Fifteen questions; fifteen minutes to better compliance.
Check your understanding of employment laws and ways Nextep can help keep your company out of hot water.
1) If federal and state minimum wages are different, which one do I pay my employee?
d. Whichever one benefits the employee most. In cases where federal minimum wage of $7.25 and the state minimum wage differ, the employee must be paid the one that benefits them the most; the higher one.
When Wage and Hour Division investigators encounter violations, they recommend changes in employment practices to bring the employer into compliance, and they request the payment of any back wages due to employees. Willful violators may be prosecuted criminally and fined up to $10,000. A second conviction may result in imprisonment. Employers who willfully or repeatedly violate the minimum wage or overtime pay requirements are subject to civil money penalties of up to $1,100 per violation.
Nextep stays up to date with state laws and can advise your company not only on min wage, but also other areas where state law may differ from federal law, such as final paychecks, PTO payouts, breaks, leaves of absence, and tax rates.
2) Can you start a new worker off as a 1099 contractor until you decide if it will work out?
b. No. If the person is working under company supervision, using company equipment, on company-directed time, and doing similar work to other company employees, then he or she must be classified as an employee. This is currently a huge red flag for the Department of Labor and IRS in their "Misclassification Initiative," so it is vital for an employee to be classified correctly.
If you misclassify an employee as an independent contractor, you may be held liable for employment taxes for that worker, plus any missed benefits, workers' compensation, or unemployment benefits.See Internal Revenue Code section 3509 for more information.
Nextep often assists in auditing specific jobs to determine if they are contractors or employees. Many times we have found that the person is in fact an employee, and in turn helped our client achieve compliance in an area that has been receiving more intense scrutiny.
3) My employee has temporary custody of her grandchild, who is seriously ill. Is she eligible for time off under FMLA?
a. Yes, if the employee and company meet the other provisions of the Family Medical Leave Act (FMLA). Recognizing that there are many forms of non-traditional parenting, the DOL has defined a “parent” for purposes of FMLA as of June 2010 to be “an employee who actually has day to day responsibility for caring for a child…even if the employee does not have a biological or legal relationship to that child.”
FMLA requires companies with 50 or more employees in a 75 mile radius to allow up to 12 weeks of job-protected leave to care for their own or family member's serious health condition (or up to 26 weeks to care for an injured service member). Not all companies are suject to the FMLA regulations.
Nextep has comprehensive policies for both FMLA and non-FMLA qualifying companies and regularly assists on case-by-case questions.
4) Do exempt level supervisors and managers spend 50% or more of their time doing the same or similar work that their nonexempt subordinates do?
b. Companies need to be careful about “working managers” to ensure that they truly are exempt. If the employee is spending large amounts of time doing the same or similar type of work as their non-exempt subordinates, then they must also be eligible for overtime. Several companies have been faced with Federal Labor and Standards Act (FLSA) class action claims from managers and supervisors for improper compensation and even being pressured to work “off the clock.”
Misclassifying employees as exempt will vary in penalties depending on the extent and egregiousness of the infraction. The Department of Labor recently assessed over $900,000 in fines to a company for misclassifying approximately 400 workers as exempt, for example.
Nextep looks for red flags that could mean improper classification, such as all employees being paid by salary. We can also audit job descriptions or do case by case consultation to correctly determine if a position should be exempt or nonexempt from overtime pay.
5) Do any nonexempt employees have company phones?
b. They shouldn’t. Checking a phone for emails or taking a quick evening call, even for five minutes, is compensable time. Those nonexempt employees would need to clock in and out each time they check their company phones, which can easily lead to unauthorized overtime, or claims of unpaid wages. It is best to not give company phones to nonexempt employees. A recent court case has shown that even having an ironclad signed policy against phone use on off hours is not enough; in one case a boss sent an email at 10 pm, which the court translated as a call to work since it was provided to the employee to read on non-standard work time.
Nextep can draft a custom policy and do case by case advisement on questions such as these.
6) Is an employer obligated to allow an employee, who is a recovering alcoholic, unpaid time off from work to attend aa meetings?
c. It depends on the employee’s job description. Recovered alcoholics and their efforts to maintain recovery are protected under the Americans with Disabilities Act Amendment Act (ADAAA). At that point, it would be up to the company to determine if one or two hours off per week would severely keep him or her from performing the essential job duties. It is important to not take this too literally and turn everything into an essential duty, making it impossible to request accommodations, another possible violation of ADAAA. Also, without written job descriptions, you would be very hard-pressed to deny a request since you had not previously laid out what the essential duties are.
Even with ADAAA protection, the employee should still make every effort to be at work if meetings are available after hours.
Remedies for ADAAA violations may include back pay, attorney fees, plus punitive damages up to $50,000 if the company has under 100 employees, or $100,000 if the company has under 200 employees.
Nextep provides case by case consultation from a certified HR expert regarding specific accommodation requests. We also assist our clients in creating job descriptions so that essential job duties are clearly and lawfully identified.
7) For I-9 purposes, is it okay for an employee in a different location to just make copies of identification documents and send it to me rather than presenting documents in person?
b. No. In order to establish eligibility to work in the US, original documents must be submitted and reviewed by the company or authorized representative in person. We are seeing more and more fines for improper I-9 procedures, such as Abercrombie & Fitch’s recent fine by ICE of over $1 million.
