Category Archives: Compensation

Texas Employers Need Snow Day Policy

Attendence, Compensation, Forms and Policies, Personnel Policies, , , , ,

Texas employers should have a policy to give employees advance warning of what to expect on a snow day, particularly in the Texas Panhandle, where we often have a couple of inclement weather days per year.

The easiest way to determine whether to keep your facility open or not is to follow your local school district’s decisions and let your staff find out through the media. That relieves you of having to communicate the decision to every employee. It is also helpful to your employees to be able to stay home with school-aged children who have no other place to go that day.

Texas and federal law do not specifically dictate when an employer must be open or closed during inclement weather, but they do dictate how compensation must be determined during those times.

Hourly employees do not have to be paid when they perform no work. Exempt employees, however, have to be paid their normal salaries when your facility is closed for weather reasons. On days when the company is open, but a salaried employee chooses not to travel because of road conditions near their house and therefore performs no work all day long, the exempt employee can be docked for that day or be required to use available paid time off.

The other pitfall with inclement weather days occurs when employees work at home on a snow day. If you give your employees the ability to remotely access their computers, if you allow them to take work home, or if you expect them to check emails and return phone calls on a snow day, you will need to pay them for those work hours (non-exempt employees) or that whole day (exempt employees).

I suggest that every employer adopt some kind of inclement weather policy similar to this one: Continue reading Texas Employers Need Snow Day Policy →

A Texas Employer’s New Year’s Resolutions 2016

Compensation, Discrimination, Employee Rights, Forms and Policies, New Year's Resolutions, Personnel Policies, , , , , , ,

The quiet week between Christmas and New Year’s is the perfect time for you as an employer to consider some resolutions for 2016. What can you do differently in 2016 to be a better employer and to avoid stepping on any legal landmines?

From 28 years of experience advising employers like you on employment law issues, here are my suggestions for 2016 resolutions with links to more information from previous posts on this website about these topics:

  • Resolve that you will make a decision about whether your employees and/or customers can openly carry handguns on your business premises. The open carry law goes into effect on January 1 and allows those who are licensed to carry concealed handguns to start carrying them openly in shoulder or hip holsters. You have the right as an employer to prohibit guns completely on your premises by both customers and employees, to just prohibit employees from carrying guns, to prohibit open carry but allow concealed carry, or to allow everyone to freely carry handguns on your premises. If you choose to ban either open or concealed carry by customers, you will have to post the §30.06 (concealed carry) and/or §30.07 (open carry) signs with the proper wording and font size required by the Texas Penal Code. To just prohibit employees from coming to work armed, you only need to add a policy to your employee policy manual. For more information about Texas gun laws in the workplace, click here.
  • Resolve that you will get ready for big changes in the overtime laws. If you have an employee to whom you pay an annual salary of less than $50,440, in mid-2016 you are going to have to move that employee’s compensation to an hourly rate and pay that employee overtime if he/she works more than 40 hours in any one workweek. Click here for more information about that change to the Fair Labor Standards Act regulations.
  • Resolve that you will stop using any kind of “contract labor”. The landscape has just gotten too rocky to use any worker whom you do not treat as an employee. Just give up on the idea that you can save the taxes or avoid the pains of having employees. The government is really cracking down on misclassification of workers as contract labor, day workers or independent contractors. That means that in 2016, you need to pay taxes on every worker, you need to provide every full-time worker with benefits, and you need to accept that you will have liability if that worker hurts or mistreats someone. Click here for more information about the dangers of misclassifying a worker as contract labor. If you think you are the exception to this rule, don’t proceed without a knowledgeable attorney’s legal opinion.
  • Resolve that you will update your employment policy manual. The requirements for written policies changed dramatically in 2015 due to the changes required by the Equal Employment Opportunity Commission, the National Labor Relations Board and the Department of Labor. Your policy manual is out of date unless your employment attorney has made significant revisions in the last six months. Click here for more information about some of the changes that are now required.
  • Resolve that you will learn and apply the new rules regarding pregnant employees. Take your maternity policy out of your handbook (because it will be considered discriminatory) and add instead a policy that allows pregnancy and maternity leave that is identical to what you allow when someone has a disability or serious illness. That means that you can’t set a standard 6-week maternity leave, but may have to be more flexible with each pregnant worker’s individual needs like the Americans with Disabilities Act requires with handicapped employees. Click here for more information about how to update your procedures regarding pregnant employees to comply with the new regulations.

 

 

 

Holiday Gifts and Bonuses Can Trip Up Employers

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Employers are generous but sometimes uninformed in December, handing out holiday gifts and bonuses without realizing the legal consequences. As an employer, you have to consider the tax and compensation consequences of your gifts. Bah Humbug!

The Fair Labor Standards Act divides bonuses into two categories: discretionary and non-discretionary. Discretionary bonuses must be decided in the employer’s sole discretion. They cannot be earned by any formula or used as a motivator or incentive. If they are truly discretionary (which is up to the employer to prove), cash bonuses do not have to be rolled into an hourly employee’s regular rate of pay on which overtime is calculated.

Holiday bonuses may be discretionary if they just fall like manna from heaven onto the employee without the employee knowingly working towards the bonus.   Generally, the amounts, timing and basis for the discretionary bonus should not be announced in advance to avoid the appearance of being an incentive.

