A Checklist to Help Employers Avoid (Or Minimize) Employee Claims
By: Douglas H. Barker, West Coast Resolution Group
Editor’s Note: This article is authored by mediator Doug Barker from West Coast Resolution Group. Doug is a former law partner of mine. I picked up his article when at West Coast Resolution Group recently for a mediation. I thought Doug’s checklist is a good one to keep in mind, and so I am passing it along to all of you. After each item, I’ve inserted “Your Next Steps” to prompt you to action. Here’s what Doug wrote:
As lawyers, we are trained that spotting issues is actually more important than knowing the law. If we can analyze facts and identify all material issues, we can then apply the law as we already know it, or we can research the issue and learn the law. In a sense, being a supervisor in an employment setting is the same. While it is not practical to expect all managers to be experts on employment law, managers can refer to a checklist, such as the one below, to help them recognize workplace practices that may deserve attention.
The outline below does not provide detail as to the law. Rather, it is a series of brief references to issues that, left unaddressed, often end up in litigation. A meaningful discussion of the issues below should be had between every employer and his/her lawyer.
1. Handbooks. Have an employee handbook which, among many, many other things, includes instructions to the employees as to what to do when there are questions, concerns, and perceived mistreatment. Assure that the personnel files include an acknowledgment of receipt from the employee as to that handbook. Comply with the provisions of that handbook. Do not run the risk of an employee accurately saying that treatment of one employee on an issue is/was different from treatment of another.
Your Next Steps: If it has been longer than 1 year since your last handbook update, contact your legal counsel and have it updated for 2019.
2. Classify Contractors with Care. Confirm that workers who are being characterized as independent contractors are, indeed, independent contractors and not employees. Employer obligations to independent contractors are limited to the terms of the contract between the parties, and such obligations are much less significant than those owed by the employer to its employees (and taxing authorities). Hence, many employers are tempted (and too quick) to label a worker an independent contractor. There are a number of factors to be considered in deeming a worker an independent contractor or an employee (with control being a most important one), so often the line is blurred. Mischaracterizing a worker as an independent contractor rather than as an employee can trigger claims against the employer by both the worker and the taxing authorities. If there is doubt, the worker is probably an employee.
Your Next Steps: Conduct an audit of your 1099 relationships and check out the California Supreme Court’s Dynamex decision. Are some of your contractors “iffy”? Get some legal advice before your company lands in court.
3. Classify Exempt Workers With Care. Are employees who have been characterized as “exempt” truly exempt? Exempt employees are not subject to rules relating to overtime pay, meal breaks, and rest breaks, so employers often wishfully deem certain workers “exempt.” Rules governing exempt status are reasonably straightforward, but a worker’s diverse responsibilities within the workplace can sometimes make application of those rules a challenge. If there is doubt, the worker is probably non-exempt.
Your Next Steps: Review your exempt employee classifications and ensure that they are paid the minimum 2019 California salary, and perform the requisite job duties to qualify. Need help? Ask me for the Ogletree exemption chart.
4. Keep an Eye on Equity. Confirm that employees performing the same duties are paid essentially the same, subject to statutorily recognized bases for allowing disproportionate pay within the same job description.
Your Next Steps: Conduct a pay equity audit. This can get complicated, and for a larger workforce, you may want the help of an advisor who can conduct a statistical study for you. Consider conducting the audit with a lawyer in order to protect the information as attorney-client privileged.
5. Mind the Time. Confirm that wage and hour (including meal and rest break) protocols are being followed for all non-exempt employees. Time cards, whether electronic or by hand, should be routinely reviewed by supervisors and acknowledged as accurate by the employees. Meal and break periods can in the right circumstances be waived by mutual consent of the employer and employee, but such waivers need to be in writing.
Your Next Steps: Retrain your supervisors on these rules, implement improved documentation regarding the reasons for missed breaks, and audit the worksite to determine whether any employees are inadvertently working off the clock, even for tiny increments of time.
6. Get Pay Days Right. Make sure paychecks are on time and that the pay stubs provide all information required by law.
Your Next Steps: Get a copy of Labor Code Section 226, and the DLSE’s sample wage statement. Make sure you have all of the required information exactly as required.
7. Keep it At Will. Unless there is an employment contract between employer and employee (and subject to any collective bargaining agreement), the employment relationship in California is mutually “at-will.’ In concept, that means that both the employer and the employee have the power to terminate the employment relationship with out cause. However, an employer’s termination of an employee is often not that simple. For instance, if the employee is a member of a protected classification (and, for all practical purposes, every employee is a member of a protected classification), there is always risk that counsel for a terminated employee will allege that the termination was on the basis of the employee’s membership in a protected classification. The reason(s) to terminate an employee may not rate a “for cause” basis for that termination, but, presumably, reasons for the termination must exist. If later called upon to do so, a supervisor must be able to provide non-discriminatory reasons for why the employee was terminated (e.g., periodic emotional outbursts, conflicts with other employees, lack of focus on work).
Your Next Steps: Review your records and ensure every employee has signed an at will acknowledgment. Email me if you need a good at will form. Review your termination procedures to ensure appropriate progressive discipline and documentation has occurred.
8. Get it In Writing. Further to the point above, supervisors should keep good (intelligible) notes of work performance. As appropriate, some of those notes should be placed in personnel files. All too often, employees are counseled time and again, but no written record of those counseling sessions ever come into existence. Eventually, the employee is terminated, yet the personnel file is devoid of any evidence of any counseling. Juries (who are typically comprised of 12 employees) expect employees to be treated fairly, and counseling and warnings are expected by juries before employee termination. Juries also tend to feel that supervisors have little else to do than write memos; so the absence of notes in a personnel file causes skepticism about supervisor testimony about a history counseling sessions. Moral: Maintain well- documented personnel files.
Your Next Steps: Train your supervisors on proper performance management and documentation. This will pay huge dividends down the road!
9. Train. Comply with legally mandated periodic sexual harassment training, and faithfully enforce the company’s sexual harassment policy. Required trainings (as of January 2019) include: Non-Discrimination and Harassment (including Trans-Gender Status and Gender Identity), Bullying, Workplace Violence, and Cal-OSHA Safety Training.
Your Next Steps: Schedule your 2019 training. According to the government, you must complete the training by the end of this year. Email me if you need a trainer.
10. Be Aware. Be vigilant to detect any evidence of harassment (of those in one or more protected classifications) and bullying (of anyone, regardless of protected classification).
Your Next Steps: See #9 above; get that training done.
11. Accommodate. Understand and distinguish workplace injuries (workers’ compensation), injuries and illnesses which require consideration of reasonable accommodation under the Americans with Disabilities Act), and the rights of employees to leaves of absence (whether paid or unpaid) without jeopardy to the employee of losing his/her job.
Christopher W. Olmsted | Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
4370 La Jolla Village Drive, Suite 990 | San Diego, CA 92122
Telephone: 858-652-3111 | Fax: 858-652-3101
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