Category Archives: Hiring

DOL Cracks Down on Using Contract Labor

The practice of many employers of using “contract labor” instead of employees to perform some jobs just got riskier as the Department of Labor (“DOL”) issued new guidance on who is an independent contractor. (Click here to read the DOL’s lengthy guidance).

The DOL concluded in an Administrator’s Interpretation issued July 15 that “most workers are employees under the Fair Labor Standards Act’s broad definitions”.

If most workers are employees, that means it is a high bar for any company to jump to prove that a person performing any work for the company is actually an independent contractor who will pay his own payroll taxes and will forego overtime, worker’s compensation, family and medical leave, health insurance under the Affordable Care Act and the other perks of being an employee. Continue reading DOL Cracks Down on Using Contract Labor

Advertising Job Openings Without Discriminating

As an employer, your work to prevent an employment discrimination lawsuit starts from the beginning: in the way you advertise the job opening. According to the Equal Employment Opportunity Commission (EEOC), the number of charges filed by employees and applicants alleging discriminatory advertising rose from 49 in 2013 to 121 in 2014.  The vast majority of the claims filed in 2014 (111) were for advertisement discrimination against older job applicants, but may also involve gender discrimination, disability discrimination or other discriminatory conduct.

Recently, the popular restaurant chain Ruby Tuesday settled a claim with the EEOC for $100,000.  Two male employees sued the restaurant after an internal job posting was advertised specifying “only females would be considered” for temporary summer positions in a Utah resort town.  Because the summer resort employees would be residing together for several weeks in company-housing, the restaurant reasoned that it would be best if all employees were of the same gender.

While violations such as a gender-specific job announcement may seem obvious in hindsight, there are many subtle ways discrimination is included in employers’ advertising.  Have you ever seen an ad in the paper seeking “recent college graduates”?  You might consider this to mean that a college degree is required for the job.  But the EEOC could look at this as way of screening out older applicants in violation of the Age Discrimination in Employment Act (ADEA).  The ADEA and its Texas equivalent statute make it illegal for employers (with 15 or more employees) to discriminate against workers age 40 and over.

To avoid problems such as the one Ruby Tuesday faced, carefully consider the wording of your advertising, most specifically, your job postings.  Continue reading Advertising Job Openings Without Discriminating

Stop Employee Theft

In 25 years of practicing employment law, I have unfortunately had to advise many clients who have been robbed by their own employees. They have lost thousands of dollars to theft of cash and inventory. In most instances, when my client has called me with questions about employee theft, the business has already been ripped off by its employee and is now just trying to figure out whether to prosecute and if there is any way to put in an insurance claim. I would rather see my clients take some preventative measures to stop employee theft before it happens.

Prevention starts by screening applicants with thorough reference and criminal background checks. Any employee with access to the financial records, bank accounts, credit cards, cash or inventory should have a clean record both with past employers and with law enforcement.

You should also assign overlapping job duties. Many of my employers who suffered losses to employee theft trusted just one person to handle the finances, the checkbook, cash receipts, reimbursement of business expenses or the bank deposits and didn’t require a second set of eyes on these records. Even if you don’t constantly have two people double-checking these records, learn a lesson from banks. Most banks require employees in sensitive financial jobs to take their vacation time in at least one week segments so that another employee can get a good long look at the vacationing employee’s records.

Every employer should also identify those areas of the business that are at high risk for theft and conduct audits every quarter or every six months on expense reporting, cash reconciliation, firm credit cards, etc. If you stock inventory, then performing a regular count of your inventory is also important. You should protect your inventory by watching for cars parked close to loading zones, unlocked exits that should remain locked, and bulging bags.

Finally, you should know your employees. The U. S. Chamber of Commerce recommends that you watch your employee’s behavior for unusual working hours, poor work performance, defensiveness when reporting on work, an unexplained close relationship or favoritism with a supplier or customer and/or a personal lifestyle that doesn’t match the employee’s salary.

