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
While a federal judge in Texas last week set aside the requirement to pay exempt employees at least $47,476 per year, nothing has changed about the duties tests for exempt employees, and that is where many employers get into trouble. Under the old rules (which are new again), the Department of Labor was collecting $140 million per year for overtime violations.
So even though the judge’s injunction has relieved you as an employer from the obligation to pay your managers almost $50,000 per year, you still have to be vigilant that you are paying salaries only to those employees who actually are exempt from the Fair Labor Standards Act based on the duties that they perform.
Determining that an employee is exempt from the overtime rules and can be paid on a salary without reference to the number of hours worked each week by that employee has always been a two-step process:
- The employee you have designated as a manager, professional or administrative worker must be paid at least $23,660 per year. This is the amount that was in effect before the new rule and the judge’s injunction, which returns us to the status quo of $23,660 per year ($455 per week). But unlike the new rule, bonuses cannot be used to get the exempt employee to that amount. So you have to pay the salary of $23, 660, and,
- The employee you are calling exempt must perform certain duties to legally be considered exempt. These duties tests have tripped employers up for years, long before the salary increase was even proposed. And now that the salary increase has been enjoined, your focus as an employer should be back on these duties tests to determine if you really can pay an employee as an exempt, salaried employee without worrying about overtime.
So, in addition to making at least $23,660 per year, your exempt employee must pass all of the duties tests for at least one of the following categories if you want to claim that you don’t have to pay overtime to that particular employee:
Executive Employees Duties Test:
- The employee’s primary duty (the most important duty and the one that takes up a significant amount of his/her time) must be the management of a customarily recognized department or subdivision (such as a stand-alone store). Management includes the hiring, training, scheduling, disciplining and supervising of employees and/or the planning and controlling of the budget, workflow, safety and compliance of a department; and
- The executive employee must customarily and regularly direct the work of at least two other full-time employees (not full-time equivalents), and
- The executive employee has the authority to hire and fire other employees, or at least the executive employee regularly makes recommendations that are relied on in the determination of an employee’s hiring, promotion, firing.
Learned Professional Duties Test: Continue reading Don’t Forget About the Duties Tests for Exempt Employees
Employers are facing a time of uncertainty in the workplace as a result of last week’s election. Does an employer still have to worry about compliance with the revised overtime rules? Do you still have to complete the Affordable Care Act tax forms due in January? What about paid maternity leave—must an employer provide salary for six weeks to new mothers? There will certainly be upheaval in the workplace because of the significant change in the governing philosophy to come in January.
Although Mr. Trump is already backing off of some of his campaign rhetoric, there are some workplace issues that you as an employer will be affected by:
- Immigration compliance should be your top concern under this new administration. As an employer, you must be certain that you are correctly completing an I-9 form on every new employee and assuring that you are only hiring applicants who are eligible to work in the United States.
- A new I-9 form was released today, so you will need to start using that new form dated November 14, 2016, immediately with your new hires. The old 2013 form you have been using may not be used after January 21, 2017. You do not have to recertify your current employees just because they were hired when a different I-9 version was in use.
- Trump has said that he wants all employers to use E-Verify, the internet verification program used by federal contractors to verify I-9 information provided by a new hire against records from Social Security Administration and the Department of Homeland Security. E-Verify sounds much easier in theory than it has proven to be in practice. Get ready for significant paperwork and several new steps whenever you receive a tentative non-confirmation letter from E-Verify on a new hire.
- Remember that it is illegal to discriminate against an applicant on the basis of national origin or ethnicity. As an employer, you cannot have blanket hiring prohibitions against any group. You must individually check the employment eligibility of each person to whom you offer a job.
- The new overtime law, which requires employers to pay at least $47,476 in salary to employees whom the employer wants to exempt from the overtime requirements, goes into effect in two weeks on December 1, 2016. That means that you as an employer need to comply with that law now without regard to how it may change down the road.
- A change to the overtime law is not included in the new administration’s first 100-day plans and Mr. Trump only addressed it one time on the campaign trail. Changing the overtime regulation does not seem to be a top priority, but the possible changes that have been mentioned are an elimination of the automatic increases now scheduled every three years and a small business and/or nonprofit exception to the overtime rule.
- The final overtime regulation took more two years to become effective after President Obama proposed it. Even if a change to it were fast-tracked, I think that you will have to comply with the current regulation at least until the end of 2017.
- And even if the new rule is changed next year, are you really going to decrease the salaries of your management employees after they saw the increase this year? If you would consider a decrease as a possibility in the future, then think about putting your salaried employees on hourly pay and overtime pay immediately (by December 1) instead of giving them salary whiplash when this regulation changes down the road.
- The Affordable Care Act is going to change significantly. How it will change, we don’t know, except that Mr. Trump has promised that it will be “replaced”, not just repealed. If that is the case, employers will still have to deal with healthcare headaches. They will just be new headaches rather than the ones we have learned to cope with over the last six years. For now, as an employer, you must continue to comply with the ACA, including sending out the Form 1095-C after the first of the year.
- Trump has proposed six-week paid maternity leave. Never before has the federal government required a private employer to provide any paid leave, unless the company was a federal contractor. The Family and Medical Leave Act only requires unpaid leave.
- This would be a radical departure from Republican policies in the past, which have always frowned on mandates to employers to pay people not to work. There is no indication yet that the U.S. Congress would go along with Mr. Trump’s proposal.
- Meanwhile, employers should be more concerned right now about complying with the Pregnancy Discrimination Act in effect since 1978, but which has grown more teeth in the last couple of years thanks to the U.S. Supreme Court decision in Young v. UPS and stricter enforcement by the EEOC.
