Overtime Salary Adjustments Could Violate Equal Pay Act

The new overtime rule is causing employers to rethink employee compensation, but I fear that one pitfall is being overlooked – an employer who pays a woman less than a man for performing the substantially the same duties could be violating the Equal Pay Act of 1963.

Employers who can’t pay their salaried employees at or above the new white-collar exemption threshold of $47,476 may be forced to pay those same employees on an hourly basis and time and a half for all hours worked over 40 in any one workweek. Overtime scares employers because it is difficult to budget for and requires higher costs for each hour of productivity after the employee has worked 40 hours that week.

So in trying to juggle the new law and payroll costs, employers are reducing pay, overtime opportunities and benefits. That may be good business, but if the impact hits female employees more than male employees, we could see an increase in Equal Pay Act cases.

The Equal Pay Act requires that female employees be paid the same as their male counterparts with substantially similar job duties. “All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits,” the Equal Employment Opportunity Commission points out.

If a woman files a lawsuit against a company for paying her less than a man performing the same work, the employer must show that the male employee’s higher pay is based on a seniority system, a merit system, a productivity system or another factor other than gender. That sounds easier than it is. Continue reading Overtime Salary Adjustments Could Violate Equal Pay Act

Strange Exemptions to the Overtime Law

The new overtime regulations are causing employers to take a closer look at the executive, administrative and professional exemptions from overtime, but did you know that there are a number of strange exemptions that allow you to pay specific employees on a salary and not worry about overtime pay?

These obscure exemptions may have more to do with the strength of certain industry lobbyists back in the 1940’s when the Fair Labor Standards Act (“FLSA”) was passed than they do with any logical reason for exempting these employees. But they are still on the books and may allow a few employers to avoid the rush to reclassify salaried employees by December 1, 2016, when the new overtime rules take effect.

Employees of certain seasonal amusement parks or recreational venues, for example, don’t have to be paid overtime or minimum wage. To qualify, the amusement park generally can’t be in business any longer than seven months of the year, or if it is, be affected so that at least six months of the year, its receipts are cut to 2/3s of the receipts in the six good months. All of the amusement park’s employees are exempt, not just the ride operators and the food concessionaires, but also the accounting, human resources and management personnel, but only as long as they work in the park and not in a corporate office that runs several seasonal parks. How is that for an arcane exemption that won’t help 99% of employers, but could be very important if you own Wonderland Park or a miniature golf course?

Similarly, there are overtime (but not minimum wage) exemptions from the FLSA for these employees: Continue reading Strange Exemptions to the Overtime Law

Employers Need Solid Reasons for Firing

Discrimination cases filed by former employees against their companies are usually won or lost on one concept—pretext—meaning that the reason given by the employer for the firing appears to the jury as a cover-up or excuse for the real reason, which the plaintiff will strongly suggest is discrimination. If the employer’s reason for firing the employee doesn’t perfectly line up with the facts developed in discovery and at trial, the business has a good chance of losing the case to the disgruntled employee.

Let me give you an example. If you fired Mary for being tardy on five specific occasions, but your security camera tapes, your time clock records, her emails and the testimony of other employees show she was not late on all of the dates that you specified, Mary’s discrimination case just got a big boost because your reasons look like pretext for terminating Mary. Then the door is wide open to say that her termination from employment occurred because she is black, a woman, disabled or born in another country.

When presented with this contrary hard evidence about Mary’s tardiness, it is not going to convince the jury when you say, “Oops, I got the dates of her tardies wrong” even if that is what actually happened. There is little a defense attorney can do to help you with the jury at that point because your reasons for the termination just look like an excuse for something more sinister.

Juries are pretty savvy in sifting through an employer’s reasons. As the employer, you must assure that the reasons you fire an employee are specific, provable, clearly-stated, well-documented and stay consistent from the time you first discipline the employee to the time of trial. Any variation in your reasons will come off looking like pretext.

Here are some other things that employers do that usually will be perceived as pretext in front of a jury: Continue reading Employers Need Solid Reasons for Firing

Employers Required to Display Poster Changes

Effective August 1, 2016, all employers of every size workforce must comply with two new mandatory federal poster changes.  The US Department of Labor (DOL) has updated its Fair Labor Standards Act (FLSA) poster and the Employee Polygraph Protection Act (EPPA) poster.

The changes to the FLSA poster include removing civil penalty amounts, the addition of the riflsaghts of nursing mothers, and a deletion of text under the Child Labor section. Except for a few very narrowly exempted employers, whether you have two employees or two hundred employees, you need to put up this new poster.

The changes to the EPPA poster include a removal of a civil penalty limit, a change in their toll-free phone number, and an additional TTY phone number. All employers, regardless of the number of employees and regardless of whether you would ever consider giving your employees a polygraph, must display this poster in the workplace.

The mandatory notices must be posted immediately. As with all of your employment posters, these two new ones should be displayed in a prominent and conspicuous place in each of your establishments wherever notices can be readily seen by employees and applicants. A spot right next to your time clock or in your employee entrance area is ideal. Just make sure wherever you place your posters is a place that all of your employees regularly enter.

If you need help knowing which posters besides these two you need to have displayed in your workforce, you can find the lists of required federal posters here and Texas posters here. All of the required posters are available online for free. You don’t need to pay a commercial service for a combined poster that isn’t customized to the specifics of your workplace.

