The same laws that prohibit gender discrimination prohibit sexual harassment. Title VII of the Civil Rights Act is the main federal law that prohibits sexual harassment. (For more information on Title VII, see Nolo's article Federal Antidiscrimination Laws.) In addition, each state has its own anti-sexual harassment law.
This article explains what sexual harassment is and provides some prevention strategies.
Sexual harassment is any unwelcome sexual advance or conduct on the job that creates an intimidating, hostile, or offensive working environment. Any conduct of a sexual nature that makes an employee uncomfortable has the potential to be sexual harassment.
Given this broad definition, it is not surprising that sexual harassment comes in many forms. The following are all examples of sexual harassment:
The harasser can be the victim's supervisor, manager, or coworker. An employer may even be liable for harassment by a nonemployee (such as a vendor or customer), depending on the circumstances.
Sexual harassment is a gender-neutral offense, at least in theory: Men can sexually harass women, and women can sexually harass men. However, statistics show that the overwhelming majority of sexual harassment claims and charges are brought by women claiming that they were sexually harassed by men.
People of the same sex can also sexually harass each other, as long as the harassment is based on sex rather than sexual orientation, which is not a protected characteristic under Title VII. For example, if a man's coworkers constantly bombard him with sexually explicit photos of women, and this makes him uncomfortable, he might have a sexual harassment claim. If, however, a man's coworkers tease and belittle him because he is gay, that might not be illegal harassment under federal law as it is currently interpreted. However, such conduct may be illegal under laws enacted by certain states, or even cities. (Of course, even if this type of behavior isn't illegal, it also isn't appropriate, and savvy employers will put a stop to it promptly so everyone can get back to work.)
The line between harassment based on sex and harassment based on sexual orientation becomes blurred when gender-based stereotypes are at play. For example, courts have held that Title VII is violated when a woman is harassed and discriminated against because she does not act sufficiently feminine; similarly, a man who is harassed for having effeminate mannerisms and gestures is protected by Title VII. These same employees might not be protected if their harassers relied more explicitly on homophobic slurs and remarks. Again, however, smart employers won't parse the legal details: This type of behavior detracts from productivity and morale and doesn't serve any valid purpose, so there's no reason to allow it to continue.
There are a number of steps that you can take to reduce the risk of sexual harassment occurring in your workplace. Although you may not be able to take all of the steps listed below, you should take as many of them as you can.
Some states require certain employers to conduct sexual harassment training. For example, California law requires employers that have at least 50 employees to provide supervisors with two hours of interactive sexual harassment training every two years. Connecticut and Maine also require sexual harassment training. And other states strongly encourage employers to provide such training, even if it isn't legally required. Even if your state doesn't require or suggest training, it's still a good idea -- your managers will know what the law is and what to do when employees complain, and, if you find yourself in a lawsuit, you'll be able to show that you took steps to try to prevent harassment.
The minimum wage in Connecticut is $15.69 per hour in 2024.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act (FLSA). Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
The FLSA allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns adds up to at least the full minimum wage for each hour worked. If not, the employer has to make up the difference.
Connecticut allows employers in the hotel and restaurant industries to take a tip credit for certain employees. Employers must pay at least $6.38 per hour to wait staff and $8.23 per hour to bartenders.
This means that employers may take a tip credit of $9.31 per hour for wait staff and $7.46 for bartenders, as long as the employee’s tips bring the total hourly wage up to the state minimum wage. (For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In Connecticut, eligible employees must receive overtime if they work more than 40 hours per week. Also, employees who work in restaurants and hotel restaurants must receive overtime for all hours worked on a seventh consecutive day of work.
Not every type of job is eligible for overtime, however. To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the state Department of Labor.
Yes. Employees in Connecticut are entitled to a meal break of 30 minutes, unpaid, after the first two hours of work and before the last two hours for those who work seven-and-a-half or more consecutive hours. Employees who already receive at least 30 minutes of paid breaks during the workday are not entitled to an additional unpaid meal break.
To learn more about wage and hour laws in Connecticut, contact the state Department of Labor.
]]>The minimum wage in West Virginia is $10.00 per hour in 2024.
The federal Fair Labor Standards Act (FLSA) allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns add up to at least the full minimum wage for each hour worked. If not, the employer has to make up the difference.
In West Virginia, employers can take a tip credit of 70% of the minimum wage.
This means that in 2024, employers can pay tipped employees as little as $3.00 per hour, as long as the employee’s tips bring the total hourly wage up to the state minimum wage.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In West Virginia, eligible employees must receive overtime if they work more than 40 hours in a week. Not every type of job is eligible for overtime, however.
To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the West Virginia Division of Labor.
Yes. Employees in West Virginia are entitled to a meal break of at least 20 minutes for each six consecutive hours worked, unless employees are allowed to take breaks as needed or to eat lunch while working. Rest breaks of 20 minutes or less must be counted as paid work time.
To learn more about wage and hour laws in West Virginia, contact the state Division of Labor.
Wage and hour laws set the basic standards for pay and time worked, covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
As of January 1, 2024, the minimum wage in Montana is $10.30 per hour. Montana allows small employers, with gross annual sales of $110,000 or less, to pay employees $4.00 per hour. However, small employers may only pay this rate if their employees are exempt from federal wage laws.
Otherwise, small employers must pay their employees at least $7.25 an hour, which is the current federal minimum wage.
Although the Fair Labor Standards Act (FLSA), the federal wage and hour law, and the laws of some states allow employers to pay tipped employees a lower minimum wage, Montana law does not. In Montana, tipped employees are entitled to the full minimum wage for every hour worked.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In Montana, eligible employees must receive overtime if they work more than 40 in a week or more than 48 hours in a week for students working seasonal jobs at amusement or recreational areas. Not every type of job is eligible for overtime, however.
To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Montana Department of Labor & Industry.
Montana does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Montana, contact the state Department of Labor and Industry.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
The minimum wage in Colorado is $14.42 per hour in 2024.
The federal Fair Labor Standards Act (FLSA) allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns adds up to at least the full minimum wage for each hour worked. If not, the employer has to make up the difference.
The maximum tip credit in Colorado is $3.02, which means that employers can pay tipped employees an hourly wage as low as $11.40 (for 2024), as long as the employee’s tips bring the total hourly wage up to the state minimum wage.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In Colorado, eligible employees must receive overtime if they work more than 12 hours in a day (or 12 consecutive hours) or more than 40 hours in a week. Not every type of job is eligible for overtime, however.
To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Colorado Department of Labor and Employment.
Yes. Employees in Colorado are entitled to a meal break of 30 minutes, unpaid, after five hours of work. An on-duty paid meal period is permitted when the nature of work prevents a break from all duties. Employees are also entitled to a paid ten-minute rest period for each four hours or major fraction worked, in the middle of the work period, if practical.
To learn more about wage and hour laws in Colorado, contact the state Department of Labor and Employment.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
For legal advice regarding Colorado's wage and hour laws, contact an attorney specializing in employment law.
]]>The minimum wage in California is $16.00 per hour in 2024. However, many cities and counties have their own minimum wages that are higher.
In addition, in 2023 Governor Gavin Newsom signed Assembly Bill 1228, which established a minimum wage of $20.00 per hour for most fast food workers in the state, effective April 1, 2024.
Although the federal Fair Labor Standards Act (FLSA) and the laws of some states allow employers to pay tipped employees a lower minimum wage, California law does not.
In California, tipped employees are entitled to the full minimum wage for every hour worked. (For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In California, eligible employees must receive overtime if they work more than eight hours in a day or 40 hours in a week. After working 12 hours in a day, California employees must receive double time.
If an employee works on a seventh day, that employee is entitled to time and a half for the first eight hours of work and double time for additional hours. Not every type of job is eligible for overtime, however.
To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the state Department of Industrial Relations.
Yes. Employees in California are entitled to a meal break of 30 minutes, unpaid, after five hours, except when the workday will be completed in six hours or less and the employer and employee consent to waive the meal break.
The employee cannot work more than ten hours a day without a second 30-minute break, except if the workday is no more than 12 hours. The second meal break may be waived if the first meal break was not waived.
An on-duty paid meal period is permitted when the nature of work prevents relief from all duties and the parties agree in writing.
Employees are also entitled to a paid ten-minute rest period for each four hours worked or major fraction thereof, as practicable, in the middle of the work period. This is not required for California employees whose total daily work time is less than three-and-a-half hours.
To learn more about wage and hour laws in California, contact the California Department of Industrial Relations.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. California also has its own wage and hour laws, and many local governments in California do too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in California, which has a higher minimum wage, must pay the higher amount.
If you need legal advice regarding California's minimum wage, overtime, or other wage and hour rules, contact an experienced employment law attorney.
]]>As of January 1, 2024, the minimum wage in Ohio is $10.45 per hour. Small employers, with less than $385,000 in gross annual revenue, may pay employees $7.25 an hour.
The federal Fair Labor Standards Act (FLSA) allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns adds up to at least the full minimum wage for each hour worked. If not, the employer has to make up the difference.
In Ohio, employers can pay tipped employees an hourly wage of 50% of the minimum wage ($5.25 as of 2024), as long as the employee’s tips bring the total hourly wage up to the state minimum wage. (For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In Ohio, eligible employees must receive overtime if they work more than 40 hours in a week. Not every type of job is eligible for overtime, however. To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Ohio Bureau of Wage & Hour Administration.
Ohio does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Ohio, contact the state Bureau of Wage & Hour Administration.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
If you need legal advice about the minimum wage, overtime, or other labor laws in Ohio, contact an attorney specializing in employment law.
]]>As of January 1, 2024, the minimum wage in Michigan is $10.33 per hour.
The federal Fair Labor Standards Act allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns adds up to at least the full minimum wage for each hour worked.
If not, the employer has to make up the difference. In Michigan, employers can pay tipped employees 38 percent of the minimum wage. For 2024, employers may pay tipped employees an hourly wage of $3.93, as long as the employee’s tips bring the total hourly wage up to the state minimum wage.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In Michigan, eligible employees must receive overtime if they work more than 40 hours in a week. Not every type of job is eligible for overtime, however. To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Michigan Department of Labor and Economic Opportunity, Wage & Hour Division.
Michigan does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your workday.
To learn more about wage and hour laws in Michigan, contact the state Department of Labor and Economic Opportunity, Wage & Hour Division.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
If you have questions about Michigan's overtime, minimum wage, or other labor laws, contact an employment law attorney.
The minimum wage in Alaska is adjusted each year for inflation. As of January 1, 2024, the minimum wage is $11.73 per hour.
Although the FLSA and the laws of most states allow employers to pay tipped employees a lower minimum wage, Alaska law does not. In Alaska, tipped employees are entitled to the full minimum wage for every hour worked. (For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In Alaska, eligible employees must receive overtime if they work more than eight hours in a day or more than 40 hours in a week. Not every type of job is eligible for overtime, however. To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Alaska Department of Labor and Workforce Development.
Alaska does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Alaska, contact the state Department of Labor and Workforce Development.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act (FLSA). Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
If you need legal advice about the minimum wage or overtime requirements in Alaska, contact an attorney specializing in employment law.
]]>Employees who are eligible for overtime are called "nonexempt" employees, which means they are covered by the federal Fair Labor Standards Act (FLSA). The FLSA does not apply to "exempt" employees, who are not eligible for overtime pay.
In this article we'll explain how overtime pay is calculated and which employees are entitled to overtime.
The overtime premium is 50% of the employee's usual hourly wage. This means an employee who works overtime must be paid "time and a half"—the employee's usual hourly wage plus the 50% overtime premium—for every overtime hour worked.
Example. John earns $14.00 per hour as a warehouse picker. If he works 48 hours per week, he'll receive his normally hourly wage for the first 40 hours (40 x $14.00 per hour = $560.00).
For the other eight hours, John receives time and a half of $21.00 per hour ($14.00 x 1.5). So he receives $168.00 in overtime ($21.00 x 8 hours), and total weekly wages of $560.00 plus $168.00 for a total of $728.00.
Federal and most state laws impose a weekly overtime standard, which means that nonexempt employees are entitled to overtime for every hour beyond 40 that they work in a workweek, regardless of how many hours they work in a day.
For example, Alex is a non-exempt employee who works 12 hours on Monday and six hours on Tuesday (and doesn't work any additional hours in the week). Because his total hours for the week do not exceed 40, he is not entitled to overtime under the weekly standard.
California and a handful of other states have a daily overtime standard, as well. This means that nonexempt employees are entitled to overtime for every hour beyond eight that they work in a day.
Let's take Alex from the example above. In a daily overtime state, he would be entitled to overtime pay for the four extra hours he worked on Monday, even though he didn't come close to working more than 40 hours in the week.
Although the vast majority of employers must pay overtime, not all are required to. To figure out whether your company must pay overtime, first determine whether you are covered by the federal Fair Labor Standards Act, the federal wage and hour law that sets out the overtime rules.
Generally, your business is covered by the FLSA if you have $500,000 or more in annual sales. Even if your business is smaller, however, you must pay overtime if your employees work in what Congress calls "interstate commerce"—that is, they conduct business between states. This includes more than you might think, including making phone calls to or from another state, sending mail out of state, or handling goods that have come from, or will go to, another state.
Even if your business is so small or local that it isn't covered by the FLSA (and this will be a pretty rare occurrence), you might be covered by your state's overtime law. Contact your state labor department for details.
If your business is covered by either the FLSA or your state's overtime law, then all of your employees are entitled to overtime unless they fit into an exception. The following workers are "exempt" from the federal overtime law (meaning that they fit into an exception and are therefore not entitled to overtime):
Probably the most common—and confusing—exceptions to the overtime laws are for so-called "white collar" workers. Employees whom the law defines as "administrative, executive, or professional" need not be paid overtime.
To be considered exempt under the FLSA, administrative, executive, or professional employees must be paid on a salary basis and must spend most of their time performing job duties that require the use of discretion and independent judgment. Some states have created additional requirements that make it more difficult to fall within these exemptions, though, so you should also check with your state's law before classifying an employee as exempt.
An employee who is paid on a salary basis must earn at least $684 per week (equivalent to $35,568 per year). The employee must also receive the same salary every week, regardless of how many hours the employee works or the quantity or quality of the work the employee does.
Generally, if an employer docks an employee's pay (for leaving work early to attend a doctor's appointment or not meeting a sales target, for example), then the employee is not paid on a salary basis and is entitled to overtime.
However, there are a few circumstances in which an employer may pay an exempt worker less than his or her full salary for a week without compromising the employee's exempt status. This includes docking an employee's pay for full-day absences according to the employer's paid sick or vacation leave policy, or during the employee's first or last week of work.
For more information on how pay docking affects an employer's obligation to pay overtime, see Nolo's article Legal Limits on Pay Docking and Unpaid Suspensions.
In addition to the above salary requirements, the employee must also be performing certain types of work—generally, work that is directly related to the company's business operations, requires an advanced degree, or is managerial or supervisory in nature. In all cases, the employee must be authorized to make relatively high-level business decisions. Here are the basic requirements for the administrative, executive, and professional exemptions:
If you're not receiving overtime pay to which you're legally entitled, bring the issue to the attention of your supervisor or human resources department. If that doesn't work, you may wish to contact an attorney to explore your legal options.
]]>Laying off an employee is different from firing an employee. "Firing" means letting a worker go for any reason, whereas a "layoff" refers to an employment termination based on economics, usually involving more than one worker. (For information on firing, see Nolo's article Firing Employees FAQ.)
If layoffs are under consideration at your company, you need to make two decisions:
Though making the decision to let someone go is rarely easy, this article can help you feel confident you've made the best of a bad situation. (If you've already considered the below factors and feel a layoff is right for your business, read Nolo's article How to Conduct a Layoff.)
Companies that consider layoffs are usually trying to cut costs in order to dig the company out of a hole or make it more profitable. But keep in mind that layoffs can be costly in other ways. For example, the company may have to pay severance packages, remaining workers' productivity and morale may decline, and the company might even be faced with a lawsuit, depending on how the layoff is conducted.
Given the risks, companies should carefully consider whether they really need to conduct layoffs and whether they can do so legally.
In some cases, less painful alternatives can do the trick. These might include:
Even if implementing these strategies won't eliminate the need for layoffs, by considering and perhaps implementing some of these alternatives before laying workers off, fewer workers will question whether the layoff was truly necessary.
If you've considered the alternatives and a layoff is still your best option, make sure you are on solid legal ground before you do anything. In order to avoid legal trouble, you should:
Have a legitimate business reason. Your company should have valid, business-related reasons for the layoff. Otherwise, you invite lawsuits from disgruntled employees. A decrease in sales, loss of a credit line, or overstaffing are legitimate reasons for a layoff; trying to get rid of older workers or punishing union supporters are not.
Check written personnel policies. Some companies lay down their own specific rules as to when, and how, the company may conduct a layoff. Know the rules and follow them.
Review actual policies and past practices. Even if your company doesn't have written policies regarding layoffs, it may have established a company policy by actions or statements. For example, if a company has always paid severance to workers it laid off in the past, it may have to do so now.
Check employment contracts. If a worker has an employment contract with the company, check it carefully to make sure you can lay off the worker for economic reasons. The contract also might require severance.
Review collective bargaining agreements. If the workplace is unionized, check the collective bargaining agreement for limits or rules on laying off workers.
Consider offering severance or other termination benefits. Even if the company is not required to offer severance or other termination benefits, consider doing so anyway. It's a good way to show laid off employees, retained employees, and the general public, that the company values the workers' contributions and is concerned for their welfare.
Once your company has decided that layoffs are necessary, it's time to figure out who gets the axe. If the company is getting rid of an entire department or outsourcing particular work tasks, the answer will be obvious.
However, if you need to make cuts across the board or reduce staff in some areas, you will have tough decisions to make. Following the steps outlined below can help you make the best layoff decisions for your business:
1. Decide what the company will need going forward. Before deciding whom to cut, the company will have to think about its future direction. Is the company shrinking in some areas and expanding in others? Is the corporate focus shifting? What are the essential positions that must be kept for this plan to succeed?
2. Figure out which departments or positions will be cut. Now that you know your company's goals, you will be able to figure out which areas need to be scaled back. For example, if the company is cutting back on direct sales to focus more attention on research and development, the sales department can be safely targeted for cuts. At this point, you should focus on jobs and positions, not on individual workers.
3. Establish the criteria for layoff decisions. Once you have a sense of what skills the company will need going forward, you can decide how to select workers for layoff. The safest course, legally, is to use objective criteria like seniority, productivity, or sales numbers. If you will consider subjective qualities like quality of work, willingness to learn new tasks, or communication skills, make sure everyone applies these criteria consistently.
4. Make a list. After the criteria are set, apply them to the workers in the targeted departments to come up with an initial layoff list. Some companies rate how well each worker meets the layoff criteria, then weed out those with the lowest scores.
5. Check it twice. Once the initial list is finished, look it over for potential problems. Make sure your layoff plan doesn't discriminate (or appear to discriminate) on an illegal basis such as race, age, or gender. For example, if you lay off the workers on your list, will the company be getting rid of a disproportionate number of women or minority workers? If, after making your list, you find that most people on it are, say, women over the age of 40, rethink your plan or talk to an employment lawyer.
6. Keep enough people to do the work. Make sure the workers who are left will be able to do the work that remains. Workers you don't lay off will quickly begin searching for new jobs if they are asked to do twice as much work.
To learn more about conducting layoffs, get the The Employer's Legal Handbook, by Aaron Hotfelder (Nolo). This handy guide covers hiring, firing, and everything in between.
]]>Proper hiring practices, including how to conduct interviews and investigate job applicants without invading their privacy. (See Nolo's Hiring Employees area.)
Rules on hiring and working with independent contractors, including tips on how to avoid misclassification problems. (See Nolo's Using Independent Contractors & Freelancers area.)
Wage and hour laws, including those governing the minimum wage, overtime, and compensatory time. (See Nolo's Compensation & Benefits for Your Employees area.)
How to avoid harassment and discrimination based on a variety of characteristics, including gender, age, race, pregnancy, sexual orientation, disability, and national origin. (See Nolo's Preventing Workplace Discrimination & Harassment area.)
The minimum requirements for sick, vacation, parental, and other types of employee leave. (See Nolo's Time Off & Leave for Your Employees area.)
How to write an employee handbook, conduct performance reviews, and discipline employees. (See Nolo's Performance Management & Employee Evaluation area.)
OSHA and other workplace health and safety laws, including health care reform, workers' compensation, and rules on employee alcohol and drug use. (See Nolo's Your Employees' Health & Safety area.)
How to fire an employee without trampling on his or her legal rights. (See Nolo's Firing Employees & Employee Resignations area.)
How to protect your business and respect employees' rights when they leave. (See Nolo's Firing Employees & Employee Resignations area.)
What the law allows if you want to run a background check, do a workplace search, or monitor employee conduct. (See Nolo's Your Employees' Right to Privacy area.)
For the most complete guide to your legal rights and responsibilities as an employer, get The Employer's Legal Handbook, by Aaron Hotfelder (Nolo). It explains how to handle every part of the employment relationship, from hiring to firing, fairly and legally.
]]>If an employment contract exists, you must treat the employee fairly and fire the employee only for "good cause." However, it is not always easy to determine if an employment contract exists.
Before you fire an employee, you must figure out whether you have an employment contract with the employee. Occasionally, this will be as simple as opening the employee's personnel file and seeing a document labeled "employment contract." This type of contract is called an express written contract.
However, employers sometimes create employment contracts without meaning to. This type of contract -- called an implied contract -- binds an employer as much as a written contract does.
Employers create implied contracts when they promise employees something, usually job security. These promises can occur in all sorts of circumstances, such as during a casual conversation with an employee or as part of a discussion in an employee handbook.
No matter how the promise occurs, if a court thinks that the promise has enough weight and that the employee has relied on that promise (usually through continuing employment), the court may view that promise as a contract and require you to hold up your end of the deal.
Figuring out whether you have unintentionally created an implied contract can be a tricky business, but past court decisions do provide some guidance.
Courts have found that an implied contract was formed in the following circumstances:
Don't let the specter of implied contracts worry you too much, however. If you feel certain that you have never promised the employee job security, then chances are good that the employee does not have an implied contract.
If you determine the employee does not have a contract, you can fire the employee for any reason that isn't illegal. (For more information, see Illegal Reasons for Firing Employees.)
If the employee does have an implied contract, however, you can fire the employee only for "good cause." And if you have an express written contract with an employee and you want to terminate that employee, you must follow what the contract says.
Contracts will either list reasons for which the employee can be fired or simply state that an employee can be terminated only for good cause.
The exact meaning of good cause varies from state to state, but generally it means what it says: You must have a "good," meaning legitimate, reason for firing the employee. Usually that means the termination must be based on reasons related to business needs and goals.
Firing an employee because you don't like the fact that she has an illegitimate child, for example, isn't good cause. Firing an employee because he harasses female coworkers is.
Examples of good cause include the following:
Regardless of what type of contract you have with the employee, that contract will obligate you to treat an employee fairly. This obligation is called the covenant of good faith and fair dealing.
Although this rule might seem like a gaping hole in your ability to terminate employees, it really isn't. To breach this obligation, employers have to engage in very egregious conduct, such as:
For a complete guide to your legal rights and responsibilities as an employer, get The Employer's Legal Handbook, by Aaron Hotfelder (Nolo).
]]>This article explains the pros and cons of using written contracts with employees. For more information on employment contracts, including a sample offer letter you can use to create an at-will employment relationship, see Dealing With Problem Employees, by Amy DelPo and Lisa Guerin (Nolo).
In addition to clearly describing what the employee is going to do for you (the job) and what you are going to do for the employee (the salary), the contract can address many other aspects of the employment relationship, such as:
When we refer to written employment contracts, we mean a contract that limits the employer's right to fire the employee, usually by detailing the grounds for termination or setting a term of employment (for example, one or two years).
Some employers require employees to sign a written agreement stating that they are employed at will -- that is, that they can quit at any time, and can be fired at any time, for any reason that is not illegal. Employers might ask employees to sign an offer letter, handbook acknowledgment, or other document agreeing to at-will employment, for example. These documents do not limit the employer's right to fire the employee. Instead, they affirm the employer's general right to fire at will.
Employment contracts can be very useful if you want control over the employee's ability to leave your business. For example, if finding or training a replacement will be very costly or time-consuming for your company, you might want a written contract. It can lock the employee into a specific term (for example, two years) or require the employee to give you enough notice to find and train a suitable replacement (for example, 90 days' notice). While you can't force someone to keep working for you, an employee is likely to comply with the agreement's terms if there's a penalty for not doing so.
Employment contracts might also make sense if the employee will be learning confidential and sensitive information about your business. You can insert confidentiality clauses that prevent the employee from disclosing the information or using it for personal gain. Similarly, a contract can protect you by preventing an employee from competing against you after leaving your company. (For more on this, see Nolo's article Will a Noncompete Agreement Stop Employees From Taking Your Trade Secrets?.)
Sometimes, you can use an employment contract to entice a highly skilled candidate to come work for you instead of the competition. By promising the individual job security and beneficial terms in an employment contract, you can "sweeten the deal."
Finally, using an employment contract can give you greater control over the employee. For example, if the contract specifies standards for the employee's performance and grounds for termination, you may have an easier time terminating an employee who doesn't live up to your standards.
An employment contract is not a one-way street. The contract binds both you and the employee, so it limits your flexibility. This may pose a problem if you later decide that you don't like the contract terms or the needs of your business change. In those circumstances, if you want to change the contract or terminate it early, you'll have to renegotiate it -- and there's no guarantee the employee will agree to what you want.
