Category Archives: Employment Counseling

January 12, 2017

Dealing With The Decline In Wyoming Jobs

Cave_BradBy Bradley T. Cave 

Recent jobs numbers reflect what many Wyoming employers already know – large job losses have hit the state, pushing down wages and possible tax revenues. Our look at the practical implications of this job environment should help you expect the best while preparing for the worst. 

First Quarter Jobs Numbers 

The numbers are rather grim. According to a November report from the Research & Planning section of the Wyoming Department of Workforce Services (DWS), 9,367 jobs were lost in Wyoming from first quarter 2015 to first quarter 2016. The average monthly employment numbers decreased from 277,691 in the first quarter of 2015 to 268,324 in the same quarter of 2016, reflecting a 3.4% drop statewide.

The largest job losses occurred in the mining sector, which includes oil and gas extraction jobs, which saw a 23% loss of jobs from the first quarter 2015 to 2016. The next highest loss was in transportation and warehousing with a 9.4% decrease, followed by company management which experienced an 8% decrease.

The decline in the total unemployment insurance (UI) covered payroll for the same period was $243.5 million, or a 7.6% drop. Average weekly wages for private sector jobs was down from $890 to $834, a drop of 6.3% which means workers received an average of $56 less in their paychecks each week.

Second Quarter Numbers Continue To Fall

In its preliminary data for the second quarter (April through June), Wyoming employment continued to decline from 2015 to 2016 by approximately 10,500 jobs, or 3.7%. Approximately 5,500 of those job losses were in the mining/oil and gas sector, with about 1,700 jobs lost in construction, and another 1,100 job losses in transportation and warehousing.

Not All Bad News

In its county-by-county breakdown, the DWS reported that employment rose in seven Wyoming counties and total payroll increased in eight counties for the first quarter comparison. Teton County saw a 3.7% increase in jobs while employment in Lincoln County grew by 3.4%. Other counties that experienced a modest increase in jobs year over year were Albany, Crook, Niobrara, Sheridan, and Weston.

Practical Effects Of Declining Job Numbers 

Job statistics can provide an interesting and telling view of the overall health of the state’s economy. But more than that, the numbers suggest that many Wyoming employers have faced, or soon may face, difficult decisions about whether to layoff or terminate workers. Read more >>

November 8, 2016

EEOC Questions Whether “Big Data” Analytics Help or Hinder Workplace Diversity

6a013486823d73970c01b7c85edbc0970bBy Jude Biggs

As more and more employers use new analytical tools for recruiting and hiring, the potential exists for employment decisions to become more fair, objective and unbiased. But could the use of big data and technology-driven decision-making disfavor candidates who lack a robust digital footprint? These are questions that the Equal Employment Opportunity Commission (EEOC) will continue to explore after an initial “big data” public meeting in Washington, D.C. in October.

What Is “Big Data?”

The EEOC refers to “big data” as the use of algorithms, data scraping of the internet, and other technology-based methods of evaluating huge amounts of information about individuals. Big data can include computer algorithms that are based on various factors designed to correlate to successful characteristics on the job; for instance, a model may look for longevity on the job, degrees from particular institutions, membership in certain organizations, or a multitude of other factors. Computer models then use this seemingly objective criteria to scan the internet for individuals possessing the desired characteristics in “passive” candidate searches. Other types of predictive or talent analytics, based on the harvesting of a wide range of empirical data, are being incorporated into HR recruiting and decision-making platforms.

According to a recent survey of Society of Human Resource Management (SHRM) members, about one-third of respondents reported that they use big data in employment. The proportion was even higher among larger employers.

Why Does the EEOC Care About Big Data? 

The EEOC is trying to get ahead of this issue by making sure that employers’ use of technology-driven HR tools does not lead to discrimination in the hiring process. EEOC Chair Jenny Lang noted that while big data has the potential to drive innovations that reduce bias in employment decisions, “it is critical that these tools are designed to promote fairness and opportunity, so that reliance on these expanding sources of data does not create new barriers to opportunity.”

What Are The Potential Advantages of Technology-Based HR Decisions?

