'Tis the Holiday Pay Season

“Best Guy, LLC” is a (fictional) small business with full and part-time employees.  Best Guy prides itself on being a fair employer, with generous benefits for its employees.  One of those benefits is paid holidays.  Best Guy provides its employees with nine paid holidays each year, including Thanksgiving and the day after Thanksgiving.  The holiday policy provides that part-time employees are paid on a pro-rated basis. 

Jane and John are full time employees (40/week), but Jane works eight hours a day, Monday through Friday, and John works ten hours a day, Monday through Thursday.  Jill and Jack each work twenty-hours per week, but Jill works four hours a day, Monday through Friday, and Jack works two ten hour days, Thursday and Friday.

When Best Guy’s accountant makes out the payroll for the week of Thanksgiving, she finds herself in a bit of a quandary.  Jane’s check is easy:  she receives the same amount of pay that she always gets, with Thursday’s and Friday’s pay being holiday pay.  Does John get ten hours for Thursday and nothing for Friday or does he get eight hours for each day because he is a full-time employee?  Should he only get eight hours for Thursday and nothing for Friday?  Does Jill get her regular pay, with four hours on each of Thursday and Friday as holiday pay, or does she only get a pro-rated amount (two hours) for each of those days?  What about Jack?  Does he get five hours of vacation each day because that is one-half of his scheduled hours or is vacation calculated on eight hour days, giving him only four hours each day?

These are all good questions, but there is no answer in the law for them.  Neither state nor federal law requires employers to give paid holidays, so whatever is provided is determined by the employer’s policy.  Employers need to make sure that their paid holiday policies take into consideration all the varying work schedules that their employees have.  Employers should consider whether holidays will be paid to individuals who are not normally scheduled to work the day of the holiday and how much holiday pay is given to people whose normal work schedule would result in missing more or less than a standard eight-hour day.  Policies also should consider the availability of holiday pay to new employees, the possibility of abuse by an employee who may call in “sick” the day before or the day after the holiday, and alternative benefits for employees who are required to work on the holiday. 

The Employer's Murphy's Law

As an employment law attorney representing employers for 22 years, I have encountered the Murphy’s Law of employment relationships many times.  It never seems to fail:  the employee you bend over backwards to help is the employee who ultimately sues you.

I can’t remember how many times clients have said, “I can’t believe [fill in the blank] is making a complaint after all we have done for [him/her].”  Clients have loaned money, granted special leaves of absence, overlooked performance nightmares, and changed workstations to satisfy a personal preference for employees who ultimately made allegations of unfair treatment against the employer.  I once advised a restaurant that was sued for sexual harassment by a waitress to whom it had given a substantial amount of money and an outlet for fundraising in order to help fund her sister’s kidney transplant. 

So, what’s behind this employment Murphy’s Law?  Employees who need extra help from their employers generally cannot afford a job loss and resort to desperate measures when they feel their jobs are threatened.  In addition, these employees often view their relationship with the employer as a personal relationship and are offended when the employer treats it as a business relationship. 

While it is admirable for an employer to care about its employees, employers should be cautious when an employee’s need for special assistance becomes frequent or extreme.

Transfers under the FMLA

Bob is your receptionist, and he’s been a great asset to you for many years.  He is the first one in the office every day, making sure coffee is ready for employees and clients alike.  He greets clients with his warm smile, directs vendors to the appropriate department, and keeps the front office looking clean and welcoming.  Bob has requested intermittent Family and Medical Leave Act (“FMLA”) leave to care for his father who needs help on a sporadic basis when his arthritis flares up.  Bob will not know until he gets up in the morning whether his father will be having a good day or a bad day.  You know that it’s going to be extremely difficult to find someone at the last minute to get into the office first thing in the morning.

You think you have a simple solution to the problem.  Lani works in the file room going through old records, destroying some and scanning others into the new computer system.  Lani can take over the front desk, and Bob can work in the file room.  Both jobs pay the same, so there’s no problem there.  If Bob has to be gone on short notice, the document project can wait.  Easy.

Unfortunately, easy is not always legal – and legal is not always logical.  According to the FMLA, an employer can transfer an employee to a position with equivalent pay and benefits that is more amenable to intermittent leave that “is foreseeable based on planned medical treatment.”  (29 U.S.C. § 2612(c)).  This means that you can transfer Bob if he needs time off every Thursday to take his father to treatment, but you cannot transfer Bob if he needs unpredictable time off.  As the Association of American Railroads pointed out when arguing for a change in the applicable regulation, “[The] unforeseeable use of intermittent leave is, if anything, a more appropriate circumstance for transfer or reassignment because unforeseeable absences may undermine the employer’s ability to carry out its business.” 

Despite this compelling, and fairly obvious, argument, the Department of Labor refused to include an expansion of the right to transfer employees needing intermittent leave when it overhauled the FMLA regulations five years ago.  The DOL determined that such an expansion was beyond the scope of its authority given the limiting language contained in the FMLA itself.

The limited right to transfer employees needing intermittent FMLA leave has been the law since the enactment of the FMLA in 1993 and was reinforced with the issuance of revised regulations in 2008.  Yet, I still encounter people who use transfers as a way to manage the difficulties posed by unpredictable absences.  There are ways to manage (or at least muddle through) sporadic FMLA leave, but employers must be careful when exercising the right to transfer the employee.