For example, if you decide you want to end a two-year contract after six months because you don't really need the employee after all, you can't simply terminate the employee -- this would be a breach of contract. Similarly, if the contract promises the employee health benefits, you can't later stop paying for these health benefits as a way to save money. The only way to change the terms of the contract is to renegotiate them. This can be done, but it's time-consuming and requires the employee's consent.
Another disadvantage of using employment contracts is that they bring with them a special obligation to deal fairly with the employee. In legal terms, this is called the "covenant of good faith and fair dealing." If you end up treating the employee in a way that a judge or jury finds unfair, you may be legally responsible not only for violating the contract, but also for breaching your duty to act in good faith.
]]>I work in customer service for a large utility company. Our department has about 50 employees; other than our managers, everyone does the same job of answering phone calls and email.
The utility has been struggling, and our managers told us they have been instructed to lay off six employees. Because the goal is to save money, they plan to review the performance records of the highest paid half of the department's employees, then lay off the six who have the lowest performance ratings.
However, our pay rate is based entirely on how long we've been with the company. Everyone starts at the same basic salary, and we receive annual increases each year. Occasionally, an employee will receive an additional bump in pay for excellent service. For the most part, though, the highest paid employees are those who have been with the company the longest.
They also tend to be the oldest employees in the department. I am one of the highest paid, and I'm 60 years old. Can the company lay us off by seniority if it results in mostly older employees losing their jobs?
In the circumstances you've described, the answer is most likely yes, your company is acting within the law. Although age discrimination is illegal, employers may rely on what the law calls "reasonable factors other than age" -- including seniority -- when making job decisions.
The federal Age Discrimination in Employment Act (ADEA) and similar state laws prohibit employers from basing their job decisions on an employee's age, if the employee is at least 40 years old. If, for example, your employer had simply decided to lay off its oldest employees (who are all over 40), that would be illegal age discrimination.
Your employer hasn't used age explicitly as a basis for the layoffs. If you thought your employer really was making decisions based on age, but was hiding it by talking about seniority and performance, you might still have a claim for intentional age discrimination.
In this situation, you would have to show that your employer wasn't actually relying on its stated criteria, but instead was using these justifications as a pretext to discriminate. However, it doesn't sound like you believe your employer is trying to cover its age discrimination tracks.
Employees may still bring an age discrimination lawsuit even if their employers are not engaged in intentional discrimination. These cases, called "disparate impact" cases, claim that the employer's practice has a disproportionate impact on a protected class of employees (in your case, older employees).
In an age discrimination case, an employer may defend itself against this type of claim by proving that it relied on a reasonable factor other than age. The Equal Employment Opportunity Commission (EEOC), which interprets the ADEA, has said that an employer can meet this requirement by showing that its challenged practice was reasonably designed to achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose.
The U.S. Supreme Court has found that seniority may qualify as a reasonable factor other than age (even though the two are often closely aligned). In your situation, it sounds like your employer has clearly defined the criteria it will use to select employees for layoff. The purpose of the layoff is to save money, undoubtedly a legitimate business purpose.
The method it has chosen to decide who will get laid off will reasonably achieve the goal of cutting costs, while also allowing your employer to keep its highest performing long-term employees, another reasonable business goal. Even if your employer ends up laying off a disproportionate number of older employees, you likely won't have an age discrimination claim.
If you've been the victim of age discrimination at work, contact an employment law attorney to explore your legal options.
]]>The main federal law is called the Americans With Disabilities Act (ADA), and it and similar state laws have changed the face of the American workforce by prohibiting discrimination against people with disabilities and by requiring employers to accommodate the disabilities of employees—and applicants—when possible.
The ADA and most state laws protect "qualified workers with disabilities." Thus, someone must be a qualified worker and must have a legally recognized disability to be protected by the ADA. Let's look more closely at these issues.
A qualified worker is a worker who can perform most basic and necessary job duties, with or without some form of accommodation.
The ADA defines disability as a physical or mental impairment that substantially limits one or more major life activities, a record of such impairment, or being regarded as having such an impairment.
For an impairment to be a legal disability, it must be long term. Temporary impairments, such as pregnancy or broken bones, are not covered by the ADA (but may be covered by other laws.)
An individual is disabled under the ADA if they have a physical or mental impairment that substantially limits a major life activity (such as the ability to walk, talk, see, hear, breathe, reason, work, or take care of oneself).
Major bodily functions, such as cell growth and the proper functioning of the immune, brain, and respiratory systems, also count as major life activities. Episodic impairments (such as asthma) and diseases that are in remission (as might be true of cancer) are also included if they limit a major life activity when active, even if the employee is not currently suffering such a limitation.
A worker is also disabled if they have a record or history of an impairment. That means an employer may not make employment decisions based on your employee's past disability.
An employee is protected by the ADA if their employer regards them—even incorrectly—as having a disability. In other words, an employer can't treat a worker less favorably because they believe the worker to be disabled, even if the employer is wrong.
Accommodating a worker means providing assistance or making changes in the job or workplace that will enable the worker to do the job. For example, an employer might lower the height of a desktop to accommodate a worker in a wheelchair; provide TDD telephone equipment for a worker whose hearing is impaired; or provide a quiet, distraction-free workspace for a worker with attention deficit disorder.
It is your employee's responsibility to inform you of the disability and request a reasonable accommodation -- you are not legally required to guess at what might help the employee do his or her job.
However, once an employee informs you of his or her disability, you must engage in what the law calls a "flexible interactive process" -- essentially, a brainstorming dialogue with your worker to figure out what kinds of accommodations might be effective and practical.
You do not have to give your worker the precise accommodation he or she requests, but you must work together to come up with a reasonable solution.
You don't have to provide an accommodation if it would cause your business "undue hardship." For instance, if the cost of an accommodation would eat up an entire year's profits (building a new wing on your office building, for example), you don't have to do it. Whether an accommodation qualifies as undue hardship depends on a number of factors, including:
You and the employee may have different opinions about what constitutes a reasonable accommodation and what would be an undue hardship. If you're unsure whether you must provide a disabled employee with a specific accommodation, you might want to get some legal help.
Alcohol and drug use pose special problems under the ADA. Employees who use (or have used) alcohol or drugs may have a disability under the law. However, an employer can require these employees to meet the same work standards -- including not drinking or using drugs on the job -- as employees who do not have a disability. Here are some guidelines to follow when dealing with these tricky issues:
Many states also have their own workplace safety laws. In order to comply with the OSH Act and applicable state laws, employers must understand their obligations. They also need to know which law applies to their business.
When the OSH Act was passed, it preempted all state occupational safety and health laws. Each state then had the option of submitting a plan to the Secretary of Labor for approval. If the secretary found the plan acceptable, then the state's law was allowed to stand.
In these states, called "state plan states," employers must follow the state's laws, regulations, and standards on workplace health and safety, not the federal OSH Act.
The state plan states are:
Connecticut, New Jersey, and New York also have workplace safety laws, but they cover state and local government employees only. Private employers must still follow the federal law.
If your business operates in one of the state plan states listed above, you can find information about your state's laws and resources on the U.S. Department of Labor's website, at www.osha.gov (look for State Occupational Safety and Health Plans).
If your business does not operate in one of the states listed above, then you must follow the federal OSH Act, as described below.
You must follow the OSH Act's rules for every worker in your business, regardless of the worker's title, status, or classification. This means that the law covers managers, supervisors, partners, stockholders, officers, and family members who work for you as well as rank-and-file employees.
The law does not, however, cover independent contractors or family members of a farm operator.
The OSH Act requires covered employers to maintain a workplace that is free of hazards that they know or should know about, and that are causing or are likely to cause death or serious physical injury. These are called "recognized hazards."
Hazards can be unsafe conditions (for example, toxic fumes or broken equipment) or unsafe practices (for example, push starting tractors or operating circular saws with one hand instead of both hands). If you can easily detect a hazard by walking through your workplace and using your senses (for example, you can see or smell the hazard), then you must get rid of it. You must also use reasonable means to look for and eliminate hazards.
Your duty to provide a safe working environment extends beyond the four walls of your building. Wherever you send people to do work must be safe, even if the work takes place elsewhere (such as at a construction or demolition site).
The OSH Act requires you to provide tools and equipment that are in safe working condition. It also requires you to adequately train and supervise employees. And it requires you to provide specific safety equipment when necessary.
Although the general safety standards described above apply to everyone, some of OSHA's standards apply only to particular industries, such as construction, maritime and longshoring, or agriculture. These safety standards can be complicated. See "Where Can I Turn For Help," below, for information on finding assistance in figuring out which rules apply to you.
Your obligations under the OSH Act don't stop with maintaining a safe work environment. You must also meet certain reporting requirements, posting requirements, and recordkeeping requirements, and you must submit to OSHA inspections.
For example, you must report fatal accidents to OSHA within eight hours of their occurrence. You must post an OSHA poster informing workers of their rights and obligations under the law.
You must also keep records of your efforts to comply with the law and to prevent injuries and illnesses. (For more information about these requirements, read Nolo's article OSHA Compliance: Recordkeeping, Reporting, Posting, and Inspection Rules.)
The OSH Act gives employees certain rights to take action to ensure that their workplace is safe. For example, workers may file complaints with OSHA regarding unsafe working conditions or other OSHA violations, and you may not retaliate against them for doing so.
Workers may also refuse to work when they face imminent danger in the workplace, and, once again, you may not retaliate against them for doing so. Indeed, it is very important that you, as the employer, do not attempt to suppress workers' rights in any way. Otherwise, you leave yourself vulnerable to fines, penalties, or worse.
OSHA has a lot of great information on its website. Of particular interest is its Compliance Assistance section. There, you will find fact sheets, booklets, Expert Advisors, eTools, and Safety and Health Topics pages.
For comprehensive information about OSHA, including how to comply with its provisions, get The Essential Guide to Federal Employment Laws, by Lisa Guerin and Sachi Barreiro (Nolo).
]]>I recently learned that some of my coworkers have health insurance, but I don’t. I have a disability and I'm concerned that my employer is trying to avoid the costs of providing health insurance to disabled employees. It just doesn't seem fair to me. Is my employer acting within the law?
In general, employers are free to offer health insurance to some groups of employees and not others, as long as those decisions are not made on a discriminatory basis.
It may surprise you to learn that employers are not required to provide health insurance by law. But what about the Affordable Care Act (ACA)? Doesn’t it require employers to provide health insurance?
The ACA imposes a penalty on employers with the equivalent of 50 or more full-time employees that fail to provide health coverage to at least 95% of their full-time employees. The ACA does not give individual employees a right to demand health care from their employers, though. If the employer fails to provide the required coverage, it can be assessed a hefty penalty by the IRS.
Other than to avoid the ACA penalty, there is no requirement that employers provide health insurance to their employees. As with most other voluntary benefits, employers are free to offer health insurance to certain groups of employees and not others. For example, employers can offer health insurance only to full-time employees, only to employees in certain job positions, only to salaried employees, or only to employees with higher seniority.
However, groups must be based on a bona fide employment-based classification, and all similarly situated employees in a particular group must be treated the same.
One major exception to this rule, however, is that employers cannot discriminate based on characteristics protected by federal or state law. For example, it would be illegal for an employer to provide health insurance to women but not men, to Caucasian employees but not African American employees, or to employees without disabilities but not employees with disabilities. (For a list of protected characteristics in your state, see state laws on employment discrimination.)
That means if you're employer is denying coverage to you because of your disability, it's committing illegal discrimination. But if you don't have coverage because, for example, you work only part time, your employer is acting within the law.
No federal law requires employers to provide the same level of health insurance coverage to all employees. For example, employers can offer a "gold plan" to full-time workers and a lower quality "silver plan" to part-timers.
However, when it comes to the provision of pay and benefits, employers must comply with federal laws that prohibit discrimination based on certain protected characteristics, such as age, race, sex, and disability. That means, for example, that employers cannot provide different levels of health insurance coverage based on an employee's race or gender.
]]>However, such a policy can create big problems if the employee whose pay is reduced is exempt from overtime—that is, the employee is not entitled to overtime pay because he or she is paid on a salary basis and generally exercises a certain degree of responsibility and discretion in doing the job.
For more information on who is exempt from overtime rules, see Nolo's article When Must Employers Pay Overtime?
To qualify as exempt, employees have to be paid a set amount each pay period, without any reductions based on the quantity or quality of work they do. If you dock their pay, you are treating them like non-exempt employees, and the law might classify them as such, which means they are entitled to overtime.
As you might guess, the money you save by docking the employee's salary could be far exceeded by the money you have to pay out in overtime.
Under federal law, exempt employees -- those who are not entitled to overtime -- must earn at least $684 per week (or $35,568 per year). To be exempt, employees generally must be paid on a salary basis, although this requirement doesn't apply to outside sales employees, teachers, lawyers, doctors, and certain computer employees.
A salary basis means the employee earns a fixed amount per pay period that doesn't depend on how many hours the employee works, how much work the employee accomplishes, or the quality of the work.
As long as employees do some work during the week, they are entitled to their full weekly pay, unless the time they take off falls into one of the exceptions described below.
Employers may make salary deductions (without jeopardizing the employee's exempt status) for one or more full days an employee takes off for the following reasons:
An employer that makes improper deductions from a salaried employee's pay can get into big trouble. However, the law contains a "safe harbor" provision, which offers employers some protection if they make improper deductions inadvertently.
An employer will be penalized if it has an "actual practice" of making improper deductions -- actions that show the employer didn't intend to pay employees on a salary basis. Among the factors a court or government agency will consider when making this determination are:
An employer with an actual practice of making improper deductions will lose the overtime exemption for all employees who work in the job classification(s) for which the deductions were made and work for the managers responsible for making the deductions. In other words, the employer will have to pay overtime (if earned by the employees) to everyone who holds the position from which improper deductions were taken.
An employer will not be subject to the penalties noted above if either of the following are true:
Employers tend to have greater discretion in docking the pay of non-exempt employees, although many states have laws limiting their ability to do so. For example, some states prohibit employers from docking pay for cash register shortages or broken equipment. But in general, pay docking is usually permissible for any of the following:
However, employers generally may not reduce an employee's wages to below the state's minimum wage.
For a sample pay docking policy that will help your company navigate the safe harbor, see Create Your Own Employee Handbook, by Lisa Guerin and Amy DelPo (Nolo).
]]>California employers must post the following federal notices:
California employers are also required to post the following notices specific to California law:
Your city or local government may also have posting requirements (for example, San Francisco has several additional posting requirements). Check with your local municipal or county government office to find out.
If a significant number of your employees speak a language other than English, you may need to post notices in that language as well.
Employers must post these notices at every work location. They must be posted in a conspicuous and easily accessible place, where employees and applicants can see them. Common locations for posting include a company break room or lunch room, near the employee entrance, near the HR office, or near a highly trafficked workplace area, such as a kitchen, copier, or vending machines.
You can download the required notices from the state or federal agency that issues them. For example, you can get most of the federal posters from the Department of Labor’s Poster Page. Most required California posters are available from the Department of Industrial Relations at its workplace postings page. And the Notice to Employee forms can be found at the Employment Development Department’s website.
There are also private vendors who assemble packages of required posters for each state. These services can be quite convenient, as the vendors will typically provide you with updates as necessary. You’ll also save on space, as these vendors combine all required posters into one large notice that’s ready to pin up on the bulletin board. An Internet search for “California workplace posters” will reveal plenty of options for purchasing posters and updating services.
]]>If you are not careful in your statements about former employees, you might find yourself facing a defamation lawsuit. To prove defamation, a former employee typically must show that you intentionally damaged his or her reputation by making harmful statements about the employee that you knew to be false.
At first glance, it might seem like only the most spiteful employer would get caught in this trap. But, if you make an unflattering statement that you don't absolutely know to be true, it could happen to you. Let's face it: Most reasons for firing make the employee look bad. And an employer often cannot prove what he or she strongly believes to be true -- that an employee is stealing from the company, is incompetent, or lied about job qualifications, for example. An employer who makes such statements about a former employee could get into trouble. Your best policy is to say as little as possible and stick to facts you can prove.
When a potential employer calls for a reference, you may feel trapped between wanting to tell the truth and fearing a lawsuit if you say anything unflattering. Unfortunately, this fear is not unfounded. Plenty of defamation lawsuits have been filed over negative references. And, even if your former employee can't successfully prove that you defamed him or her, you will have to spend precious time and money fighting the allegation.
Here are some tips to help you avoid problems:
For more help in dealing with difficult employees, get Dealing with Problem Employees: A Legal Guide, by Amy DelPo and Lisa Guerin (Nolo).
]]>Under a legal doctrine sometimes referred to as "respondeat superior" (Latin for "Let the superior answer"), an employer is legally responsible for the actions of its employees. However, this rule applies only if the employee is acting within the course and scope of employment. In other words, the employer will generally be liable if the employee was doing his or her job, carrying out company business, or otherwise acting on the employer's behalf when the incident took place.
The purpose of this rule is fairly simple: to hold employers responsible for the costs of doing business, including the costs of employee carelessness or misconduct. If the injury caused by the employee is simply one of the risks of the business, the employer will have to bear the responsibility.
But if the employee acted independently or purely out of personal motives, the employer might not be liable. Here are a few examples to illustrate the difference:
If you are sued under this legal theory of respondeat superior, your employee's victim generally won't have to show that you should have known your employee might cause harm, or even that you did anything demonstrably wrong. If your employee caused the injury while acting within the scope of employment, you will have to answer to the victim.
Workers' compensation generally protects you from lawsuits by injured employees. If an employee injures a coworker while acting within the scope of employment, the coworker probably won't be able to sue your company. Instead, the coworker can make a workers' compensation claim to receive payment for lost wages, medical bills, and so on. Employees can sometimes sue outside the workers' compensation system if their injuries were caused by their employers' intentional misconduct, but that generally won't be the case if they are hurt by another employee who is simply doing his or her job.
Under a different legal theory, someone who is injured by your employee can sue you for failing to take reasonable care in hiring your workers ("negligent hiring") or in keeping them on after learning the worker poses a potential danger ("negligent retention"). This rule applies even to what your workers do outside the scope of employment -- in fact, it is often used to hold an employer responsible for a worker's violent criminal acts while working, such as rape, murder, or robbery.
However, under this theory you are legally responsible only if you acted carelessly -- that is, if you knew or should have known that an applicant or employee was unfit for the job, yet you did nothing about it.
Here are a few situations in which employers have had to pay up:
Many states have allowed claims for negligent hiring and negligent retention. Although these lawsuits have not yet appeared in every state, the clear legal trend is to allow injured third parties to sue employers for hiring or keeping on a dangerous worker. What can you do to stay out of trouble? Here are a few tips:
Make it your policy to run a routine background check before you hire an applicant. Verify information on resumes, look for criminal convictions (to the extent allowed in your state), and check driving records. These simple steps will weed out many dangerous workers and help you show that you were not careless in your hiring practices. For more information on checking out applicants, see Nolo's article Running Background Checks on Job Applicants.
You are more likely to be held responsible for a worker's actions if the job involves working with the public. These workers all require more careful screening:
workers who go to a customer's home (to make deliveries, perform home repairs, or manage apartment buildings, for example)
workers who deal with vulnerable people such as children, the elderly, or people with disabilities, and
workers whose jobs give them access to weapons.
Under the theory of negligent retention, you can be responsible for keeping a worker on your payroll after you learn (or should have been aware) that the worker poses a potential danger. If an employee has made violent threats against customers, brings an unauthorized weapon to work, or racks up a few moving violations, you have to take immediate action.
]]>This means your company has a lot of power over whether a worker will receive unemployment benefits. If a former employee files a claim, your company will need to decide whether or not to contest it.
Employees are eligible for unemployment benefits only if they are out of work through no fault of their own. This rule works differently depending on whether the employee quit, was laid off, or was fired.
An employee who loses a job through a layoff or reduction in workforce is always eligible for unemployment benefits.
Fired employees can claim unemployment benefits if they were terminated because of financial cutbacks or because they were not a good fit for the job for which they were hired. They can also receive unemployment benefits if the employer had a good reason to fire the employee, such as being late for work several times, but the infractions were relatively minor, unintentional, or isolated.
On the other hand, in most states an employee who is fired for misconduct will not receive unemployment benefits. Although you might think that any action that leads to termination should constitute misconduct, the unemployment laws don't look at it that way. Not all actions that result in termination are serious enough to qualify as misconduct and justify denying benefits to a terminated worker.
What qualifies as misconduct that will disqualify an employee from receiving unemployment benefits? Generally speaking, an employee engages in misconduct by willfully doing something that substantially injures the company's interests.
For example, revealing trade secrets or sexually harassing coworkers is typically the type of misconduct that renders the employee ineligible to collect unemployment benefits.
Other common types of disqualifying misconduct include
Common actions that often result in firing -- but do not constitute misconduct -- include poor performance because of lack of skills, good faith errors in judgment, inefficient work habits, an unpleasant personality, poor relations with coworkers, or off-work conduct that does not have an impact on the employer's interests. An employee fired for any of these reasons will usually be allowed to collect unemployment benefits.
It is important to remember that what qualifies as misconduct is a matter of interpretation and degree. Annoying one coworker might not be considered misconduct that will disqualify an employee from receiving unemployment benefits, but intentionally engaging in actions that anger an entire department, even after repeated warnings, might be considered disqualifying misconduct.
An employee who quits or resigns from a job will be eligible for benefits only if the employee resigned for "good cause." A good reason for quitting a job, such as job dissatisfaction, is not necessarily good cause. The law requires the employee's reason for leaving to be "compelling" -- that is, the worker would have suffered some sort of harm or injury by staying. Put another way, the reason the employee left must be the sort that would have made any reasonable person leave.
If an employee leaves a job because of intolerable working conditions (such as being sexually harassed) or because of being offered the opportunity to quit in lieu of being fired, most states would allow the worker to collect unemployment benefits.
Similarly, leaving a job because it poses a serious threat to the worker's health or safety is usually good cause.
On the other hand, most states would not accept leaving a job because it doesn't offer opportunities for career advancement as a good cause, and it won't make a worker eligible for unemployment benefits.
Your state's unemployment office -- not your company -- will ultimately decide whether a former employee can receive unemployment benefits. You do, however, have the option of contesting an employee's application for unemployment benefits, and that option gives your company a great deal of power.
In California, for example, the unemployment board presumes that a terminated employee did not engage in misconduct that would disqualify the employee from getting unemployment benefits unless the employer contests the unemployment claim. Thus, in California, terminated employees who claim unemployment benefits receive them unless the former employer contests the claim.
Remember, there is no reason -- and there are no grounds -- to contest an unemployment claim if the employee was laid off. There are also no grounds to contest the claim if the employee did not engage in misconduct but was fired for lesser reasons -- for instance, for sloppy work, carelessness, poor judgment, or the inability to learn new skills.
Even if an employee engages in misconduct, your company might want to give up its right to contest an unemployment insurance claim as part of a severance package, especially if the fired employee seems likely to sue. In other words, your company would agree not to contest unemployment benefits and the employee would agree not to sue your company.
Your company should contest a claim only if it has grounds to do so -- meaning that the employee engaged in serious misconduct or quit without a compelling reason. And even then, your company should also have a good, practical reason to contest.
Employers typically fight unemployment claims for one of two reasons:
If your company plans to contest an unemployment compensation claim, proceed with caution. These battles not only cost time and money, but they also ensure that the former employee will become an enemy.
The employee might even file a wrongful termination lawsuit that otherwise could have been avoided. And if the fired worker has friends who remain on the job, they too may doubt and distrust your company's tactics.
Before making any decisions, you might want to do some research by contacting your state's unemployment office for specific information about the law in your state. This office can tell you what effect a successful unemployment benefit claim will have on your company's rates. If it's relatively small, backing off might be a good idea.
Although the rules for contesting unemployment claims vary from one state to the next, in general the process proceeds as follows:
It's a good idea to hire a qualified employment attorney to handle your contested unemployment claim, no matter which side you're on. An attorney will help you navigate your state's application and appeal process and present your case in the most favorable light possible.
]]>Like many other states, Alabama has a drug-free workplace program regulating drug testing. Employers who establish such a program, as certified by the state’s labor department, can qualify for a discount on their workers’ compensation insurance premiums. However, employers must follow the state’s rules to get their discount. In Alabama, employers must test in certain circumstances, and must observe certain procedures intended to protect employee and applicant rights.
Alabama employers who have a drug-free workplace program are required to drug test applicants who have received conditional offers of employment. More limited testing is allowed if it is conducted on the basis of reasonable classifications of job positions. For example, an employer that doesn’t want to test every job applicant could instead test only those applicants whose jobs would require potentially dangerous activities (such as operating heavy machinery or carrying a weapon).
If an employer requires applicants to take a test, it must include a notice in its job announcements or ads regarding the testing requirement.
Alabama employers with a drug-free workplace program must test employees in the following circumstances:
In addition, employers may conduct random drug testing.
An employer that conducts drug testing must post its policy, and employees must have at least 60 days’ notice of the policy. Employees who test positive have five days to contest or explain the result. State laws also require employers to use certain procedures for gathering specimens, testing, maintaining confidentiality, and so on.
Have you been illegally asked or required to take a drug test? Even though Alabama law allows employer to drug test, employees and applicants may have legal claims based on how the test was conducted, who was tested, or how the results were used. Here are some examples:
The law has a number of requirements for health insurance plans, including coverage of preventive care, preexisting conditions, and adult children; restrictions on lifetime and annual coverage limits; and more.
