Overtime Change: Local Businesses Should Start Planning Now

Vicki Wilmarth was quoted extensively about the new Department of Labor overtime rule in today’s lead story in the Amarillo Globe-News.

Vicki Wilmarth, an employment law lawyer in Amarillo, said that employers now have two options: Pay the employee the minimum salary of $47,476 or start paying that employee by the hour.

Click here to read the rest of the Globe-News story.

New Overtime Rule Changes Salary Basis Requirement

Do you pay any employee on a salary basis instead of paying them hourly and overtime? Of course you do, so you need to be very aware of the new final overtime rule issued by the U.S. Department of Labor on May 17, 2016.

You must pay your salaried employees at least $913 per week ($47,476 per year) beginning December 1, 2016, or you will be in violation of the Fair Labor Standards Act (which you do not want to violate).

In the past, salaried employees had to be paid $455 per week ($23,660 per year) to qualify as an employee exempt from the FLSA’s requirement of paying overtime for every hour over 40 worked in any one workweek. That salary basis has doubled under the new regulations.

In addition to meeting this increased salary level, the salaried employee must 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 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.

This increase in the threshold salary required to consider an employee exempt could change the classification of many Panhandle-area retail managers and assistant managers, human resources directors, marketing professionals, bookkeeping employees, project managers, foremen, performers, and other employees who have not been earning overtime in the past.

Now those exempt employees will either get a raise to get them over the $913 per week threshold or they will have to be changed to nonexempt, hourly employees who earn overtime. Either way, it could mean an overall increase for the employee and higher payroll costs for the employer.   Continue reading New Overtime Rule Changes Salary Basis Requirement

Should You Protest Unemployment Claims?

Unemployment claims can cost you money as an employer because your Texas Workforce Commission tax rate will escalate the next year if an employee is awarded benefits. But handling your unemployment claim deftly has become critical in avoiding even more expense down the road when your employee sues you.

It is not always an easy decision about whether to protest unemployment and you have to make that decision quickly (usually within 14 days of the notice of an unemployment claim). On the one hand, you as an employer don’t want your tax rate to increase. On the other hand, you don’t want to say something harmful in an unemployment appeal hearing that will have significant consequences in later litigation.

At an employment law conference that I attended this week, I heard an employee’s lawyer with 40 years of experience say that he believes that TWC unemployment appeal hearings are one of his best tools for winning discrimination cases for employees. Why? Because at the appeal hearing, the company’s witnesses have to testify under oath about the reasons an employee was fired. Often, the employer’s witnesses are not represented by legal counsel and they are not adequately prepared for the testimony they are going to give. They give inconsistent or unprovable reasons that later come back to haunt them when the former employee sues the company in a completely different matter.

The plaintiff’s lawyer admitted that he likes to ambush supervisors and HR representatives at the TWC unemployment hearing and get helpful sworn testimony for his client from those witnesses, because the company’s representatives rarely expect the employee to appear at the hearing with legal counsel. When he cross-examines them, the witnesses get flustered and accidentally provide testimony harmful to the company.

The result is Continue reading Should You Protest Unemployment Claims?

Cussing Out the CEO

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What is the proper response from the company when two employees express their anger at the CEO when they receive bonus checks by returning the checks, voiding them, and writing, “kiss my a– Bob,” and “eat sh– Bob” on the checks? According to the National Labor Relations Board, firing them is improper.

After returning the checks, the employees posted pictures of the checks on a private Facebook page.  Other employees followed suit by also voiding their checks and posting them to the Facebook page.  However, only the first two employees wrote profanities on their checks.  Not very long following this incident, both employees were fired.  They filed grievances shortly thereafter with the NLRB.

The NLRB reinstated the employment of the two West Virginia coal miners.  After their union voted against bonuses based on productivity, the coal mine management decided to implement the bonus program anyway.  Apparently the two miners were unimpressed with the company’s generosity.

The NLRB judge who presided over the case found that the two miners had been wrongly discharged and that the words on the checks, “while profane and offensive, were nevertheless expressions of protest and outrage over what those employees viewed as implementation of a plan that would adversely affect their safety conditions and which constituted what the employees believed was a surprising violation of the terms of the collective-bargaining agreement.” Continue reading Cussing Out the CEO

Ban the Felony Box on Applications

If your employment application asks whether the applicant has ever been convicted of a felony, you may need to consider whether to “ban-the-box” that asks that question of your applicants. Why? Because nationally, over 100 cities and counties and over 185 million people live in a ban-the-box or fair-chance jurisdiction.  In addition, the Equal Employment Opportunity Commission is gunning for employers who exclude everyone with a criminal history from employment.

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The “ban the box” movement seeks to have employers consider an individual candidate’s job qualifications while prohibiting the employers from taking into account a candidate’s criminal history in the beginning of the application process.  Ban-the-box aims to provide applicants with a “fair chance” at employment by delaying any consideration of criminal history until a preliminary job offer is made.

Austin is the first city in Texas to “ban the box,” but it is likely that more areas of the Lone Star State will follow in the near future.  As of March 24, 2016, Austin passed the Fair Chance Hiring Ordinance, which prohibits employers from asking about or taking under consideration the criminal history of an individual until after making a conditional employment offer. While this ordinance does not cover state agencies or federal employment, it does apply to any private organization with 15 employees or more in the Austin city limits.

