court battle will take significant time and the 2019 Texas Legislative session ended last month with the lawmakers failing to pass any bill to standardize these municipal ordinances statewide or prohibit cities from passing them, so there is little chance that Dallas and San Antonio’s laws won’t go into effect in August, even if they are challenged in court later.

Even if you don’t have Dallas and San Antonio employees, I think all Texas employers must consider offering paid sick leave right now. Not only are states and cities all over the country requiring this, but employees are coming to expect this benefit.

Plus such a change can benefit an employer in a time of historically low unemployment in this state. It seems that almost every employer that I represent tells me that he/she can’t hire and keep good help. So shouldn’t you be offering some kind of paid sick leave to improve your hiring and retention? Maybe it would be helpful to adopt a policy that would comply with these city ordinances as part of a more comprehensive review and beefing up of your benefits to attract and retain high-quality employees.

Even Walmart (long regarded as one of America’s worst employers) recognized in 2019 the value of providing its hourly employees with 48 hours of paid sick leave per year in addition to regular paid time off. In fact, Walmart’s new company-wide paid sick leave policy looks surprisingly similar to the ordinances just passed by Dallas and San Antonio. Walmart wasn’t being altruistic, of course. It just made the move to standardize its policies to comply with a nationwide patchwork of new state and municipal laws requiring employers provide paid sick leave.

Firing For Abortion is Discrimination

Since abortion laws are such a hot topic right now, employers should be warned: firing a woman for obtaining an abortion is discrimination.

The Pregnancy Discrimination Act (“PDA”), which amended the federal discrimination law, Title VII, prohibits employers from taking adverse action against an employee “because of or on the basis of pregnancy, childbirth or related medical conditions”. The EEOC and the courts who have examined this question agree that this definition includes protection for women who chose abortion.

The Equal Employment Opportunity Commission guidance on the PDA states as follows:

Title VII protects women from being fired for having an abortion or contemplating having an abortion. . . . Title VII would similarly prohibit adverse employment actions against an employee based on her decision not to have an abortion. For example, it would be unlawful for a manager to pressure an employee to have an abortion, or not to have an abortion, in order to retain her job, get better assignments, or stay on a path for advancement.

While our Fifth Circuit Court of Appeals has not ruled on this question, the most recent court to examine this issue is a federal district court in Louisiana, which answers to the Fifth Circuit. In Ducharme v. Crescent City Deja Vu, LLC (E.D. La. May 13, 2019)(emphasis added), last week the judge plainly stated:

[A]n abortion is only something that can be undergone during a pregnancy. Title VII requires that “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes.” 42 U.S.C.A. § 2000e(k). A woman terminated from employment because she had an abortion was terminated because she was affected by pregnancy.

The judge in Ducharme found support for this decision in two earlier appellate cases. Doe v. C.A.R.S. Prot. Plus, Inc., 527 F.3d 358, 364 (3rd Cir.), order clarified on other grounds, 543 F.3d 178 (3rd Cir. 2008) (“Clearly, the plain language of the statute, together with the legislative history and the EEOC guidelines, support a conclusion that an employer may not discriminate against a woman employee because she has exercised her right to have an abortion. We now hold that the term ‘related medical conditions’ includes an abortion.”); Turic v. Holland Hosp., Inc., 85 F.3d 1211, 1214 (6th Cir. 1996) (“Thus, the plain language of the statute, the legislative history and the EEOC guidelines clearly indicate that an employer may not discriminate against a woman employee because ‘she has exercised her right to have an abortion.’).

There is another important lesson in this case besides understanding that abortion cannot play any role in an employment decision. The lesson for business owners, managers and supervisors is to think before you speak and keep your strong opinions about sensitive topics like abortion out of the workplace.