Technology is here to stay so the question is not will it be used in the HR context but rather how should it be used to best achieve employers’ goals. Using technology and big data can result in many positive outcomes, including that it:

  • may help identify non-traditional candidates who would not have been considered for a particular job previously
  • can help overcome implicit and explicit prejudice and bias in the workplace
  • can improve person-job fit
  • may increase diversity in the workplace
  • may expand the pool of candidates with the qualities necessary to succeed
  • may reduce employee turnover.

In fact, given the global nature of online data, it is possible for certain types of employers to increase their diversity dramatically, by being able to cast a larger net to find applicants.

What Is The Potential Downside of HR’s Use of Big Data?

As with anything technology-related, the outcome is only as good as the computer program, factors selected, and data used. Many algorithms focus on correlation of successful characteristics without looking to specific job requirements. For example, a set of characteristics of high-performing employees may reflect the group’s demographics (for instance, graduation from an Ivy League school) rather than their skills or abilities to perform certain jobs (for example, leadership shown during a military deployment or creation of a successful program serving the poor). In such cases, algorithms may match people characteristics, but not job requirements.

Using big data may perpetuate past discrimination. If an algorithm is based on looking for applicants with the same characteristics as those possessed by existing managers, secretaries or high-tech programmers in a company, then the algorithm may limit diversity. Similarly, certain talent-seeking algorithms may rely too much on the make-up of the company’s current staff, meaning that minorities or other groups not currently represented in the workforce continue to be passed over.

Think about whether individuals who do not have a robust online presence will be at a disadvantage in the new, data-mining recruiting world. Individuals with lower incomes or in rural areas may not have ready access to computers, lessening their ability to engage digitally. Other individuals may choose not to engage in many online activities. Or, others who are at the start (or end) of their careers may not have established much of an online presence. Employers who focus only on technology-driven programs to identify and hire candidates may miss out on large groups of qualified individuals who simply lack significant online experience that is discoverable by algorithms.

In addition, the collection of other data points, such as attendance or leave-related data, may discriminate against disabled individuals, giving rise to ADA concerns. Moreover, such data, coupled with information about gaps in employment, could disproportionally hurt female candidates who are more likely to have taken time off of work for pregnancy or child-rearing reasons. Read more >>

October 4, 2016

Employment Contracts with California Employees Require California Law

6a013486823d73970c01b7c85edbc0970b-120wiBy Jude Biggs

Beginning January 1, 2017, employers may not require a California employee to agree to litigate claims in a state other than California or to apply the law of another state to disputes that arose in California. These new restrictions pose particular problems for companies headquartered outside of California who employ workers in California.

New CA Labor Code Section 925

Recently signed into law by Governor Jerry Brown, Senate Bill 1241 adds section 925 to the California Labor Code. It provides that an employer “shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:

  • Require the employee to adjudicate outside of California a claim arising in California.
  • Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.”

In other words, an employer may not force an employee who primarily works and lives in California to enter into an employment agreement, as a condition of employment, that provides that any claims must be resolved, either in court or by arbitration, in another state (a so-called forum-selection clause) or that another state’s law, which offers less protection to the employee than California law, will apply (a choice-of-law provision).

Why It Matters

California law is typically more pro-employee than other states’ laws. For instance, California law prohibits employers from requiring employees to waive their right to a jury trial before a dispute arises and places substantial restrictions on arbitration agreements.  It also requires the payment of business expenses, where many other states do not.

Multi-state companies frequently seek to create some uniformity and predictability in where employment disputes will be litigated so they insert a venue clause into their employment agreements. Such clauses often provide that disputes must be heard in the state where the business is based or where its legal team is located, regardless of where the employee lives or works. Similarly, companies may write into contracts that the law to be applied is that of the state where they are headquartered or incorporated. This offers the business uniformity across all its operations and helps to avoid onerous employment laws in certain states.

