Monthly Archives: August 2008

Employees Required to Prevent ID Theft

Personnel Policies, Training

A CVS pharmacy employee threw prescription forms in the dumpster behind the store in Houston. A Radio Shack worker in Corpus Christi dumped customer credit applications. EZPAWNS employees throughout Texas threw away customers’ bank statements. And the Levelland police found more than 4000 customer records in the garbage containers behind Select Physical Therapy. These were not isolated incidents, because according to the Federal Trade Commission, Texas ranks fourth in the nation in identity theft.

The Texas Attorney General, Greg Abbott, was not pleased by these incidents and has started prosecuting these businesses and others under Texas’ new Identity Theft Enforcement Act and other recently-enacted laws to protect people from identity theft. Businesses like yours can be fined between $500 and $50,000 for improperly disposing or disclosing sensitive customer information, such as

  • Credit and debit card numbers
  • Social Security numbers
  • Bank account information
  • Mother’s maiden name or other personal identifying information
  • Tax forms
  • Passwords
  • Dates of Birth
  • Account numbers

These types of information often appear on receipts, applications, bank statements, checks, personnel files, medical forms, and in discarded computers.

What should you do to protect your business from identity theft exposure? As I often say in this blog and in my training presentations to businesses throughout the Panhandle of Texas, as with most legal problems in your business, you have to take four steps to avoid litigation and prosecution for identity theft exposure: Continue reading Employees Required to Prevent ID Theft →

Common Overtime Mistakes

Compensation

Note: This article appeared first in the Amarillo Sunday Globe-News on August 24, 2008.

One of the trickiest areas of employment law that every employer has to learn to handle well is the overtime law.

The Fair Labor Standards Act is not at all intuitive, so if you don’t know the specifics of it, you need to educate yourself quickly.

Why bother learning the overtime law? Because overtime violations are one of the most common bases for employee lawsuits against companies right here in the Panhandle.

These cases are never limited to just one employee seeking a little back pay. They are routinely turned in class actions seeking two times the alleged overtime compensation due to each employee for up to three years past and, of course, the employees’ attorney’s exorbitant fees.

To explain all of the Fair Labor Standards Act requirements, I would have to write a book, not a newspaper column. But here a few danger areas that you should know about: Continue reading Common Overtime Mistakes →

Employee Acknowledgment Form

Forms and Policies, Personnel Policies

If you haven’t discovered the Texas Workforce Commission’s book Especially for Texas Employers, you are missing out on an invaluable and free resource to help you avoid costly legal mistakes in managing your employees. You can get a hard copy of the book at Panhandle Workforce Solutions at 1206 W. 7th Street in Amarillo. There are also offices in Borger, Childress, Dalhart, Dumas, Hereford, Pampa and Tulia.

You can also access this book with all of its wonderful forms online by clicking here. It includes lots of solid advice for employers and suggested personnel policies and forms.

One example of a good form available in Especially for Texas Employers is an acknowledgment of receipt of the employee policies.

Continue reading Employee Acknowledgment Form →

E-mail Dangers

Personnel Policies

Just because e-mail is the most common method of communicating in the business world these days does not mean that it is a benign form of communication. E-mail is frequently used by employees to harass, slander, stalk, insult, and discriminate against coworkers. If you tolerate the use of your company e-mail systems to send pornographic, hostile, crude or offensive jokes, slurs, pictures, stories, language or documents, the company is probably responsible and you are setting yourself up for a lawsuit.

If you haven’t taken steps to protect your company from these liabilities, this problem won’t go away, so don’t stick your head in the sand. Get busy implementing a policy and training that will let your employees know that your workplace information systems are not the appropriate place for unprofessional and libelous statements.

As with most workplace problems, there are 4 steps you need to take: Continue reading E-mail Dangers →

Cell Phone Policy

Forms and Policies, Personnel Policies

I love my smartphone, which acts as my phone, my calendar, my to do list, my address book, my e-mail server, etc. My clients know that my cell phone is always on and that they can call me anytime of the day or night. I took client calls while on the Washington, D.C. metro system this summer and I returned calls on our last camping trip to New Mexico. For me, a cell phone is an essential tool to serve my clients, who are my bosses.

But for some employees, a personal cell phone may get in the way of doing a good job. For many health care, manufacturing, service and retail workers who don’t need to constantly talk to clients on the phone, or who need to deal with the public in person, a cell phone can be very distracting.