Even though the judge’s opinion acknowledged that a woman choosing abortion is protected under Title VII, the ex-employee in Ducharme did not prevail on her claim against her employer in part because she failed to demonstrate that her employer actually fired her for the abortion instead of the on-the-job drinking. A significant part of the court’s reasoning was based on the fact that the employer who did the firing, Ms. Salzer, did not actually demonstrate an anti-abortion bias:

Perhaps most fatal to plaintiff’s pregnancy discrimination claim, however, is the complete absence of any support for any alleged anti-abortion animus by Ms. Salzer. Here, it is uncontroverted that Ms. Salzer had never said anything about abortion or religion to Ms. Ducharme at any time during their 18-month relationship. Ms. Ducharme does not dispute that when she informed Ms. Salzer that she was planning on undergoing an abortion, Ms. Salzer did not attempt to talk her out of it and did not say that she disapproved of the decision. There is no evidence that prior to that, Ms. Salzer had ever said anything to suggest to Ms. Ducharme that she would disapprove of the abortion. Ms. Salzer had never said anything political about abortion. Ms. Ducharme did not think of Ms. Salzer as religious.

So the employer did not:

  • Say anything about abortion or religion to Ms. Ducharme at any time during the 18 months Ms. Ducharme worked there;
  • Try to talk Ms. Ducharme out of her decision to have an abortion;
  • Express disapproval about Ms. Ducharme’s decision;
  • Generally talk about her religious or political views in the workplace.

Consider how differently this case could have gone if the employer was a known abortion opponent who lectured his/her employees on the evils of abortion, strongly objected when an employee asked for time off for an abortion and then fired that employee soon thereafter. That employer’s words and actions on this sensitive medical, religious and political issue would definitely come back to bite the employer in a discrimination case.

Or consider the flipside. What if the employer were very strongly in favor of abortion rights and did not want a top-performing female employee to lose any work time to pregnancy and a maternity leave? That employer’s statements encouraging the employee to end the pregnancy “for the good of the business” and to increase the employee’s chances of advancement could also be strong evidence in a pregnancy discrimination case.

The lesson is that your workplace is not the right place for a boss to pontificate on religious and political hot topics. As an employer, you can be you without hostility or stridency towards who your employees are or what they believe. Successful leaders create more welcoming, tolerant workplaces and give fewer lectures.

When an Employee’s Social Security Number is Incorrect (or Fake)

In 2019, the Social Security Administration (“SSA”) is again starting to send “No Match” letters after a seven-year hiatus to employers who reported payroll taxes for an employee under an incorrect (or fake) Social Security number.

What are the legal do’s and don’ts when the company receives an “Employer Correction Notice” (more commonly known as a No Match letter) from the SSA or otherwise finds out that an employee’s Social Security number isn’t accurate?