The new Labor Code section 925 makes non-California venue and choice-of-law provisions virtually unenforceable per se for California employees, when made a condition of employment. If an employee has to go to court to enforce his or her rights to have a case in California and to use California law in the case, the court may award reasonable attorney’s fees to the employee. Read more >>

July 15, 2016

Executive Compensation for Tax Exempt and Governmental Employers: Unraveling New Proposed Regulations on Non-Qualified Deferred Compensation Under Section 457

By Bret Busacker and John Ludlum

Nearly 40 years ago, Congress concluded that because tax-exempt employers are not subject to taxation, they are more inclined (more so, at least, than taxable employers) to provide non-qualified deferred compensation to their employees. As a result, Congress passed Section 457 of the Internal Revenue Code (Section 457) to limit the amount of deferred compensation a tax-exempt employer may promise to its employees.  Now, the IRS has proposed new regulations that will greatly impact non-qualified deferred compensation plans maintained by tax-exempt employers under Section 457. Here are our key takeaways from the proposed regulations.

Background on Section 457 Arrangements

Section 457 generally separates non-qualified deferred compensation arrangements into two types of programs and regulates these two types of plans in different ways.

  1. Eligible Plans: if a deferred compensation program is designed to look much like a 401(k) plan and provides limited benefits (capped at $18,000 in 2016), the arrangement is subject to Section 457(b) which allows the deferred amounts to avoid taxation until distributed to the employee.
  1. Ineligible Plans: if a deferred compensation arrangement provides larger or different benefits than those permitted under eligible plans, the arrangement is likely subject to Section 457(f) which means that the deferred amounts become taxable when they are no longer subject to a substantial risk of forfeiture (i.e., when they become vested).

The newly proposed IRS regulations will significantly affect ineligible plans.

Substantial Risk of Forfeiture Is the Name of the Game

In an attempt to even the playing field with taxable employers not subject to Section 457(f), tax-exempt employers often pushed the envelope with ineligible plans by using various tactics to delay the vesting date of deferred compensation. These tactics created uncertainty regarding what constitutes a substantial risk of forfeiture. The proposed Section 457 regulations address these important 457(f) design tactics in a mostly favorable way for tax-exempt employers:

A. Current Compensation Deferrals

The IRS currently takes the position that salary deferrals cannot be made to ineligible plans because such amounts are already vested when they go into the plan. In other words, they cannot escape taxation at the time of deferral. Under the proposed Section 457 regulations, employees may defer current compensation if the following requirements are met:

  1. The employer must provide a match of more than 25% of the amount the employee contributes.
  2. The employee must commit to provide additional substantial services for at least two years in order to receive both the deferral and the match.
  3. The deferral election must be made in writing and document the employee’s agreement to continue service. To defer current compensation, the deferral election must be made prior to the beginning of the year to which the compensation relates.

B. Rolling Risk of Forfeiture

Historically, some ineligible plans were designed to allow the employer and employee to agree to push out the vesting date of an amount payable under the arrangement (and thereby push out the time of taxation), referred to as rolling the risk of forfeiture. But practitioners worried that by pushing out the vesting date, the arrangement became subject to, but did not comply with, Section 409A, which would make the compensation taxable.

The proposed regulations will legitimize the practice of rolling the risk of forfeiture, provided that the election to push out the vesting date occurs at least 90 days prior to the date the compensation would have otherwise vested. The election to roll the risk of forfeiture also must otherwise comply with the general requirements applicable to deferring current compensation, as summarized in paragraph A above.

C. Non-Competes

Another tactic employers utilize to push out the vesting date of an ineligible plan in order to defer taxation of compensation is to condition the amounts payable under the ineligible plan on the employee adhering to the terms of a non-compete. Like the rolling risk of forfeiture, this practice too was called into question under Section 409A because Section 409A does not recognize non-competes as creating a substantial risk of forfeiture. If implemented, the proposed Section 457 regulations will legitimize this practice as well, subject to the following requirements:

  1. The right to the compensation must be clearly tied to adherence to the terms of the non-compete.
  2. The employer must make reasonable and regular efforts to verify adherence to the non-compete requirements.
  3. The facts and circumstances must support a bona fide interest of the employer in subjecting the employee to a non-compete and a bona fide interest of the employee, and the ability of the employee, to otherwise compete.

Read more >>

July 13, 2016

EEOC Revises Its Proposal To Collect Pay Data Through EEO-1 Report

By Cecilia Romero

6a013486823d73970c01b8d204e441970c-320wiOn July 13, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) announced that it has revised its proposal to collect pay data from employers through the Employer Information Report (EEO-1). In response to over 300 comments received during an initial public comment period earlier this year, the EEOC is now proposing to push back the due date for the first EEO-1 report with pay data from September 30, 2017 to March 31, 2018. That new deadline would allow employers to use existing W-2 pay information calculated for the previous calendar year. The public now has a new 30-day comment period in which to submit comments on the revised proposal.