The law also imposes penalties on certain employers that fail to provide health care coverage. We discuss this rule, called the “employer mandate,” below.
In 2017 Congress passed the Tax Cuts and Jobs Act, which effectively eliminated the ACA's individual mandate by lowering the federal tax penalty to $0. (Some states, including Massachusetts and New Jersey, impose their own penalties for failure to maintain health insurance.) But to the surprise of many, Congress left the remainder of the federal health care law intact.
The Affordable Care Act is a federal law that imposes a penalty on larger employers that do not offer health insurance to their employees. This is sometimes called the “pay or play” penalty or the “employer shared responsibility payment.”
The ACA applies to employers with 50 or more full-time employees, or the equivalent in part-time employees, during each month of the previous year. For purposes of the ACA, a full-time employee is someone who works an average of 30 hours per week (or 130 hours per month). To come up with a figure for full-time equivalent (FTE) employees, employers must add up all of the hours worked in a month by those who are not full-time employees, and then divide that number by 120.
Example: Suppose you have 20 employees who work 40 hours per week, 20 employees who work 32 hours per week, and 20 employees who work 15 hours per week (or 65 hours per month). Your company’s first 40 employees are considered full-time employees because they work at least 30 hours per week. The part-time employees work 1300 hours per month (20 x 65), which divided by 120, is 10.8 full-time equivalents. You would add this to the 40 full-time employees, for a total of 50.8, which is rounded down to 50. Your company would be covered by the ACA.
The above example assumes that your employees and their hours remain steady from month to month. If these numbers vary, there are a couple of different ways to do the calculation. If your situation is complex, or your company is very close to the 50 number, you should consult with a lawyer or tax professional to determine whether your company is covered.
Employers covered by the ACA, sometimes referred to as “applicable large employers” or ALEs, must provide health insurance to 95% of their full-time employees (and their dependents) or pay a penalty. Note that even though FTE employees are counted toward an employer’s total for purposes of determining whether the employer is covered, only employees who work at least 30 hours a week are entitled to coverage.
The health insurance must also meet minimum standards of coverage and affordability:
Under the ACA, a dependent is an employee’s biological or adopted child who is under 26 years old. Spouses are not considered dependents.
ACA penalties only kick in if the employer fails to meet the coverage requirements and at least one full-time employee receives the premium tax credit for securing individual coverage through the Health Insurance Marketplace. The ACA provides for two types of penalties: one for failing to provide coverage to at least 95% of their full-time employees, and one for failing to meet the minimum requirements for coverage.
An employer that doesn’t provide health insurance coverage to virtually all (at least 95%) of its full-time employees is subject to a penalty, as long as one of its employees received the premium tax credit for purchasing coverage through the Marketplace. Coverage must also be available for the employee’s dependents, defined as children under the age of 26. Spouses are not considered dependents for purposes of the employer mandate.
The penalty amount can be quite hefty: For the 2022 tax year, it’s $2,750 for each full-time employee that the employer has, excluding the first 30 employees. For example, if an employer has 60 full-time employees, the first 30 full-time employees are “free,” but the employer will still owe a penalty of $82,500 ($2,750 x 30 employees).
A potentially smaller penalty applies if the employer does offer health coverage to 95% of its full-time employees, but at least one employee received the premium tax credit for securing coverage through the Marketplace because:
The penalty also applies if an employee receives the premium tax credit for securing coverage through the Marketplace because he or she was in the 5% of employees who did not receive coverage.
For the 2022 tax year, the penalty is $4,120 for each full-time employee who receives the premium tax credit. For example, if only one employee receives the tax credit, the penalty is only $4,120. No matter what, the penalty cannot exceed the penalty for failing to provide health insurance in the first place.
All employers covered by the Fair Labor Standards Act, which is most employers, must provide employees with a notice of their health coverage options at the time of hire. This includes employers with fewer than 50 full-time employees that are not required to provide health insurance. The Department of Labor has model notices available at its website, one for employers that offer health insurance and one for employers that do not.
Employers with 50 or more full-time employees must also fulfill certain reporting requirements under the ACA. Employers must file Form 1095-C and Form 1094-C with the IRS, which it uses to determine the employer’s shared responsibility payment, if any. Employers must also provide a copy of Form 1095-C to all full-time employees. Employers must also report the value of health care coverage on their employees’ W-2 forms.
To learn more about this topic in general, see our page on taxes and Obamacare.
]]>The system strikes a compromise between employers and employees: Employees get benefits regardless of who was at fault. In return, employers get protection from lawsuits by injured employees seeking money damages for pain and suffering.
State law governs workers' compensation (except for the federal workers’ comp system, which covers employees of the U.S. government). Each state's system differs in the details, but the overall structure and operation of workers’ comp is very similar from state to state. From the employer’s perspective, the main differences are the procedural rules that they must follow.
To find out the details of your state's law, contact your state department of industrial relations or workers' compensation. You can find phone numbers for workers’ compensation officials in your state by using this map tool on the U.S. Department of Labor’s website.
Every state but Texas requires the vast majority of employers to carry workers’ compensation insurance. In most states, any employer with even one employee has to have coverage; in other states, the minimum may range from two to five employees.
A few states exempt certain agricultural or construction businesses; charities may also be allowed to opt out of the system. Although private employers in Texas don’t have to carry workers’ comp coverage, they’re subject to reporting and notification requirements if they choose not to do so.
Very large employers may insure themselves, but they must apply with the state and meet stringent self-insurance requirements.
Businesses don’t have to provide coverage for all kinds of workers. For example, workers’ comp generally doesn’t cover independent contractors, domestic workers in private homes, and volunteers. Some states also exclude casual or seasonal workers when the work they do isn’t part of the employer’s regular business or profession.
Even if they aren’t required to buy workers’ comp insurance, many employers choose to do so. States generally allow exempt employers to opt into the workers’ comp system, which then affords them the same liability protections.
If a business lacks workers’ comp insurance coverage, an injured employee may sue the employer in civil court (more on that below). Some states have special funds to provide workers’ comp benefits for injured employees of illegally uninsured employers. The funds may then go after the employers to seek reimbursement for the cost of those benefits. Employers who don’t have legally required insurance may also face criminal charges and steep fines.
Workers' compensation laws cover only injuries or illnesses that are related to the employee’s job—or, in legalese, “arising out of employment and occurring during the course of employment” (AOE/COE).
An injury doesn’t necessarily have to happen at the workplace to be considered AOE/COE. For example, workers’ comp usually covers injuries that happen while employees are traveling on business, running an office errand, or attending a business-related social function. (Learn more about the rules on whether injuries or illnesses are work-related.)
Along with sudden accidents like falling off scaffolding on the job, injuries and illnesses covered by workers’ comp may also include:
However, workers’ comp generally won’t cover injuries that were caused by the employee’s intoxication or use of illegal drugs. Many states also deny coverage in other situations involving misconduct, including injuries that:
In some states, injuries may not be covered if they happened while the employees were violating company policy or engaging in ‘horseplay” (that is, fooling around). But courts may still decide those injures are work-related if the employer condoned the behavior, or it was an accepted or common part of the working environment.
State laws often have special rules for workers’ comp claims that are filed after the employee is fired or laid off.
Workers’ comp laws don’t protect employers from all employee lawsuits related to injuries. There are limited exceptions that allow employees to sue their employers when they’ve been hurt, but those exceptions vary from state to state.
When employees are injured because of their employers’ intentional actions, some states allow those employees to bypass the workers’ comp system and sue the employer in court for a full range of money damages, including punitive damages (intended to punish the employer) and pain and suffering (the mental anguish, physical discomfort, or overall loss of enjoyment of life caused by the injuries).
But employees generally must prove that their employers actually intended to hurt them. In addition, injured workers may sue if their employers didn’t obtain required workers’ compensation insurance. (Learn more about when injured employees may sue their employers.)
Employees may also be able to file lawsuits outside workers’ comp against third parties, such as the manufacturers of defective products, or the other driver in a work-related car accident.
In addition to carrying insurance to cover work-related injuries, employers have a number of other obligations under state workers' compensation laws.
Employers must post required notices in a convenient location frequented by employees during working hours. The notices or posters must:
Employers must also provide the same notice to new hires.
Typically, employers must provide injured employees with a workers' compensation claim form within 24 hours after the employee has given notice of an on-the-job injury or work-related illness. Even if the employee hasn’t given this notice, the employer may still be obligated to provide the forms if it knew about the injury.
Employers must also supply the employee with written information (usually a pamphlet) about the employee's rights under the workers' comp system. The written material should provide details about available benefits and how to file a claim.
]]>Normally, it's very difficult for most employees to get these benefits for an infectious disease, especially one that's widespread in the community. But thanks to a state law passed in response to the pandemic, it will be easier to qualify for workers' comp if you get COVID-19 while working:
Read on for more details about getting workers' comp for COVID-19 in California.
Senate Bill 1159, which the California governor signed into law on September 20, 2020, makes certain employees who contract COVID-19 eligible to collect workers' compensation benefits, including medical coverage.
The law creates a rebuttable presumption that when first responders, firefighters, peace officers, and health care workers contract COVID-19, it is assumed to be work-related unless it can be proven otherwise. That means that these employees are generally eligible for workers' comp benefits for COVID-19.
The law also establishes a rebuttable presumption that workers who test positive during an outbreak of COVID-19 at their workplace contracted the virus at work, and are thus eligible for workers' comp.
The new law is set to remain in effect until January 1, 2023.
When certain healthcare workers and first responders test positive for COVID-19 within 14 days after working at their employer’s direction and place of employment, they’ll be entitled to a presumption that the illness is work related. High-risk employees covered under this law include:
If you work in one of these occupations, the insurance company has only 30 days to deny your claim for COVID-19 (rather than the normal 90-day time limit), unless it discovers evidence after that point to challenge the presumption that your illness is covered by workers’ comp.
When you qualify for this presumption, you must use up any sick leave benefits that have been made available in response to COVID-19 before you can start collecting temporary disability benefits. But if you don’t have access to any coronavirus-related sick leave, the normal three-day waiting period for temporary disability won’t apply. (Cal. Labor Code § 3212.87 (2021).)
Even if you don’t qualify for the law that applies to healthcare workers and first responders, California will presume that you have a work-related illness when you get COVID-19 within 14 days of working at a job site that’s experiencing an outbreak of the disease, as long as your employer has at least five employees. An outbreak means that, within a 14-day period, at least four out of 100 or fewer employees at your workplace have tested positive for COVID-19 (or 4% of the total if there are more than 100 employees at that site), or officials have closed the workplace because of the risk of infection.
The insurance company has 45 days to deny your claim. To overcome the presumption, your employer or its insurer may present evidence including proof of measures it took to reduce transmission of the coronavirus at the workplace, as well as your own risks of infection outside of work. (Although this isn’t spelled out in the law, you should be aware that the insurance company may look at social media posts and other evidence that you or other household members have gone to restaurants, gyms, or other gatherings with a risk of exposure to the virus.)
As with high-risk employees, you will need to exhaust any available coronavirus-related sick leave before you can collect temporary disability benefits under this law. (Cal. Labor Code § 3212.88 (2021).)
If you don't work in the type of job or workplace covered by the presumptions described above, it's not impossible to qualify for workers' comp benefits for COVID-19. But it will be very difficult. Under a longstanding rule in California, workers’ comp won't cover an infectious illness unless you can prove both that your job involves a special exposure hazard that’s greater than the risk in the general public, and that you contracted the disease because of a specific, identifiable exposure at work.
The California Supreme Court has long recognized that in order for an injury or illness to be covered by workers’ compensation in California, the employee’s job doesn’t have to be the only reason the worker needs medical care or can’t work. It simply must be one of the contributing causes. (See, for example, South Coast Framing, Inc. v. Workers’ Comp. Appeals Bd., 61 Cal.4th 291 (2015).)
This rule usually applies to cases when an on-the-job injury aggravates a pre-existing condition that wasn’t related to work. But in theory, at least, it might apply in the reverse situation—when a preexisting work-related condition makes a case of COVID-19 more severe, resulting in a greater need for medical treatment and a long recovery (or even death).
It’s not clear how insurers and the state workers’ compensation agency will apply the “contributing cause” rule to this scenario. But if you find yourself in this situation, it’s possible you could get workers’ comp benefits for all of your medical treatment and temporary disability (as well as death benefits for your survivors, in the awful event that you died from the disease), even if you couldn’t show that you got COVID-19 at work.
In order to start the process of applying for workers’ comp benefits for COVID-19, you need to report your illness to your employer within 30 days after the date of injury. You also have to file a claim form. (Learn about how and when to file a workers’ comp claim in California.) While the insurance company is deciding whether to approve or deny your claim, it must pay up to $10,000 for your medical bills. However, you’ll need to follow the rules for selecting your treating doctor.
If your claim is denied, you have the right to appeal. You also may challenge the insurer’s decisions if isn’t paying all of the benefits you’re entitled to receive. But you should probably speak with a workers’ comp lawyer first. The appeals process involves complicated rules on evidence and procedure. And it’s especially important to have an experienced attorney on your side when you've filed a claim for COVID-19, because the issue is still new and unsettled. Workers’ comp lawyers in California receive only a limited percentage of the benefits they win for you, and most will offer a free initial consultation—which might be over the phone or by videoconference. (Learn more about working with a workers’ comp attorney.)
Meanwhile, you have other options for getting immediate benefits when you’re out of work due to COVID-19, including paid leave under California’s short-term disability insurance program.
]]>I am a newly divorced dad, and the court ordered me to pay child support. Rather than just telling me how much I owe each month and letting me figure out how to pay it, the court issued a wage garnishment order. Now, almost a third of my take-home pay, after deductions and tax withholding, is going straight to my ex-wife! Is this legal? Isn't there a limit on how much of my wages can be garnished?
There is a limit on how much of your wages can be garnished to pay child support (or child support plus spousal support). Believe it or not, however, the amount you are paying is well below that limit.
Generally speaking, there are a lot of legal protections for debtors when it comes to how creditors can collect what they are owed. For example, a credit card company or department store can't simply garnish your wages if you stop paying your bills. They must first sue you, win the lawsuit, and get the court to issue a wage garnishment order against you. Once they jump through all of these hoops, the amount they can garnish is limited to a maximum of 25% of your disposable income. For more information see Nolo’s article, If Your Wages are Garnished: Your Rights.
The rules are different for debts that are considered a higher priority. These debts include back taxes, student loans, and child support. Since 1988, all court orders for the payment of child support automatically include an order for wage withholding to pay that amount. (If you also owe spousal support or alimony, that amount may be included in the wage withholding order. However, if you owe only spousal support and not child support, the court will not automatically order wage withholding.)
Because child support is so important, the law sets a very high limit on the amount that can be withheld from your paycheck for this purpose. If you are not currently supporting another child or spouse who are not the subject of the order, up to 60% of your wages can be garnished. However, if you are currently supporting another child or a spouse (for example, if you have remarried and had another child), the court can order that up to 50% of your wages be withheld for child support.
The amount withheld from your check – about a third of your wages – is well within these limits. If you feel that you don't have enough to live on after your child support is deducted, that's a matter to bring up with the family court judge. Talk to your divorce lawyer to find out your chances for obtaining a modification of your child support obligations.
]]>What this means is that if you're a young person looking for a job—or an employer looking to hire one—you need to check the laws of your state to ensure you're following the law.
The FLSA regulates the types of jobs that minors can do by taking into consideration the age of the minor and the nature of the work. In general, the FLSA provides that:
According to the Secretary of Labor, hazardous jobs often involve:
There are also special rules that apply to minors who do agricultural work. Children employed by farms that are not owned by their parents, for example, are not permitted to work during the school day and may need parental consent for certain jobs.
Not all minors are covered by the FLSA. There are exceptions for:
Outside of the FLSA’s general guidelines, child labor is regulated by the state in which you work. This includes whether you will need a work permit to get a job.
In most states, a work permit is necessary for anyone under the age of 18 to become legally employed. The purpose of this document is to ensure that the minor is not underage and is physically fit to work.
State laws vary, but a work permit generally consists of an employment certificate or an age certificate, or both.
An employment certificate shows that the minor meets the state’s criteria for employment, which might include a doctor’s note indicating that the minor is cleared medically. An age certificate, on the other hand, simply provides proof of the minor’s age.
Do not get lost in the terminology. Many states issue one document that covers all the things that a minor would need to get a job, whether it’s called a work permit, work certificate, or employment certificate.
The best way to determine if you need working papers is to check the U.S. Department of Labor's helpful state-by-state guide to work permits.
Work permits are normally issued by school guidance counseling departments and state labor departments. Your school's guidance counselors will most likely have work permit applications on hand and should be able to answer all your questions. Applications and further guidance can also be found online; check the website of your state's department of labor.
Remember, each state has its own set of rules and regulations, but in most cases you will need:
In California, for example, the application needs to be completed by the minor, parent, and prospective employer. The employer will need to describe the nature of the work, and the number of hours the minor will work per day and per week.
New York color-codes working papers depending on whether the minor is 14 to 15 years old, 16 to 17 years old and in school, or 16 to 17 years old and out of school. The original employment certificate must be given to the employer and returned at the end of the job. Employers are not permitted to take photocopies.
Most states have a different set of rules and paperwork for agricultural, entertainment, and newspaper delivery jobs.
If you are a teenager looking to enter the working world, a good place to start is the federal government's YouthRules! website. This site is designed to educate young workers and their parents on everything from workplace safety to wage and hour laws.
One thing to keep in mind is that employers can have their own age and hour requirements so long as they do not conflict with state and federal law. You might be a mature 15-year-old who is ready to balance school and work, but to work at many fast food chains, for example, you need to be at least 16 years old.
Finally, while most teenagers now conduct their job hunt online, don't underestimate the value of visiting the places you want to work and trying to chat with the manager about any openings. A friendly smile and firm handshake can help you stand out from the crowd.
]]>To figure out whether your company has to provide FMLA leave to an employee, you must ask yourself three questions:
Your company is legally obligated to provide FMLA leave only if the answer to all three of these questions is “yes.”
Your company is covered by the FMLA if it employed 50 or more employees for 20 or more weeks in the current or preceding year. Independent contractors don’t count toward the total, but you must include:
The 20 weeks need not be consecutive. As long as your company had at least 50 employees during any 20 weeks of this calendar year or the previous calendar year, it is covered by the FMLA.
An employee is eligible for FMLA leave only if all three of these conditions are met:
Only certain situations and reasons for leave are covered by the FMLA. They are:
If your employer has denied your request to take FMLA leave, or has retaliated against you for using such leave, contact an employment law attorney to discuss your legal options.
]]>Under federal law, the general rule is that employers may deduct certain expenses from their employees’ paychecks, as long as the deductions don’t bring the employee’s earnings below the minimum wage. (However, there are some exceptions, as explained below.)
Some states have laws that are more protective of employees. For example, some states prohibit employers from passing certain business costs on to employees. And, even in states that allow these types of deductions, employers must follow certain rules.
This article explains the basic paycheck deduction rules employers must follow. To find out what your state allows and prohibits, contact your state department of labor.
Under federal law, employers may deduct the cost of a uniform (including the cost of having it cleaned and pressed) from an employee's paycheck, as long as the employee's wages after the deduction don't fall below the minimum wage. If an employee earns the minimum wage, the employer may not require the employee to pay for a uniform, through payroll deductions or otherwise.
Some states have stricter rules. In New Jersey, for example, employers may not require employees to buy or pay for a uniform that has a company logo or is unsuitable for street wear. And, a number of states don't allow employers to charge employees for uniforms under any circumstances. In these states, the cost of uniforms is considered a business expense, which must be borne by the employer.
The same federal law that applies to uniforms applies to work tools. Employers may require employees to pay for tools and equipment, whether through payroll deductions or otherwise, but only if the employee's pay after deductions is at least equal to the minimum wage.
State laws differ here as well. Oregon employers, for example, may require employees to pay for their work tools if the employee earns more than the minimum wage. However, Oregon employers may not accomplish this by withholding money from the employee’s paycheck. In California, employers must provide all tools and equipment necessary to perform the job; employees can't be required to pay at all.
Some employers charge employees for items they break or for shortages in their cash register drawers. Under federal law, employers can charge the employee for these losses, as long as the employee is still earning at least the minimum wage.
A number of states are more protective. Some states require employers to get the employee's consent, in writing, before they can deduct the cost of broken goods or cash register shortages from the employee's paycheck. Some allow these deductions only if the employee admits to being responsible for the loss or shortage.
California doesn't allow these deductions at all. Unless the employer can show that the employee acted dishonestly, willfully, or in a grossly negligent manner, these costs may not be passed along to employees.
Under federal law, there’s an exception to the general rule that paycheck deductions cannot bring an employee’s pay below the minimum wage. Employers may deduct the cost of providing lodging and meals to employees, even if that causes the employee to take home less than the minimum wage. In fast food restaurants, for example, many employees work minimum wage jobs—and employers often charge employees the cost of one meal per shift.
Employers may deduct meals and lodging only if they are being provided primarily for the benefit of the employee and only if it is customary in the industry to provide those items to employees. And, the employer may deduct only the reasonable cost of providing the items, not what it would charge the public.
Most states follow the same rule, but some are more protective. In California, for example, employers may take deductions for meals and lodging only if employees voluntarily agree, in writing, to the deductions. And, some states place limits on how much an employer can deduct.
Employer loans are another exception to the general rule that deductions cannot reduce an employee’s wages below minimum wage. If an employee owes your company money—for a salary advance, for example—the company can withhold money form the employee’s paycheck to pay itself back, even if the employee’s earnings would fall below minimum wage.
Some states prohibit paycheck deductions for debts to the employer, or limit the circumstances under which these deductions may be made. For example, state law might require employers to secure the employee’s agreement, on a signed consent form, to withhold this money.
If your employer is making any of the following deductions from your paycheck, it might be violating the law:
If your employer has made illegal deductions from your check or refuses to pay you the minimum wage, consider contacting an employment lawyer to discuss your legal options. You can find one in your area using our Lawyer Directory.
]]>Employment discrimination occurs when an employer treats a worker differently based on a protected characteristic—such as age, race, or religion—that is unrelated to job performance. The federal government and each state has laws outlawing discrimination in the workplace.
Federal laws protect employees from discrimination based on race, color, national origin, sex, religion, disability, genetic information, citizenship status, and age (if the employee is at least 40 years old).
These laws apply only to employers of a certain size. For example, Title VII of the Civil Rights Act of 1964, the main federal law prohibiting discrimination, applies only to employers that have at least 15 employees.
Some states have enacted laws that go further. In some states, for example, the law prohibits discrimination on additional grounds, such as marital status or weight. And, some states apply to smaller employers.
If your state offers additional rights to employees, you are entitled to those protections. To find out your state's rules on discrimination, select it from the list below.
1. Decide whether to investigate.
Before you put on your detective's hat, take some time to decide whether you really need an investigation. In a few situations -- for example, if all employees agree on what happened or the problem appears to be minor -- you may reasonably decide that a full-blown investigation is unnecessary. Usually, however, it's best to err on the side of conducting an investigation. If the problem is more serious than it seemed, failing to investigate can lead to legal trouble -- and continuing workplace problems. And sometimes, you just can't tell how widespread or substantial a problem is until you do a little poking around.
2. Take immediate action, if necessary.
You might have to act right away -- even before you begin your investigation -- if a situation is volatile or could otherwise cause immediate harm to your business. If an employee is accused of sexually assaulting a coworker, stealing valuable trade secrets, or bringing a weapon to work, you'll probably want to suspend the accused employee temporarily -- with pay -- while you look into the matter. But be careful not to prejudge the situation or lead the accused employee to believe that you've already made up your mind.
3. Choose an investigator.
You'll want an investigator who is experienced and/or trained in investigation techniques, is impartial and perceived as impartial by the employees involved, and is capable of acting -- and, if necessary, testifying in court -- professionally about the situation. If you have someone who meets this job description on your payroll, you're in luck. If not, you can hire an outside investigator to handle things for you.
4. Plan the investigation.
Take some time up front to organize your thoughts. Gather any information you already have about the problem -- such as an employee complaint, a supervisor's report, written warnings, or materials that are part of the problem (such as X-rated emails or threatening letters). Using this information as your guide, think about what you'll need to find out to decide what happened. Whom will you interview and what will you ask? Are there additional documents that employees or supervisors might have? Is there anyone who witnessed important events -- or should have?
5. Conduct interviews.
The goal of every investigation is to gather information -- and the most basic way to do that is by asking people questions. Most investigations involve at least two interviews: one of the employee accused of wrongdoing, and another of the employee who complained or was the victim. Sometimes, you will also want to interview witnesses -- others who may have seen or heard something important. When you interview people, try to elicit as much information as possible by asking open-ended questions.
6. Gather documents and other evidence.
Almost every investigation will rely to some extent on documents -- personnel files, email messages, company policies, correspondence, and so on. And some investigations will require you to gather other types of evidence, such as drugs, a weapon, photographs, or stolen items.
7. Evaluate the evidence.
The most challenging part of many investigations -- especially if witnesses disagree or contradict each other -- is figuring out what actually happened. There are some proven methods of deciding where the truth lies -- methods all of us use in our everyday lives to get to the bottom of things. You'll want to consider, for example, whose story makes the most sense, whose demeanor was more convincing, and who (if anyone) has a motive to deceive you. And in some situations, you may just have to throw up your hands and acknowledge that you don't have enough information to decide what really happened.
