At the beginning of each year, I encourage my business clients to make some New Year’s resolutions to achieve better compliance with the myriad employment laws. Based on what many of my clients are telling me and what the courts and enforcement agencies have on their agendas, here are the employment matters that you could improve in 2017:
- Immigration compliance: President-Elect Trump has promised strong enforcement of the immigration laws. Many of those enforcement efforts will affect employers, such as mandatory use of the E-Verify system to double-check the legal status of every new hire. Even before that requirement is put in to place, resolve to correctly complete the mandatory new I-9 form for every new hire. The best way to make sure the I-9 is correctly completed: consult the government-published Employer’s Guide to the I-9, particularly the color pictures that show you exactly what a valid permanent resident card, for example, looks like. Also, be prepared that some of your employees may lose their work eligibility under the new administration, including young people (known as the Dreamers) who became eligible under the Deferred Action for Childhood Arrivals (DACA) program in 2012.
- Market rate on salaries: Texas’ unemployment rate was sitting at 4.6% at the end of November 2016. Amarillo’s rate was 3.0%. Economists consider 3% to be full employment, meaning you as an employer maybe finding it difficult to attract and keep the talent that you need. I am always surprised therefore when my clients don’t keep up with the market data on salaries. Resolve in 2016 to tap into the data available on the Bureau of Labor Statistics for your industry and your location to really analyze whether your salaries are sufficient. Employees will also be looking at Salary.com and Payscale.com, so you need to do the same.
- Improve your PTO offering: I am amazed when I am drafting or revising my client’s employment handbooks how little paid time off many local employers offer. Many don’t give an employee any vacation, sick leave, personal days or other paid time off during the first year and then rarely allow more than five days per year after that. This will not attract top talent or create long-term loyal employees, I promise you. Particularly if you are hiring millennials or need an educated workforce, you need to up your game on PTO. My 22-year-old son was hired in 2015 by a consulting firm in Washington, D.C., right out of college (with a degree in economics and a master’s degree in business analytics) and offered three weeks of PTO that started accruing immediately. After one promotion, employees at his company get four weeks of PTO. I’m not arguing that every job merits that much PTO, but resolve in 2017 to at least consider that two weeks per year should be the minimum to improve your hiring, increase your retention, rejuvenate your employees every year and allow your employees to deal with the inevitable ups and downs of life. As an employment lawyer, I know that most employee lawsuits arise after the worker leaves your employ. Keeping your staff reasonably happy and loyal by providing better PTO will provide you with other benefits too, but I like it because you will spend less time with me in court and instead we can just have lunch and talk about more pleasant topics.
- Health Reimbursement Accounts: None of us know what the new administration will create to replace the Affordable Care Act, so I can’t give you much advice yet about your group health insurance offerings. However, employers with less than 50 employees who don’t offer group health insurance should resolve to consider using Health Reimbursement Accounts in 2017 because of the bipartisan 21st Century Cures Act that sailed through Congress and the President’s signature in December. That act included permission for small employers to now use HRA’s to pay for qualified out-of-pocket medical expenses for their employees and to fund individual health insurance premiums. In other words, employers can use pretax dollars to help employees to purchase their own insurance on the open market while capping the employer’s contribution at a reasonable amount. There are, of course, many restrictions associated with this opportunity, but it is worth consideration by smaller employers in 2017.
- Good Documentation: Every employment lawyer would like for you to add this to your resolution list each year. Memories fail and managers move on, so written documents are often an employer’s only evidence of the nondiscriminatory reasons that certain employment actions were taken. Understand and resolve that performance reviews, reasons for bonuses and merit increases, violations of policy, attendance problems, changes in job duties and disciplinary actions will be well-documented in 2017. I’ll help with any of kind of documentation, but I highly recommend that you get me involved whenever the documentation is of disability or religious accommodations, FMLA, harassment claims, overtime or other compensation problems, egregious policy violations, demotions, final warnings, layoffs and terminations.
- Gratitude: Resolve that you will say “thank you” more often to your employees in 2017. Studies have repeatedly shown that this one action can enhance employee engagement and loyalty even more than raises and promotions. Gratitude can also make your workplace so much more enjoyable for all of your employees.
If you are hiring any employees, this is just a quick reminder that you need to start using the new I-9 form to confirm your new worker’s eligibility to be employed in the United States.
