Category Archives: Documentation

Salary Basis for FLSA Exemptions Raised Dramatically

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

Lubbock Business Settles Disability Discrimination Claim

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

More Businesses Are Now Required to Keep Records of Work-Related Injuries

As of January 1, 2015, many employers who were previously exempt from the OSHA (Occupational Safety and Health Administration) requirements of tracking work-related injuries, will now have to prepare and maintain records of occupational injuries and illnesses using OSHA 300, 301, and 300A forms. If you have more than 10 employees, you may be one of those employers who has never had to worry about this before but will have to start this recordkeeping at the beginning of the new year.

Any employer of any size must report all work-related fatalities to OSHA within 8 hours. Under the new rule, all employers are also now required to report all work-related in-patient hospitalizations, amputations and loss of an eye within 24 hours to OSHA.

Those extreme situations are the only reporting requirements if you employ 10 or fewer people because you don’t have to worry about keeping injury logs for OSHA. Even if you have more than 10 employees, you do not have to keep the OSHA logs if you are in a “low-hazard industry.” But the definitions of “low-hazard industries” have changed, and that’s why you may have new reporting OSHA recordkeeping requirements.

Because OSHA has revised the regulation and is now using the North American Industry Classification System (NAICS) instead of the Standard Industrial Classification (SIC) to determine which industries fall into the low-hazard category, hundreds of thousands of employers will now be required to keep records that never had to before. It is important that you determine what the NAICS code is for your type of business so that you can tell how you will be affected by this revised rule, if at all.

Some of the business industries that will now have to keep OSHA 300 logs and post their injury records for employees to view include bakeries; automobile dealers; automotive parts, accessories, and tire stores; building material and supplies dealers; specialty food stores; beer, wine, and liquor stores; commercial and industrial machinery and equipment rental and leasing; performing arts companies; museums, historical sites and similar institutions; amusement and recreation industries; and some other personal services industries.

Some businesses that will still be defined as “low hazard” and will not have to keep OSHA records are law offices, insurance brokers, accounting firms, architectural and engineering firms, advertising agencies, schools, doctor and dentist offices, day care facilities, electronic and computer servicing companies, and religious organizations.

For more information and to discover if your industry now has to keep the OSHA records, go to Here you can find links to a complete list of all of the business industries that are required to keep injury records, as well as a list of the exempt business industries.

You should also remain careful about terminating any employee who has reported an injury or workplace illness. OSHA prohibits employers from retaliating or discriminating against any employee who has suffered an on-the-job injury.

Texas Legislature Strengthens Protections of Company Trade Secrets

The Texas Legislature in its most recent session adopted the Uniform Trade Secrets Act by passing Senate Bill 953. The new law, which will go into effect September 1, 2014, will help you keep your departing employees from competing against you using your own trade secrets, which are defined as “a formula, pattern, compilation, program, device, method technique, process, financial data, or list of actual or potential customers or suppliers.” Most employers ask me to protect their customer and/or supplier lists after the employee has left the company, which is about as effective as that old saying about closing the barn door after the horse has already bolted for greener pastures.

So the recently adopted statute is good news, but you as an employer have some responsibilities too. The trade secret will only be protected if it is (1) valuable; (2) not generally known to, and not readily ascertainable by proper means from others; and (3) subject to “efforts that are reasonable under the circumstances to maintain its secrecy”. In other words, you can’t blame a former employee for using your trade secrets if you made no efforts to keep them, you know, SECRET!

To prevail under this statute, which provides for an injunction and damages, you are going to have to show that you took proactive steps to protect your confidential property, such as:

  • Limiting employee access to the trade secret so that only those with a strong “need to know” gain access;
  • Labeling files or stamping the trade secret documents with “Confidential” or “Secret” stamps;
  • Password protecting the trade secrets if located on database;
  • Installing monitoring software to record who had access to the computerized trade secret;
  • Keeping the secret under lock and key;
  • Requiring numbering and shredding of all copies of the trade secret documents;
  • Requiring employees to sign non-disclosure and confidentiality agreements in addition to a written confidentiality policy in your employee handbook;
  • Conducting periodic inspections and reviews to beef up security of trade secrets; and/or
  • Having your employees sign a non-competition agreement that meets all of the quirky requirements for valid and enforceable non-competes in Texas.

If you can demonstrate that a former employee misappropriated valuable confidential information and you took some or all of these reasonable steps to protect your data before the employee left, this statute will allow your lawyers to more easily stop your employee and his new employer from profiting from your hard work and secrets.