8. Take action.
Once you decide what happened, you'll have to figure out what to do about it. If you conclude that serious wrongdoing occurred, you will have to take disciplinary action quickly to avoid legal liability for that employee's behavior and to protect your company and other workers from harm. In deciding how to handle these situations, you should consider a number of factors, including how serious the actions were and how you have handled similar problems in the past.
9. Document the investigation.
Once your investigation is complete, you should write an investigation report that explains what you did and why. This will not only give the company some protection from lawsuits relating to the investigation, but will also provide a written record in case of future misconduct by the same employee(s). Among other things, your report should explain how and when the problem came to the company's attention, what interviews you conducted, what evidence you considered, what conclusions you reached, and what you did about the problem.
10. Follow up.
The last step is to follow up with your employees to make sure that you've solved the problem that led to the investigation. Has the misconduct stopped? Has the wrongdoer met any requirements imposed as a result of the investigation -- for example, to complete a training course on sexual harassment? If the investigation revealed any systemic workplace problems (such as widespread confusion about company policy or lack of training on issues like workplace diversity or proper techniques for dealing with customers), some training might be in order.
This article provides an overview of child labor regulations in California. You can find more information on employing minors at the website of the Department of Labor Standards Enforcement.
With a few exceptions, California employers must get a work permit issued by the minor’s school before hiring a teenager. (This rule applies to those who are under the age of 18 and have not yet graduated from high school; early graduates don’t have to get a work permit.)
Typically, once you agree to hire a teenager, he or she must complete a form provided by the school. You must also fill in some information on the form, including your contact information and the nature of the work to be performed by the teen. Your company and the teen’s parents must sign the form.
Once the form is returned to the school, it will decide whether to issue a work permit. This decision is discretionary, in recognition of the public policy that education should be a minor’s first priority. The school may decide to issue a permit for the maximum hours allowed by law, or it may limit the hours the teen may work or refuse to issue a permit at all.
Teens who do odd jobs in private homes (like mowing lawns, babysitting, or dog walking) don’t have to worry about this requirement. Nor do teens who are self-employed, including most of those who deliver newspapers.
Federal law allows employers to pay workers who are not yet 20 years old an “opportunity wage” that is less than the regular minimum wage during their first 90 days of work. California law doesn’t have this type of provision. California employers may, however, pay “learner” employees 85% of the minimum wage for their first 160 hours of work. A learner is someone of any age who has no previous similar or related experience to the work being performed.
When it comes to labor laws, the law that provides the most protection to workers applies. Here’s how it works:
Unlike adults, minors are not allowed to work unlimited hours. Instead, the work hours of a minor employee depend on his or her age and the school calendar. Here are the general rules:
Young minors – those under the age of 14 – may generally work only in very limited jobs, such as delivering newspapers or doing odd jobs in people’s homes. Once a minor turns 14, however, a wider range of typical teenage work is allowed, including retail, food service, and office and clerical work. Minors in this age group are not allowed to do any hazardous work, including mining, manufacturing, repairing equipment and machines, working on ladders, work involving power-driven machinery, and much more.
There are also special restrictions that apply to teens who will engage in door-to-door sales, including that they must work in pairs.
Minors who are 16 and older may work in a wide variety of fields, except those deemed hazardous under federal law (which includes roofing, excavation, working with explosives, and working with radioactive substances). They also may not sell alcohol or work in certain areas of gas stations, among other things.
For more information on all of these restrictions, check out this summary chart of child labor restrictions from the California Department of Labor Standards Enforcement.
]]>You might have legitimate performance-based reasons for the firing, but unless you can prove it with documentation, you might have a hard time defending against a lawsuit.
Fortunately, employers can often minimize the risk of lawsuits by considering a few questions before making the decision to fire an employee, including:
These questions (discussed in further detail below) are best suited for at-will employees; different considerations might apply if the employee is a member of a labor union or has an employment contract.
One of the most important things you can do before firing an employee is to make sure that you have consistently and uniformly followed all of your personnel policies. That means that you haven’t skipped any steps or procedures and you’ve applied your policies to all employees in the same manner.
If you have an employee handbook, see what it says about the employee’s situation. For example, if you want to fire an employee for missing too much work, check to see what your handbook says about attendance. Does the employee have too many unexcused absences? Did the employee follow the proper procedures for calling in sick? Does the handbook specify when poor attendance is grounds for termination?
Your handbook may have a progressive disciplinary policy, which means that an employee will receive a bigger consequence for each offense (usually starting with a verbal warning as a first step and ending in termination as a last step). Often times, a handbook will make it clear that employers are not bound by the procedure and can skip steps depending on the seriousness of the offense. But, if your progressive discipline policy doesn’t reserve this right, you should make sure that you’ve taken all the required disciplinary steps. And, even if you’re not required to follow your progressive disciplinary policy, doing so can reduce the likelihood of a lawsuit from an employee claiming that he was treated unfairly.
Another important consideration is whether you have made exceptions for other employees in the past. For example, did you give lighter discipline, such as a suspension or a written warning, to an employee who committed the same offense earlier this year? If you now fire a different employee for the same thing, then you might be subject to a lawsuit from the later employee. For example, you may face a discrimination lawsuit from an employee who claims that you treated her harsher than a similarly situated male because of her gender.
One of the best ways to minimize legal risk is to make sure that the grounds for the decision are thoroughly documented in the employee’s personnel file. If there was a specific incident that happened, such as a safety violation or insubordination, then each person involved in the incident as well as any witnesses should be interviewed and asked to write statements if appropriate. Be sure to give the employee write-ups for any other disciplinary issues and have the employee sign to acknowledge receipt.
Similarly, all evidence of performance problems should be saved, such as screen printouts, customer complaints, time card records, production records (for manufacturing employees), or telephone records. You might want to consider saving any surveillance or other video recordings you may have, or taking pictures if possible. You will need these documents to prove that you had a good reason for the termination if the employee later files suit.
Under federal law, it is generally illegal to fire an employee due to race, sex, religion, national origin, pregnancy, ethnicity, or age. State laws may protect additional categories, such as sexual orientation or marital status. When employees are surprised or confused by their terminations, they often file lawsuits claiming that they were discriminated against. Especially if the employee is a minority, female, pregnant, or over 40, it is important to make sure that you are not treating the employee any differently than any other employees. (For more information, see our page on preventing discrimination and harassment in the workplace.)
If the employee is currently on leave under the Family and Medical Leave Act (FMLA), you typically cannot fire the employee. In most cases, employees have the right to be reinstated to their same positions upon returning from FMLA leave (for exceptions, see our article on reinstatement under the FMLA). Employers are also prohibited from retaliating against employees who take FMLA leave. If the employee has recently returned from FMLA leave or given you notice that she intends to take FMLA leave, you should be very cautious before terminating the employee. If you fire an employee soon after he or she exercises rights under the FMLA, a court is more likely to find that the firing was retaliatory. If you feel you must terminate the employee, be careful to follow your personnel policies and document the reason for firing.
Under the Americans with Disabilities Act (ADA), it is also illegal to fire an employee due to his or her disability. If the employee in question has a disability, you should make sure that you’ve followed your policies carefully and that you’ve documented your reason for the termination. If the employee has asked you for a “reasonable accommodation” — changes to help his or her do her job, such as a flexible work schedule, more frequent breaks, or an unpaid leave of absence—you must engage in a conversation with the employee to explore options for accommodation. If you fire an employee for performance problems that are related to a disability and fail to discuss reasonable accommodation, you could face an expensive disability discrimination lawsuit.
For more information on other types of protected leave, see our page on time off for your employees.
Employers should be extremely cautious before terminating any employee who has recently claimed that the employer has done something illegal. For example, if the employee has come forward with a complaint that a manager is sexually harassing someone, that the company is not following work safety regulations, or that the company’s pay practices do not comply with the law, and the employee is then fired, the employee may have a strong case that he or she was fired in retaliation for making the complaint.
All employee complaints of illegal activity should be taken seriously, carefully investigated, and documented. The investigation of the complaint should be kept entirely separate from the employee’s personnel file. And, before firing an employee who has made a complaint, make sure that the reason for the termination is well within your policies and well documented. (See our article on preventing retaliation claims for more details.)
Before firing any employee, check your pay records to make sure the employee has been appropriately paid for all of his time at work. If you haven’t paid the employee at the overtime rate for hours worked beyond 40 in a week, the employee may decide to file a lawsuit against you for unpaid wages. The employee will be entitled to those wages regardless of the reason for the firing.
Most states have their own specific rules about minimum wage, overtime, and meal periods and rest breaks. Many states also have rules about what can be deducted from an employee’s final pay and when the final paycheck must be issued. (Check out our wage and hour page for more information, including state-specific rules.)
If any of the above situations apply, you should consult with a lawyer before taking action. Firing employees who are in protected categories, have filed complaints, have taken protected leave, or have not been paid correctly can be risky. A lawyer will be able to help you assess the situation and decide on the best course of action.
]]>Although the minimum wage is an hourly wage, this doesn't mean that you have to pay employees by the hour. You may pay a salary, commission, wages plus tips, or piece rate, as long as the total amount paid divided by the total number of hours worked is equal to at least the minimum wage.
The main federal law that sets the minimum wage is the Fair Labor Standards Act (FLSA). (29 U.S.C. § 201 and following.) Although the FLSA covers most employers, some employers and employees are not covered.
Generally, your business must abide by the FLSA if you have $500,000 or more in annual sales or if your employees work in what Congress calls "interstate commerce"—that is, if they do business between states. This includes making phone calls to or from another state, sending mail out of state, or handling goods that have come from or will go to another state. In today’s world, this means that nearly all employers are covered by the FLSA.
Even if your business is covered, federal law does not require you to pay the following workers the federal minimum wage:
Even if your business or your employees are exempt from the federal minimum wage law, they might still be covered under your state or local law. To learn more about your state minimum wage law, select your state from our state wage and hour page. Most, but not all, states allow cities and counties to set minimum wage rates higher than the state rate. To find out whether your area has a higher rate, contact your local government.
If your employees regularly earn tips from customers, you might be able to pay them less than the minimum wage, Federal law allows employers to pay a special hourly rate to tipped workers, as long as they earn enough in tips to make at least minimum wage for each hour worked. If you follow this procedure (called taking a "tip credit"), you are legally required to adopt a policy explaining it to your employees. Not all states let employers take a tip credit, however. To learn more on this topic, see our article on how tip credits work.
For a complete guide to your legal rights and responsibilities as an employer, read The Employer's Legal Handbook by Aaron Hotfelder (Nolo).
]]>I work in the HR department of a large company. I've been helping to investigate a sexual harassment complaint in our regional office. I was recently told that several employees -- whom we interviewed as potential witnesses to the alleged harassment -- have been talking to each other and to other employees about the investigation. Our standard investigation paperwork instructs employees that the investigation is confidential, and cautions them that talking about it could lead to discipline. Can we discipline these employees? Should we?
Investigation confidentiality rules are a very hot topic these days. It used to be standard practice for companies to forbid employees from discussing an investigation at work, on pain of discipline or even termination. It sounds like your company followed this practice. These days, however, it could lead to legal problems.
Both the Equal Employment Opportunity Commission (EEOC), the federal agency that enforces laws prohibiting discrimination and harassment, and the National Labor Relations Board (NLRB), which enforces federal laws regarding unions and workplace organizing, have recently cautioned that such blanket gag rules could be illegal.
In a letter to an employee, the EEOC stated that threatening to discipline or fire employees who discussed a sexual harassment complaint with anyone was illegal retaliation. Discussing harassment complaints with others is a form of "protected opposition" to illegal practices under federal antidiscrimination laws. The letter also indicated that employees subject to such a broad confidentiality rule might believe that they could be disciplined or fired for discussing harassment with the EEOC or other outside agencies.
The NLRB found that employers may not tell employees who had made a complaint not to discuss the matter with coworkers while the investigation was ongoing. The NLRB found that this request violated employees' rights to discuss the terms and conditions of their employment with each other. Although the NLRB said that an employer could impose confidentiality if it had a legitimate business justification for the request that outweighs the employee's rights, the justification has to be fairly significant. And, it has to be based on facts specific to the investigation, rather than a general, blanket approach to all workplace investigations.
So, what should you do? First, consider whether any damage has been done by the employees' discussions. If, for example, you believe the employees are trying to influence others to say certain things or are creating a difficult environment for either the accuser or the accused, that's a potentially serious problem. In this situation, you should consult with an experienced employment lawyer to find out whether you can craft a confidentiality requirement that will pass legal muster. If, however, you are dealing merely with workplace gossip, you might sensibly decide to let it go.
Second, think about how to change your policies -- and your investigation practices -- in the future. Your paperwork should not include a blanket confidentiality requirement. And, when you interview employees, you should focus on revealing only what that person needs to know to provide full, accurate answers. Make sure you are maintaining confidentiality yourself, both to set a good example and to avoid providing more fodder for the rumor mill.
Finally, consider how you are conducting the investigation. Practices such as interviewing people in a private space, or even off-site, can help cut down on gossip. Staying focused and avoiding delays in the investigation are also good strategies. The quicker you come to a conclusion, the quicker the workplace can return to normal.
In all 50 states, federal law makes it illegal to discriminate based on:
The state of California prohibits workplace discrimination based on any of the following characteristics:
Several cities in the U.S. have their own laws protecting additional characteristics or extending protection to more employees. For example, height and weight are protected classes in San Francisco. Contact your local government to learn more.
You have three years from the most recent incident of discrimination or retaliation to file a claim with California's Department of Fair Employment and Housing (DFEH).
If you work in California and want to file a workplace discrimination claim with the EEOC, you generally have up to 300 days to do so
If your employer takes any sort of negative action against you for filing a claim of discrimination or harassment, that would constitute illegal retaliation. Such retaliation might involve:
Note that you can generally file a claim for retaliation even if you don't have an underlying discrimination or harassment claim.
Federal antidiscrimination laws apply to California employers with 15 or more employees, with the following exceptions:
California's antidiscrimination laws apply to companies with five or more employees.
The Equal Employment Opportunity Commission (EEOC) is the federal agency that regulates workplace discrimination. You can contact the Equal Employment Opportunity Commission by calling 800-669-4000 or check out its website. The website can help you locate an EEOC field office in California. (See our article on filing a discrimination claim with the EEOC.)
The Department of Fair Employment and Housing, Sacramento District Office enforces state antidiscrimination law in California. You can contact the Department of Fair Employment and Housing, Sacramento District Office at 916-478-7200 or 800-884-1684 or go to its website.
If you've been the victim of workplace discrimination, consider contacting an experienced employment attorney to discuss your legal options.
]]>However, you don't have an unfettered right to dig into applicants' personal affairs. Workers have a right to privacy in certain personal matters, a right they can enforce by suing you if you dig too deeply. And, you may be legally required to follow certain procedures -- such as getting the applicant's consent in writing -- before you can get certain records.
Many employers conduct background checks of job applicants during the hiring process. A background check usually involves verifying information such as employment history, education credentials, criminal records, credit history, and references.
Employers may want to conduct background checks to assess the credibility and suitability of job applicants for a particular position, ensuring they have the necessary qualifications, experience, and character to perform the job effectively.
Background checks also help mitigate potential risks, maintain a safe work environment, and protect the company's reputation and interests.
Employers conducting background checks should follow these tips to stay out of trouble:
In addition to these general considerations, specific rules apply to certain types of information:
For more information on hiring, see Dealing With Problem Employees, by Amy DelPo and Lisa Guerin (Nolo).
]]>The owner of the company I work for just announced a new policy for the New Year: Any employee who smokes must quit within the next three months or be fired. Employees who smoke can sign up for smoking cessation programs to help them quit, which the company will pay for. But anyone who is still lighting up at the end of three months will lose their job. I enjoy an occasional cigarette, and I don't want to give it up. Is it legal for my employer to force me to quit? As long as I don't smoke in no-smoking areas at work, what business is it of my employer whether I choose to smoke?
Some employers have adopted policies that encourage (or coerce) employees to quit smoking in order to save money. Studies show that smokers are sick more often, which means they use more sick days and are more likely to utilize their health insurance. For employers who provide health benefits, this means higher premiums for the company. And, smokers tend to take more frequent breaks at work, as most workplaces across the country now don't allow smoking in indoor locations.
That answers your question of why employers might want to adopt this type of policy. But is it legal? It depends on your state's law. Federal law doesn't address whether employers can fire employees for smoking. In a number of states, however, it is illegal to fire an employee simply for being a smoker.
These laws, often called "off-duty conduct" laws or "lifestyle discrimination" laws, take several forms. In some states, such as California, employers are prohibited from taking action against employees for any lawful activities they choose to undertake in their own time, away from the work site. Some states, including Nevada, protect employees from discrimination for the lawful use of any product offsite during non-work hours. And, some states, like Connecticut, limit the protection to smoking or tobacco products. In these states, employees may not be fired for smoking or otherwise using tobacco, and they may not be required to quit as a condition of employment.
Your employer's decision to fire employees who don't quit smoking would violate these off-duty conduct laws, whether they apply just to tobacco or to anything an employee does off duty. However, if your state doesn't have an off-duty conduct law, your employer's policy change is likely legal. To find out whether your state has a law like this, select it from the list atWorkplace Smoking Laws in Your State.
]]>I was recently diagnosed with cancer. My doctor told me that I'll need to have surgery, followed by a course of chemotherapy. She expects me to be out of commission for a couple of weeks following surgery. She wants me to agree to an eight-week course of chemo, with treatment once a week for a couple of hours.
I've been doing some research online, and people say that I can expect to feel pretty good through the first several rounds of chemo, but progressively worse after that. Some people said that they needed to take a day or two off work to recover from the weekly treatments, especially towards the end. Can I take FMLA leave for this time off? I want to work as much as I can, so I don't want to just take the whole eight weeks off work.
You may take time off for your surgery and treatments, and you can take as much or as little time as you need to recover (up to the 12-week maximum provided by law). The federal Family and Medical Leave Act (FMLA) allows employees to take intermittent leave for their own serious health problems, meaning that you can take a few hours or days off at a time.
The FMLA gives eligible employees the right to take up to 12 weeks of unpaid leave each year for a variety of reasons, including recuperation from their own serious health conditions. Your cancer diagnosis will certainly qualify as a serious health condition. So, as long as your employer is covered and you meet the eligibility requirements, you will be able to take FMLA leave. This means that your job will be protected while you are off work, and you will be able to continue your health insurance coverage.
The drafters of the FMLA recognized that some health conditions (or treatment for them) are sporadic or intermittent. That's why the FMLA gives employees the right to take a few hours or days of leave at a time, if necessary, for their own serious health conditions or to care for family members with serious health conditions. Under the FMLA, you can take leave in hourly increments or in increments as small as your employer tracks for timekeeping purposes, whichever is shorter.
Your employer has the right to request a medical certification, completed by you and your doctor, explaining your condition and an estimated treatment schedule, including the approximate time you will need to take off. As long as it is medically necessary for you to take time off intermittently, the FMLA gives you the right to do so.
]]>Employment law can change rapidly. Courts and government agencies issue new opinions interpreting these laws every day, sometimes completely overturning what everyone thought the law meant. When you also factor in that lawsuits brought by former employees can end in huge damages awards against the employer, it's easy to see why you should seek legal advice when you get in over your head.
On the other hand, you don't need to talk to an employment lawyer every time you evaluate, discipline, or even fire a worker. After all, lawyers don't come cheap. If you run to a lawyer every time you have to make an employment-related decision, you will quickly go broke.
The trick is to figure out which situations require some expert help and which you can handle on your own.
An employment lawyer can help you make difficult decisions about your employees, including when to fire or make layoffs, how to respond to employee complaints, and how to change employee benefits. An employment lawyer can also draft and review employment contracts, employee handbooks, and other legal documents, and provide advice on employee classification.
Read on to learn more.
Particularly if you are worried that an employee might sue, you should consider getting legal advice before firing an employee for misconduct, performance problems, or other bad behavior. An employment law attorney can tell you not only whether terminating the worker will be legal, but also what steps you can take to minimize the risk of a lawsuit.
Here are a few situations when you should consider asking an employment lawyer to review your decision to fire:
Classification issues can affect a large portion of your workforce and create a potential for increased liability. Before classifying a certain position as exempt or nonexempt, or labeling a group of individuals independent contractors rather than employees, you should consider seeking guidance from a lawyer. Misclassification often comes with a hefty price tag, which can include years of unpaid overtime and penalties for multiple employees.
You may also wish to have a lawyer review any employment decision that will affect a large number of employees. For example, if you are planning to lay off some workers, change your pension plan, or discontinue an employee benefit, it would be smart to run your plans by a lawyer before you take action. The lawyer can tell you about any potential legal pitfalls you might be facing -- and give you advice on avoiding them.
Lawsuits. If a current or former employee sues you, speak to an employment lawyer right away. Employment lawsuits can be very complex. You have to take certain actions immediately to make sure that your rights are protected -- and to preserve evidence that might be used in court. The time limits for taking action are very short -- many courts require you to file a formal, legal response to a lawsuit within just a few weeks. As soon as your receive notice of a lawsuit against you, begin looking for a lawyer.
Claims and complaints. Sometimes, a current or former employee initiates some kind of adversarial process short of a lawsuit. For example, an employee might file an administrative charge of discrimination, retaliation, or harassment with the U.S. Equal Employment Opportunity Commission or a similar state agency. Or, a former employee might appeal the denial of unemployment benefits, which in many states allows the employee to request a hearing.
In these situations, you should at least consult an employment law attorney, if not hire one. Although some employers can and do handle these administrative matters on their own, most could probably benefit from some legal advice on the strength of the employee's claim, how to prepare a response to the charge, how to handle an agency investigation, and how to present evidence at the hearing.
It might be worth hiring an employment lawyer to represent you if any of the following occur:
Contracts and agreements. An employment lawyer can quickly review and troubleshoot employment-related agreements you routinely use with your workers, such as employment contracts, severance agreements, or releases. A lawyer can check your contracts to make sure that they contain all the necessary legal terms and will be enforced by a court.
If you have included any language that might cause problems later, or if you have gone beyond what the law requires of you, a lawyer can draw these issues to your attention. And a lawyer can give you advice about when to use these contracts -- for example, you may not want to give severance to every departing employee or enter into an employment contract with every new worker.
Policies and handbooks. You can also ask a lawyer to give your employee handbook or personnel policies a thorough legal review. First and foremost, a lawyer can make sure that your policies don't violate laws regarding overtime pay, family leave, final paychecks, or occupational safety and health, to name a few.
An employment lawyer can also check for language that might create unintended obligations towards your employees. And a lawyer might advise you to consider additional policies. (For help creating an employee handbook -- including sample language you can modify to fit your workplace -- see Create Your Own Employee Handbook, by Lisa Guerin and Amy DelPo (Nolo).)
If you have decided that it might be wise to speak to an employment lawyer, your next step is to find a good one. For tips and information on finding an attorney, read Nolo's article How to Find an Excellent Lawyer.
]]>Wrongful termination is any firing that violates a state or federal law, or public policy. State and federal laws prohibit employers from relying on certain justifications for firing employees, such as discrimination or retaliation.
These prohibitions apply whether the employee has an employment contract or works at will. (To learn more about additional limitations on firing employees with employment contracts, see Nolo's article Firing Employees With Employment Contracts.)
This article provides an overview of the most common illegal reasons for firing employees.
Federal law makes it illegal for most employers to fire an employee because of the employee's race, gender, national origin, disability, religion, genetic information, or age (if the person is at least 40 years old).
Federal law also prohibits most employers from firing someone because that person is pregnant or has a medical condition related to pregnancy or childbirth. To find out if your business is covered by these federal laws, see Nolo's article Federal Antidiscrimination Laws.
Most states also have antidiscrimination laws that prohibit firing for all of the reasons listed in the federal law. Many state laws include additional prohibitions (for example, some state laws prohibit discrimination on the basis of sexual orientation or marital status), and they cover a wider range of employers. To learn more about your state's antidiscrimination laws, see Nolo's articles Employment Discrimination in Your State.
It is illegal for employers to fire employees for asserting their rights under the state and federal antidiscrimination laws described above. An employee can bring a retaliation claim even if the underlying discrimination claim doesn't pan out.
For example, if you fire an employee for complaining that you denied a promotion because of race, you could lose a retaliation lawsuit even if a judge or jury finds that your promotion decision was not discriminatory. To learn more about retaliation, see Nolo's article Preventing Retaliation Claims by Employees.
The federal Employee Polygraph Protection Act prohibits most employers from firing employees for refusing to take a lie detector test. Many state laws also set out strong prohibitions against using lie detector tests.
The federal Immigration Reform and Control Act (IRCA) prohibits most employers from using an employee's alien status as a reason for terminating employment, as long as that employee is legally eligible to work in the United States. To find out more about the IRCA, see Nolo's article Federal Antidiscrimination Laws.
The federal Occupational Safety and Health Act (OSHA) makes it illegal for employers to fire employees for complaining that work conditions don't meet state or federal health and safety rules.
Most states prohibit employers from firing an employee in violation of public policy -- that is, for reasons that most people would find morally or ethically wrong. Of course, morals and ethics can be relative things, so the law varies from state to state. A termination decision that might be allowed in one state might be prohibited in another.
Despite this relativity, most states agree that the following reasons for termination would violate public policy and would therefore be illegal:
Whether you're an employer who's unsure about the legality of firing an employee, or a worker who has been wrongfully terminated, it would be a good idea to consult with an employment attorney to discuss your legal options.