The new I-9 form was released on November 14, 2016 (look for that date on the form to verify that you are using the most recent one). You already can be using the new form, but it is mandatory that you are using that new form by January 22, 2017. My suggestion for making it easy on yourself is to begin using the new form today, or at least no later than January 1, 2017, so that you start the new year off right.
You do not have to update any of your completed I-9s on current employees with the new form. It is only mandatory that you start using the new I-9 with employees who are hired beginning in January 2017.
As you know, employers must assure an I-9 is completed on each new employee hired (citizen or otherwise) to document identity and authorization to legally work in the United States. The new employee must bring the proper forms of identification and work authorization so that you can complete the I-9 by the third business day of employment, or you can no longer employ that worker.
Mistakes happen on an incredibly frequent basis while filling out I-9 forms and employers get penalized substantially if Immigration and Customs Enforcement (“ICE”) audits an employer’s forms. Here is a guide to the most common mistakes and how to avoid them.
Another way to avoid mistakes on the I-9 form is Continue reading New Employees Should Complete New I-9 Form
Hiring in Texas can be done in a very efficient and effective manner that reduces your chances of violating employment laws if you follow this simple hiring checklist. While large employers may need to add many more steps, I have found in 25+ years of law practice that many small employers aren’t even doing these simple steps, but should be:
- Is one well-trained centralized manager with human resources experience doing the hiring instead of a group of supervisors who might ask the wrong questions?
- Do you have a job description of the job for which you are hiring so you know the job-related qualifications?
- Did you carefully word your job advertising so as not to discriminate?
- If you require that an application be completed, is your application form up to date and without legal pitfalls?
- Does the interview focus only on job-related qualifications and not personal information?
- Do you stay away from open-ended questions like “Tell me about yourself”, which could elicit all kinds of information from the applicant that could be considered the basis of a discrimination claim?
- Is the interviewer using an outline so that each applicant is asked the same questions and you can compare apples to apples rather than relying on the interviewer’s conversation skills and “gut reaction”?
- Do not ask questions in the interview about the following topics. If this seems like a whole bunch of rules to remember, try focusing on this one rule: If your question isn’t related to how the applicant could perform the job duties, don’t ask it.
- Race or color (photographs should not be requested)
- Gender or marital status or sexual orientation
- Whether applicant has young children, what his/her daycare arrangements are, or other family questions.
- Age, including date of birth or when the applicant graduated from high school
- Religion, including “Where do you go to church?” and “What do you do with your Sundays?”
- Union membership or affiliation
- Criminal arrests or convictions (you can run a background check if you decide to actually offer the job, but you must comply with the Fair Credit Reporting Act in obtaining the background check)
- National origin or ethnicity (don’t ask about an applicant’s birthplace, accent, parentage, ancestry).
- Citizenship (only inquire into an applicant’s eligibility to work in the United States, not their citizenship).
- Education beyond what is necessary for the job (inflated educational requirements can have a chilling effect on minority applicants; therefore only ask educational questions that are relevant to the actual job responsibilities).
- What clubs and organizations do you belong to? What causes do you support? (this could reveal illnesses, religious beliefs, family issues, marital status, race and other grounds on which you could be accused of discriminating).
- Are you pregnant? Are you planning on having kids? (pregnancy and/or gender discrimination).
- Have you ever declared bankruptcy? (discrimination under the Bankruptcy Act).
- Is English your first language? Do you know that we have an English-only policy? (national origin discrimination)
- Do you have elderly parents or an illness in the family that would take you away from work? (disability discrimination).
- Do not ask the following questions in an interview that could violate the Americans with Disabilities Act:
- Whether an applicant needs a reasonable accommodation to perform the job, unless the disability is apparent or the applicant voluntarily divulges it.
- Details of an applicant’s worker’s compensation history.
- Whether the applicant can perform “major life activities,” such as standing, lifting and walking.
- Whether the applicant has any physical or mental impairments.
- Whether the applicant is taking prescription medication or any other lawful drugs.
- If the applicant has used illegal drugs in the past or has ever been addicted to drugs.
- Whether the applicant has participated in an alcohol or drug rehabilitation program.
- How frequently the applicant consumes alcoholic beverages.
- Certain questions are permissible under the ADA:
- Whether an applicant can perform the essential functions of the job.
- How the applicant will perform the essential functions of the job, if all applicants are asked this question.
- Whether an applicant needs reasonable accommodation for the hiring process.
- Whether an applicant can meet the employer’s attendance requirements.
- Whether an applicant has ever been convicted of driving under the influence of alcohol or drug if driving is an essential duty of the job.