New I-9 Form Required

On March 8, 2013, the United States Citizenship and Immigration Services released a new I-9 form that all employers must begin using by May 7, 2013, to document the employment eligibility of new hires. If you are reverifying the eligibility of a current employee because an eligibility document expired, or if you are rehiring a former employee, you must also use the new form for those purposes. Just as before, every new employee must provide you with documents that verify the employee’s identity and eligibility to work in the United States within the first 3 days of employment. Only the form on which that eligibility review is documented has changed.

Here is the link to the new form: There is no reason to delay in beginning to use this form, so make sure whoever is in charge of your hiring is aware of the change to the form.


Employers Targeted by ICE

While the whole nation has been focused on our country’s economic woes, Iranian protests and the death of Michael Jackson, ad nauseum, the issue of illegal immigration has been pushed to the cobwebby recesses of most of our minds. However, if you are an employer, you need to refocus on the employment eligibility of your workforce.

U.S. Immigration and Customs Enforcement (ICE) announced on July 1 that it issued notices of inspection to 652 businesses nationwide, beginning the involuntary inspection and auditing of those companies’ hiring records. The purpose is to determine whether the businesses are complying with the immigration laws, particularly the requirement that companies have an I-9 employment eligibility form completed on each employee and that the documentation used by the employee reasonably appears genuine.

The 652 notices that ICE issued on the first day of this month exceeded the number of similar notices (503) issued by ICE during all of fiscal year 2008. ICE has been warning employers since April 30 that it is going to concentrate less on the business raids like the one at the Swift plant in Cactus two years ago that separated young children from their families. Instead, ICE is going to be focused on investigating and prosecuting employers who employ illegal workers.

Ten percent of the 1100 criminal arrests ICE made last year resulted in charges against owners, managers, supervisors or human resources directors, not the illegal workers who may have stolen identities, faked social security numbers or forged papers. Do you want to go to jail for harboring illegal immigrants for financial gain?

Just for having your I-9s out of order, even if your workers are all eligible to work in the United States, you can be fined up to $1100 per worker. If you have “constructive knowledge” from circumstantial evidence that you are employing illegal workers, you can face both civil and criminal penalties of up to $2200 for a first offense, $11000 for two offenses and six months imprisonment. If ICE can show that you knowingly employed at least 10 illegal workers for 12 months, you face imprisonment for up to five years.

Let’s say that you don’t believe that you employ any illegal workers. You may still have documentation problems. Go through your personnel files just to check for these issues:

  • Does every file contain a completed I-9 form filled out when the employee first started working for you? I can’t tell you how many of the forms I have seen don’t have both sections 1 and 2 filled out and signed.
  • Did you photocopy the documentation the employee produced that you are relying on? Copies are the best way to show why you believed the documents were valid. Double-check these. Upon a closer look, you will see slight irregularities that should have caused you concern at the time. Compare the documents you received to the genuine articles in the Employer’s Handbook provided by ICE on its website (click here).
  • If you have hired an employee since Spring 2009, have you been using the updated I-9 form, revised on February 2, 2009? (Click here for a pdf copy).
  • Have you calendared the dates necessary for reverification if your employee has work verification documents that will be expiring? Upon reverification, did you fill out Section 3 of the I-9 form?

Chances are high that your review uncovered some problems with your I-9 forms. The time to correct those is before ICE serves you with a notice of inspection, particularly if your company is engaged in one of the businesses ICE checks frequently because of past violations in these industries: agriculture, cleaning services, factories, slaughterhouses, construction companies, or other blue collar industries.

Although you will often hear about ICE targeting big employers like Wal-mart and Tyson Foods, they also inspect local small businesses if they receive any kind of tip (from disgruntled employees, competitors, the public or other law enforcement agencies) that a company is employing illegal workers.

It is clear from conversations that I have had with other federal law enforcement officers that the days during the Bush administration of the federal government being “nice” to businesses is over. If ICE or any other federal inspector shows up at your business, you will breathe a sigh of relief if you have gotten your record-keeping, such as your I-9s, into shape before the feds came knocking.

Recordkeeping Tips for Employers

This may not be the most exciting topic in employment law, but it is one of the most important: AS AN EMPLOYER, YOU HAVE TO KEEP GOOD RECORDS. Virtually every employment law requires the employer to do some recordkeeping, and anytime the employer fails to do so, the employer is the one that gets burned.

For example, the Fair Labor Standards Act, which regulates overtime and minimum wage payments, makes it imperative for an employer to keep the following records on each employee for three years:

  • Identifying information such as full name and address;
  • job title and duties if claiming exempt status for employee;
  • rate of pay;
  • hours worked each day and each workweek (by time card or time sheet if nonexempt);
  • payment of wages, including overtime adjustments;
  • all bonuses or other additions to wages;
  • amounts and types of all deductions taken from each paycheck;
  • total wages paid in each pay period;
  • dates of payment and the pay period covered;
  • commission agreements or other compensation related agreements.