One word of caution. If you suspect an employee of theft, don’t make the mistake of falsely imprisoning that employee or defaming that employee. If you detain an employee in the workplace by restricting his movement in some way, you could be guilty of false imprisonment. Let him leave if he wants to, and then let the police track him down and arrest him later if you have proof of theft. Defamation involves publicizing to others (such as your other employees) that an employee stole from you before that fact has been clearly established. In most instances, there is no reason for anyone else to be notified that you are accusing your employee of a crime. Only when the employee has been convicted of theft can you safely report to others, such as prospective employers who call for a reference, that your former employee stole from you.

Employers Face Obesity Discrimination Issues

In June, the AMA recognized obesity as a disease, instead of just an issue of poor judgment. As an employer, you now have to think about obesity in terms of the Americans with Disabilities Act (“ADA”). To be protected under the ADA, an employer must have a physical or mental impairment that affects a major life activity, such as walking or bending, or affects a major bodily function, such as the cardiovascular system. In addition, the ADA protects people who are “regarded as” having a disability, even if they don’t.

With the AMA’s decision as ammunition, you as an employer are now in the crosshairs of many more disability claims because the Centers for Disease Control says 35.9% of American adults over 20 are obese. We don’t know all the ramifications yet, but it is reasonable to assume that the AMA’s label will eventually change your legal obligations.

As an employer, you are going to need address the obesity of your employees in three ways:

  1. You must not discriminate against obese applicants or employees by treating them adversely in hiring, promotions, discharge, compensation, job training, or other terms and conditions of employment. Appearance discrimination hasn’t found much support in the courts before the AMA’s decision, but this could give that kind of claim new life. This means that the overweight applicant who you fear will have absenteeism problems because of health issues cannot be excluded on that basis from hiring consideration. Also, that obese employee who you have consistently passed over for a promotion because you think he is lazy, or the fat assistant who wants to go into sales but you don’t believe she presents a professional image, may have a discrimination claim against you either because he/she is disabled by obesity or is regarded as such. Finally, when you are firing an employee, you’ll need to have well-documented reasons if obesity could be a claim.
  2. You will have to accommodate an obese employee’s reasonable requests for bigger, more comfortable furniture, more doctor’s visits or additional time to perform certain physical functions at work. As with any disability, you will have to handle these requests with discretion and sensitivity. I imagine that public theaters, airplanes and stadiums will also have to address this issue of whether they will have to provide larger seats.
  3. You must prevent harassment based on a person’s disability. That means that fat jokes will have to be tamped down just as you would racial or religious slurs to prevent a hostile work environment.

At a time when some parts of the federal government (HHS, DOL and IRS) are promoting wellness programs under Obamacare and encouraging employers to adopt programs that reward employees who stop smoking, lower their cholesterol or their BMI, the federal discrimination enforcement agency, the EEOC, is going to be scrutinizing wellness programs that may stigmatize obese employees. As an employer, you are going to need to walk a fine line with your wellness incentives. Heck, just having a motivation poster glorifying skinny people climbing to the top of a mountain may imply a negative stereotype of disabled obese employees.

There are no easy answers to this new issue. The AMA’s decision, by itself, doesn’t carry any legal weight. But it could influence the courts and accelerate the EEOC’s efforts to make appearance a protected class. My advice is to avoid becoming the test case on this issue and just use some care and common sense when dealing with obese employees.

 

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: http://www.uscis.gov/files/form/i-9.pdf. 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.

 

New Requirements for Applicant Background Checks

Companies routinely conduct background checks on applicants for employment or current employees being considered for promotion to assist them in selecting the best candidates. There are several types of background checks available to employers. The type of check utilized should depend upon the requirements and nature of the job position. Some checks may also be required by federal or state law. Employers are subject to the Fair Credit Reporting Act (“FCRA”) when they utilize third parties to perform background checks on job applicants or employees.

The FCRA requires employers to notify applicants/employees before ordering a background check or taking an adverse employment action based on the results of a background check. It also requires that prior to ordering a background check, an employer must obtain the application/employee’s consent. Failure to comply with these requirements can result in civil penalties, punitive damages, and even attorneys’ fees.