]]>Allegations of sexual harassment are very serious, regardless of the outcome of the employer’s investigation. Employers are, at times, reluctant to conduct as in-depth an investigation of harassment as they should; sometimes they blame the employee alleging harassment and punish him or her. Other employers choose to just discipline or fire the alleged harasser, without properly investigating to confirm that he or she actually engaged in harassment. An experienced employment lawyer can help the victim of harassment and the alleged harasser through this process.
An employee reporting harassment can feel very alone in a difficult, even hostile, process. And, the employee may not know his or her rights or have the confidence to assert them.
An employee who is named as a harasser may be treated as a pariah even before any investigation is done. An employer may blow off a fair investigation and just demote or fire the alleged harasser, without a real inquiry into what happened.
Each of the employees involved can benefit from the advice of a skilled employment lawyer.
Employees who report sexual harassment to their employers often receive a cold shoulder, or worse. An experienced employment lawyer can assist the sexual harassment victim in persuading the employer to conduct a thorough, good faith investigation of the alleged harassment. This is what the law requires, and a lawyer can hold the employer to that obligation.
The alleged harasser also wants the employer to investigate the harassment claims objectively and fully. A “white-wash” that just blames the named harasser is not fair and can result in serious negative repercussions for the employee charged. So, an employee named as a harasser can definitely benefit from the advice of a lawyer throughout the investigation process.
Some employers go so far as to discipline or otherwise retaliate against an employee who reports harassment. An employment lawyer can step in if the employer takes such actions against an employee reporting harassment.
As for the employee charged with harassment, an employer may decide to separate the alleged victim and the alleged harasser. This may mean that the alleged harasser is inconvenienced (by being physically moved to a remote location, for example) or even suspended from work during the investigation. While such actions are legal and may be appropriate in certain circumstances, an employer cannot act arbitrarily in punishing an alleged harasser before the investigation is concluded. With the advice of an experienced employment lawyer, the employee charged with harassment can make sure any actions taken by the employer are fair and justified.
Both the alleged victim and the alleged harasser need to know that the determination made by the employer after the investigation is fair and objective. Each of these employees needs their own lawyer to analyze the report of the investigation to make sure that:
If the lawyer for either the victim or the alleged harasser believes that the investigation results are not supported by facts or that the investigation was flawed, the lawyer can advise the employee as to steps to take in response.
After an investigation, regardless of the findings, the employer must take appropriate action. If the investigator found that harassment occurred, the employer must take effective action to address what happened (such as disciplining the harasser or assigning the victim to a different manager) and to prevent it from happening again.
In no event can the employer retaliate against the reporting employee. If the employer finds that the reporting employee made an intentionally false report of harassment, the employer may discipline the employee. An experienced employment attorney can monitor the employer’s actions after the investigation is concluded to make sure the reporting employee is treated fairly.
If the investigation clears the alleged harasser, the employer should not take adverse action against him or her. If the employer disciplines or fires the employee, the employee may have a legal claim against the employer for wrongful termination. The employee’s lawyer can advise the employee of his or her rights after the investigation and help protect them.
An employer who calls an employee a harasser after he or she has been cleared by an investigation may be defaming that employee. An experienced employment lawyer can advise the employee of the actions he or she can take in response to possible defamation by the employer.
Regardless of whether you are the victim of harassment or the alleged harasser, you should talk to an experienced employment lawyer as soon as possible. Rest assured that your employer has legal counsel offering advice throughout this process, and you should too.
]]>State laws dictate when a departing employee must be paid, and the rules sometimes depend on whether an employee quit or was fired. These time limits can be very short (you may have to pay an employee on his or her last day of work, rather than waiting for your usual payroll cycle). In some states, the final paycheck must also include all accrued unused vacation time. For more information, see Final Paychecks for Departing Employees. Once the final paycheck has been cut, have your payroll or accounting clerk remove the employee's name from your payroll.
If the departing employee has paid for expenses that the company will cover (for business-related travel or training, for example), reimburse the employee promptly.
Make sure you get back any company property the employee has before he or she walks out the door for the last time. Among the things you might need to collect are a company car, keys and security cards, company credit cards, long distance cards, computers, cell phones, company manuals, and confidential company files.
If you have issued the employee a company credit card, long distance phone card, or other cards or account numbers that allow the employee to charge amounts to the company, cancel them right away.
Once the employee has finished his or her last day of work, turn off his or her passwords to the computer system, telephone system, and building, if applicable.
If you have at least 20 employees and you offer group health insurance coverage, a federal law called the Consolidated Omnibus Budget Reconciliation Act (COBRA) requires you to give departing employees the opportunity to continue their coverage for a specified period of time. Employees who want continued coverage must pay the premiums; some employees are eligible for a subsidy of 65% of the cost. (For information on this subsidy, see New COBRA Rules: Stimulus Package Subsidizes Continued Health Insurance.) Some states also have insurance continuation laws --and some of these laws apply to smaller employers. For more information on COBRA, see The Essential Guide to Federal Employment Laws, by Lisa Guerin and Amy DelPo (Nolo). For information on your state's laws, contact your state labor or insurance department.
Create a plan for handing off the employee's work to other employees. Determine who will handle the employee's clients or accounts. It may be a good idea to start this process early, so the departing employee can bring coworkers up to speed on pending projects before leaving.
If the employee had access to trade secrets or other confidential company information, debrief the employee on his or her obligation not to reveal that information. If the employee signed a nondisclosure, nonsolicitation, or noncompete agreement, review it with the employee to make sure his or her responsibilities are clear.
If the employee's name appears on anything available to those outside of your company -- such as letterhead, brochures, or your website -- make the necessary changes. Also drop the employee from interoffice lists, such as phone rosters, routing slips, and email groups.
The departing employee may have questions or need information after leaving the company. For example, the employee may need to know whose name to use as a reference, how to sign up for continuing benefits, or how to handle pension or retirement account issues. Assign someone to be the point person for providing this information.
]]>Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e and following) prohibits employers from discriminating against applicants and employees on the basis of race, color, religion, sex, and national origin (including membership in a Native American tribe). It also prohibits employers from retaliating against an applicant or employee who asserts his or her rights under the law. To learn more about retaliation, see our article on preventing retaliation claims by employees.
Title VII prohibits discrimination in all terms, conditions, and privileges of employment, including hiring, firing, compensation, benefits, job assignments, promotions, and discipline. Title VII also prohibits practices that seem neutral but have a disproportionate impact on a protected group of people. Such a practice is legal only if the employer has a valid reason for using it. For example, a strength requirement might be legal—even though it excludes disproportionate numbers of women—if an employer is using it to fill a job that requires heavy lifting. Such a requirement would not be valid for a desk job, however.
Title VII makes it illegal to harass someone on the basis of a protected characteristic (race, sex, and so on). For information on sexual harassment and tips on preventing it, see our article on preventing sexual harassment in the workplace.
Title VII applies to employers that fit into the following categories:
The U.S. Equal Employment Opportunity Commission (EEOC) enforces Title VII. The EEOC has offices throughout the country. To find the office nearest you, and to learn more about Title VII and other antidiscrimination laws, visit the EEOC's website at www.eeoc.gov.
The Pregnancy Discrimination Act (PDA) amended Title VII to make it illegal for employers to discriminate on the basis of pregnancy, childbirth, or a related medical condition (including those related to miscarriage or termination of a pregnancy). All employers covered by Title VII are covered by the PDA.
The PDA prohibits employers from discriminating against pregnant employees, forcing them to take leave when they are still able to perform their jobs, and making assumptions about their ability or willingness to work after they have children. When it comes to benefits and accommodations in the workplace, employers must treat pregnant employees the same as other employees who are temporarily unable to work for other reasons. For example, if an employer offers light-duty work to all employees with medical conditions, it likely must provide light-duty work to pregnant employees as well. To learn more, see our article on requesting a reasonable accommodation for pregnancy.
The EEOC enforces the PDA. The EEOC has offices throughout the country. To find an EEOC office near you, and to learn more about the PDA, check out the EEOC's website at www.eeoc.gov.
The Age Discrimination in Employment Act (ADEA) can be found at 29 U.S.C. 621-634. It prohibits discrimination based on age against employees who are at least 40 years old. It also prohibits employers from retaliating against an applicant or employee for asserting his or her rights under the ADEA. To learn more about retaliation, see our article on preventing retaliation claims by employees.
The ADEA prohibits age discrimination in all terms and conditions of employment, including hiring, firing, compensation, job assignments, shift assignments, discipline, and promotions. A separate law, the Older Workers Benefits Protection Act (OWBPA), protects employees over the age of 40 from discrimination in benefits.
The ADEA applies to private employers with at least 20 employees, the federal government, interstate agencies, employment agencies, and labor unions. Although the ADEA also protects state government employees, these employees may not file lawsuits claiming age discrimination -- they may assert their rights only through the Equal Employment Opportunity Commission (EEOC).
The EEOC enforces the ADEA. To find an EEOC office near you, and to learn more about the ADEA, check out the EEOC's website at www.eeoc.gov.
The Americans With Disabilities Act (ADA) can be found at 42 U.S.C. 12101-12213. It prohibits employers from discriminating against people with disabilities in any aspect of employment, including applications, interviews, testing, hiring, job assignments, evaluations, compensation, leave, benefits, discipline, training, promotions, medical exams, layoffs, and firing. (For information on complying with the ADA during the hiring process, see our article on how to avoid disability discrimination in the workplace.)
The ADA protects not only applicants and employees with disabilities; it also protects those who have a history of disability and those who are perceived -- incorrectly -- as having a disability. For example, an employee who was diagnosed with cancer and has been in remission for ten years may not have a current disability, but his employer is still prohibited from making job-related decisions based on the employee's former disability. Similarly, an employee who walks with a limp may not have a disability, but an employer who makes job-related decisions based on the mistaken belief that the employee is disabled (for example, by refusing to promote the employee to a managerial position that would require her to walk a shop room floor) violates the ADA. The ADA also prohibits employers from discriminating against someone because that person is related to or associates with someone who has a disability.
The ADA applies to private employers with at least 15 employees, local governments and their agencies, employment agencies, and labor unions. Although state employees are protected by the law, these employees may not sue their state government employers for monetary damages. A separate law, the Rehabilitation Act, protects federal employees from disability discrimination.
Two government agencies enforce the ADA: the U.S. Department of Justice, at www.ada.gov, and the EEOC, at www.eeoc.gov.
The Equal Pay Act (29 U.S.C. 206(d)) requires employers to give men and women equal pay for equal work. Employees do equal work when they perform, under similar working conditions, jobs that require equal skill, effort, and responsibility. Two jobs may be equal even if they have different job titles. For example, a hotel may not pay its janitors, who are primarily men, more than its housekeepers, who are primarily women, if they are doing the same work.
There are a few exceptions to the Equal Pay Act. Employers can pay men and women different salaries for doing equal work if the difference is based on seniority, merit, an incentive system, or any factor other than gender.
Practically speaking, all employers must comply with the Equal Pay Act. This includes private employers (regardless of size), the federal government, state and local governments, and labor unions.
The EEOC enforces the Equal Pay Act. To find an EEOC office near you, and to learn more about the Equal Pay Act, log onto the EEOC's website at www.eeoc.gov.
The Immigration Reform and Control Act of 1986 (IRCA) can be found at 8 U.S.C. 1324. IRCA prohibits employers from discriminating against applicants and employees on the basis of their citizenship or national origin. IRCA's prohibition on discrimination applies to all terms, conditions, and privileges of employment, including hiring, firing, compensation, benefits, job assignments, promotions, and discipline. This antidiscrimination provision applies to federal, state, and local governments and to private employers with at least four employees.
IRCA also makes it illegal for employers to knowingly hire or retain employees who are not authorized to work in the United States. Employers are required to examine employee documents and keep records verifying that their employees are authorized to work in this country.
IRCA is enforced by the U.S. Department of Justice, Office of Special Counsel for Immigration-Related Unfair Employment Practices, at www.justice.gov/crt/osc.
The Civil Rights Act of 1866 (commonly referred to as Section 1981 because of its location in the United States Code) declares African Americans to be citizens, entitled to a series of rights previously reserved to white men. The law confers a number of rights, including the right to sue or be sued in court, to give evidence in a lawsuit, and to purchase property. It also confers the right to make and enforce contracts, which courts have found prohibits racial discrimination in the employment relationship.
Although the law's original purpose was to protect African Americans, courts have interpreted it to protect people of all races from discrimination and harassment. Section 1981 has also been interpreted to prohibit discrimination on the basis of ethnicity, if the discrimination is racial in character.
Section 1981 protects all private employees and all employees of state and local governments. It also protects independent contractors from discrimination by hiring firms and protects partners in a partnership from discrimination. It does not apply to federal employees, however.
No government agency enforces Section 1981 or takes complaints of violations of the law. Employees or applicants who believe their rights under Section 1981 have been violated may file a lawsuit in state or federal court.
The Genetic Information Nondiscrimination Act (GINA) can be found at 42 U.S.C. 2000ff and following. This 2008 law prohibits employers from using an applicant's or employee's genetic information as the basis for employment decisions and requires employers to keep genetic information confidential.
GINA also prohibits employers from requiring or asking employees to provide genetic information. The law includes exceptions for information the employer learns inadvertently, information gathered pursuant to the certification requirements of the Family and Medical Leave Act, and information used for genetic monitoring, among other things. Even if one of these exceptions applies, however, the employer must keep the information confidential and may not use it when making employment decisions.
GINA applies to:
The EEOC enforces GINA. To find an EEOC office near you, and to find out more about GINA, visit the EEOC's website at www.eeoc.gov.
]]>Progressive discipline has evolved over time. It used to refer to a rigid system in which particular punitive measures were required for particular transgressions. Today, however, progressive discipline is often based on a coaching model: Rather than a way to force employees out, it’s seen as a way to help employees improve, if they are willing and able to do so. Here are seven principles that underlie modern systems of progressive discipline; for information on implementing progressive discipline in your workplace, see Using Progressive Discipline.
Some managers mistakenly believe that the purpose of discipline is to build a case to fire employees down the road. Of course, handling disciplinary issues properly will help you preserve your right to end the employment relationship legally, if an employee can’t improve. But that’s just one of the benefits of the system, not its purpose.
As a manager, your goal when dealing with employees who’ve gotten off track isn’t to fire them, but to help them improve their performance and renew their dedication to the job. Termination is seldom the best outcome for a business, when you consider how much it costs to hire and train a new employee, the decline in morale and productivity that can occur when an employee is fired, the real losses to your company of having a position vacant while you search for a replacement (which is also costly), and the potential for legal claims that accompany an employment termination.
Progressive discipline requires you to respond to an employee’s behavior by choosing a disciplinary measure of corresponding seriousness. Responding to a relatively minor issue with an informal coaching session lets an employee know that you’ve identified a problem and you want to give the employee every chance to improve. Similarly, giving a written warning to an employee who has engaged in serious misconduct indicates that the behavior is unacceptable and must stop immediately. In either case the employee you discipline is not the only audience for your action: Other employees will also se (or hear about) how you handle these issues and will get a better understanding of what you and the company expect.
Before you meet with an employee to discuss a problem, you’ll need to be ready to explain why correction is necessary. Employees need to understand the scope of the problem and to be included in the decision-making process. This means you can’t just hand over a written warning; instead, you have to be prepared to explain the problem clearly, with pertinent examples and potential solutions.
Your ability to listen as you discuss performance or conduct issues will make or break the discipline process. If you monopolize the conversation or ignore your employee’s effort to explain, your relationship with the employee might be jeopardized beyond repair – and you may not solve an otherwise solvable problem.
Listening carefully will help you understand the root of the problem and collaborate with the employee to come up with a solution. It will help you make sure that you’ve chosen the right disciplinary response. And, the employee will feel heard and understood, and will therefore be more willing to engage in the process and move forward with a positive attitude.
After you have explained how the employee’s behavior is affecting the company and listened to the employee’s side of the story, it’s time to work together to develop an action plan for improvement. Collaboration allows the employee to feel some ownership of the resolution and take responsibility for making it happen. If you come into a disciplinary meeting with all the answers, your employee won’t have to actively participate – and is more likely to disengage emotionally.
Progressive discipline systems are fair because they require consistency. They require managers to treat similar problems alike and to differentiate between less serious and more serious issues. This framework provides a solid basis for making disciplinary decisions and deciding how to handle all of the particular and unique issues that might come up on your team.
However, because progressive discipline is rooted in collaboration, it allows also for some flexibility in handling disciplinary discussions, coming up with potential solutions, and working with employees to help them improve. Although the particular disciplinary measure you use will typically be dictated by the employee’s behavior, the way you and the employee work together will depend on the facts.
Although the goal of progressive discipline is to help employees improve, some employment relationships were just not meant to be. If an employee really can’t or won’t take the necessary steps to solve a problem, progressive discipline lays the proper foundation for a fair and legal termination process.
]]>In either situation, a company that performed an incomplete, biased, or late investigation—or that never investigated at all—begins the lawsuit in a fairly deep hole. Not only has the company ignored its workers’ legal rights, but it has also shown a lack of concern for its workers’ well-being, something that many jurors (most of whom are or were employees themselves, not employers) find offensive.
In addition to these legal issues, companies that don’t investigate problems or that conduct a half-hearted investigation will face practical problems. These employers are sending precisely the wrong signals to employees, managers, and customers: that they don’t want to hear about workplace problems, they don’t really care what’s going on in their company, and they won’t enforce their own workplace rules.
Here are some common investigation errors:
If company management is aware of serious misconduct or dangerous activity in the workplace and doesn’t do anything about it, the company could have significant legal exposure.
Generally, any harm that comes to a company’s employees—and sometimes, to people who aren’t on the payroll, such as customers, clients, or bystanders—after the company has notice of a problem will be the company’s legal responsibility.
To avoid the legal problems that can result from failing to investigate, take workplace problems seriously. Never ignore complaints of wrongdoing. Even if a situation seems straightforward, always do some initial research before deciding that an investigation isn’t warranted. And make sure you know all the facts before taking disciplinary action against an employee.
Even if you eventually decide to investigate and do a good job, your company can get into legal trouble if you wait too long to get started.
If an employee suffers harm—from harassment or workplace violence, for example—after you learned about the problem but before you took action, your company will usually be legally responsible to the employee. The longer you postpone the investigation, the more serious that legal liability could be.
Of course, there’s a simple solution: Don’t delay your investigation. Once you learn of a serious problem or complaint, get moving right away. If you absolutely have to wait a bit before getting started (because the victim is on vacation, for example), document the reasons for the delay.
Some companies get into trouble by acting inconsistently—that is, by handling similar situations differently. In the employment arena, inconsistent treatment can lead to claims of discrimination.
An employee who feels that he or she was treated differently because of a protected characteristic—an inherent quality, such as race or gender, which cannot legally form the basis for an employment decision—might bring a discrimination lawsuit.
Avoid discrimination claims by treating similar problems similarly. If you decide to investigate one claim but not another, make sure you have a valid, business-related reason for doing so. If you punish one employee more harshly than another, be prepared to justify the difference.
Your company may not take any negative action against an employee for coming forward with a complaint or participating in an investigation. An employee need not show that he or she was fired or demoted to bring a retaliation claim: Lesser forms of mistreatment might also qualify as retaliation, if they could discourage employees from bringing complaints.
To protect against retaliation claims, warn everyone involved in an investigation that retaliation won’t be tolerated. Ask the complaining employee—and perhaps his or her manager—to bring any instances of retaliation to your attention immediately. And if you must separate workers, either move the worker accused of misconduct or make very sure that the worker who complained is in favor of the change you propose.
Performing an incomplete or sloppy investigation—by failing to interview key witnesses, neglecting to review important documents, or ignoring issues that come up during the investigation, for example—can have many of the same negative consequences as failing to investigate at all.
If an employee can show that you did an incompetent job, perhaps by hiring an expert witness to testify that you didn’t investigate properly, your company will be in an even worse position than if you never investigated in the first place.
Loose lips do more than sink ships: They can also torpedo a workplace investigation. From a practical standpoint, talking too much during the investigation—telling a witness what another witness said, revealing your personal opinion to one of the employees involved, or publicizing the complaint in the workplace, for example—can lead others to doubt your objectivity.
They might believe you have already made up your mind and therefore aren’t going to investigate fairly. Employees involved in the investigation might change their statements, either subconsciously or intentionally, based on what you say. And you can bet that if you’re talking about the investigation, the entire workplace is talking, too, which will lead to a lot of gossip and lost productivity.
You’ve probably developed some personal opinions about most of the people you work with. It’s human nature to like some people more than others. But you have to put these opinions aside and look objectively at the evidence when you conduct a workplace investigation.
If you let your personal feelings and opinions hold sway, you might be accused of discrimination—and the results of your investigation could be called into question.
The best antidote for this problem is to remember your role. When you investigate, you are acting on behalf of the company. If you feel unable to put your personal feelings aside, get some help. Ask someone else within the workplace (or hire an outside investigator) to conduct the investigation or get some advice from a lawyer.
Some investigators are so intent on getting straight answers from the workers they interview that they restrain workers against their will. For example, an investigator might lock the door to the interview room, physically prevent the employee from leaving, or tell the employee something like “nobody’s leaving this room until I find out what really happened.” Using physical means to restrain an employee, or taking actions that lead the employee to believe that he or she is not free to go, can lead to a legal claim of false imprisonment.
You can avoid false imprisonment lawsuits by avoiding coercive tactics. If an employee indicates that he or she wants to leave the room or stop an interview, let him or her go. Your company is free to take disciplinary action against an employee who refuses to answer legitimate questions or participate in a workplace investigation. However, you can’t use physical means or threats to prevent the employee from leaving.
Don’t become so zealous in your search for the truth that you invade employees’ privacy rights. This can be a tough call; after all, conducting an investigation involves a certain amount of poking around, usually into things that someone doesn’t want you to know about. However, if you cross the line from legitimate workplace concerns into private employee property or behavior, you could be inviting a lawsuit for invasion of privacy.
The best way to avoid violating employee’s privacy rights is to ask—or search for—only what you need to know. Exercise restraint: Don’t search or monitor employees without a good reason. The further you stray from the complaint or alleged misconduct, the more likely you are to violate the rights of your employee under investigation.
You might believe that the easiest way to get to the bottom of a workplace problem is to require everyone involved to take a lie detector test. In many situations, however, polygraph tests will only lead to trouble.
A federal law, the Employee Polygraph Protection Act strictly limits the circumstances in which an employer can require workers to take a lie detector or polygraph test, and it’s not easy to meet the law’s requirements.
Learn everything you need to know about conducting legal and effective investigations in The Essential Guide to Workplace Investigations, by Lisa Guerin (Nolo).
]]>How can you decide whose story is more credible in these “he said, she said” situations? The first step is to conduct interviews designed to elicit as much information as possible. The more information you can draw out of each witness, the easier it will be to figure out what happened and why. The interviewing tips that follow will help you elicit the most useful responses, even from the reluctant or contentious witness.
Some investigators don’t want to believe that serious misconduct or harassment could happen in their company, and so tend to make light of possible wrongdoing. Others jump to the opposite conclusion, assuming that an employee would not complain without good cause.
As an investigator, your job is to avoid making assumptions. No matter how serious the problem or how straightforward the situation appears to be, don’t reach any conclusions until you have gathered and evaluated all the facts. If you start your investigation believing you already know what happened, you will miss some important details. But if you keep an open mind until your investigation is complete, you will conduct more thorough interviews—and receive more candid answers to your questions.
Your goal when conducting an interview is to get as much information as possible. The best way to accomplish this is to ask open-ended questions. If you ask questions that suggest the answer you want to hear or questions that call only for a yes or no answer, you will be doing all the talking. Instead, ask the witness what he or she heard, said, or did, and why.
The employees you interview are likely to be nervous and uncomfortable. Employees suspected of wrongdoing will probably also be defensive, frightened about what may happen, and perhaps willing to lie to save their jobs. If you begin your interview by asking directly about the alleged misconduct, you will aggravate an already tense situation—and probably limit the flow of information. Someone who feels accused or put on the spot is more likely to clam up. Also, if you cut to the chase too soon, you’ll miss your chance to find out important details before the employee knows why you’re asking questions (and, therefore, has an opportunity to tailor the answers accordingly).
The better course of action is to start with basic background questions about the employee’s job, coworkers, daily schedule, and so on. You’ll have to get to the tough questions eventually, but starting with a few softballs will put the employee at ease and give you the opportunity to ask about seemingly unimportant details that could prove very significant to your investigation. It will also help you get a sense of the employee’s demeanor and body language when he or she is comfortable and telling the truth. Then, when you get to the tougher questions, you can see whether the witness reacts differently (for example, the witness stops making eye contact, starts fidgeting, or becomes much less certain of the facts). This will help you judge credibility.
As your investigation progresses, you will inevitably start to develop some opinions about what really happened. You should not share these opinions with witnesses, however. If you suggest, through your statements or the tone of your questions, that you have already reached a decision, witnesses will be less likely to speak freely with you. Some witnesses might be afraid of contradicting your version of events; others might feel there is no point in explaining what really happened if you have already made up your mind. In the worst-case scenario, a witness might believe you are conducting an unfair or biased investigation and challenge the outcome in court.
On the television series Dragnet, Joe Friday had a simple interviewing technique: He asked his subjects to tell him “just the facts.” If only it were that easy in real life. Many people have a difficult time distinguishing objective fact from subjective opinion when describing what they have seen and heard. Some witnesses might describe another person’s motivations or thoughts, relate rumors as if they were known facts, or exaggerate. Your job is to separate the wheat from the chaff—that is, to isolate fact from opinion—then find out the basis for the witness’s story.