Don’t ignore your federal and state posting requirements. The penalties have risen recently. For example, if you have 15 or more employees, the failure to put up the required EEO poster was raised to $210 in 2014 for each of your locations and is now indexed to the Consumer Price Index to increase with inflation. Considering you have as many as twelve posters required in your workplace, you don’t want to be fined for something so easily remedied.

Sexual Harassment Prevention Training Essential

Training photo

Every employer with 15 or more employees needs to require employees to attend sexual harassment prevention training. That is the takeaway that businesses need to understand from a new task force report on harassment in the workplace that the Equal Employment Opportunity Commission published in June 2016.

The EEOC’s report states that businesses have “to reboot workplace harassment prevention efforts.” The EEOC is especially concerned that most sexual harassment  prevention training focuses only on defining harassment and telling employees what they are prohibited legally from doing.

Instead, the EEOC is encouraging (read: requiring) businesses to also include workplace civility training and bystander intervention training. If a disgruntled employee makes an illegal harassment claim against your business in the future, the EEOC, as the investigating agency, is going to immediately require your business to provide evidence that you thoroughly trained your employees on these new topics. If the harassment complaint goes to trial, this training will also be your best defense.

Bystander Intervention Training is defined by the EEOC report as training that helps employees identify unwelcome and offensive behavior and creates collective responsibility to step in and take action when they see other employees exhibit problematic behaviors. The training is geared towards empowering employees to intervene when they see unacceptable conduct and gives them resources to do so.

Workplace civility training focuses on teaching employees to abide by reasonable expectations of respect and cooperation in the workplace. The emphasis is supposed to be positive—what the employees should do—rather than those things they are prohibited from doing. The training needs to include navigation of interpersonal relationships, an understanding of conflict resolution and teaching supervisors how to be civility coaches. In other words, it is now the company’s responsibility to teach workers how to be responsible, respectful professionals. On the job training and supervisor modeling is fine, but you need to add formal in-house training also.

Interestingly, at the same time that the EEOC is “encouraging” employers to promote more civility in the workplace and to prevent bullying and harassment, the National Labor Relations Board is issuing decisions that punish non-unionized businesses for written policies requiring employees to be respectful to coworkers.

The NRLB has repeatedly found that a company is infringing on an employee’s labor rights when the employer enforces handbook policies like this one from T-Mobile’s employee manual: “Employees are expected to maintain a positive work environment by communicating in a manner that is conducive to effective working relationships with clients, co-workers and management.” The NRLB thinks that kind of policy has a chilling effect on employees who have a right to discuss with coworkers all of the terms and conditions of their employment. I’ve alerted you about the NRLB’s crusade against policy manuals before.

So you as an employer are left with trying to decide whether to be investigated and sued by the NLRB or the EEOC. Continue reading Sexual Harassment Prevention Training Essential

Pot Smoking Still Grounds for Termination

Can an employer in Texas still fire someone for smoking pot? For once, my lawyerly answer does not have to be “maybe”. Yes, you can fire an employee for testing positive for marijuana.

Unlike Colorado, Washington state, Oregon, Alaska and Washington, D.C., the Lone Star State still treats the recreational use of marijuana as illegal. It is also illegal to buy, sell, grow or even possess pot in Texas, so going to Colorado to buy it and then bringing it back to Texas is not an option.

If your written substance abuse policy tells your employees that you prohibit “illegal drugs”, then you have the right to enforce that policy regardless of whether the pot is illegal under federal, state or local laws.

Therefore, a Texas employer can still require a drug test of an applicant, a current employee, an employee involved in an accident or when the employer has a reasonable suspicion of drug use. If the test shows that the employee has used marijuana, the employer can discipline or fire the employee for violation of the company substance abuse policy.

But what if the employee claims that he is smoking pot for medicinal reasons? Continue reading Pot Smoking Still Grounds for Termination

Employers Responsible for Preventing Illegal Immigration

In all of the talk about immigration in this election year, it is important for businesses to understand that the responsibility for preventing illegal immigration generally rests on employers, who must verify that all new hires are eligible to work in this country.

Under the Immigration Reform and Control Act (IRCA), employers are mandated to verify an employee’s identity and eligibility to work in the United States by completing an Employment Eligibility Verification, more commonly known as a Form I-9.

The current version of the I-9 (available here) says on the form that it expired on March 31, 2016, but it is still in effect three months later because a newer version has not been released.

Every employer, regardless of the size of the business, must present the latest version of the Form I-9 to each prospective employee and confirm that employee completes and signs the employee section of the form.  The employer is required to inspect the employee’s supporting documents and have an authorized individual from the Company sign the employer section of the I-9.  All of these items must be completed within three (3) business days of the employee’s hire date.

An employer’s failure to properly complete the Form I-9 can bring about costly fines by the U.S. Immigration and Customs Enforcement (ICE).  As recently as April 2016, a judge ruled that Golden Employment Company in Minnesota was liable for failure to timely present I-9 forms for at least 125 employees as well as not preparing forms in any capacity for almost 236 workers.  The employer also inaccurately completed some of the I-9s.  The civil penalties totaled $209,600.

Most ICE inspections result from complaints from current employees, former employees, labor unions and even competitors. However, random inspections are also undertaken by ICE.  It’s important to make sure all of your work eligibility records are up-to-date and properly completed.

What can you do to avoid penalties and ensure I-9 compliance? Continue reading Employers Responsible for Preventing Illegal Immigration

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