  1. Don’t overreact. There are a number of reasons that an employee’s Social Security number may have been reported incorrectly, the most common being a transposition of numbers in the company’s system or a name change. Your responsibility as an employer is to carefully address this matter so you don’t violate any discrimination laws, but you also protect the company now that you know there is a problem.
  2. Don’t ignore. You have to act in response to a No Match letter or other knowledge that a Social Security number is invalid. But what actions you need to take should be discussed with your employment lawyer, who you should call immediately upon receipt of the No Match letter.
  3. Don’t fire anybody (yet). The letter itself will say, “You should not use this letter to take any adverse action against an employee, such as laying off, suspending, firing or discriminating against that individual just because his or her name or SSN does not match our records.”
  4. Don’t confuse the Social Security Administration with Immigration and Customs Enforcement (ICE). No match letters come from SSA and must be addressed through the SSA system. There may be a connection between the incorrect Social Security number and the employee’s eligibility to work in the United States, but you are a long way from making that determination yet when you have just received the No Match letter. On the other hand, ICE may regard a failure on the part of the company to act correctly in response to a No Match letter as an indication of guilt in employing undocumented workers, which is why having an employment lawyer walk you through this process is essential.
  5. Do check your records. Make sure the mistake is not on your end—check that you correctly reported the name and Social Security number that your employee provided to you. If the mistake was yours, notify SSA of the correction.
  6. Do ask the employee to address the problem. After you confirm that the mistake is not on your end, you need to notify the employee in writing that he/she has the responsibility to clear up any discrepancy with SSA by a reasonable deadline (at least 90 days).  Advise your employee that failure to act immediately, to provide the corrected documents in a reasonable time or to provide a good-faith explanation of the problem could later be grounds for termination.
  7. Don’t make an employment eligibility decision yet. There is a dangerous tendency for Texas employers to suspect a Hispanic employee with an incorrect Social Security number might be ineligible to legally work in the United States. This bias could quickly get you sued for discrimination. Give every employee with a mistaken Social Security number a chance to correct that mistake through the SSA procedures. Don’t require an employee to fill out a new I-9 employment eligibility form until the SSA procedure is complete and then only if the employee used the incorrect Social Security number on the first I-9 that the employee filled out.
  8. Don’t turn a blind eye to an affirmative statement of ineligibility by the employee. On the other hand, employees will sometimes tell you when confronted with Social Security number mistake that the employee doesn’t have a Social Security number. Your response should still be, “Talk to SSA and get this corrected.” But if the employee actually says, “I’m not in the United States legally and can’t get a Social Security number because I’m not eligible to work here,” you have to take that admission of ineligibility to work seriously. There is a requirement that employers must terminate any employee immediately upon receiving actual knowledge that the employee is not authorized to work, such as when the employee admits to having submitted false documents for I-9 purposes or to entering the country illegally and never applying for a work permit. This is a red flag warning to call your employment attorney.
  9. Do consider if you need to adopt verification procedures at time of hiring. The SSA provides a verification service that you can use to check Social Security numbers for payroll purposes only (not I-9 purposes) at the time of hiring. Many background checking services will also offer this as part of their criminal background check. But if you are going to start verifying Social Security numbers with new hires, you must be consistent and verify every single employee to whom you make a job offer or your inconsistency can be considered discrimination.
  10. Don’t mistake SSA verification for E-Verify. E-Verify is the federal database for verifying employment eligibility for I-9 purposes. This is where you can find out if your employee really is legal to work in the United States. However, at the present time, there are so many red-tape and technical problems with E-Verify, which has been known to mistakenly block eligible workers, that I do not recommend that employers enroll in that system if you don’t have to (enrollment is mandatory for some employers, such as federal contractors).

“Do As We Say, Not As We Do”: The Lesson for Employers from the Shutdown

As the federal government’s shutdown nears the end of its third week, one has to wonder why many federal employees are required to work even when they aren’t being paid. Could you as a private employer ever require your employees to work without pay during a crisis period at your business? Of course not.

About half of the 800,000-strong federal workforce is sitting at home worrying about their finances because they are “furloughed”. At least that group is not performing any work, so being unpaid is legal, although obviously unacceptable for their financial security.

The other half, those whose jobs involve public health and safety, are required to report to work even though Congress has not appropriated any money to pay their salaries. FBI agents, air traffic controllers, TSA agents, the Coast Guard, and, ironically, Border Patrol officers, are all working without pay right now. If one of these essential employees refuses to report to work because of the lack of compensation, he/she will be considered absent without leave and faces disciplinary action.

Most federal employees are on biweekly pay, so on Friday, January 11, the bulk of that workforce will receive nothing for work performed December 23 through January 4. No money for rent, food, transportation, etc., will be available to those workers until both houses of Congress pass funding legislation and the President signs it.

A federal shutdown has never lasted more than three weeks before, so the fact that the shutdown is dragging on and there are no positive signs of an agreement right now is obviously distressing to these employees, many of whom are poorly compensated and live paycheck to paycheck.

The federal government is unique in its ability to require this kind of unpaid servitude of its employees. As the Atlantic recently explained:

Since the enactment of the Taft-Hartley Act in 1947, federal employees have been legally prohibited from striking. That law was intended to prevent public-sector workers from leveraging a work stoppage that could cripple the U.S. government or major industries in negotiations for better pay, working conditions, and benefits. But it likely did not envision a scenario where the government would require its employees to work without paying them, as is the case now.

What prevents you as a private employer from taking a play from this playbook and requiring your employees to work without pay when your business has a cash flow problem?

Continue reading “Do As We Say, Not As We Do”: The Lesson for Employers from the Shutdown