Always look for leads. Ask every person you interview whether they know of other witnesses or physical evidence relating to the incident. If the witness is the accused or complaining employee, ask whether anyone else saw or heard the incidents in question. Ask whether they told anyone about the incident when it happened. Find out if they took any notes about the problem or if any workplace documents—emails, memoranda, or evaluations, for example—relate to the incident.
Sometimes, one witness contradicts what another has said. The accused and complaining employees are perhaps most likely to contradict each other, but even uninvolved witnesses might give conflicting stories. The best way to deal with these inconsistencies is to ask about them directly. Once you get down to specifics, you may find that everyone agrees on what happened, but not on whether it was appropriate.
If the witnesses continue to contradict each other even after you have pointed out the conflicts in their stories—if the accused flatly denies the complaining employee’s statements, for example—ask each witness why the other might disagree.
Complaints can polarize a workplace. Workers will likely side with either the complaining employee or the accused employee, and the rumor mill will start working overtime. Worse, if too many details about the complaint get out, you may be accused of damaging the reputation of the alleged victim or alleged wrongdoer.
You can minimize these problems by practicing confidentiality in your investigation. Tell each witness only those facts necessary to conduct a thorough interview.
It is against the law to punish someone for making a complaint—or participating in an investigation—of harassment, discrimination, illegal conduct, or unsafe working conditions. And it is against your company’s best interests to punish any employee who comes forward with a good-faith complaint, regardless of the subject matter. You want to encourage employees to bring problems to your attention, so they can be resolved before they start draining productivity or stirring up legal trouble. Assure every person you interview that you want to hear their side of the story and that they will not be retaliated against for coming forward.
People sometimes freeze up when they’re put on the spot. It’s very likely that a witness might remember some significant detail—or learn new information—after the interview is over. To make sure you stay in the loop, close every interview by thanking the witness and asking him or her to contact you if anything else comes to mind.
Take notes during every interview. Include the date, time, and place of each interview, the name of the witness, and whether anyone else was present. Don’t just record the witnesses’ conclusions; include all the important facts that the witness relates or denies, using the witness’s own words whenever possible. These notes will help you remember what each witness said later, when you are making your decision. They will also help you defend your investigation in court, if it is challenged as biased or incomplete.
Before the interview is over, go back through your notes with the witness to make sure you got it right. It’s a good idea to have the witness sign either your notes (if they are legible) or a written statement of what was said during the interview.
Want to know more about interviewing witnesses and conducting investigations? Pick up a copy of The Essential Guide to Workplace Investigations, by Lisa Guerin (Nolo).
]]>It’s amazing how many evaluations contain the proverbial smoking fun that makes an employee’s case. Perhaps the evaluation uses biased terms or stereotypes, or maybe it directly contradicts the reasons the company now gives for terminating the employee. Whatever the legal pitfall, a manager who has a basic understanding of the law can avoid this type of trap.
Most employees work on an at-will basis. This means they can quit at any time, for any reason, and you can fire them at any time, for any reason that isn’t illegal. (Illegal reasons for termination include discrimination or retaliation.)
However, you can undo this basic principle by promising employees job security in some way. If enough statements are made indicating that an employee won’t be fired, has job tenure, has a “long future” at the company, and so on, a court might decide that the employee has an implied contract of employment, by which the company must have good cause to termination the relationship. As you can see, these types of statements are often made in the course of evaluating an employee’s work. If you stick to talking about the employee’s performance – that is, how the employee has performed in the past and what goals and requirements you expect the employee to meet in the future – rather than making promises about what will happen, your evaluations won’t compromise the at-will relationship.
If you fire an employee, the employee’s performance evaluations must support – or at the very least not contradict – the reason you give for the termination. And, because you can’t go back and create evaluations after someone is fired, you must make sure that you write thorough, honest evaluations. If you anticipate trouble down the road for an employee, make sure your evaluation spells out the problem.
Of course, if there is nothing wrong with the employee’s performance, then it’s fine to write a glowing review. Just make sure that positive evaluations are earned, not the product of glossing over poor performance or misconduct.
It should go without saying, but any sign of bias, stereotyping, or outright slurs in an evaluation is inappropriate and can lead to serious legal trouble. Sometimes, bias creeps into an evaluation through the application of stereotypes. Criticizing a female employee’s assertiveness or an older employee’s lack of energy or inability to master new technology, for example, will sound a lot like prejudice to a judge or jury.
To avoid these traps, focus on the facts and be specific. For example, you could say “John was charged with compiling several Xcel spreadsheets this quarter, but was late each time. He has had to ask coworkers for help using the program. One of his goals for next quarter is to enroll in a class in Xcel basics, so he can meet his spreadsheet deadlines.” This is accurate and detailed; it will also sound a lot better later than “you can’t teach an old dog new tricks.”
When an employee complains about discrimination, harassment, or another violation of a workplace law, or if the employee supports another employee’s complaint, you must be especially careful. If you take any action that the employee might view as punishment for making the complaint – including giving the employee a negative performance evaluation because of the complaint – you might find yourself on the wrong end of a lawsuit. It is illegal to retaliate against an employee for complaining about discrimination or another violation of a workplace law to you, someone else in your company, or a government agency.
This doesn’t mean you can’t give an employee in this situation a negative evaluation if the employee’s job performance warrants it. It does mean, however, that you should be prepared to back up your negative evaluation with documents and evidence supporting your assessment, particularly if they predate the employee’s complaint.
If you carefully document employee performance throughout the year, you’ll have the information you need to prepare an accurate, effective evaluation. You’ll also have the evidence you need to rely on your evaluation in court, if it comes to that. Documentation shows that your evaluation – and any job decisions based on it, such as discipline or termination -- is grounded in objective, job-related facts, not illegal considerations such as discrimination or retaliation.
]]>We recently switched from a system of offering separate sick time and vacation time to one paid time off (PTO) entitlement. Employees get 12 paid days off per year, to use as they see fit. Employees accrue PTO every pay period; once they reach three weeks, they don't accrue any more unless they use some. We do business in California, and I know we have to pay out unused, accrued vacation time when an employee leaves. But does this include all PTO, even though some of it is supposed to cover sick leave?
Many employers have made the same decision you have. Some like the ease that a PTO program offers, some want to give employees more control over their time off, and some undoubtedly just grew tired of listening to employees trying to sound ill ("cough cough, sniffle") when calling in sick after a three-day weekend. No matter what your company's reasons, switching to one system for all time off makes a lot of sense.
Despite these advantages, however, PTO systems can present a couple of difficulties. And you've put your finger on one of them: cashing out unused vacation time. A number of states require employers to pay out unused vacation time to employees who leave the company, whether voluntarily or involuntarily. In some states, accrued vacation is considered a form of compensation that the employee has already earned. To withhold it when the employee leaves would be wage theft. (California is one of these states.) In other states, an employer's responsibility to pay out accrued vacation depends on its own policies and practices. If the employer has promised to pay out accrued vacation, or has simply done so in the past, the employee has a right to the same treatment.
Because PTO is intended to replace both sick and vacation days, some employers assume they don't have to pay out the full allotment when an employee leaves. However, this is generally incorrect. In California, for example, the Department of Labor Standards Enforcement (DLSE) has said that all PTO must be counted as unused, accrued vacation -- and must be cashed out when the employment relationship terminates. The employee has the right to and could use all PTO for vacation. Therefore, employers that would have to pay out vacation when an employee leaves generally have to pay out PTO in full, too.
Our company has never allowed employees to ask for payroll advances, but we're considering a change in policy. If we let an employee take an advance, can we just deduct the amount from the employee's next paycheck?
The answer depends on several things, including how much the employee earns, how much the employee borrows, and what state you do business in.
Employers are not required to allow payroll advances (loans from the employer made against an employee's future earnings). Many employers simply don't let employees take advances. After all, it can be a hassle for your payroll administrator. It also puts your company in the position of providing banking services for employees, essentially.
If you choose to allow advances, however, you need to follow some basic rules when it comes to getting your money back. Under federal law, you may deduct an advance from your employee's paycheck. However, you may not deduct so much that it reduces your employee's pay to less than the hourly minimum wage ($7.25, currently). For low-wage employees, this means you may need to spread the repayment period out over several paychecks.
State law might set more protective rules for employees. For example, some states allow employers to deduct money from an employee's paycheck to repay an advance only if the employee agrees to the deduction, in writing. Even if your state doesn't imposed this requirement, however, it's a good idea to follow it. That way, you'll have written proof that your deduction was authorized. And, employees will be on notice of exactly how they'll have to pay back that advance.
My company is firing an employee this week. Can we give him his final paycheck on the regular payroll schedule, or do we have to provide it sooner? And does it matter whether we are laying him off or firing him for cause?
State law determines when you must provide final paychecks. To answer your second question first, it doesn't matter whether the employee is laid off, fired with cause, or fired without cause.
However, some states distinguish between employees who quit and employees who are terminated involuntarily, for any reason. In these states, employers can wait a bit longer to give a final check to an employee who quits, presumably because an employee who decides to leave your company has more time to plan ahead financially (and probably also have a new job lined up).
The deadlines for final paychecks vary by state. Some states, including California and Massachusetts, require employers to provide a final paycheck immediately. Some states allow employers to wait until the next business day or give employees from a few days to a week to cut that last paycheck. And, some states allow employers to wait until the next regularly scheduled payday, as you would like to do.
To find out your state's requirements, see Final Paychecks for Departing Employees.
Before you cut that final check, make sure it includes everything you are legally required to pay. For example, some states require employers to pay out unused, accrued vacation time. (Some states require this in all circumstances; others require it only if company policy or practice is to pay out vacation time). If your state imposes this mandate, the vacation money must be included in the final paycheck.
If an employee fails to collect their final paycheck, the employer should make reasonable efforts to arrange for them to receive the payment. Such efforts might include mailing them the check or arranging for it to be picked up at the employer's location. (Of course, this issue generally won't arise for workers who are paid via direct deposit.)
If, despite these efforts, the employer isn't able to reach the employee or if the employee refuses to collect their paycheck, the employer must follow their state's law on unclaimed wages. This might involve turning the funds over to the state's unclaimed property department or holding them in a separate account for a specified period of time before disposing of them.
I'm the personnel manager at a local chain of pubs. We pay a lower minimum wage to employees who earn tips, like wait staff and bartenders, but they receive large amounts in tips that bring their take-home pay to well above the minimum wage. Our company really values teamwork, and we want to create a fair system where everyone benefits from tips left by satisfied customers. Can we require tipped employees to pool their tips with the back of the house (dishwashers and cooks) and shift supervisors?
The rules for tipped employees have been confusing up until now. However, the federal Fair Labor Standards Act was recently amended to clarify when tip pooling is legal and who may participate in the pool.
To start, you have the basic rule of tips right: It is perfectly legal—in most states—for an employer to pay tipped employees less than the regular minimum wage per hour, as long as the employee earns enough in tips to make up the difference. However, this practice, called taking a "tip credit," is not allowed in some states (including California). And, some states allow a smaller tip credit than the one allowed by federal law. So you should double check your state's tipping rules.
When it comes to tip pooling, though, your company's plans will run into some legal problems. Tip pooling—in which tipped employees contribute a portion of the their tips to a pool, which is distributed among a group of employees—is generally legal. However, under federal law, managers and supervisors are not allowed to participate in a tip pool. This is true regardless of whether your company takes a tip credit or pays employees the full minimum wage.
Back of the house employees, such as cooks and dishwashers, may participate in a tip pool, but only if the employer doesn't take a tip credit. Because your company takes a tip credit for wait staff and bartenders, your company cannot require those employees to share their tips with non-tipped coworkers. However, if you decide to pay all employees at least the full minimum wage, you can create a tip pool that includes all non-supervisory employees.
Some states have stricter rules for tip pools. Select your state from our tipped employees page to learn more.
Alabama has no minimum wage law. That means eligible employees in Alabama are entitled to either federal minimum wage (currently $7.25 per hour) or any local (city of county) minimum wage law that is on the books, whichever wage rate is higher.
Because Alabama has no minimum wage law, Alabama employees are subject to the federal rules on tip credits and minimum wages for employees who receive tips.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
Alabama has no overtime laws, although you may be eligible for overtime pay under the federal Fair Labor Standards Act (FLSA). To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Alabama Department of Labor.
Alabama does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Alabama, contact the state Department of Labor.
Wage and hour laws set the basic standards for pay and time worked -- covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
Updated December 21, 2023
]]>The minimum wage in Georgia is $5.15 per hour, although employers covered by the federal Fair Labor Standards Act (FLSA) must pay their employees at least the federal minimum wage of $7.25 an hour.
The FLSA applies to employers with at least $500,000 in annual sales and those who are engaged in interstate commerce. In practice, the FLSA covers nearly all employers.
Tipped employees are not covered by the state's minimum wage law. Employers covered by the FLSA must ensure their workers are paid at least the federal minimum wage, including tips.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
Georgia has no overtime laws, although you may be eligible for overtime pay under the federal Fair Labor Standards Act.
To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Georgia Department of Labor.
Georgia does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch).
And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Georgia, contact the state Department of Labor.
Wage and hour laws set the basic standards for pay and time worked, covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
Updated December 12, 2023
]]>An employee must be reinstated to his or her former position or to an equivalent position. The employee’s former position is simply the position the employee held before going out on leave. But what’s an equivalent position?
A position is equivalent only if it is virtually identical, in every important respect, to the employee’s former position. Courts will look at the following factors in determining whether a position is equivalent:
An employee is entitled to immediate reinstatement once he or she reports back to duty. If your company knows well in advance exactly when an employee will return, this means the employee must be reinstated the day he or she reports back to work.
If an employee’s return to work is delayed or accelerated (often because a serious health condition has taken an unexpected turn), you may require the employee to give you notice, at least two business days ahead of time, of the date he or she plans to return to work. If the employee just shows up unexpectedly for work, and your company can’t reinstate the employee immediately, consider that your notice – and reinstate the employee within two working days.
If an employee takes leave for his or her own serious health condition, you may require the employee to provide a fitness-for-duty certification: a signed statement from a health care provider indicating that the employee is able to return to work. However, your company may require the employee to provide this certification only if it has a consistently applied practice or policy of requiring employees to provide such a statement.
There are several exceptions to the reinstatement right. An employee may be denied reinstatement if:
Because denying an employee reinstatement could well lead to a lawsuit, you should consider talking to a lawyer before making this decision.
]]>But there are employees who have a legitimate need to view the information in a personnel file. For example, a supervisor may need to review performance evaluations to decide whether to promote an employee, or the human resources manager may need to review an employee's salary information to decide what to pay a new hire in the same position. And, in most states, employees have the right to inspect their own personnel files. (To learn more about an employee's right to inspect his or her own personnel file, read Nolo's article Employee Access to Personnel Files: Is It Required?)
Treat personnel files like any other private company records. You can do this by keeping employee files in a locked cabinet. Make them available only to those people in your company who have a legitimate business need to access the files. For example, you might establish a policy that only the human resources manager, the individual employee's manager, and the employee have a right to see an employee's file. This will protect your employees' privacy and limit opportunities for inappropriate documents to find their way into the files.
Special guidelines apply to medical information pertaining to your employees. For example, the Americans With Disabilities Act (ADA) imposes very strict rules for handling information obtained through post-offer medical examinations and inquiries. Employers who are covered by the ADA must keep these medical records confidential and separate from other personnel records. This information may be revealed only to safety and first aid workers, if necessary to treat the employee or provide for evacuation procedures; to the employee's supervisor, if the employee's disability requires restricted duties or a reasonable accommodation; to government officials as required by law; and to insurance companies that require a medical exam.
The Health Insurance Portability and Accountability Act (HIPAA) also imposes privacy obligations on many employers who provide group health plans. (Employers who administer their own plans and have fewer than 50 participants don't have to comply with HIPAA's privacy rules, and employers that sponsor plans that receive only enrollment information have minimal obligations.) Under HIPAA, employers are required to protect the privacy of employees' personal health-related information by designating an in-house privacy official, adopting policies and procedures to keep this information private, and notifying employees of their privacy rights, among other things. For more information on HIPAA's privacy rules, go to the HIPAA website established by the federal Department of Health and Human Services, at www.hhs.gov/ocr/hipaa.
The Genetic Information Nondiscrimination Act (GINA) also requires employers to keep employee medical records confidential. GINA prohibits employers from requesting or requiring that employees provide genetic information. If, however, the employer receives such information inadvertently or pursuant to one of the strict exceptions to the law, the employer must keep it in separate, confidential files.
Some state laws also provide special protections for employee medical records. These laws may limit the way such records can be used or the people who can view them.
For help in establishing policies regarding personnel files, get Create Your Own Employee Handbook: A Legal & Practical Guide, by Lisa Guerin and Amy DelPo (Nolo).
]]>It depends on how small your business is. The federal Family and Medical Leave Act (FMLA) requires employers to give 12 weeks of unpaid leave in certain circumstances (and up to 26 weeks of leave for employees who need to care for a family member who was seriously injured while serving in the military). However, the FMLA applies only to companies that employ more than 50 people within a 75-mile radius. If your company doesn't meet these conditions, you do not have to provide leave under the FMLA.
However, many states also have family and medical leave laws, and these often apply to smaller business. So even if the FMLA does not apply to you, your state's law might. To learn more about your state leave law, contact your state labor department.
For more on the requirements of and exceptions to the FMLA, see Nolo's article Providing Family and Medical Leave.
It depends. The federal Family and Medical Leave Act (FMLA) requires you to grant leave for your employees to care for family members with a serious health condition, and it defines family members as parents, spouses, and children. (Parents include those persons who took the place of a parent when the employee was a child; children include those children whom the employee cares for and supports.) The definition, however, does not include many people that most of us consider family members, including grandparents, aunts and uncles, in-laws, same-sex partners, or siblings. For more on the FMLA, see Nolo's article Providing Family and Medical Leave.
The military family leave provisions of the FMLA might allow time off, however. These provisions, added in 2008, allow eligible employees to take up to 26 weeks of leave in a single 12-month period to care for a family member who was seriously injured while serving in the Armed Forces. For purposes of this entitlement only, the definition of family member is much broader, and includes adult children, siblings, grandparents, and cousins. For more information on these rights, see Nolo's article Family and Medical Leave for Military Family Members.
If your state has a family and medical leave law, it might require leave to care for siblings. To find out about your state's law, contact your state labor department. For information on employee leave rights under state laws -- and what happens if both the FMLA and a state leave law applies -- see Nolo's article State Family and Medical Leave Laws.
It depends on why the employee needs leave. If the employee knows well in advance when he or she will need to take leave, the employee must give at least 30 days' notice. For example, if an employee has surgery scheduled in two months, that employee can give the required notice. If, however, the employee needs leave for an emergency, the employee is required to give only as much notice as is practicable under the circumstances. For example, an employee who is hit by a car should inform the employer as soon as it is practical to do so.
Under revised regulations issued in 2008, an employee who wants to use accrued paid leave during FMLA leave must follow the notice requirements of the employer's policy. If the employer's policy requires one week of advance notice to use vacation time, for example, the employee must provide that notice. If the employee has a medical emergency and cannot give any advance notice, the employee is still entitled to FMLA leave, but may not take paid leave until the employer's requirements are met. For more information on the FMLA's notice requirements, see Nolo's article FMLA Regulations Change Rules on Notice and Certifications.
It depends. If your business is covered by the Family and Medical Leave Act (FMLA) and the employee is eligible for leave, you must allow the employee to take up to 12 weeks of leave to care for a new child. This leave is unpaid and must be taken within a year of the child's arrival.
Generally, employers are not required to offer paid leave to either parent after a child's birth. However, if you do offer a paid maternity leave benefit, you must offer this leave to new fathers as well as mothers or risk a lawsuit for sex discrimination. In other words, if you offer paid leave, it must be parental leave, not maternal or paternal leave.
In addition, the states of California and New Jersey, as well as the District of Columbia, now provide paid family leave to new mothers and fathers. (The state of Washington has a similar law, but it has not gone into effect due to budgetary constraints.) Many others states are considering paid family leave laws as well.
For more on this, see Providing Pregnancy and Parental Leave.
The answer will differ depending on the state where you do business. Here are the basics.
Voting. Almost half of the states require employers to provide a few hours of paid leave to allow their employees to vote. Generally, paid leave is required only if the employee would have insufficient time to vote without taking time off.
Even if you live in a state that does not require paid leave for voting, you must not punish any employee for taking time off to cast a ballot. Almost every state prohibits employers from firing or disciplining an employee for taking leave to vote.
For more information on voting leave, see Nolo's article Giving Employees Time Off for Voting and Jury Duty.
Jury duty. Most states do not require you to pay your employees for the time they spend on jury duty, unless your own employment policies provide for such pay.
But almost every state prohibits employers from firing or disciplining an employee for being called to jury duty. In some states, an employee fired in violation of these laws can sue you for lost wages. In addition, a handful of states impose criminal penalties against employers who break this law.
For more information on providing leave while an employee serves on a jury, see Nolo's article Giving Employees Time Off for Voting and Jury Duty.
Military duty. Federal law requires employers to allow employees to take up to five years of leave for military service. And, in almost every state, employers must allow their employees to take leave for certain types of military duties, such as service in the state Guard or Militia. You are not required to pay your employees for this time off.
For more information, see Nolo's article Providing Military Leave.
For a complete guide to your legal rights and responsibilities as an employer, get The Employer's Legal Handbook: Manage Your Employees & Workplace Effectively, by Aaron Hotfelder (Nolo).
Employers in all states are not required to provide paid vacation to their employees. In most states, employers are not required to provide paid sick leave either. However, a growing number of states and cities are considering and passing paid sick leave laws. Currently, Connecticut, California, Massachusetts, the District of Columbia, and a handful of cities require employers to provide some form of paid sick leave.
Many employers choose to offer some form of paid sick leave, even when not to required by law. A generous leave policy can help employers attract high-quality employees and improve office productivity and morale.
If you decide to adopt a policy that gives your employees paid vacation or sick time, be sure to apply the policy consistently to all of your employees. If some employees receive a more attractive package than others, and it appears that you're singling out a protected class for less favorable treatment, you might have a discrimination claim on your hands.
For more information on paid time off, see Nolo's article Providing Vacation and Sick Leave.
When you hire employees, you must get an employer identification number (EIN) to use on tax returns and other documents you submit to the IRS. To get an EIN, you must file IRS Form SS-4. You can download the form from the IRS website at www.irs.gov.
Once you bring on employees, you will have to pay state unemployment compensation taxes. These payments go to your state's unemployment compensation fund, which provides short-term relief to workers who lose their jobs. Go to the Department of Labor's website for a list of state unemployment insurance tax agencies.
You should have workers' comp coverage to protect workers who might suffer on-the-job injuries. Workers' comp insurance is required in the vast majority of states, although some make an exception for very small employers.
You'll need to withhold a portion of each employee's income and deposit it with the IRS, and also make Social Security and Medicare tax payments to the IRS. For more information, get IRS Publication 15, Circular E, Employer's Tax Guide from the IRS website at www.irs.gov. (You may also have to withhold taxes for your state. For more information, check with your state's tax agency; you can find links to each state's agency at the website of the Federation of Tax Administrators at www.taxadmin.org/state-tax-agencies.)
On the W-4 form, employees tell you how many allowances they are claiming for tax purposes, so that you can withhold the correct amount of tax from their paychecks. (You don't have to file the form with the IRS.) You can find this form at www.irs.gov. You should ask employees to fill out a new W-4 form each year if they want to change their allowances.
U.S. Citizenship and Immigration Services (USCIS, formerly known as the INS) requires employers to use this form to verify that every employee they hire is eligible to work in the United States. (You don't have to file this form with the USCIS, but you must keep it in your files for three years and make it available for inspection by officials of Immigration and Customs Enforcement, known as ICE.) You can obtain the form online at www.uscis.gov. Note that these filled out forms should be kept in a separate I-9 folder for all employees -- not in each employee's personnel file.
The new hire reporting program requires employers to report information on all new employees for the purpose of locating parents who owe child support. Each state has a different new hire reporting agency. To find the name and address of your state's new hire reporting agency, see the State New Hire Reporting page at the Administration for Children & Families website (www.acf.hhs.gov).
Several government agencies require employers to post notices providing information on worker rights for their employees. For information on required federal posters, go to the Department of Labor website at www.dol.gov/elaws/posters.htm. The DOL's "Poster Advisor" will help you determine which posters you must display in your workplace. In addition, you must comply with your state department of labor's poster requirements. A list of state departments of labor is included on the federal Department of Labor's website.
You must file IRS Form 940 to report your federal unemployment tax for any year in which you paid wages of $1,500 or more in any quarter or for any year in which an employee worked for you in any 20 or more different weeks of the year. You can find the form at www.irs.gov.
Virtually every employer must comply with the requirements of the Occupational Safety and Health Act (OSHA) by, among other things, providing a workplace free of hazards, training employees to do their jobs safely, notifying government administrators about serious workplace accidents, and keeping detailed safety records. For information on these rules, go to website of the Occupational Safety and Health Administration at www.osha.gov.
Although not required, it is an excellent idea to have a handbook describing your business's employee policies and making it clear that employment is at will unless an employee has signed a written employment contract. A great resource is Create Your Own Employee Handbook: A Legal & Practical Guide, by Lisa Guerin and Amy DelPo (Nolo).