- Whether an applicant is a current illegal drug user (drug testing the successful applicant after a conditional offer of the job is the best way to handle this).
Once you think you have narrowed your choices down to the applicant that you would like to hire, you can make a job offer conditional upon the results of these items: Continue reading Simple Hiring Checklist for Texas Employers
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
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 rights 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.
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
The National Labor Relations Board ruled last week that two unrelated companies may be held to be joint employers of an employee who works for just one of the companies. Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015), ruled that unrelated companies may be joint employers even if one employer has no power to hire, fire, supervise or determine the pay of an employee of the other employer.
The NLRB says that it “will no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority”.
In other words, if you as a business owner contractually could say anything to your subcontractor about the work you want performed by the subcontractor’s employees, then you can be jointly liable to those employees if any of the subcontractor’s employment practices go awry, even if you never actually exercise any control over your subcontractor’s employees. Continue reading Employers Face “Joint Employer” Liability with Unrelated Companies
There are companies that want to sell you expensive workplace posters that you don’t need to purchase because they are available for free online. Many employers are afraid that they don’t know which employment notices must be visible in the workplace, so they fall for the marketing pitch to pay for these expensive commercial posters.
As a Texas employer, have you received advertising in the mail similar to the notice pictured here? Such notices appear official, and can feel almost threatening, with warnings of penalties and fines associated with an employer failing to post current state and federal employment posters in the workplace.
It is not necessary for a Texas employer to pay $84 for the poster offered here. While it is true that posting certain notices and information is legally required, employers need not pay any company for this information. Free copies of the required posters can be found from the websites of each of the federal or Texas agencies that require them. The Texas Workforce Commission has graciously gathered a list of these posters into one place for you here.
Not only are you out the money if you buy one of these expensive posters, but these for-profit posters could actually hurt you if they promise rights to your employees that the law does not give them (such as promising Family and Medical Leave rights if the company has less than 50 employees and isn’t required to provide Family and Medical Leave). You don’t want to obligate yourself to things the law doesn’t require you to provide. The poster “invoice” pictured here didn’t ask the size of the employer’s workforce and apparently was not tailored to the laws to which a particular employer was subject.
As of August 2015, the posters that you as a Texas employer must have on your bulletin board, depending on the size of your workforce, are as follows: Continue reading Workplace Posters For Free Online
Claiming that your employees are exempt from overtime is about to become much more difficult with release of new regulations this week by the U.S. Department of Labor (“DOL”) under the Fair Labor Standards Act (“FLSA”).
On June 29, 2015, President Obama announced that the DOL is issuing proposed rules that will probably go into effect in early 2016. Those proposed rules redefine which employees have to earn overtime on their hourly pay instead of being paid as an exempt salaried employee.
The result could be skyrocketing overtime costs and more frequent wage and hour suits against companies that fail to make this transition carefully.
The advantage for an employer of an FLSA exemption has always been that the employer doesn’t have to track that employee’s hours and doesn’t have to pay overtime wages of 1.5 times the hourly rate for anything over 40 hours worked in one workweek. That advantage will no longer be available to you as an employer in 2016 for those employees you pay less than $970 per week, which adds up to $50,440 per year. Continue reading Salary Basis for FLSA Exemptions Raised Dramatically
A Lubbock auto dealer was accused of disability discrimination and recently settled the claim for $250,000. The Equal Employment Opportunity Commission (“EEOC”) sued Benny Boyd Chevrolet-Chrysler-Dodge-Jeep, Ltd., d/b/a Benny Boyd Lubbock, and Boyd-Lamesa Management, L.C., for discriminating against the dealership manager with multiple sclerosis. Click here for more information.
The manager was hired before his diagnosis with promises of future ownership in the dealership. He managed the dealership successfully for six months before he revealed his disability, according to the EEOC. He was then faced with comments like, “What’s wrong with you? Are you a cripple?” He was also denied the partnership and quit, claiming he was forced to resign.
I am always concerned when my Texas Panhandle business clients don’t believe that employment lawsuits like this can happen to them. I’m sure this Lubbock dealer felt the same way. But there were there were approximately 10,000 charges of discrimination filed in Texas with the EEOC and the Civil Rights division of the Texas Workforce Commission during fiscal year 2014. Around 27% of those charges claimed disability discrimination. It can and does happen to employers here, and some of the cases, like the one in Lubbock, can be very costly.
What can you do to prevent or at least prevail in such suits? Continue reading Lubbock Business Settles Disability Discrimination Claim