As of January 1, 2013, employers required to follow the FCRA must provide new and updated notices to applicants and employees. The recently created Consumer Financial Protection Bureau (“CFPB”) issued these new requirements and deadlines. The CFPB is now the enforcement authority over the FCRA. Prior to the creation of this new federal agency, the Federal Trade Commission enforced the FCRA. Under the FCRA, an employer must certify that it: (1) notified the applicant/ employee and obtained that individual’s permission to get a consumer report; (2) complied with all of the FCRA requirements; and (3) will not discriminate against the applicant or employee or otherwise misuse the information, as provided by any applicable federal or state equal opportunity laws or regulations.

Before an employer may reject a job application, reassign or terminate an employee, deny a promotion, or take any other adverse employment action based on information in a consumer report, the employer must give the applicant or employee: (1) a notice that includes a copy of the consumer report relied upon in making the decision; and (2) a copy of a summary of Rights Under the Fair Credit Reporting Act. The 2013 change includes modification to the mandatory “Summary of Rights” form. This form is a standard notice that must be provided to an applicant or employee subject to an investigative consumer report or when a “pre-adverse action” notice is sent to an applicant or employee. A copy of the new notices are available here.

Please note that employers have flexibility to avoid these strict FCRA requirements by conducting their own background checks. As an employer evaluating a potential hire, you may conduct your own due diligence search of the prospective employee by contacting past employers, checking with local law enforcement, searching public databases and another reasonable methods of assessing a person’s character, skills, and suitability for a particular position. Employers may use their own employees, such as a human resource professional, or their attorney to conduct background checks by verifying references or credentials without implicating the FCRA.

Health Care Reform for Small Employers

Since the U.S. Supreme Court ruling upholding the Patient Protection and Affordable Care Act (“PPACA”), health care reform questions have been raised by many of my employer clients. It is important for small businesses to know if and how the PPACA will affect them.

The PPACA “mandate”, requiring employers to provide health insurance to employees or face a penalty, does not apply to employers with less than 50 full-time employees or the equivalent of 50 full-time employees. This is the small business exemption to the mandate.

To apply this small business exemption, Continue reading Health Care Reform for Small Employers

Attempting to Prevent Workplace Violence

Amy Bishop, a 42-year-old biology professor at the University of Alabama-Huntsville (UAH), walked into a biology faculty meeting on Friday, February 12, and according to eyewitnesses, opened fire on her colleagues, killing three and wounding three others. She is charged with capital murder and the death penalty may be sought. Obviously this a nightmare for the victims’ families and friends, the university and the community of Huntsville.

As the shock of this gruesome event settled in to my brain, the questions about workplace violence prevention arose. Could this horrific mass shooting have been prevented by policies, background checks, or alert coworkers? The question is unanswerable, of course, but trying to answer it is the only way we can learn something from this tragedy.

One method that an employer can use to prevent workplace violence is to thoroughly check the criminal and employment background of any prospective employee. There is speculation about Amy Bishop’s background, including suspicion that she was involved in the killing of her own brother and in sending of a mail bomb to a former boss. However, no criminal convictions were recorded in these incidents so they would have been of no help to a human resources professional trying to check Bishop’s background.

A much clearer sign of a potential problem was her guilty plea to misdemeanor assault and disorderly conduct in 2002 for punching a woman in the head at an IHOP after the victim took the last booster seat just as Bishop arrived with her children. The victim told officers that Bishop started a profanity-filled argument and at one point shouted, “I am Dr. Amy Bishop”. Some of the news stories now say that Bishop was put on probation and ordered to take anger management classes. If so, a criminal record would exist. Any employer who finds violent crimes on a prospective employee’s criminal record, even if they are misdemeanors, should think carefully about whether that applicant’s abilities are worth the risk to others in the workplace.

A thorough reference check with Bishop’s past employers might have revealed some personality issues that could have raised red flags. Granted, many past employers will only give out dates of employment, rate of pay and job titles. But if a prospective employer will fax to the former employer a release signed by the applicant absolving the former employer of any liability for giving out real information during the reference check, the conversation will usually be much more revealing.