For each employee you hire, create a file in which to keep job-related documents, such as job applications, employment offers, IRS Form W-4, performance evaluations, and sign-up forms for employee benefits. Medical records should be kept in a separate, confidential file, in a locked cabinet. And you should store I-9 Forms, which document an employee's immigration status, in a separate file as well. For more information on developing a system for storing and maintaining personnel records, including state-by-state rules about employee access to their files, see The Employer's Legal Handbook, by Fred Steingold (Nolo).
If your business has established employee benefit programs such as health insurance or a 401(k) plan, you'll need a sign-up procedure so employees can enroll, name their dependents, and select options.
]]>If you take the complaint seriously, however, and follow a careful strategy for dealing with it, you can reduce the likelihood of a lawsuit and even improve employee relations in the process.
Here are some basics rules to follow if you receive a complaint of discrimination or harassment. (For detailed information on conducting an investigation, see The Essential Guide to Workplace Investigations, by Lisa Guerin (Nolo); it includes separate chapters on investigating discrimination and harassment.)
To learn more about protecting your employees, and the company, from workplace harassment and discrimination, see The Essential Guide to Handling Workplace Harassment & Discrimination, by Deborah C. England (Nolo).
]]>Both employers and employees have notice obligations under the FMLA. Employers must inform employees of their rights under the FMLA, using four different notice forms. Employees must inform employers of their need to use FMLA leave. The deadlines for employee notice depend on why the employee needs leave.
Employers must give employees a series of notices about their rights under the FMLA and their obligations when using leave. The regulations that interpret the FMLA divide these notice requirements into four separate documents:
You can find notice forms at the Department of Labor’s FMLA page. For detailed instructions on completing and providing the forms, deadlines, and more, pick up a copy of The Essential Guide to Family and Medical Leave.
The FMLA requires employees to give notice of their need to take FMLA leave. Generally, employees need not refer specifically to the FMLA or to their legal right to take leave. However, they must provide sufficient information to let your company know that the FMLA may apply (for example, that an employee needs time off after a baby is born or to care for a seriously ill parent). It’s up to your company to recognize the possibility that an employee’s request for leave may be protected by the FMLA and to ask for more information, if necessary, to determine whether the law applies.
If the employee has already taken FMLA leave and requests more time off for the same reason, then the employee must specifically refer either to the FMLA or to the qualifying reason for leave. This rule recognizes that employees who have already used the FMLA and know their situation qualifies for FMLA leave can be expected to know the rules and provide more extensive notice.
Employees must give notice at least 30 days in advance if their need for FMLA leave is foreseeable (for example, for non-emergency surgery). An employee who does not give 30 days' notice must explain why such notice was not practicable, if the employer requests.
Employees who need leave for an unforeseeable reason must give as much notice as is practicable, usually the same or next business day after the employee learns of the need for leave.
FMLA leave is unpaid. An employee who wants to substitute paid leave available under a company policy for unpaid FMLA leave must meet all of the notice and other procedural requirements of company policy. For example, if your company requires two weeks' advance notice for vacation requests, an employee must give notice two weeks in advance to substitute vacation time for FMLA leave, even if the employee needs FMLA leave for an emergency that wasn't foreseeable two weeks in advance. The employee is still entitled to FMLA leave for that time, but can be prohibited from substituting paid leave until the two-week notice period has passed.
]]>The minimum wage in Virginia is $12.00 per hour in 2024.
The federal Fair Labor Standards Act (FLSA) allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns adds up to at least the full minimum wage for each hour worked. If not, the employer has to make up the difference.
In Virginia, state law allows employers to pay tipped employees an hourly wage of the minimum wage less tips actually received.
However, federal law provides more protection. Employers who are subject to the FLSA must follow must pay a wage of at least $2.13 an hour. If the employee doesn't earn enough in tips to bring their total pay up to at least the full minimum wage, the employer must make up the difference.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
Virginia has no overtime laws, although you may be eligible for overtime pay under the federal Fair Labor Standards Act. To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Virginia Department of Labor and Industry.
Virginia does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Virginia, contact the state Department of Labor and Industry.
Wage and hour laws set the basic standards for pay and time worked, covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act. Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
If you need legal advice regarding Virginia's minimum wage, overtime, or other wage and hour laws, consult an employment law attorney.
]]>The minimum wage in Utah is $7.25 per hour.
The FLSA allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns adds up to at least the full minimum wage for each hour worked. If not, the employer has to make up the difference.
In Utah, employers can pay tipped employees an hourly wage of $2.13, as long as the employee’s tips bring the total hourly wage up to the state minimum wage.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
Utah has no overtime laws, although you may be eligible for overtime pay under the federal Fair Labor Standards Act. To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Utah Labor Commission.
Utah does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Utah, contact the state Labor Commission.
Wage and hour laws set the basic standards for pay and time worked -- covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act (FLSA). Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
Updated December 14, 2023
]]>Mississippi has no minimum wage law. That means eligible employees in Mississippi are entitled to either federal minimum wage (currently $7.25 per hour) or any local (city or county) minimum wage law that is on the books, whichever wage rate is higher.
Because Mississippi has no minimum wage law, Mississippi employees are subject to the federal rules on tip credits and minimum wages for employees who receive tips.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
Mississippi has no overtime laws, although you may be eligible for overtime pay under the federal Fair Labor Standards Act (FLSA).
To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Mississippi Department of Employment Security.
Mississippi does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your workday.
To learn more about wage and hour laws in Mississippi, contact the state Department of Employment Security.
Wage and hour laws set the basic standards for pay and time worked—covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act (FLSA). Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
Last updated on 12/14/2023.
]]>The minimum wage in Indiana is $7.25 per hour.
The FLSA allows employers to pay a lower hourly minimum wage, as long as that wage plus the tips the employee earns adds up to at least the full minimum wage for each hour worked. If not, the employer has to make up the difference.
In Indiana, employers can pay tipped employees an hourly wage of $2.13, as long as the employee’s tips bring the total hourly wage up to the state minimum wage.
(For more information, see Nolo’s article Tips, Tip Pooling, and Tip Credits.)
In Indiana, eligible employees must receive overtime if they work more than 40 hours in a week. Not every type of job is eligible for overtime, however.
To learn more, see Nolo’s article Overtime Pay: Your Rights as an Employee and contact the Indiana Department of Labor.
Indiana does not require employers to provide lunch or rest breaks. However, you are entitled to be paid if you have to do any work during a break (for example, if you have to cover the phones while you eat lunch). And, generally, you are entitled to be paid for any short breaks (five to 20 minutes) your employer provides; this time is considered part of your work day.
To learn more about wage and hour laws in Indiana, contact the state Department of Labor.
Wage and hour laws set the basic standards for pay and time worked, covering issues like minimum wage, tips, overtime, meal and rest breaks, what counts as time worked, when you must be paid, things your employer must pay for, and so on.
The federal wage and hour law is called the Fair Labor Standards Act (FLSA). Most states also have their own wage and hour laws, and some local governments (like cities and counties) do, too.
An employer who is subject to more than one law must follow the law that is most generous to the employee. For example, the federal minimum wage is currently $7.25 per hour, but employers in states that have set a higher minimum wage must pay the higher amount.
Consult an employment law attorney in your area if need legal advice regarding Indiana's minimum wage, overtime, or other wage and hour laws.
Last updated on 12/14/2023
]]>Oral agreements invite costly misunderstandings because there's no clear written statement of what the IC has agreed to do, how much you have agreed to pay, or what the two of you will do if a dispute arises.
These misunderstandings might be innocent -- you and the IC may genuinely remember your agreement differently -- or they may be intentional. Either way, it will be your word against the IC's, and there is no telling whom a judge or jury will believe. It's much safer to rely on a written document that clearly sets out the details of your relationship.
Even more important, a written independent contractor agreement helps establish a worker's independent contractor status by showing the IRS and other agencies that both you and the worker intended to create a hiring firm/independent contractor relationship, not an employer/employee relationship. (But don't expect the written agreement to be a magic bullet: A written agreement is useless if you treat the IC like an employee; for tips on structuring your work relationship with an IC in a way that will withstand government scrutiny, see Nolo's article Working With Independent Contractors: Avoiding Classification Problems.
A written independent contractor agreement should contain at least the following terms:
Other terms you could include range from copyright ownership to naming who will be responsible for the IC's employees.
Fortunately, an independent contractor agreement is something that you can create yourself. Two excellent sources for such agreements are Working With Independent Contractors (Nolo) and Consultant & Independent Contractor Agreements (Nolo), both by Stephen Fishman.
]]>Whether an individual is an employee or independent contractor (IC) is relevant to many different laws, including tax laws, wage and hour laws, unemployment compensation laws, and workers’ compensation laws. Federal and state agencies—such as the IRS or a state labor department—have their own tests for determining whether an individual has been misclassified as an independent contractor. However, common themes include: how much control the employer has over how, when, and where the work is performed; how much control the employer has over financial matters; and the relationship between the parties.
Your company can minimize misclassification claims by following these tips:
To learn more, see our article on how government agencies determine independent contractor status.
One way that you can lessen the likelihood of independent contractor misclassification is to hire ICs who have incorporated their own businesses, rather than those who operate as sole proprietors or partners in a partnership. When you hire incorporated ICs, you enter into a three-tiered relationship: You pay the worker's corporation, which pays the worker, who is an employee of the corporation.
Legally, the corporation is the worker's employer, not you. It is supposed to pay state and federal payroll taxes, provide any employment benefits, and purchase workers' compensation insurance. If the corporation fails to pay taxes, IRS and state auditors will go to the corporation and its owners, not to you (unless the corporation is a sham—for example, you've required your employees to incorporate themselves just so you can classify them as ICs).
Just because an individual has incorporated does not automatically establish independent contractor status, though. Government agencies are more concerned with the actual working relationship than official paperwork. However, it can be evidence that the IC is actually running an independent business. Forming a corporation is expensive and time-consuming, and operating one can be burdensome as well. People are more likely to go through this trouble if they are legitimately running their own businesses.
Instead of hiring workers directly, some companies lease or rent them from outside leasing companies. Workers like these are sometimes referred to as temps, contract employees, or contingent or casual workers.
Employee leasing gives you many of the benefits of hiring ICs. You use them only when needed, you don't have to pay and withhold federal and state payroll taxes, and you don't have to provide employee benefits or workers' compensation coverage. Although it may cost more to lease workers than to hire them directly (because the leasing company will take a cut), you will get screened, trained workers—and possibly reduced exposure to government audits.
However, this arrangement is not without its risks. If your company has the right to control the worker’s performance or terms of employment, it could be considered to be a "joint employer" with the leasing company. If this happens, the worker will be considered an employee of both companies.
To minimize the risk of being found to be a joint employer, make sure that you don't exercise control—or have the right to exercise control—over leased workers. In general, your company should not:
If you’re considering using an employee leasing company, especially on a large-scale basis, consult with an employment lawyer to make sure your company is classifying workers properly.
It’s important to have documentation to support an independent contractor classification. Your company should have all ICs sign an Independent Contractor Agreement, setting forth the terms of the relationship. Learn more in our article on IC agreements.
You should also ask the contractor to provide you with proof that he or she is running an independent business. This might include corporate formation documents, the URL for the contractor's business website, a copy of the contractor's business license, and business cards and stationery. You can find more suggestions in our article on what documentation to get when hiring independent contractors.
]]>In the worst-case scenario, a personnel file may turn into evidence in a lawsuit brought by a disgruntled former employee. Make sure that you include all periodic evaluations, raises, commendations, and disciplinary actions in your personnel files so you always have easy access to the information you need -- and to protect your company in case of a lawsuit.
This article explains what to keep in -- and keep out of -- employee personnel files. For help creating sound and effective personnel policies, pick up a copy of Create Your Own Employee Handbook, by Lisa Guerin and Amy DelPo (Nolo).
You should begin a personnel file for each employee on the date of hire. Most, but not all, important job-related documents should go in the file, including:
You should establish a time to periodically review each employee's personnel file, perhaps when you conduct the employee's annual evaluation. During this review, consider whether the documents in the file are accurate, up to date, and complete. Some questions to consider:
Your personnel files should not be a receptacle for every document, note, or thought about the employee. Here are some areas to be careful about:
Medical records. Do not put medical records into a personnel file. If your worker has a disability, you are legally required to keep all of the worker's medical records in a separate file -- and limit access to only a few people. Even for workers who are not disabled, you may have a legal obligation to keep medical records private (and it's a good idea to do so, in any case). For more information on storing medical records, read Nolo's article Keeping Personnel Files and Medical Records Confidential.
Form I-9s. Do not put Form I-9s into your employees' personnel files. (Form I-9 is a form from U.S. Citizenship and Immigration Services (USCIS), formerly the INS. You must complete an I-9 for all employees, verifying that you have checked to be sure that the employees are legally authorized to work in the United States.)
You should put all Form I-9s into one folder for USCIS. The government is entitled to inspect these forms, and if it does, you don't want the agents viewing the rest of the employee's personnel -- and personal -- information at the same time. Not only would this compromise your workers' privacy, but it might also open your business up to additional questions and investigation.
Unnecessary material. Although an employee's personnel file may contain any other job-related documents, don't go overboard. Remember that, in many states, employees have the right to view their personnel files. (For more information, read Nolo's article Employee Access to Personnel Files: Is It Required?) Indiscreet entries that do not directly relate to an employees job performance and qualifications -- like references to an employees private life or political beliefs, unsubstantiated criticisms or comments about an employees race, sex or religion will come back to haunt you. A good rule of thumb: Dont put anything in a personnel file that you would not want a jury to see.
]]>The evaluation process also nips a lot of employment problems in the bud. Performance evaluations can keep you out of legal trouble by helping you track and document your employees' problems.
If you ever need to fire or discipline a worker, you will have written proof that you gave the employee notice of a performance or conduct problem and an opportunity to correct it. This will be invaluable later on if a fired employee argues that he or she was fired for illegal reasons, such as discrimination.
This article provides an overview of the evaluation process; for step-by-step instructions and forms for conducting performance evaluations, see Dealing With Problem Employees, by Amy DelPo & Lisa Guerin (Nolo).
An employee performance review is a structured evaluation process conducted by employers to assess an employee's job performance and accomplishments. It typically involves discussing the employee's strengths, areas for improvement, and goal-setting for the future. The review aims to provide feedback, promote growth, and align the employee's efforts with the organization's objectives.
Before you can accurately evaluate employee performance, you need to establish a system to measure that performance. For each employee, you need to come up with performance standards and goals.
Performance standards. Performance standards describe what you want workers in a particular job to accomplish and how you want the job done. These standards apply across the board, to every employee who holds the same position. For example, a performance standard for a salesperson might be to make $50,000 in sales per quarter. Make sure your standards are achievable and directly related to the employee's job.
Goals. Unlike performance standards, goals should be tailored to each employee; they will depend on the individual worker's strengths and weaknesses. For example, a goal for a graphic artist might be learning a new software program that will make his or her work more efficient; for an accounting professional, a goal might be to take the exam to become a certified public accountant. Your workers can help you figure out what goals are reasonable and appropriate.
Once you have defined the standards and goals for each position and worker, write them down and hand them out to your employees. This will let your employees know what you expect and what they will have to achieve during the year to receive a positive evaluation.
Throughout the year, track the performance of each employee. Keep a log for each worker, either on your computer or on paper. Note memorable incidents or projects involving that worker, whether good or bad. For example, you might note that a worker was absent without calling in, worked overtime to complete an important project, or participated in a community outreach program on behalf of the company.
If an employee does an especially wonderful job on a project or really fouls something up, consider giving immediate feedback. Let the employee know that you noticed and appreciate the extra effort—or that you are concerned about the employee's performance. If you choose to give this kind of feedback orally, make a written note of the conversation for the employee's personnel file. It is also a good idea to have a policy on employee discipline in your company’s employee handbook; for some guidance, see our article on progressive discipline policies.
At least once a year, formally evaluate each employee by writing a performance review and holding a meeting with the employee. To prepare, gather and review all of the documents and records relating to the employee's performance, productivity, and behavior. Review your log and the employee's personnel file. You might also want to take a look at other company records relating to the worker, including sales records, call reports, productivity records, time cards, or budget reports.
Once you have reviewed these documents and gathered your thoughts about the employee's work, write the performance review. Although a performance review can take many forms, it should include:
If you will solicit input from other managers, ask each of them to complete an evaluation, and then compile them. You might also want the employee to conduct a self-evaluation in advance of the meeting.
When you have finished writing the evaluation, set up a meeting to discuss it with the employee. Remember, this is likely to be one of the most important meetings you have with each employee all year, so schedule enough time to discuss each issue thoroughly.
At the meeting, let your worker know what you think he or she did well and which areas could use some improvement. Using your evaluation as a guide, explain your conclusions about each standard and goal. Listen carefully to your worker's comments and ask the worker to write them down on the evaluation form. Take notes on the meeting and include those notes on the form.
Giving evaluations can be difficult. Some workers react to criticism defensively. And, sometimes, no one understands what merits a positive evaluation. If your workers feel that you take it easy on some of them while coming down hard on others, resentment is inevitable. Avoid these problems by following these rules:
When you set goals and standards for your workers, spell out exactly what they will have to do to achieve them. For example, don't say "work harder" or "improve quality." Instead, say "increase sales by 20% over last year" or "make no more than three errors per day in data input." Similarly, when you evaluate a worker, give specific examples of what the employee did to achieve—or fall short of—the goal.
If you want to see improvement, give the worker a timeline to turn things around. If you expect something to be done by a certain date, say so.
If you set unrealistic or impossible goals and standards, employees will have little incentive to do their best if they know they will still fall short. Don't make your standards too easy to achieve, but do take into account the realities of your workplace.
A common error in conducting performance review is overemphasizing the positive in order to avoid conflict or keep employees happy (a phenomenon called “leniency error”). But this can lead to major problems for your company.
If everyone gets the same positive performance review no matter what they do, employees will have little incentive to do their best. Also, if you end up firing an employee for poor performance, but the employee later claims he or she was fired for illegal reasons, you won’t have any documentation to back you up.
Write your evaluation so that an outsider reading it would be able to understand exactly what happened and why. Remember, that evaluation just might become evidence in a lawsuit. If it does, you will want the judge and jury to see why you rated the employee as you did.
Focus on how well (or poorly) the worker does the job—not on the worker's personal characteristics or traits. For instance, don't say the employee is "angry and emotional." Instead, focus on the workplace conduct that is the problem—for example, you can say the employee "has been insubordinate to managers twice in the past six months. This behavior is unacceptable and must stop."
The evaluation process will seem fairer to your workers if they have an opportunity to express their concerns, too. Ask employees what they enjoy about their jobs and about working at the company. Also ask about any concerns or problems they might have. You'll gain valuable information, and your employees will feel like real participants in the process. In some cases, you might even learn something that could change your evaluation.
Most large companies use some form of progressive discipline, although they don't necessarily call it by that name. Whether they are referred to as positive discipline programs, performance improvement plans, corrective action procedures, or some other title, these systems are all similar at their core, although they might vary in the details. All are based on the principle that the company's disciplinary response should be appropriate and proportionate to the employee's conduct.
Using progressive discipline can help you get employees back on track. Done right, progressive discipline can:
Progressive discipline also helps you avoid the consequences of allowing workplace problems to continue unchecked. If you don't intervene, the employee may not know that his or her behavior or actions are unacceptable. Not only will you have lost an opportunity to help the employee improve, but your company will continue to suffer the consequences of the employee's problem, which could result in reduced productivity and profits, quality control problems, lost opportunities or customers, low employee morale, and high turnover.
Using progressive discipline appropriately will also help your company stay out of legal trouble. Progressive discipline requires you to let employees know what you expect, to be fair, consistent, and objective in imposing discipline, to include employees in the process of improvement, and to document your actions and decisions properly. By following these actions, you'll ensure that employees who are unable to unwilling to improve won't have the legal ammunition to fuel a lawsuit. And, if you are consistently respectful to employees, few of them will be motivated to sue.
A progressive discipline system or policy provides a basic framework for handling employee problems fairly and consistently, but it's only a start. To get the best results from progressive discipline, you can't just move mechanically from one disciplinary measure to the next, until it's time to fire the employee. Instead, you must involve the employee in the process. The employee's engagement in improving his or her performance, behavior, or attitude will ultimately determine whether progressive discipline is successful.
For information on what steps to follow when disciplining an employee, see the article Using Progressive Discipline for Employees. For detailed strategies and techniques that will help you engage employees in the disciplinary process, see The Progressive Discipline Handbook, by Margie Mader-Clark and Lisa Guerin (Nolo).
]]>For example, an employee who has to cover the phones while eating lunch is entitled to be paid for that time, even if the phones aren't ringing.
Sometimes, it can be hard for employers to figure out when an employee is entitled to pay. This article discusses the two areas that give employers the most trouble: on-call time and travel time. We discuss only the federal rules; many states have similar laws, but some give workers the right to be paid in more situations.
To check your state's law, contact your state labor department.
If employees are required to stay on your premises or at a customer's location while waiting for a work assignment, you must pay them even if they do not spend that time actually working. For example, a mechanic who knits a sweater while waiting for a customer to arrive, a corporate trainer who must wait for the client to gather employees and set up equipment, or a secretary who plays solitaire on a computer while waiting for an assignment is entitled to be paid for that time.
If employees must be on-call elsewhere, you must pay them for those hours over which they have little or no control and which they cannot use for their own enjoyment or benefit. If you place significant restrictions on an employee who is on call, that employee should be paid. There are few hard and fast rules in this area -- but generally, the more constraints you put on an employee, the more likely it is that he or she should be paid.
Here are some factors a court or agency might consider when deciding this issue:
Although you do not usually have to pay an employee for time spent commuting, you must pay for travel time if that time is part of the job. For example, if your employees are required to go out on service calls, the time spent traveling to and from the customers must be paid. Also, if you require employees to take employer-provided transportation from a central location to the worksite, you may have to pay for this time.
Even if an employee's job does not ordinarily involve travel, you may have to pay for travel time if the employee is required to come to the workplace at odd hours to deal with emergency situations.
Special rules apply to employees who occasionally travel to another location for business. The rules depend on whether the trip includes an overnight stay.
If you send an employee on a one-day business trip, you must pay for the time the employee spends traveling. However, you can subtract the time it takes the employee to get to the airport or public transportation hub as commuting time, even if it takes the employee longer than his or her ordinary commute to the worksite.
Tom lives in Greenbrae, California, and regularly commutes to his job in San Francisco. His commute takes about 1/2 hour each way by bus. His employer sends him to Los Angeles for a business trip. Tom leaves home at 6 a.m. to catch an 8 a.m. flight.
He spends all day with a customer in Los Angeles, then dashes off to the airport to catch his 6:30 p.m. flight, which lands at 8 p.m. Tom arrives home by 9 p.m. He is entitled to be paid for 12 hours of work; the time he spends commuting between his home and the airport is considered noncompensable commuting time, even though it's quite a bit longer than his usual commute.
When an employee spends more than a day out of town, the rules are different. Of course, you must pay the employee for all of the time he or she spends actually working. However, whether you have to pay the employee for time spent in transit depends on when the travel takes place.
Employees are entitled to pay for time spent traveling during the hours when they regularly work (the period of the day they regularly work), even if they ordinarily work Monday through Friday but travel on the weekend.
For example, if Tom usually works 9 to 5, and leaves the office at 3 p.m. to catch a flight for an overnight business trip, he should be paid for the two remaining hours in his day, but not for the rest of the time he spends traveling that evening. But if Tom returns home on a 10 a.m. Saturday flight that takes four hours, he is entitled to be paid for all of that time. Even though he traveled on the weekend, the flight took place during his ordinary hours of weekday work.
Employees who are eligible for overtime pay might be entitled to count some of their travel time toward overtime.
While an individual's ordinary commute to and from work isn't paid or counted for overtime purposes, travel time that is part of the job should count toward overtime. That means any of the scenarios described above for which an employee is paid to travel should count toward overtime. For example, service calls to and from customers should be paid and that time should be included in any overtime calculation.
]]>Because filming can implicate privacy rights, however, employers must be very careful not to cross the line. (Employers can learn more about their workers' privacy rights in Nolo's Your Employees' Right to Privacy section.)
Most employees don't mind if retail establishments conduct video surveillance to guard against theft by outsiders. For example, there might be a video camera that tapes everyone who comes in the door or stands in front of the register.
But what about employers that use hidden cameras to try to catch their own employees stealing? What about video surveillance of employees while they're working? Or cameras in the bathrooms or locker rooms?
Whether filming employees at work is legal depends on state law and on what images are being captured.
Privacy is a cherished value for most of us, and state legislators know it. Most states have passed at least some privacy-related laws. Many of these laws are intended to protect consumers by, for example, limiting the ways companies may use personal information or requiring businesses to maintain the confidentiality of medical information or Social Security numbers.
Some states have also passed laws that deal with workplace privacy, including the use of cameras and video equipment. In California, for example, it's a crime to install a surveillance mirror (one that can be seen through from only one side and looks like a mirror on the other side) in a restroom, shower, fitting room, or locker room. In Connecticut, employers may not operate surveillance equipment in areas designed for employee rest or comfort -- such as restrooms, locker rooms, or employee lounges.
To find out more about your state's workplace privacy laws, contact your state labor department.
Even if your state hasn't passed laws that specifically protect workplace privacy, you almost certainly can't tape or film employees while they are doing certain things at work, such as using the restroom or changing clothes.
