All posts by Vicki

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).

DOL Proposes New Salary Minimum

A new federal overtime rule that has been proposed by the U.S. Department of Labor may become effective early in 2020, and employers need to start preparing now to get into compliance.

The rule, if it becomes final as proposed, 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 as long as the employee is performing exempt duties, such as executive work or professional work.

The new minimum salary threshold is proposed to increase to $679 per week ($35,308 annually). That means that if you have any employee whom you are paying on salary in an amount less than $35,308 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 workweek.

In addition to meeting this increased salary level to $35,308 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 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 assure yourself that those salaried employees are making at least $679 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 $679 every week. The proposed rule does give employers the ability to make up 10% of the salary basis test with bonuses and commissions. So, if you pay an executive, administrator or professional employee no less than $31,777.20 in yearly salary (divided by 52 weeks) and then the employee earns another $3,530.80 annually in bonuses and commissions (paid on at least a quarterly basis), you will not be in violation of the new 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 what they want to do with their salaried employees in 2020.

Interestingly, the Trump Administration’s DOL has made it even harder for companies to claim the “highly compensated employee” exemption under the new proposed rule for 2020. 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 proposed rule raises that salary threshold for highly-compensated employees almost 50%, to $147,414.00 per year. That means that it actually might be cheaper with a highly compensated employee who doesn’t strictly qualify for one of the white-collar exemptions to be paid on an hourly basis plus overtime rather than increasing the employee’s salary that substantially.

“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

Employees Secretly Recording Workplace Conversations

Is it legal for one of your employees to secretly record your conversations with that worker for the employee to use as evidence in a discrimination case? If you are a Texas employer, the answer is “yes”.

Texas is a “one-party” consent state, meaning that as long as one party to the conversation knows about the recording, the recording is legal. This can lead to your employee secretly starting the video app on his smartphone in his pocket just before he walks into your office for a disciplinary meeting. He knows the conversation is being recorded, so as the supervisor, you don’t have to be informed in a one-party consent state like Texas.

More than 30 states have the one-party consent rule, while California, Washington, Florida and a few other states require that every person being recorded give permission to the recording. These “all consent” states make it impossible for a supervisor to be secretly taped when talking to an employee. Making a recording without permission in one of those all consent states can lead to both criminal liability and exclusion of the tapes as evidence in the employee’s discrimination or other lawsuit.

In Texas, however, when an employer is taped, the recordings can be material evidence when an employee sues for discrimination. The Houston Chronicle reported in 2011 that one-third of the discrimination complainants who reached out the Equal Employment Opportunity Commission office in Houston brought audio tapes from their workplace to play for the EEOC investigators.

If there is a recording with you as a supervisor using a racial slur, firing an older employee while saying that the company needs “fresh and energetic workers” or suggesting to a subordinate that he/she can expect a raise if the employee will accompany you to a hotel, you might as well get your checkbook and pen out now to facilitate the inevitable settlement.

Besides the obvious – THINK BEFORE YOU SPEAK, here are some other steps you as an employer can take to protect yourself and the company from employees taping all of your interaction:

  • Adopt a written policy banning recording: As of June 2018, the National Labor Relations Board has newly declared that employers may prohibit employees using recording devices and cameras at work. This is a change from a 2015 NRLB opinion that such policies had a chilling effect on employees asserting their rights to document poor working conditions. In 2018, it was decided that no-photography/no-recording rules have little impact on NLRA-protected rights and could actually improve working conditions by forcing supervisors and subordinates to have open discussions and exchanges of ideas.
  • Ask employees if they are recording: Before you have a hard discussion with an employee, such as a disciplinary warning, ask the employee if he/she is recording the conversation. Make a written note of his response (juries don’t like liars who produce recordings when they stated they weren’t taping). You can remind the employee about the company policy prohibiting such recordings. Ask the employee to set his phone on your desk so you can assure that he isn’t recording or, even better, have him leave it at his desk before coming into your office.
  • Be careful about disciplinary actions for recording: If an employee does record in your workplace, don’t automatically warn or fire that employee even if it violated your policy. You need to know what the employee recorded, so ask to listen to the tapes. If the employee did record or photograph unsafe workplace conditions, sexual propositions, racial epithets, etc., then you need to do a formal investigation and apply effective remedial measures to fix the problem the employee’s recordings uncovered. Then carefully decide with your legal counsel whether disciplining the employee who violated your recording policy could lead to an unfair labor practice, retaliation or whistleblower claim.
  • As the employer, don’t audiotape others in the workplace without consent: While you may have video cameras in the non-private areas of your workplace for safety purposes or to monitor productivity, it becomes more complicated to make audio recordings. Wiretapping (recording the conversations of others without consent when you are not a party to the discussion) is illegal under several statutes. So, you would need permission of every employee as well as the consent of every vendor or guest who comes into your business if you were going to wholesale audiotape all the interactions in your workplace. It can be done, but it is complicated to do correctly, and the wiretapping law is easily violated. And personally, in more than 30 years of practicing employment law, I’ve only seen a handful of situations where widespread audio recording was helpful to a lawsuit defense, much less positive employee relations.