Hidden Costs of Retaining Bad Employees

Susie has been with the company for a long time.  When she first started, she was a “good enough” employee, but as time has gone on you wish she would rise to the level of “good enough” again.  She complains about the food you serve at office parties, she leaves early when she thinks no one is watching, she irritates her co-workers with her constant jabber about Dancing with the Stars, and her manager has to check all her work product before it goes out because she is “not a detail person.”  The list of your issues with Susie goes on and on.  Yet, she’s been there so long, you know she needs the job (and who else would ever hire her?), and she fits into about every protected class there is.  So, you sit and wait for her to either quit or do something so bad that firing her is the only reasonable response.

Either consciously or unconsciously, you have weighed the pros and cons of ending the employment relationship and have decided that the cons are more substantial.  You should consider, however, whether you weighed the right data.  Underestimating the costs of a problem employee leads to an unbalanced cost-benefit analysis in making employment decisions.

An employee with recurring behavior, attendance, or performance problems requires increased attention of managers and human resources personnel.  When considering whether to terminate employment or to continue to work with such an employee, you should think about how much time your managers and human resources personnel have spent dealing with problems involving the employee as compared to other employees.  The simple act of tracking time spent over the course of a week or month can be very enlightening.

You also should consider the impact of a misbehaving or poor performing employee on co-workers.  If co-workers perceive that the company will tolerate a certain level of misconduct or poor performance, they may believe that they can “get away with it” too.  Employees who choose not to follow suit may resent that others are allowed to violate rules or under-perform without consequences.  If an employee who is a disruptive force in the workplace is retained, you might begin having similar problems with others or find yourself losing valued employees.

A bad employee can have an impact on clients or customers, vendors, or the public.  Problem employees may sabotage business relationships intentionally or as the simple result of their incompetence.  Your business must rely upon, and be at the mercy of, the impression your employees make.  You should take into account the potential impact a troublesome employee may have on those whose dealings with the company depend upon that employee.

The longer you wait to take action, the stronger the employee’s sense of security will become.  Unfortunately, the troublesome employee often uses the company’s patience as additional months or years of “ammunition” against the company. 

If you can’t imagine a scenario in which Susie would go back to “good enough,” then the time to take action is now.  There are steps you can take to soften the blow to Susie and bolster the company’s position in case Susie decides to pursue legal action, but you have to do what’s right for your business rather than doing what might feel like the safe (or kind) thing.

Employment Practices Audit

In my previous post, I addressed the importance of reviewing employment applications for compliance with the Minnesota “Ban the Box” legislation.  A similar review of other employment documentation and practices can be a useful tool in detecting problems in your systems before they cause problems in your actual operations.

An employment practices (or human resources) audit can be done internally or through an outside consultant or attorney.  If you choose to do an internal audit, it is important to assign the task to someone who does not work in or have responsibility for the human resources function within the business.  The most likely candidate for an internal auditor is an in-house attorney.  Lacking such a position, you can rely on someone who has experience with business systems or conducting other types of audits.  If the person does not have a thorough understanding of employment laws and good human resources practices, however, he or she will require training and guidance from an outside resource. 

The audit should address the full range of human resources functions, from the hiring process to termination of employment issues and everything in between.  In addition to looking at forms and policies, the auditor should probe into what actually happens on a day-to-day basis (how things operate in the real world).  For example, having a form to be used whenever someone requests time off is of little relevance if supervisors grant vacation requests without ever requesting that employees complete the form. 

The audit will help you recognize weaknesses in your processes, identify procedures that can be made simpler through technology, and address potential liabilities.   Completing an implementation plan after the audit will improve human resources efficiency, correct any legal non-compliance issues, and put the business in the best possible position to address human resources issues that inevitably arise in every organization.

EMPLOYMENT APPLICATIONS

When is the last time you had your employment application reviewed for legal compliance?  Unless it has been within the past several months, it is time to do it again (or for the first time).

Effective January 1, 2014, private employers in Minnesota will be prohibited from inquiring into or requiring disclosure of a job applicant’s criminal record or criminal history until the applicant has been selected for an interview or, if there is no interview process, has been given a conditional offer of employment.  The common inquiry on employment applications regarding criminal convictions must be discontinued by most employers. 

The new law does not apply to employers who have a statutory obligation to conduct criminal background checks or otherwise take into consideration potential employees’ criminal history during the hiring process.  The law does not prohibit employers from conducting criminal record checks, but they may not ask about criminal records or history on the application or conduct the background check until the interview or offer stage.

The law, colloquially known as “Ban the Box,” referring to the practice of having a box on the application for an applicant to check if he or she has a criminal record followed by space for more information, has been in place for public employers for many years.  The most recent legislature amended the statute to extend the ban to private employers and provided for a graduated penalty schedule that gives employers time to adjust to the new restriction. 

No penalty is better than a light penalty, so you should take steps to be incompliance with the new law by January 1, 2014.

Launch

The Law Office of Marcy R. Frost, PLLC, will launch on October 10, 2013.  Thank you to everyone who has supported me in my decision to leave the big law firm world and begin my own practice.