These records need to be organized and accessible enough that they could be produced to a Department of Labor wage and hour investigator within 72 hours.

The foregoing list is only for that one law (FLSA). To battle payroll tax questions, discrimination accusations, immigration complaints and the myriad other employment law investigations and civil claims with which your company could be involved, you need to have an organized and deliberate system for keeping records about all of your employees.

This usually involves at least three kinds of files. First, you should have detailed and voluminous personnel file on each employee. I have many clients who are requested to bring me the employee’s personnel file when I am asked to defend the company in a discrimination case, for example, and all the business owner brings me is a thin folder containing an employment application and a W-4. I can usually predict the bad outcome of the case for the company right then, just based on poor recordkeeping.

This first set of personnel files ought to contain the application, W-4, I-9 form regarding eligibility for employment in the United States, a report to the Texas Attorney General of a new hire, interview notes, background investigations, training records, performance appraisals, disciplinary actions and warnings, signed acknowledgments of company policies, and termination documentation.

Second, you need a separate set of confidential personnel files with highly restricted access that are kept in a locked cabinet and contain medically sensitive information, such as insurance applications, drug or alcohol tests, physical exams (if you require them for physically-intense jobs), requests for Americans with Disabilities Act accommodations, documents related to use of sick leave or Family and Medical Leave, doctor’s notes and worker’s compensation history.

Third, you should keep payroll records like those set forth above, which are necessary to comply with the Fair Labor Standards Act. This file should also include attendance records, vacation requests, holidays off, records of raises, and other records that completely document the reasons and amount of the employee’s pay. Many employers keep all of these records electronically, which is fine, as long as you regularly back up your system so that no records will be lost.

Discrimination Filings Increase Dramatically

You might think that by now all employers are careful and correct in their hiring and firing decisions, leading to a decrease in discrimination suits filed by employees and former employees, particularly since the Civil Rights Act has been around for 45 years. You would be wrong.

In 2007, the Equal Employment Opportunity Commission (“EEOC”) saw a 9% increase in the filing of discrimination claims based on race, gender, age, disability, etc. If that weren’t dramatic enough, in fiscal year 2008, the EEOC saw a 15.2% increase over 2007. And that was before the economy hit rock bottom and the  nationwide unemployment rate rose to its current rate of 8.5%. I think it is a safe bet to expect the charges filed with the EEOC in 2009 to increase even more.

What should these statistics say to you as a business owner or manager? They should tell you that you cannot afford to make mistakes in your employee hiring, compensation, evaluation, discipline and termination practices that could be interpreted as discriminatory. Don’t assume that you know what you are doing. Get an experienced HR expert or employment lawyer to help you review your policies and practices.

What should you be reviewing to assure that you have reduced your exposure to an employee lawsuit:

  • Documentation: I can’t say it enough in this blog–if it isn’t written down, it didn’t happen as far as the EEOC or a jury is concerned. Do you discriminate on the basis of race, religion, disability, national origin, age, etc.? You do unless you have a written policy stating that you don’t and you have documents supporting each employment decision you have made and showing that it was made for nondiscriminatory reasons such as performance deficiencies.
  • Written Policies: I still get questions about whether you need to have an extensive written policy manual that you provide to your employees. My final answer: YES, you need written policies! Lots of them! Every governmental agency, whether it is the Texas Workforce Commission investigating an unemployment claim, OSHA investigating a workplace injury or the EEOC investigating a discrimination charge, will first ask for your relevant written policies. Without these, the odds that the governmental agency will make a finding beneficial to your business are pretty close to zero.
  • Layoffs: The decisions you make about which employees to lay off in poor economic times cannot be explained simply by the financial well-being of the business. You won’t be questioned about why you had to lay off 20 employees, you’ll be questioned about why you picked the specific 20 that you picked. If you let your poor performers go, you better have documentation supporting the poor performance of each member of that group, as well as documents showing the outstanding performance of those that you retained. Layoff time is not the time to cherry pick the employees with whom you have the most in common or feel most comfortable, because it is almost a given that you will be explaining your choices to a governmental investigator or a jury at a later time.
  • Retaliatory actions: If someone cooperates with a governmental investigation or files a discrimination claim, you should not fire that employee any time soon thereafter unless you have rock solid documentation of a serious disciplinary violation that employee committed after the claim or the cooperation. Why? Because every claim filed with the EEOC is subject to a retaliation claim. Frequently, an employee who says she was discriminated against can be proved wrong, but if you fired her soon after she made her complaint, you will probably will lose the retaliation claim even as you win the discrimination suit. This would be a very hollow and expensive discrimination “victory”.