Texas Employers Must Comply with Election Laws

Since Election Day is Tuesday, November 6, here are some quick reminders for employers about the Texas election laws that you must follow.

Employers must give all employees a reasonable time off to vote on Tuesday, assuming the employee hasn’t taken advantage of early voting.  So here’s how you apply that law:

  • You can ask if the employee voted early, but you cannot retaliate against an employee for his/her failure to take advantage of early voting. 
  • You need to just accept the employee’s word about whether he/she voted early.

A “reasonable time off to vote” is considered two hours. However, since the lines are predicted to be long on Tuesday, do not discipline any employee who has to wait in line to vote and thereby takes a little longer than two hours away from work. 

The time off to vote should be paid time off if it cuts across the working hours, according to a Texas Attorney General’s opinion. 

It is a crime for an employer to:   Continue reading Texas Employers Must Comply with Election Laws

Four Steps to Protect Your Company’s Secrets When Employees Leave

What can you do to protect your company secrets when Angela, your vice-president of sales, announces she is leaving your company and going to work for your competitor? Is there a way to keep Angela from telling her new employer all about your customers’ preferences, your company’s proprietary pricing, or the new business line you are exploring?

Truthfully, the day Angela announces her resignation is way too late to adequately protect your company’s most important secrets. Your efforts to safeguard your formulas, recipes, passwords, marketing plans, customer lists or other information you would like to keep confidential should have started before Angela was even hired.

There is no time like the present to begin taking at least four concrete actions if you value your business secrets:

  1. Physically protect your confidential information. Remember the urban myths that the secret recipe for KFC chicken or the formula for Coca-Cola were locked in a safe somewhere in company headquarters? According to Fox News, those are actual precautions taken by these companies. “The recipe [for Coca-Cola] lies in a vault in a downtown Atlanta SunTrust Bank vault and only two executives at a time have access to it.” As for KFC: “’Colonel Harlan Sanders’ Original Recipe eleven herbs and spices are inscribed in pencil on a yellowed piece of paper inside a Louisville, Kentucky safe’, says KFC spokesman Rick Maynard. ‘The safe lies inside a state-of-the-art vault that is surrounded by motion detectors, cameras and guards.’” Corporate espionage and theft of trade secrets is big business these days. These two food companies are serious about safeguarding their trade secrets. Are you as careful with yours?
    1. Do you at least have good password procedures, firewalls and cyberthreat protection, files marked “confidential”, inventories of your laptops and other equipment, and limitations on which employees have access to the keys to your business kingdom?
    2. Do you teach your new employees what information is confidential, how to protect it, remind employees frequently about their confidentiality obligations, and take immediate action if there is any breach in confidentiality?
    3. Do you prevent employees from downloading company documents onto flash drives or leaving the premises with your files?
    4. If you don’t take serious measures to protect your trade secrets, you really shouldn’t expect your current or departing employees to care either. Plus, the new Texas Uniform Trade Secrets Act doesn’t even recognize information as a trade secret unless the owner can demonstrate that the business has taken reasonable measures to keep the information secret. So without active measures to protect the secrecy of your proprietary information, you are helpless in the courts when your secrets are stolen.

Continue reading Four Steps to Protect Your Company’s Secrets When Employees Leave

Five Steps for Responding Well to Harassment Claims

Two nooses hanging near a loading dock and racist graffiti on a company truck designed to be seen by the company’s African-American employees will almost certainly lead to an expensive racial harassment lawsuit against a business, but the federal Fifth Circuit Court of Appeals recently sided with an employer who promptly took five comprehensive steps in response to this reprehensible conduct.

In its June 2018 opinion, the Court held that YRC, the employer, responded appropriately to these incidents at its Irving, Texas facility. The opinion gives all employers helpful guidance on how to combat harassment in the workplace. Tolliver v. YRC, Inc. (5th Cir. 2018).