Purpose of EEOC’s Pay Data Rule 

The EEOC’s proposed rule would require larger employers to report the number of employees by race, gender, and ethnicity that are paid within each of 12 designated pay bands. This is the latest in numerous attempts by the EEOC and the Office of Federal Contract Compliance Programs (OFCCP) to collect pay information to identify pay disparities across industries and occupational categories. These federal agencies plan to use the pay data “to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.”

Employers Covered By The Proposed Pay Data Rule 

The reporting of pay data on the revised EEO-1 would apply to employers with 100 or more employees, including federal contractors. Federal contractors with 50-99 employees would still be required to file an EEO-1 report providing employee sex, race, and ethnicity by job category, as is currently required, but would not be required to report pay data. Employers not meeting either of those thresholds would not be covered by the new pay data rule.

Pay Bands For Proposed EEO-1 Reporting 

Under the EEOC’s pay data proposal, employers would collect W-2 income and hours-worked data within twelve distinct pay bands for each job category. Under its revised proposed rule, employers then would report the number of employees whose W-2 earnings for the prior twelve-month period fell within each pay band.

The proposed pay bands are based on those used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey:

(1) $19,239 and under;

(2) $19,240 – $24,439;

(3) $24,440 – $30,679;

(4) $30,680 – $38,999;

(5) $39,000 – $49,919;

(6) $49,920 – $62,919;

(7) $62,920 – $80,079;

(8) $80,080 – $101,919;

(9) $101,920 – $128,959;

(10) $128,960 – $163,799;

(11) $163,800 – $207,999; and

(12) $208,000 and over.

Read more >>

June 2, 2016

Colorado Bill Will Give Employees Right to Review Their Personnel Files

Williams_BBy Brad Williams

Most employees in Colorado currently have no legal right to review or copy their personnel files. But that is about to change. A bill awaiting signature by Colorado Governor John Hickenlooper will require private employers to allow employees to inspect and copy their personnel files at least annually upon request. If enacted, House Bill 16-1432 will also grant former employees the right to inspect their personnel files one time after termination of employment. Once signed, the bill will become effective on January 1, 2017.

Employers Must Allow Access to Pre-Existing Personnel Files

Under the bill, employers are not required to create or keep personnel files for current or former employees. They are also not required to retain any particular documents that are – or were – in an employee’s personnel file for any particular period of time. However, if a personnel file exists when an employee asks to inspect it, the employer must allow access.

The inspection should take place at the employer’s office and at a time convenient for both parties. Employers may have a manager of personnel data, or another employee of their choosing, present during the inspection. If an employee asks to copy some or all of his or her file, the employer may require payment of reasonable copying costs. Because the bill is silent regarding whether employees may bring others (such as their lawyers) to inspections, employers should likely limit inspections to only the requesting employees.

What Constitutes a “Personnel File”?

The bill defines a “personnel file” as an employee’s personnel records which are used to determine his or her qualifications for employment, promotion, additional compensation, employment termination, or other disciplinary action. This encompasses both records kept in an actual file, and those employers may collect through reasonable efforts. Put differently, employers cannot avoid the bill’s mandates by simply scattering employee records amongst multiple file cabinets. 

The bill provides numerous exceptions to the documents that must be made available for inspection. The following are not included in the definition of “personnel files” and need not be made available:

  • documents required to be placed or maintained in a separate file from the regular personnel file by federal or state law;
  • records pertaining to confidential reports from previous employers;
  • an active criminal or disciplinary investigation, or an active investigation by a regulatory agency; and
  • information which identifies another person who made a confidential accusation against the requesting employee.

Read more >>

April 19, 2016

Employee Reveals Medical Condition At Disciplinary Meeting – Now What?

Collis_SBy Steve Collis

You’re all set to fire an underperforming employee. You sit down for the disciplinary meeting and just as you start discussing her performance problems, she reveals she has back and neck pain due to work-related stress. What do you do? Here are practical steps you can take to handle this all-to-often workplace scenario.