Many employers have started to create written policies to deal with all the issues that arise with cell phones in the workplace, such as the privacy issues that occur with cell phone cameras and recorders.  If you as an employer want to address the use of cell phones at your business, here are some items you may want to include in your policy: Continue reading Cell Phone Policy →

The Myth of Contract Labor

Compensation,

My clients sometimes fall for the myth of “contract labor”, which is about as real as Bigfoot and the Loch Ness monster. The Texas Workforce Commission’s mythbusters explain it this way:

“Contract labor” may be the most widely used misnomer in business today. The issue is really whether a given worker is an employee or an independent contractor. In basic terms, an employee is someone over whose work an employer exercises direction or control and for whom there is extensive wage reporting and tax responsibility. An independent contractor is self-employed, bears responsibility for his or her own taxes and expenses, and is not subject to an employer’s direction and control. The distinction depends upon much more than what the parties call themselves. . . . It is important to note that it does not matter that one or both parties may call their arrangement “contract labor”.

I can’t tell you how many employers I know who still try to claim that an employee is “contract labor”, a “subcontractor” or an “independent contractor”. The IRS and the TWC will very likely see your situation differently . . . even if the employee has signed a contract labor agreement . . . even if your employee agrees to this arrangement . . . even if you’ve always done it this way . . . even if your employee doesn’t work full-time . . . etc.

While there is no easy test, let’s just put it this way: The person performing work for you is your employee. Unless the worker advertises his services in the phone book, works by the job and has lots of other clients besides you, the government is probably going make a finding that he is your employee.

If you really, strongly, firmly believe that your situation is unique and you really do use independent contractors instead of employees, talk to your employment lawyer before deciding that you can get away with not following the tax and employment laws as to any particular worker. Otherwise, get ready for a TWC payroll tax audit, a Department of Labor overtime investigation or an IRS audit. Or maybe all three.

Checking An Applicant’s Past Employers

Hiring

One of the crucial parts of hiring a new employee is calling each past employer that the applicant discloses to find out what kind of employee the applicant has been during his career. It is true that some former employers won’t give out specific information about past employees, mainly because their employment attorneys have advised them to keep quiet. Even if the former employer won’t talk, you still need to document that you made the attempt to investigate to avoid any kind of negligent hiring claim.

However, in many small towns, like those in the Texas Panhandle, you can get a former employer to talk, mainly because you probably attend Rotary with, go to church with, or coach t-ball with the former employer. But even if you know you can find out something about the applicant, what do you want to know? Here are suggested questions to ask about an applicant: Continue reading Checking An Applicant’s Past Employers →

Policy Manual Promises can be Exploited

Personnel Policies

Does your company have an employee policy manual that you borrowed from another company, found on the internet, or wrote yourself? A recent federal appeals court opinion is a cautionary tale for those companies that have not had an employment law expert draft or review their employee manual.

The 7th U.S. Circuit Court of Appeals held recently that an employee who wasn’t covered by the Family and Medical Leave Act (“FMLA”) could assert a claim to enforce the promises that his company employee handbook made, regardless of whether the FMLA actually applied to him. The company published an inadequately worded FMLA policy to all of its employees. That mistake cost the company. The court said that the company has to live up to whatever was written in its employee manual, even though the company was not actually required by law to provide FMLA to this particular employee. Peters. v. Gilead Sciences, Inc. (7th Cir. July 14, 2008).

What should you take away from this case? The direct answer is that if you are a small employer (less than 50 employees), don’t promise family and medical leave to your employees in your handbook, because your business is excluded by law from having to provide FMLA.

Similarly, if you employ less than 15 workers, don’t promise equal employment opportunity in your workplace. You can still practice equal employment, but don’t promise it in your written policies because you are small enough to fly under the regulatory radar and avoid expensive discrimination litigation.

The larger lesson is that what you say in your employee policies can protect you if you are careful about drafting and enforcing your policies. But carelessly worded policies can be used against you by a disgruntled employee and his/her attorney, so make sure a professional who knows the law of your state and knows something about your company has reviewed any employee policy you adopt.

Layoffs Can Lead to Lawsuits

Discrimination, Termination

The Department of Labor released new unemployment figures today. Nationwide, the unemployment rate is 5.7%. That is the highest it has been in 4 years. The DOL found that the manufacturing, construction and retail industries were seeing lots of layoffs, while education and health care are still growth industries.

In the Panhandle of Texas, the unemployment rate is not nearly as high. The last figures I found are for June 2008, and show that the unemployment rate is only 3.7% here. But that doesn’t mean that every industry is solid in our area. Several of my clients have recently laid off a few employees because of increasing expenses, mainly for transportation.

If you have to lay off employees, it is important to know how to do so without discriminating against any of the employees who lose their jobs. Just because you have an economic reason for your actions doesn’t mean that your business is immune from facing a lawsuit by one or more of the employees you laid off. In fact, in hard times, an employee who has been laid off may have difficulty getting reemployed and then decide he/she has little to lose by suing you. So here are some tips to protect your business during a layoff: Continue reading Layoffs Can Lead to Lawsuits →