It is important to note that the Court acknowledged that the racist actions were “morally unacceptable” and “reprehensible. But the plaintiffs didn’t allege that the acts were directed specifically toward them and “for the most part, learned about the acts secondhand”. So, the Fifth Circuit did not find that this conduct was sufficiently severe or pervasive enough to change the terms or conditions of employment as to these particular employees, meaning that their personal racial harassment claims weren’t strong to begin with.

But what really mattered to the Court is that the employer took prompt remedial action to protect all employees after these horrifying incidents occurred. The steps YRC followed offer guidance for all employers facing any kind of harassment situation, whether involving racial harassment, sexual harassment, ethnic harassment, etc.

Let’s call these the Five Steps to Responding Well to a Harassment Claim: Continue reading Five Steps for Responding Well to Harassment Claims

Employers Targeted in ICE Raids and Audits

If you think that only illegal aliens need to be concerned about Immigration and Customs Enforcement (“ICE”), then as an employer, you have not been paying attention in 2018, when ICE has clearly put businesses in the crosshairs with compliance audits and enforcement raids.

Take, for example, a raid conducted by ICE in small town Tennessee in April 2018. The Southeastern Provision meatpacking plant reportedly employed at least 104 undocumented immigrants at the time of the surprise raid. The company hired most of these without requiring the employees to complete the required I-9 forms and without making them provide documents showing their identities and authorization to work legally in the United States. To make matters more felonious, these workers were paid in cash each week and not reported on the company’s payroll tax reports.

Last month, the owner of that Southeastern Provision meatpacking plant agreed to a plea bargain in federal court on charges of tax evasion, wire fraud and employing undocumented immigrants. The owner has not been sentenced to prison yet, but he has already agreed to pay at least $1,296,183 to the IRS in restitution.

Similar worksite raids have escalated dramatically under the Trump administration and are happening all over the country. On August 28, a trailer manufacturer located near Paris, Texas, faced one of the largest immigration raids in recent history, when 159 of its approximately 500 employees were arrested by ICE. Because that Texas company, Load Trail, was fined $445,000 four years ago for hiring dozens of undocumented workers, one could reasonably expect the employer to also face jail time and restitution requirements for a pattern and practice of breaking the immigration laws.

How do companies get selected for raids? Continue reading Employers Targeted in ICE Raids and Audits

What Can I Say? Giving References in Texas

Just when you thought you’d heard the last of Fired Felicia, you get a call from Felicia’s prospective employer, who is diligently checking Felicia’s references. What can you as an employer in Texas legally say about Felicia?

Employment lawyers like me have been telling employers for years to remain close-lipped, giving only dates of employment, job title, and last rate of pay. Safe, but almost deceptive in its reticence. We advise this taciturn approach because of our fear that you will say too much and say something defamatory.

Why do I have that fear? Because in a small city like Amarillo, or really anywhere in West Texas, we spend a lot of time on the other end of the reference spectrum. Instead of reticent, we are gleefully chatty.

Hiring managers around here will pick up the phone, ask for their friend who works at Felicia’s last employer, and find out all about Felicia’s problem pregnancy, Felicia’s attitude problem, or Felicia’s suspected but unconfirmed alcohol dependency. That’s when my head explodes as an employment lawyer who is trying to keep the company out of legal hot water.

The rules of references must be one of the most misunderstood areas of human resources. But in Texas, it really shouldn’t be that hard. Here are some simple guidelines: Continue reading What Can I Say? Giving References in Texas

Best Employment Law Training To Be Offered in Amarillo

One of the best employment law training opportunities for managers, human resources personnel and business owners of your company is happening in Amarillo on September 21, 2018.

The Texas Workforce Commission only offers its Texas Business Conference in Amarillo every few years and I recommend it to my clients as a “not to be missed” event. The cost is only $125 per person and just the written materials you will receive at the one-day conference are worth that.

The TWC’s speakers will cover the following in detail:

  • Wage and Hour Law (which is arguably the most violated business law in the country);
  • Independent Contractors;
  • Policies and Handbooks;
  • Worker’s Compensation: How to Control Costs of an On the Job Injury;
  • Hiring/Employment Law Update; and
  • Unemployment Claims and Appeals.

The great news is that the conference will help you no matter whether you are new to human resources issues or have been dealing with them forever.  I’ve been practicing employment law for 30 years, yet I learn something new every time I attend this conference.

If you would like to sign up for this training event, you can find more information and registration here. I hope I see you there on September 21.