Setting the Stage

Let’s look at the facts from a Tenth Circuit Court of Appeals case that dealt with this situation. Susan Bennett had worked as a Fiber Optic Tech for Paetec Communications, Inc. (Paetec) for twelve years. She was responsible for locating, repairing, testing and maintaining fiber optic cable in a service area covering parts of Oklahoma and Arkansas.

After Paetec was acquired by another company, Windstream Communications, Inc. (Windstream), Todd Moore became Bennett’s supervisor. Moore instituted a new policy requiring all technicians to check in at an assigned office each morning at 8 a.m. to allow for cross-training and to pick up company vehicles stored on the secured company premises.

Bennett was assigned to report to the Tulsa office each morning which required her to commute a total of almost four hours each day. She often arrived at the Tulsa office more than two hours late, or left several hours early to commute home. On a number of occasions, she failed to report to the office at all. Her time and attendance issues resulted in her being unable to complete a cross-training program that other technicians received.

A month or so after instituting the check-in policy, Moore and the company’s human resources specialist provided Bennett with a “final coaching” session which was the first step in the company’s progressive discipline policy. That same day, Bennett called to report that she was experiencing chest and shoulder pain due to work-related stress and had a doctor’s appointment the next day. The company directed Bennett to complete a workers’ compensation claim. She did and after she failed to return from her leave of absence, the company deemed her to have abandoned her job. She sued her employer, alleging her termination was due to gender and age discrimination. Bennett v. Windstream Comm., Inc., 792 F.3d 1261 (10th Cir. 2015).

Practical Steps To Avoid Liability

Disciplinary meetings do not always go as planned. As in Windstream’s case, employees sometimes disclose new information that raises a legal concern. When faced with an employee’s previously unknown medical condition, a new complaint about workplace harassment, or some other new issue, you should consider the following practical steps to help reduce the risk of liability for your organization.

Step #1 – Weigh Severity of Misconduct Versus Risk of Potential Liability

If an employee has engaged in severe misconduct, such as workplace violence, it may still be in your organization’s best interests to go forward with imposing the planned discipline or termination. As long as you are treating this person the same as any other employee who has engaged in this sort of severe misconduct, the risk of liability for a discrimination or failure to accommodate claim is likely low. In such cases, ensure that you have confirmed the facts supporting your discipline/termination decision and that they are properly documented before taking action against the employee.

For less severe infractions, such as attendance issues or failing to meet performance goals, however, moving forward with the planned discipline may be risky in light of the new issue(s) raised by the employee. You likely need more information about the person’s medical condition or newly asserted complaint before you can make an informed decision about your next steps.

In addition, you need to know whether the employee’s supervisor or anyone else in a decision-making capability had prior knowledge of the employee’s asserted medical condition or complaint. In these circumstances, your best practice is to inform the employee of his or her performance problems or misconduct at the meeting and explain the consequences of such conduct, but postpone imposing the discipline until you have had an opportunity to confirm the facts related to new information. If appropriate, you can place the employee on a paid administrative leave while you investigate the new issue.

Step #2: Have Written Policies and Follow Them

Good employment policies will provide you with a road map for how to handle most employee concerns. For example, if the employee asserts that she has been sexually harassed by her supervisor, follow your harassment policy and initiate an internal workplace investigation to determine whether harassment is indeed occurring at your facility. If so, take appropriate steps to remedy it. In the case of a newly revealed medical condition, determine whether it may qualify as a serious health condition under the Family and Medical Leave Act (FMLA) and then follow your FMLA policy, providing necessary notices and forms. As in Bennett’s case, if the employee alleges that the medical condition is work-related, handle it as a workers’ compensation claim and follow your workers’ comp procedures.

Step #3 – Provide Leave and Benefits to Which The Employee is Entitled

Once the employee has informed you of a medical condition, disability or other concern, your best bet is to provide them with the leave, reasonable accommodation or other benefits to which the employee is entitled. As frustrating as it may be that the employee waited until a disciplinary meeting to inform you of his or her condition, you now have knowledge of that information and you can’t put the genie back in the bottle. Sure, you can try to defend any potential claims by proving that you didn’t have knowledge of the condition when the actual discipline decision was made, but that sort of defense is fact specific and will be difficult to get resolved early in the case. If you want to avoid potential liability, it is best to offer any leave and benefits for which the employee is eligible.