So Texas Panhandle employers don’t have to comply with the Austin ordinance if they have no employees in Austin, but they do need to worry about the EEOC claiming that a local employer discriminates in their hiring on the basis of race or ethnicity (it is the official position of the EEOC that “national data supports a finding that criminal record exclusions have a disparate impact based on race and national origin. The national data provides a basis for the Commission to investigate Title VII disparate impact charges challenging criminal record exclusions”).

So the wise employer will go ahead and take the “ever been convicted of a felony” question off of the application for employment. In addition, for both prudence and economic reasons (detailed criminal background checks aren’t cheap), smart employers will wait until they actually make a conditional job offer before checking the criminal record of a potential employee.

In addition, an employer should not: Continue reading Ban the Felony Box on Applications

HR Director Can Be Individually Liable for FMLA Violation

Most human resources professionals and managers think that working for a corporation gives them some protection from being sued themselves by former employees, but a federal appeals court recently held that an HR director can be individually liable for violations of the Family and Medical Leave Act (“FMLA”). The federal Second Circuit Court of Appeals made this decision in Graziadio v. Culinary Institute of America, No. 15-888-CV (2d Cir., Mar. 17, 2016).

The Second Circuit decided that the HR director who instigated the firing of an employee who was out on leave to care for her ailing sons could be sued in addition to the company who formerly employed the plaintiff. The FMLA provides that for purposes of being a defendant in a lawsuit, an “employer” includes “any person” who “acts, directly or indirectly in the interest of an employer” toward an employee. Therefore, a manager, supervisor, vice-president, HR director, leave administrator and other decision-making employees could be sued along with their company if the FMLA isn’t administered correctly.

The courts look at the “economic realities” of the situation, including whether the HR director had the power to hire and fire employees; supervise and control employee work schedules or conditions of employment; determine the rate and method of payment; and maintain employment records. Although a vice-president actually made the final firing decision in the Graziadio case, the evidence suggested that the HR director played an important role and the vice-president essentially just rubber-stamped the HR director’s recommendation of terminating the employee who was on leave.

These kinds of decisions are frightening to management employees who have to make hiring and firing decisions and those who have to administer the complex FMLA. However, this ruling should not come as a complete surprise to those of us who live and work in Texas, because the Fifth Circuit, which rules on federal cases in Texas, Louisiana and Mississippi, made a similar ruling ten years ago.

In addition, our Fifth Circuit court approaches the Fair Labor Standards Act (wage and hour) cases in the same manner. If the economic realities demonstrate that a supervisor was responsible for the misclassification of an employee as an independent contractor (meaning that the proper taxes weren’t paid, among other violations of employment laws) or the underpayment of minimum wages or overtime, then that supervisor may face a personal lawsuit by a former employee, along with the company being sued.

How can you as a manager or HR director protect yourself from a lawsuit that could endanger your personal assets? Continue reading HR Director Can Be Individually Liable for FMLA Violation

Preventing Workplace Violence

Do you as an employer have a plan to address workplace violence?  This topic is front and center in the wake of the recent workplace shootings in Hesston, KS, Kalamazoo, MI, and Roanoke, VA.  Although legislation has been introduced to provide a “safe harbor” for employees and employers to report violent or threatening behavior, it is important for employers to assess their own workplaces and look at what can be done to make that environment as safe as possible.

The House of Representatives introduced the “Safe Harbor for Reporting Violent Behavior Act” on February 11, 2016, in response to the on-air shooting of a television reporter and cameraman in Roanoke, VA.  This bill would provide immunity from lawsuits to individuals who, in good faith, make a report about an employee (or potential employee) who exhibits violent or threatening behavior.

However, regardless of whether or not this bill passes, employers still have a duty to examine their workplace violence policies and take steps to decrease any possible dangers in the workplace.  Several things that should be done include: Continue reading Preventing Workplace Violence

Employers Must Pay for “Unauthorized Overtime”

I see many employee policy manuals that prohibit “unauthorized overtime”, but employers must still pay an employee his overtime pay, whether the time worked was authorized or not.

Employers need to understand that all governmental enforcement agencies, such as the Texas Workforce Commission (“TWC”) and the U.S. Department of Labor (“DOL”), treat paychecks as sacred and not subject to any reduction or withholding because of a disciplinary reason.

Unauthorized overtime can result in disciplinary action, like a written warning, a suspension or a firing, but not docking of a paycheck or any refusal to pay.

The TWC explains it this way in their publication “Especially for Texas Employers”:

Many employers feel that such [overtime] should not be payable as long as the employer has not authorized the extra work, but the DOL’s position on that is that it is up to the employer to control such extra work by using its right to schedule employees and to use the disciplinary process to respond to employees who violate the schedule.

Just saying in your employee handbook that an employee cannot work overtime without prior authorization is not sufficient. You as an employer need to take steps to closely monitor (and pay for) all hours actually worked. Continue reading Employers Must Pay for “Unauthorized Overtime”