Contracts with My Teenager

It is very hard to leave a legal job at the end of the day and not take it home with you. I watch TV and guffaw over the ridiculous courtroom scenes that never would occur in real life. I read and reread the fine print on every piece of mail (particularly from credit card companies!). I won’t let my husband sign his teaching contract for the next year without my approval.

But the one area where it has really paid off to be an attorney in my family life is in the area of contracts with my teenage son, Hart. A few years ago when he received his first cell phone, I considered all the horror stories I had heard about runaway bills due to teen texting or replacement phone costs due to teenage negligence. I’ve always been the kind of parent who believes in spelling out my expectations ahead of time and then encouraging my son to meet them. This has worked for grades, for manners and I figured it should work for cell phone ownership also.

So I drafted a simple, plain English agreement for Hart to sign when he received the cell phone. I let him know specifically how many minutes and text messages he could send per month. I explained the rules about free nights and weekends and what time those free periods started and ended under our plan. I let him know the cost of a replacement phone. I told him how much I would charge him for any excess minutes or texts. I emphasized how he would lose his phone privileges if he were to ever use it during class time. And I required him to get permission from the subject of any picture he took or conversation he recorded so as not to invade any other person’s privacy. If I were writing that contract today, I would also include a prohibition of sending or possessing sexually explicit photos with a cell phone, a practice known as “sexting” that can lead to a criminal conviction and sex offender status that could haunt a teen for the rest of his or her life.

In the three and a half years that Hart has had a cell phone, he has paid me $1.10 in overcharges. He has never lost or broken his phone, never had it taken away at school and seems to use it appropriately to keep me informed of his whereabouts. Granted, being a boy, he has little interest in sending thousands of texts in a month or spending every minute on the phone with friends. But I really think that spelling out the rules and the consequences of breaking those rules has helped him be more responsible with the cell phone.

Fast forward to last week, when Hart turned 16 years old. He obtained his driver’s license on his birthday after ten months of driving with a learner’s permit. We gave him my ten-year-old Toyota Avalon to use as his car from now on. Time for a driving contract.

Obviously, the consequences of irresponsibility with a car are much greater than with a cell phone, so the driving contract is longer and more detailed than the one page cell phone agreement. But again, I used plain English to convey important rules like wearing a seat belt, never using a cell phone while driving, and at least while he is in high school, getting permission before he drives the car out of Potter or Randall counties. Violating those kinds of rules results in a $100 fine (you gotta make it painful).

The most serious consequence is reserved for driving while impaired by alcohol or drugs. There is no penalty if he calls us to come get him and doesn’t get in a car. However, the penalty for driving while impaired is a loss of driving privileges for three months and no chauffeuring by a parent (catch a ride with friends, ride a bike or hoof it for three months). A second violation of that rule results in the car being sold and again, no chauffeuring by parents during the duration of high school.

The driving contract also sets out who pays for any traffic ticket he receives (he does), gas he uses (he does), getting oil changes and regular maintenance on his car (he does), insurance deductibles he incurs (he does) and increases in insurance premiums he causes (he does). I hope this will short-circuit any arguments that may arise over the significant costs of car ownership and irresponsible driving.

Let me say that I don’t think you can solve all teen problems with a contract. There was a lot of parenting that went on before these contracts. Hart is an excellent student, a polite, witty and responsible kid. While his parents are divorced, we have worked hard to achieve a friendly and cooperative relationship that allows us to consult with each other and enforce similar rules at both houses. So we have had few problems with Hart and don’t really anticipate any big issues with his driving.

But why wait until a problem arises to anticipate how to solve it, particularly if you could avoid the problem altogether? That’s what I spent three years in law school learning to do: prevent difficult legal problems or resolve them as painlessly as possible if they can’t be prevented. When it comes to my only son, I am definitely in favor of trying to prevent problems before they arise.

I heard the other day of a parent who required her daughter to sign a college contract, which reminded the girl about the expectations for her GPA, her financial contribution and her behavior if her parents were going to support her for four more years and pay for tuition, room and board and expenses. Looks like Hart has another contract in his future . . . !

Time to Change I-9 Forms (Again!)

As if employers didn’t have enough to keep up with, it is time to throw out your old blank I-9 employee eligibility forms (for immigration compliance) and adopt the new form as of Friday, April 3, 2009.

Click here to download a copy of the new required form. The form is available on the United States Citizenship and Immigration Services website.

Don’t blame this one on the Obama administration. The regulation for the new form was written during the waning days of President Bush’s term. President Obama delayed its enactment for 60 days, as he did with all of Bush’s pending regulations, but unless something changes this week, you must make the switch to the new form for anyone whom you hire on Friday or thereafter.