- Title VII of the Civil Rights Act of 1964 remains the law and no administration would dare push for its revision, or the revision of later laws that prevented discrimination on the basis of age or disability. That means that as an employer (if you have 15 or more employees), you must continue to keep your workplace free from discrimination and harassment on the basis of sex, religion, national origin, ethnicity, age, disability, etc.
- There were 3500 charges of religious discrimination filed in 2015 with the EEOC. That number has risen 44% in the last 10 years. Employers must be extra vigilant that some of the tenor and tone of the election rhetoric doesn’t lead to any hateful actions in their workplace against, for example, a Muslim employee.
- Discrimination on the basis of sexual orientation and/or gender identity is not prohibited by the actual language of Title VII and it seems unlikely that the new administration would champion gay rights in the workplace. There is also no state law in Texas preventing such discrimination, although most of the larger cities in Texas have local ordinances. But employers need to know that the EEOC has targeted employers who are allowing discrimination against LGBT employees and there are several court rulings that back up the EEOC’s position that “sex” as a protected class includes sexual orientation, so all employers should continue to protect their LGBT employees from harassment and unfair treatment.
Reminder: The Department of Labor’s final rules regarding the overtime exemption requirements go into effect December 1, 2016. So in the next month, you must get in compliance with these rules:
- Salary increase for certain exemptions. The minimum salary requirement for administrative, professional, and executive exemptions dramatically increases from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). If you aren’t paying salaried employees $47,476 per year by December 1, 2016, you will be exposing your business to risky Department of Labor investigations and employee lawsuits.
- Increase for highly compensated employees. The minimum total compensation required for the highly compensated employee exemption increases from $100,000 per year to $134,004 per year, which must include at least $913 paid on a weekly salary basis.
- A portion of certain bonuses count. Employers may use nondiscretionary bonuses (generally those announced or promised in advance), incentive payments, and commissions, to satisfy up to 10 percent of the minimum salary requirement for the administrative, professional, and executive exemptions, as long as these forms of compensation are paid at least quarterly.
- Automatic updates. Every three years, the DOL will adjust the minimum salary requirement, meaning you will need to review and adjust (if necessary) exempt employees’ salaries every three years as well.
Don’t wait until December; take steps NOW to prepare for the rule changes:
- Ensure that your “exempt” employees are actually exempt. It takes more than the proper salary for an employee to be exempt. Call me for help with reviewing the primary duties your exempt employees actually perform to ensure they meet the DOL’s criteria for administrative, professional, and executive exemptions.
- Compare the costs. If your exempt employees’ salaries fall below the new minimum, you will generally have to either: 1) raise their salaries to the new requirement; or 2) reclassify the affected employees as non-exempt and start following the overtime rules whenever they work more than 40 hours in a workweek. Review exempt employees’ salaries and their typical number of hours worked to determine which option is more cost-effective for your business.
- Review your timekeeping policies. Get from me written policies and procedures for your business to ensure all non-exempt employees are accurately recording all time worked. I can provide training for employees on proper timekeeping practices and otherwise complying the compensation laws.
The new overtime rule is causing employers to rethink employee compensation, but I fear that one pitfall is being overlooked – an employer who pays a woman less than a man for performing the substantially the same duties could be violating the Equal Pay Act of 1963.
Employers who can’t pay their salaried employees at or above the new white-collar exemption threshold of $47,476 may be forced to pay those same employees on an hourly basis and time and a half for all hours worked over 40 in any one workweek. Overtime scares employers because it is difficult to budget for and requires higher costs for each hour of productivity after the employee has worked 40 hours that week.
So in trying to juggle the new law and payroll costs, employers are reducing pay, overtime opportunities and benefits. That may be good business, but if the impact hits female employees more than male employees, we could see an increase in Equal Pay Act cases.
The Equal Pay Act requires that female employees be paid the same as their male counterparts with substantially similar job duties. “All forms of pay are covered by this law, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits,” the Equal Employment Opportunity Commission points out.
If a woman files a lawsuit against a company for paying her less than a man performing the same work, the employer must show that the male employee’s higher pay is based on a seniority system, a merit system, a productivity system or another factor other than gender. That sounds easier than it is. Continue reading Overtime Salary Adjustments Could Violate Equal Pay Act
The new overtime regulations are causing employers to take a closer look at the executive, administrative and professional exemptions from overtime, but did you know that there are a number of strange exemptions that allow you to pay specific employees on a salary and not worry about overtime pay?
These obscure exemptions may have more to do with the strength of certain industry lobbyists back in the 1940’s when the Fair Labor Standards Act (“FLSA”) was passed than they do with any logical reason for exempting these employees. But they are still on the books and may allow a few employers to avoid the rush to reclassify salaried employees by December 1, 2016, when the new overtime rules take effect.
Employees of certain seasonal amusement parks or recreational venues, for example, don’t have to be paid overtime or minimum wage. To qualify, the amusement park generally can’t be in business any longer than seven months of the year, or if it is, be affected so that at least six months of the year, its receipts are cut to 2/3s of the receipts in the six good months. All of the amusement park’s employees are exempt, not just the ride operators and the food concessionaires, but also the accounting, human resources and management personnel, but only as long as they work in the park and not in a corporate office that runs several seasonal parks. How is that for an arcane exemption that won’t help 99% of employers, but could be very important if you own Wonderland Park or a miniature golf course?
Similarly, there are overtime (but not minimum wage) exemptions from the FLSA for these employees: Continue reading Strange Exemptions to the Overtime Law
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.