I often use this column space to try to update you on one area of employment law in which a new development has occurred. But employment law is changing so rapidly that rather than explaining any of the latest changes in detail, I just want to alert you this month to several important changes.
As a business owner or supervisor of employees, you need to seek specific advice, information and/or training on any of these recent employment law developments that affect your workplace.
- If you have at least 50 names on your payroll (including part-time and most temporary employees), you know you are subject to the requirements of the Family and Medical Leave Act, which requires you to offer 12 weeks of unpaid leave to employees with serious health conditions, family health problems, or the birth or adoption of a child. On January 28, 2008, President Bush signed into law an expansion of the FMLA that is designed to benefit military families. Effective immediately, employers must provide 12 weeks of unpaid leave to the spouses, children, parents and “next of kin” of military personnel (soldiers, reservists or National Guard) if the military member has a “qualifying exigency”, such as being called to active duty or sent overseas. The FMLA amendments also grant 26 weeks of unpaid leave to employees to provide care to family members who are wounded military personnel. Your obligations as an employer include notifying employees of the changes (through a revised poster and policy) and granting the leave when the employee indicates that he or she qualifies.
- I’ve mentioned this before, but all employers must be using the newly-revised I-9 form to verify the eligibility of employees to legally work in the United States. The form itself is available for free from the U.S. Citizenship and Immigration Services at https://www.uscis.gov/files/form/i-9.pdf. The requirement to start using the form for all new hires began in December 2007, but I have seen many employers since then still using the old form. Throw out your old copies and begin completing the new one within three days of hiring any employee from this point forward.
- Just a reminder that you must comply with laws about employee compensation (don’t pay them cash under the table), keep accurate records (don’t keep a second set of books) and pay your payroll taxes correctly (don’t report that you have no employees or use “contract labor” in an effort to avoid payroll taxes). A Lubbock businessman, Mike Hogan, Jr., recently pled guilty in federal court to interfering with the tax laws by violating all those requirements. He faces 3 years in federal prison and a $250,000 fine for falsely claiming he had paid no wages since 1999, even though he owned and operated Lubbock Mattress Sale, Discount Furniture Outlet, and Smoker’s Outlet in Lubbock and a Phillips 66 restaurant in Slaton through 2006. It is important for you as an employer to understand that since the Enron debacle, governmental agencies are increasingly enforcing employment regulations through criminal prosecution. Many of your questionable actions as an employer can result in criminal liability, whether it is lying to an OSHA inspector, failing to keep accurate records of ERISA benefits such as health insurance, falsifying documents pertaining to workers’ compensation or unemployment, electronically monitoring employees’ communications without consent, obtaining an employee’s credit report under false pretenses or hiring illegal aliens. If you want to avoid spending time in prison, don’t try to find a “loophole” around your tax and regulatory obligations.
- Finally, I can report one positive development for businesses. The Fifth Circuit Appeals Court, the federal appeals court that has jurisdiction over Texas, decided a case in November for an employer who sued its employees, not the other way around, as we usually encounter. The company sued two managers for disloyalty by breaching contracts and misappropriating trade secrets. The employer was awarded nearly $2 million plus punitive damages and attorneys’ fees. Although it is exciting to see that the Fifth Circuit upheld this large award, it is more prudent to try to stop this kind of employee disloyalty before it starts. As a business owner, you can use confidentiality, nondisclosure and noncompete agreements to try to protect the business. Even more effective is adopting practices to carefully protect any information that you deem proprietary, whether through elaborate passwords, locked file cabinets or very limited distribution.