In Bishop’s case, UAH might have discovered that Bishop, as one FBI profiler said, was “wired in a way that any rejection, either real or imaginary, is seen as an insult against her very existence and self-esteem. Her narcissistic ego was impugned and threatened.” People like Bishop, who have a tendency to blame others whenever things go wrong in their lives, who show anger often and who retaliate aggressively, may have left an indelible impression on past employers. The trick is to get them to relate those personality problems to you as a prospective employer so you can reject that applicant before he or she becomes an irritant, or worse, an aggressor, in your workplace.

Of course, as an employment attorney, I would be remiss if I didn’t point out that the Americans with Disabilities Act protects those with mental illnesses from discrimination in hiring if the applicant is qualified and can perform the job with or without reasonable accommodation. However, you will not know that the applicant has a mental illness from just a  reference check. You simply will have identified some negative behaviors that are unacceptable in your workplace. This is always a good reason to pass over that applicant in favor of someone equally well qualified who doesn’t have poor reports from past employers.

Finally, after you have hired an employee, your best protection from violence occurring in your workplace is a policy that makes it very clear that even threats of violence are prohibited and may cost an employee her job. Training of all employees, but particularly supervisors, to recognize and identify certain suspicious behavior can be helpful. Granted, in academia as in other work environments, the line between eccentricity and madness may be a very thin one. But no one should be allowed to make specific threats, carry a weapon (even in a car in the company parking lot), or physically fight with a coworker without the employer taking serious disciplinary action, including possible termination.

The truth is that no employer can make a workplace 100% safe from someone as irrational and violent as Amy Bishop appears to be. However, that doesn’t give you license as an employer to fail to do everything you can to prevent such an occurrence in your workplace.

Protect Your Business From Embezzlement

There was an insignificant story in the Amarillo newspaper last week about a former credit union employee who was sentenced to 30 months in federal prison for stealing $221,000 from her employer over a seven-year period. At least it seemed insignificant, based on the placement in the paper. But to her employer, I know it was very significant.

I’ve advised many employers in the Panhandle of Texas who have lost money to thieving employees. It has happened to large companies, small businesses, non-profits and for profits. I’ve dealt with embezzlement at banks, car dealerships, doctor’s offices, law offices, construction companies and charities. Each employer feels embarrassed to have been deceived, angry over the missing money (often which will not be recovered) and mistrustful of all employees from that point forward. Those reactions are understandable, since most embezzlement could have been prevented with some careful policies and practices.

Of the three factors leading to embezzlement, motivation (financial pressures), opportunity (access to company cash or accounts and a lack of corporate controls in place) and rationalization (its just a loan or my rich boss won’t miss it), opportunity is the only part of the equation that the business can control. Here are some of the ways to do this:

  • Thoroughly screen potential new hires by requiring a criminal history and by talking to past employers.
  • Never let any one employee, no matter how long tenured and how trusted, handle all the bookkeeping. You need a system of checks and balances.
  • Know your employees and consider the telltale signs of a potential problem: gambling losses, large medical bills, credit card debt, a standard of living above all possible income, etc.
  • Make every employee who has access to company funds take a long vacation every year while another employee performs his work and double-checks the procedures the absent employee follows.
  • Never sign checks that aren’t completely filled in or that lack supporting documentation like an invoice.
  • Require two signatures on checks over a certain amount, such as $500.
  • At least once per month, do your own mini-audit. Carefully check company credit card bills, cash flow and deposit slips, accounts payable, and other vulnerable items.
  • Have your business audited annually by an independent accountant.
  • Immediately fire any employee about whom you have strong evidence of theft. This person is not going to be rehabilitated through progressive discipline. And don’t worry about the fallout. If you can prove theft by the terminated employee, you will be protected from unemployment or discrimination claims.
  • Prosecute any thief to the full extent that the law allows. Often this is required by the insurance company if you want to recoup any of your losses. Some employers, like banks, are hesitant to do this because of the bad press it could cause. I think every employer has a societal obligation to prevent this from happening to another business by making sure the theft shows up on that employee’s criminal record from now on.

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.