If the holiday bonus is earned by the employee by meeting certain announced criteria, Continue reading Holiday Gifts and Bonuses Can Trip Up Employers →

Employers Face “Joint Employer” Liability with Unrelated Companies

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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 →

DOL Cracks Down on Using Contract Labor

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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 →

Salary Basis for FLSA Exemptions Raised Dramatically

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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 →

The DOL’s Database of Investigations on Compensation

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In a recently posted database, the federal Department of Labor (“DOL”) has allowed the public to see the companies who have been investigated for various violations of the laws the DOL enforces, including overtime violations, minimum wage violations and independent contractor violations.

I quickly scanned the records just for 2014-2015. During that time, more than 35 Amarillo businesses were investigated. Some employed just three or four people. Others employed more than 100. But there are some visible trends in the local DOL investigators’ handiwork.

Local preschools were put under the microscope because they often pay their teachers on salary rather than hourly, resulting in frequent Fair Labor Standards Act violations. Amarillo and Canyon hotels are a favorite target, often because they pay housekeeping personnel by the room, rather than by the hour. Amarillo restaurants were repeated targets because of common violations of the tip wage credit, which allows restaurants to include tips in the calculation of whether their employees are making minimum wage or because the restaurant paid employees on salary. Local construction companies, heating and air companies and plumbers showed up on the investigation list probably because their blue-collar workers were not paid overtime correctly, weren’t paid for their travel time, or were put on salary as supervisors when they regularly  performed labor that should have been paid hourly.

Other industries that were affected by the DOL’s local efforts in the last year included home healthcare, landscaping, retail, trucking, medical, automobile service and online companies.

What can you do in your business to assure that you are paying your employees correctly? This is a very complicated area of the law, but here are some quick generalities: Continue reading The DOL’s Database of Investigations on Compensation →

Paying Employees for After Hours Work

Compensation, Personnel Policies, , , ,

In the last three or four years, there have been several cases filed against employers by nonexempt (hourly) employees who claimed they worked more hours than they were paid for because they checked their work email accounts at home in the evening or they remotely accessed their work files and sent a document to a client or answered a supervisor’s questions after hours. Technology has made this type of work easy and acceptable, but it also has made us as employers sloppy about our pay practices.

Applying the Fair Labor Standards Act, which regulates overtime and minimum wages, has never been easy, but when an employee showed up at the office, punched a time clock at the beginning of the work day and again at the end, paying that employee correctly was simpler.  Nowadays, smartphones, flash drives, remote log-ins, texts, etc., have added a new layer of compliance issues to the FLSA. And attorneys who represent employees in wage and hour lawsuits are taking advantage of the complexity by bringing collective (class) actions against employers for failing to capture and compensate for the time employees spend using all of that technology outside of the office. These cases are very expensive because they court will always award the employee(s) two times their damages plus attorneys’ fees that often greatly exceed the damages.

Don’t stick your head in the sand on this issue and just hope you never get sued. At a minimum, you need a policy in writing addressing these issues. Tell your nonexempt employees that you never want them working “off the clock” and that you will pay them for any after hours work they perform. Let your employees know whether this kind of out of the office work is acceptable, or if not, be prepared to discipline your employees for performing it (but still pay them for it).

Employers Vulnerable to Overtime Claims

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As it routinely does, the United States Department of Labor recently released to the media a report of another Texas employer who had to pay back wages to current and former employees for overtime violations. This time the company was Porter Ready Mix Inc., in Porter, Texas and the amount was $173,863. But it could have been almost any employer because the overtime laws are very difficult to understand and follow. The DOL gets more than 26,000 complaints a year and collected $224 million in back wages in fiscal year 2011. Some of its favorite targets are restaurants, construction companies, agriculture, hotels, healthcare providers, landscapers, preschools and other industries that pay lower wages, but no employer is immune. Porter Ready Mix’s mistake? It paid gravel truck drivers by the trip instead of by the hour.

If you as an employer are paying any employee in any manner other than by the hour and paying time and one-half for all hours over 40 worked in one week, you too could be facing a Department of Labor investigation soon. Paying employees by the day, by the trip, by travel time, by commission, by tips, by bonus, by incentive, even by weekly salary can put you in the hot seat. Salaried employees must fall into one of four or five narrow categories to be exempt from overtime. Many employers put employees on salary or another pay scheme without doing any analysis of whether failing to pay overtime is legal based on that particular employee’s job duties.

Don’t rely on your instinct, your competitors, your experience, your employee’s desires or any other resource other than the Fair Labor Standards Act when you set compensation for a new employee or when you are reviewing your current staff compensation. Do your research before you pay any employee on any basis other than hourly plus overtime.

DOL Encourages Employees To Track Their Hours

Attendence, Compensation

The United States Department of Labor, long an agency that advocates for employees to the chagrin of employers, continued that trend by just releasing its first free application for smart phones to help employees in claims against their employers.

The app, for iPhone, allows employees to track work hours, overtime and breaks, all in an effort to discredit the records kept by the employer in any kind of wage and hour dispute. In times past, the employer kept the time clock or time sheets and paid accordingly. Employees can now easily record what they believe their working hours were and sue for more compensation, including overtime.

The app allows employees to send a copy of their time sheets via email to their own private email accounts, so that they can easily keep a paper trail with which to confront their employers. The app also includes summaries of the wage and hour laws and contact information for the DOL for employees to report violations. Continue reading DOL Encourages Employees To Track Their Hours →