Penalties for knowingly not complying with I-9 regulations range from $375 to $16,000 per violation, with repeat offenders receiving penalties at the higher end. Penalties for other violations, which includes failing to produce a Form I-9, range from $110 to $1,100 per violation. In determining penalty amounts, ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations.
Nextep’s Payroll Account Managers inspect every I-9 for accuracy and advise clients on suggested corrections.
8) Do I ever give employee comp time (extra PTO) in lieu of pay for overtime hours worked?
b. You shouldn’t. Comp time is only to be used by certain state and government employees and not in the private sector. Overtime must be paid for nonexempt employees who work over 40 hours in a week and cannot be carried over in any form. Not paying an employee his or her overtime can lead to a wage claim as well as fines from the Department of Labor’s Wage and Hour division.
In the course of business, Nextep often finds our clients making honest misunderstandings of employment law, this one in particular is very common. Nextep stays abreast of Wage and Hour laws to ensure that common mistakes such as this can be corrected.
9) Do I store an employee’s medical information (including benefit enrollment forms), I-9 forms, and performance reviews in the same personnel file?
b. You shouldn’t. Documents containing personal health information as well as I-9s should each be kept in separate files. One reason: if a government agency audits your I-9 forms, you want them to just have access to the I-9 forms and not any other documents. Another reason: releasing health information to people who do not have a need to know violates HIPAA.
Nextep has developed a quick guide that employers can use to lawfully maintain their personnel files.
10) If an employee violates company policy and works through lunch, do I still have to pay him or her?
a. Yes. This is a discipline problem; not a payroll problem. If the employee works overtime, you have to pay it in a timely manner. Period. In this situation, you should pay the employee, but also give them a strongly worded written warning that expressly forbids them from working unauthorized overtime again, the consequences of which include discipline up to and including termination.
Nextep often writes strongly worded handbook policies outlawing unauthorized overtime. Our certified HR experts also perform case by case advisement on discipline issues such as this.
11) Do I perform pre-employment screening on potential new hires? Does it include a credit check?
c. You should perform background checks prior to hiring any employee, but use credit checks very sparingly. If an employee turns out to be dangerous and the courts think the company could have easily known of that before endangering other employees, the company could be found guilty of negligent hiring. Background checks are inexpensive and can save your company from situations or lawsuits later. However, credit checks are coming more and more under fire, with some states outright banning credit checks in the pre-employment screening process. Unless the employee will be playing a very significant role in the company’s finances (such as CFO), you should not perform a credit check.
Nextep offers reliable and affordable background screening services. In addition, we advise our clients on how to interpret the results and whether we would recommend for or against hiring.
12) Is English-language safety training sufficient under OSHA guidelines, even if I have employees whose native language is different?
b. No. Employers are obligated to provide safety training in a manner that is understandable to employees. If an employee has limited English speaking ability then the employer must provide the training in a language that the employee can understand.
Nextep offers a variety of online safety courses in multiple languages.
13) I believe I can terminate an employee at any time for any reason because we are an “at-will” state.
(any answer will work) Yes, BUT it won’t keep you from being sued. We often think of “at will” as “get sued quicker” because it gives employers a false sense of security. Managers making termination decisions must understand that the "at will" provision can be inapplicable if an employee is discharged for reasons protected by law, such as age, gender, health, religion, pregnancy, or written or implied contract. Such an implication could result in unemployment expenses, an EEOC claim, or possibly a wrongful termination lawsuit. All terminations should be handled legally and ethically with consideration given to any perceived discrimination.
Nextep urges our clients to contact our HR Department before terminating any employee for cause to identify and mitigate risks.
14) Under the regulations set forth in PPACA, the employer paid portion of benefits must be stated on the W-2, starting with 2010 W-2 for tax year 2009.
b. False. It was originally slated to start with W-2s for tax year 2009, but has been pushed back to allow employers to better prepare for the extra administrative burden this causes.
The Patient Protection and Affordable Care Act (PPACA), also known as healthcare Reform, is a huge focus among employers right now. Nextep watches each change closely and ensures that we handle the overwhelming administration and compliance for our clients. We send Compliance Updates to our clients, letting them know of what actions they need to take.
15) Can I fire an employee for writing disparaging remarks about me or my company on Facebook?
c. It depends. While disparaging remarks about a supervisor would usually be seen as insubordination, the National Labor Relations Board (NLRB) is increasingly coming to the defense of employees who criticize their supervisors or workplaces on Facebook or in other mediums, claiming that this is protected, concerted activity, similar to the NLRB protection employees are afforded in discussing their pay rates (another practice which has often been mistakenly outlawed in handbooks). The key factor in whether employees win or lose these cases is if the remark voices real concerns about workplace conditions. Further, this scrutiny is placed on companies whether they are unionized or not.
Nextep has developed a carefully worded technology/blogging policy that is legally enforceable, and will continue to monitor this case carefully. We also discuss effective progressive discipline with our clients, offering both company-wide policies as well as case by case troubleshooting.
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3550 West Robinson, Suite 300
Norman, Oklahoma 73072
Toll Free Phone: 888.811.5150
Email: info@nextep.com
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Fifteen questions; fifteen minutes to better compliance.