If there's no state law that specifically allows or prohibits surveillance, courts determine whether an employee's privacy has been violated by looking at two competing interests: the employer's need to conduct surveillance and the employee's reasonable expectation of privacy.
An employee who is using the bathroom or getting undressed has a very strong, and very reasonable, expectation of privacy -- and few (if any) employers will have a substantial enough need to justify filming employees doing these things.
It is a violation of federal labor law for employers to secretly film or tape union meetings.
Although some courts have ruled against employees who challenged employer surveillance of their activities while on leave for a medical condition or workers' comp injury, these cases often involve fairly clear employee abuse of leave laws. (For example, one employee who was too ill to work was apparently well enough to spend the day at the gym; another took FMLA leave when his request to use vacation time was denied, then recuperated in Las Vegas.)
A court could well rule differently if an employer's surveillance strayed into private activities and effectively deterred employees with a legitimate need for leave from exercising their legal rights.
If you have questions about the legality of your business's surveillance policy, you might want to consult with an attorney.
To locate an employment law attorney in your area, visit Nolo's Lawyer Directory, where you can view information about each lawyer's experience, education, fees, and perhaps most importantly, the lawyer's general philosophy of practicing law.
By using Nolo's directory you can narrow down candidates before calling them for a phone or face-to-face interview.
]]>Unless you fear that the employee might commit some type of violence, sabotage, or theft, you should hold the meeting where the employee will be most comfortable. Choose a private place that ensures confidentiality -- and leaves the employee somewhere to process the news away from prying eyes. If the employee has a private office, that's the best place for the termination meeting. The employee will be comfortable there, you'll be able to leave once the meeting is over, and the employee will be able to collect his or her thoughts after you've left. If the employee works in a cubicle, shares an office, or otherwise doesn't have a private workspace, a conference room or another private neutral spot -- with a door that closes and walls that go all the way to the ceiling -- is the next best thing.
Before the meeting, review the employee's personnel file, particularly the documentation of the performance or conduct problems that led to the termination decision. You should also review any steps the company has taken to help the employee improve, such as coaching or training. Especially if you are not the employee's day-to-day supervisor, you should take some extra time to get all the facts straight.
You will also want to be ready to explain what will happen going forward -- for example, when the employee will receive a final paycheck, how to continue benefits, whether the employee will receive severance, and so on. You may need to meet with HR or consult with the company's lawyer to get all of the details.
Begin the meeting by informing the employee that you are terminating his or her employment as of a particular date. It may sound harsh to just dive right in like this, but starting out with small talk, jokes, or pleasantries will only ensure that the employee will be caught off guard -- and will probably feel foolish -- once the real reason for the meeting becomes clear.
Be direct and focused in breaking the news, so the employee realizes the decision is final and not up for negotiation. This is no time for ambiguous language ("things just aren't working out") or euphemisms ("it may be time for you to consider moving on"). Actually using the words "terminated" or "termination" is often the best approach, to avoid any possibility of misunderstanding.
The next step is to briefly explain why you are firing the employee. The best tone to strike is objective and professional. If you're too direct, you risk seeming coldhearted. At the same time, being too sympathetic might make it seem like you are apologizing or backtracking from the decision.
Don't feel that you have to justify your decision. Simply state the reasons and leave it at that. To do more is to risk hurting the employee's feelings unnecessarily or drawing the employee into an argument. There's no point trying to prove to the employee that firing was your only option. No matter how bad the circumstances, the employee is likely to disagree with your decision -- or, at least, be unhappy about it. And dwelling on the employee's every mistake isn't a good way to end the relationship.
At the same time, make sure you don't minimize the problems that led to your decision. Even if your intent is simply to spare the employee's feelings, these soothing words could come back to haunt you if the employee decides to file a lawsuit and you are forced to defend the decision to fire.
Try to avoid being drawn into an argument about the decision. If the employee wants to vent or express unhappiness, you can simply say, "I understand you feel that way, but the decision is final." And, particularly if you didn't make the termination decision, resist any temptation to distance yourself from the situation. Telling the employee that you would have handled things differently or you don't agree with the company's decision will almost certainly lead to problems, during the meeting and after.
If possible, bring the employee's final paycheck with you to the termination meeting, and be prepared to explain what it includes (for example, whether it includes accrued vacation time or whether the company has decided to pay the employee through the end of the week or month, even though the employee isn't expected to come in). State law governs the vacation time issue, as well as the time limits for providing a final check; see Nolo's Chart: Final Paychecks for Departing Employees for more information.
If your company will offer a severance package, explain what it includes. If the employee is expected to sign a release or waiver in order to get the severance, briefly explain the terms and give the employee a copy of the document to review. Don't pressure the employee into making a decision at the meeting.
If the employee has contractual obligations to the company that will continue, such as a noncompete or nondisclosure agreement, briefly review those documents with the employee. Also explain whether and how the employee will be able to continue benefits, particularly health insurance.
After learning of the termination, the employee will most likely feel confused and upset. Be prepared to help the employee move forward by preparing to answer questions such as:
Before the meeting, you should come up with a plan for work that is in progress. Will these projects be handed off to a coworker? Do you need for the employee to complete anything? Does the employee need to assist in the transition?
Before you leave the employee, provide contact information for yourself or someone else at the company who can answer questions that come up later, assist the employee in collecting personal belongings and turning in company property, and be sure to provide any relevant paperwork for benefits and outplacement.
End the meeting on the most positive note possible. Wish the employee good luck and shake his or her hand. If you can honestly say something positive about the employee's tenure at the company, by all means do so. And assure the employee that the contact person you've provided will be available to answer any questions that come up and assist the employee with the termination process.
For more information on workplace investigations, discipline, and performance evaluations, see Nolo's book Dealing With Problem Employees: A Legal Guide, by Amy Delpo and Lisa Guerin (Nolo).
]]>There are only two situations when you may be legally required to provide severance pay. First, a handful of states require employers who are closing a facility or laying off a large number of workers to pay a small amount of severance. (Contact your state labor department to find out if your state has this type of plant closing law.)
Second, you might be legally required to provide severance to former employees if you led them to believe they would be paid, as evidenced by:
Many employers routinely give severance packages to long-term employees who are fired for reasons other than serious misconduct, even if they are not legally required to do so. Why? To soften the blow of being fired and to buy a little insurance against lawsuits. A severance package may help sweeten the sour grapes a worker feels about being fired. And a happier former employee is a less litigious former employee. (For information on requiring an employee to sign an agreement not to sue you in exchange for receiving severance, see Nolo's article Using Severance Agreements to Avoid Lawsuits.)
If you decide to pay severance, the most important rule is to be consistent. The amount of severance can vary depending on how long the employee has worked for you and the employee's job category. But be sure to treat your employees equally. If you are evenhanded and uniform in paying severance, you are less likely to face claims of discrimination (for example, that men received higher severance pay than women).
There are no hard-and-fast rules about what constitutes a severance package. The idea is to ease the burden on the fired employee. To this end, you might want to consider including any or all of the following benefits:
For help in creating and documenting a severance policy and other personnel policies, get Create Your Own Employee Handbook: A Legal and Practical Guide, by Lisa Guerin and Amy DelPo (Nolo).
]]>All employers, managers, supervisors, and human resources representatives should become familiar with the law of retaliation, because retaliation claims are becoming more and more common. And they are also becoming more costly.
Retaliation means any adverse action that you or someone who works for you takes against an employee because he or she complained about harassment or discrimination. Any negative action that would deter a reasonable employee in the same situation from making a complaint qualifies as retaliation.
Employees who participate in an investigation of any of these problems are also protected -- for example, you cannot punish an employee for giving a statement to a government agency that is looking into a discrimination claim.
Even if the original complaint of discrimination or harassment turns out to be unfounded, an employee who can prove that something negative happened because of the complaint can still win a retaliation claim. You also may not punish employees for participating in an internal investigation of harassment.
Adverse action includes demotion, discipline, firing, salary reduction, negative evaluation, change in job assignment, or change in shift assignment. Retaliation can also include hostile behavior or attitudes -- by you or someone who works for you -- toward an employee who complains. Sometimes, an employee can claim retaliation if another employee complains. For example, the Supreme Court has held that a man who was fired shortly after his fiance (who worked for the same employer) filed a discrimination charge could sue for retaliation.
Although retaliation obviously includes any action that you take with the intent to harm or punish the employee for complaining, it can also include actions that you take with the best of intentions, if those actions have a negative impact on the employee.
For example:
In both of the above examples, the employer made the mistake of focusing on the complaining employee rather than focusing on the wrongdoer. When someone complains about something unlawful in the workplace, the employer's job is to fix the problem -- not avoid it by removing the complaining employee from the situation. By changing the job conditions of the employee who complained, the employer took actions that could be viewed as retaliatory.
As soon as someone complains about discrimination or harassment in the workplace, you must take some precautionary steps:
An adverse action is retaliatory only if it is taken because the employee complained. You are free to take actions against an employee for other reasons, even if that employee has complained about discrimination or harassment.
For example:
The problem for employers is that some employees will claim that these adverse actions are retaliation, even if they have nothing to do with the employee's complaint.
If you must take adverse action against an employee who has complained, be prepared to show that you had valid reasons for discipline, unrelated to the complaint. Those reasons should be supported, if possible, by prior documented warnings to the employee.
]]>There are several major advantages to using independent contractors rather than employees, with financial savings topping the list.
You will probably save money. Even though most employers pay ICs more per hour than they would pay employees to do the same work, it usually ends up costing employers more to hire employees. When you hire an employee, you will have to pay a number of expenses that you don't have to pay for ICs, including employer-provided benefits, office space, and equipment. You will also have to make required payments and contributions on behalf of your employees, including:
All together, these expenses can easily increase your payroll costs by 20% to 30% -- or more.
You have staffing flexibility. Working with ICs allows employers greater leeway in hiring and letting go of workers, which can be especially advantageous for employers with fluctuating workloads. You can hire an IC for a specific task or project, knowing that the worker will be gone when the job is finished. You won't have to face the trauma, expense, and potential legal trouble that can accompany firings and layoffs.
You may also enjoy greater efficiency when you use ICs. Because most ICs bring specialized expertise to the job, they are usually productive immediately, eliminating the time and cost of training.
You reduce your exposure to lawsuits. Employees have a wide array of rights under state and federal laws -- and therefore, a variety of legal claims they can potentially bring against their employers for violating those rights. Because ICs are independent businesspeople, they are not protected by many of these laws. Among the rights that are available to employees but not to ICs are:
Employees may also be able to sue their employers for wrongful termination. ICs cannot bring this type of lawsuit (although there may be restrictions on your right to terminate an IC relationship, depending on what the written IC agreement says -- see Nolo's article Put Your Independent Contractor Agreement in Writing for more information on IC contracts).
After reading about the possible benefits of hiring ICs, you may be thinking that you'll never hire an employee again. But there are also some significant drawbacks to using ICs -- and the risk that your classification decision may be questioned by government agencies.
You have less control over your workers. Unlike employees, whom you can closely supervise and monitor, independent contractors enjoy a certain autonomy to decide how best to do the task for which you hired them. If you interfere too much in an IC's work, you risk making the IC look like an employee, for whom the law says you should be paying payroll taxes, workers' compensation insurance premiums, and more. If you want to exercise significant control over what your workers are doing and how they're doing it, classify them as employees.
Your workers will come and go. Many employers use ICs only as needed for relatively short-term projects. This means that workers are constantly coming and going, which can be inconvenient and disruptive. And the quality of work you get from various ICs may be uneven. Employers who want to rely on the same workers day after day are better off hiring employees rather than ICs.
Your right to fire an IC depends on your written agreement. You do not have an unrestricted right to fire an IC, as you might with your employees. Your right to terminate an IC's services is limited by the terms of your written IC agreement. If you fire an IC in violation of the agreement, you could be liable for breach of contract.
You may be liable for injuries an IC suffers on the job. Employees who are injured on the job are usually covered by workers' compensation insurance. In exchange for the benefits they receive for their injuries, these employees give up the right to sue their employer for damages. ICs are not covered by workers' compensation, which means that if they are injured on the job, they might be able to sue you and recover damages.
You may not own the copyright in works created by an IC. If you hire an IC to create a work that can be copyrighted -- such as an article, book, or photograph -- you might not be considered the owner of the work unless you use a written agreement transferring copyright ownership from the IC to you. (See Nolo's article How to Protect Your Intellectual Property Rights in Works Created by Contractors for more information on these agreements.) In contrast, if an employee creates such a work, in most circumstances you will automatically own the copyright.
You face a risk of government audits. State and federal agencies -- particularly the IRS -- want to see as many workers as possible classified as employees, not ICs. The reason is financial: The more workers are classified as employees, the more tax and insurance money flows into government coffers, and the harder it is for workers to underreport or hide their income from the tax man.
Any number of state and federal agencies might audit your business if they believe you have misclassified employees as ICs. At the federal level, you might face an audit from the IRS; the Department of Labor, which enforces federal minimum wage and hour laws; the National Labor Relations Board, which enforces employees' rights to form a union; or the Occupational Safety and Health Administration, which enforces workplace safety laws.
At the state level, you could attract the attention of your state's unemployment compensation or workers' compensation agency if a worker you classified as an IC applies for benefits. You could also face an audit from your state's tax agency.
To learn more about hiring independent contractors, freelancers or consultants, read Working With Independent Contractors, by Stephen Fishman (Nolo).
]]>Employees of government and public entities have a constitutional right to privacy that protects them from most employer monitoring of, or even inquiring about, their off-the-job conduct. For public employers, then, this type of monitoring is largely off-limits.
In the private sector, a number of laws prohibit employers from intruding into their employees' lives outside of work. Some state constitutions specifically provide for a right to privacy, which prevents private employers from looking into their employees' off-duty activity. Some states, including California, have laws prohibiting employers from taking any job-related action against a worker based on that worker's lawful conduct off the job.
Even in those states that don't provide private workers with a constitutional or statutory right to privacy, it is generally illegal for an employer to intrude unreasonably into the "seclusion" of an employee. This means that physical areas in which an employee has a reasonable expectation of privacy are off-limits to employers, unless there is a very good reason to intrude. And an employer is never allowed to physically enter an employee's home without consent (even when searching for allegedly stolen property belonging to the employer).
The same balancing approach often applies to private information. Generally speaking, an employer may not inquire about or otherwise obtain facts about employees' private lives. For example, an employer may not ask employees about their romantic relationships or sexual likes and dislikes.
Courts and legislatures have created some specific rules for certain types of private, off-duty activities.
Under the National Labor Relations Act (NLRA), it is illegal for an employer to monitor or conduct any surveillance of employee union activities, including off-the-job meetings or gatherings. This rule also applies to any concerted activity (that is, activity undertaken by workers acting together, rather than individually) even if no union is involved, as long as employees are discussing their work conditions or terms of employment. An employer who sends a supervisor to eavesdrop on such meetings, or plants a spy among employees engaged in such conduct, violates the NLRA.
Because drug testing has the potential to reveal an employee's use of drugs outside of work hours, it has been the subject of much privacy litigation. In general, drug testing is permitted in the job application context, where employees are performing safety or security-sensitive work, or when an employee has given an employer some reason to believe that he or she is impaired by drugs at work. (See Testing Job Applicants for more information about drug testing.)
An employee's off-the-job political and religious activities are off-limits to his or her employer. Federal and state laws prohibit discrimination on the basis of religious or political affiliation. However, an employee who brings politics or religion to work, by proselytizing or attempting to convert others, for example, may be subject to discipline by the employer.
Generally speaking, working more than one job is lawful. However, an employer has the right to limit after-hours work that is in conflict with the employer's own business. For instance, going to work for the competition could provide grounds for discipline or discharge.
Many states make it illegal for employers to discriminate on the basis of marital status. Therefore, employers may not keep track of whether their employees are single, married, or divorced, except as may be necessary for providing certain benefits such as health insurance. However, tricky issues can arise when, for example, one spouse applies for a position in which he or she would supervise the other, or an applicant's spouse works for the hiring company's major competitor. To find out whether your state prohibits marital status discrimination, and how its law might apply to situations like these, contact your state fair employment practices agency.
May an employer take action against an employee who has been arrested for driving under the influence or convicted of a crime? If an employer learns that a worker has engaged in illegal conduct off duty, can the employer ask the worker about it? In many states, the answer to these questions is "no," unless the off-duty illegality has some concrete impact on the employee's work or the employer's business interests. An employer would be entitled to look into the drunk driving arrest or conviction of a bus driver or the embezzlement conviction of a bank employee, for example.
For a complete guide that contains everything you need to know about being an employer, get The Employer's Legal Handbook: Manage Your Employees & Workplace Effectively, by Fred Steingold (Nolo).
]]>In fact, however, you may not own the finished product, even if you pay an IC to create it for you. Unlike employees, whose work almost always automatically belongs to the employer, ICs are independent business people and can retain ownership rights to the work they create.
If you hire an IC to create a work of authorship -- such as written works, plays, music, art, graphics, photographs, computer software, films and videos, designs, and so on -- the finished product will be protected by copyright. The owner of a copyright has a number of rights to control how the work may be used, including the exclusive right to copy and distribute the work. If an IC retained the copyright to work you hired him or her to create, your right to use that work could be severely limited -- even though you paid for it.
A written agreement avoids this problem. For certain types of creative works (called "works for hire"), you will own the copyright as long as you and the IC execute a written work-for-hire agreement. For other types of creative works, you will have to use an assignment: a written agreement in which the IC transfers some or all of the copyright rights in the work to you.
When you pay an IC to create a work for hire, you are legally considered to be the work's author and are entitled to all copyright rights in the work -- but you must have a written agreement with the IC stating that the work is for hire. (For more information and sample work-for-hire contract language, see Consultant & Independent Contractor Agreements, by Stephen Fishman (Nolo).)
Not every creative work can be a work for hire, however. Only work that falls into one of these categories can qualify:
If the work you want an IC to create doesn't fall into one of the nine work-for-hire categories above, it will not qualify as a work for hire, and you are not automatically entitled to own the copyright to the work. In this case, you will have to have a written assignment, in which the IC transfers all or some of the copyright rights to you. For information on assignment agreements and licenses, including sample contract language, see Consultant & Independent Contractor Agreements, by Stephen Fishman (Nolo).
]]>These problems can include diminished job performance, lowered productivity, absenteeism, tardiness, high turnover, and increased medical and workers' compensation bills.
Employees who abuse drugs and alcohol can also make a workplace more volatile and more dangerous, and they can expose employers to legal liability.
Your company's employee handbook (or its verbally announced workplace policies) should state that drinking on the job is not allowed. If you catch an employee actually using alcohol at work, you can deal with it through your company's standard disciplinary procedures.
Depending on the circumstances and on your company's policies, the punishment can range from an oral reminder to immediate termination.
The consequences should depend in part on whether the employee has endangered the health and safety of others. For example, an employee who has a few beers at lunch before returning to work operating a forklift might warrant more severe discipline that a waitress who has a glass of wine at lunch.
Many people drink alcohol when not at work. Most employers aren't concerned about an employee's occasional drink -- or even the occasional overindulgence -- as long as it doesn't affect the employee's work performance. But when off-site, off-hours drinking begins to take its toll on the worker's ability to do the job, employers may have reason to take action.
Handling a worker with a drinking problem or alcoholism is tricky business. The federal Americans with Disabilities Act (ADA) and many state disability rights laws protect alcoholics from workplace discrimination.
The ADA doesn't allow employers to make an employment decision based solely on the fact that an employee is an alcoholic. An employer can, however, make a decision (including a decision to discipline or terminate an employee) based on the employee's inability to meet the same performance and productivity standards that it imposes on all employees.
Many employees properly use prescribed or over-the-counter drugs, such as sleeping aids, cold medicine, or painkillers. Most employers sensibly believe that this is none of their business, as long as the drugs don't impair the employee's job performance.
Things get trickier, however, if legitimate drug use affects an employee's ability to do the job safely and well. For example, medications that cause drowsiness might make it downright dangerous for a worker to do a job that requires driving or operating machinery. Medication may also impair judgment and abilities, which could impair a worker's ability to meet job requirements.
If an employee's performance is affected by the proper use of prescription or over-the-counter drugs, state and federal disability laws may limit an employer's options. Depending on how the drug affects the employee, and whether the employee suffers from a disability within the meaning of these laws, your company may have to accommodate the employee's use of the drugs.
If an employee is under the influence of illegal drugs at work, disability rights laws do not limit your company's options. You may deal with that employee through your company's standard disciplinary procedures. If the employee has not created a safety threat and does not hold a highly sensitive position, a written reprimand might be appropriate for a first offense.
If the employee endangers the physical safety of others -- for example, by driving the company van after smoking marijuana at home -- something more drastic is called for. If the employee has a drug problem, one option is to suspend the worker until he or she successfully completes a treatment program.
Some employers, however, opt for a zero-tolerance policy under these circumstances and immediately suspend and then terminate the employee. Because using, selling, or possessing illegal drugs is a crime, many employers immediately terminate employees who engage in this type of behavior at work.
Drug testing is a dicey legal issue for employers -- and one that should be approached with caution. Drug tests are highly intrusive, yet they can also be invaluable tools for preventing drug-related accidents and safety problems. (For more information, see Nolo's article on Testing Employees.)
The law of drug testing is changing rapidly as more courts rule on employee lawsuits claiming that a particular drug test violated their right to privacy. Because drug testing is intrusive, a worker who sues you and convinces a jury that a test was illegal (in violation of either your state's drug testing laws or your state's privacy laws) could cost your company a lot of money -- and ruin its reputation as a fair employer.
Before performing any drug test or adopting a drug test policy, you must get some legal advice. Here are some guidelines to consider.
Avoid testing every employee for drugs, and avoid random drug testing. Unless all of your company's workers perform dangerous jobs, these sorts of tests cast too wide a net. A drug test is most likely to withstand legal scrutiny if you have a particular reason to suspect an employee of illegal drug use or the employee's job carries a high risk of injury.
Your company will be on the safest legal ground if your primary motive is to ensure the safety of workers, customers, and members of the general public. Employers are most likely to withstand a legal challenge if they limit testing to:
Even if you have strong reasons for testing, your company can still get into legal trouble over the way the test is administered and interpreted. To be safe, employers should:
Employers cannot force workers to take a drug test against their will. However, an employee who refuses to take a drug test can be fired for that reason, as long as the employer had a solid basis for asking the employee to submit to the drug test in the first place.
For more information on testing your employees, see Nolo's article on Testing Employees. For information on using pre-employment tests to screen out potential problem employees, see Nolo's article Testing Job Applicants.
Finally, for more information in general on employee drug and alcohol use and many other human resources issues, see the book The Employer's Legal Handbook, by Aaron Hotfelder.
]]>When you meet with a prospective IC for the first time, you should have the IC complete an independent contractor questionnaire. Design this questionnaire to elicit the sort of information that will establish that the IC is a separate business entity, not just an employee in IC's clothing. You'll want to know:
None of the answers to these questions will provide conclusive evidence that a worker is an employee or an IC. But taken together, this information will help you decide whether the worker is an independent businessperson whom you can safely treat as an IC.
Warning - Employment applications are for employees, not independent contractors. Don't ask an IC to complete one of your standard employment applications. Government agencies may use this as evidence that the IC is actually your employee. Make sure the term "independent contractor" appears prominently in the title of your questionnaire, to avoid any possible confusion.
Ask the IC to provide documents that will enable you to establish that the IC is a separate business entity, should the government ever decide to audit you. Make copies of all such documents and keep them in your files along with the questionnaire described above.
The documents you should request include the following:
Once you have reviewed the IC's questionnaire and documents, you will have to decide whether you can safely treat him or her as an IC -- or whether a government agency is likely to challenge that classification. For information on how government agencies decide whether a worker should be classified as an IC or an employee, see Independent Contractor or Employee: How Government Agencies Make the Call.
If you are satisfied that the worker qualifies as an IC, your next step is to create a written agreement detailing the terms of the project. For tips on drafting an agreement, see Put Your Independent Contractor Agreements in Writing.
If you have serious concerns that government agencies might classify the worker as an employee, you probably shouldn't court trouble by hiring the worker as an IC. Instead, you might consider hiring the worker as an employee -- or, you can thank the worker for his or her time and continue your search for a truly self-employed freelancer.
An independent contractor is a self-employed worker who is hired to complete a specific project or task. They are responsible for managing their own time and work, providing their own tools and equipment, and paying their own taxes.
In contrast, an employee is hired by an employer to perform ongoing work for the company and is typically provided with tools and equipment, training, benefits, and other types of compensation.
Hiring independent contractors can be beneficial for businesses as it allows them to hire workers on a temporary or project basis without incurring the costs associated with hiring full-time employees.
Independent contractors also often have specialized skills and expertise that can be difficult to find in-house.
The classification of a worker as an independent contractor or an employee is based on a variety of factors, including the degree of control the employer has over the worker's work, the worker's level of independence, and the nature of the work being performed.
The IRS provides guidelines for determining worker classification. (See also Nolo's article Employees vs. Independent Contractors.) You can use the IC's questionnaire and documents (described above) to determine whether your worker is an IC or an employee. If in doubt, seek legal advice.
Misclassifying an independent contractor as an employee can result in penalties and fines from the IRS, as well as legal action from the worker.
Employers may be required to pay back taxes, overtime pay, and other compensation to workers who were misclassified as independent contractors.
For detailed information working with independent contractors, freelancers and consultants, get Working With Independent Contractors, by Stephen Fishman (Nolo).
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