Step #4 – Be Patient

It’s tough to back off on your planned discipline and “be nice” to a poor performing employee while he or she is out on leave or is getting medical treatment. It’s especially difficult in cases where you suspect that the employee may be manipulating the laws in order to avoid getting fired or being placed on a performance improvement plan. But be patient.

Let the workers’ compensation claim or FMLA leave run its course. At that point, the employee either comes back to work and is expected to perform up to your standards, or is unable to return to work. If the employee’s condition does not allow for a return to work, consider whether the employee’s condition is a disability covered by the Americans with Disabilities Act (ADA). If so, engage in an interactive process to determine if a reasonable accommodation would permit the individual to perform the essential functions of his or her job. A reasonable accommodation may include providing additional time off to complete medical treatments or recover, but you are not required to provide an indefinite period of leave. If you are patient and provide all required benefits until they are exhausted, you often are presented with clear, low-risk options for resolving the employment situation.

Step #5 – With Proper Documentation, Proceed With Discipline/Termination

An employee who engages in misconduct or performs poorly does not become “untouchable” simply by asserting a medical condition or harassment complaint. You may still hold them to your performance and conduct standards. First, be sure you have communicated your standards to the employee through an employee handbook, training and/or performance reviews. Second, ensure that the employee’s infractions or poor performance issues are properly documented in an objective, fact-based manner. And third, be certain to treat this employee the same as any other employee who has engaged in similar misconduct or poor performance. If you’ve met these criteria, you will minimize the risk that the discipline or termination you impose will result in liability.

Conclusion

Taking action to discipline or fire an employee is rarely risk-free. Taking such action after an employee reveals a medical condition, disability or other concern raises the stakes even higher. But you can minimize the risk of a lawsuit if you stay calm, follow your policies, and provide any rights and benefits to which the employee is entitled. Take each new development step-by-step and you will reduce the chance that you will need to defend your decisions in court.

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December 9, 2015

Holiday Party Checklist—Plan Ahead to Minimize Employer Risks

Wiletsky_MBy Mark Wiletsky 

Delicious food, fine wines, music, camaraderie, laughter – all ingredients for a great holiday get-together.  What could go wrong?  Too much, unfortunately.  Employees may drink too much, act inappropriately, offend co-workers or guests, hurt themselves or others, or even start a brawl. Depending on the circumstances, your company may find itself potentially liable for the inappropriate or unlawful actions of your employees at company-sponsored parties.  You can help minimize the risks associated with holiday parties by following these five tips. 

  • Avoid or Limit Alcohol 

Employers face potential liability when providing alcohol at a company holiday event when someone gets hurt due to drunk driving, falling down, etc., or when inappropriate behavior crosses the line from embarrassing to unlawful, such as sexual harassment or violence during an argument.  You can limit your company’s exposure for such conduct by either banning alcohol entirely (we know that may not be well-received in some situations), or limiting each person’s consumption through the use of drink tickets or a 2-drink limit.  If you choose to allow alcohol at your events, don’t allow free access to the alcohol (e.g., open bar, self-serve beer or unlimited wine bottles).  Instead have a professional, licensed bartender serve the alcohol as they are trained not to over-serve patrons.  Be sure to offer plenty of food and non-alcoholic beverages.  Arrange for taxis or hotel stays if someone over-indulges.  Schedule the event during the week so folks are less inclined to get carried away. Set an end time for the party and shut down the bar at least a half hour before the event closes.  Do not authorize or condone “after parties.” Finally, designate some supervisors or managers to refrain from drinking alcohol to make sure things don’t get out of hand. 

  • Keep Harassing Behavior in Check 

Make sure that your sexual harassment policy is up-to-date and that it applies to company parties, even if held off company premises.  Send out a reminder to employees in advance of the party that all company policies, including those prohibiting harassment and other inappropriate conduct, apply to the party. Consider making the event a family party where employees may bring their spouse, significant other, or children as the presence of family members and children often deters inappropriate behavior which could give rise to a harassment complaint.  Make sure that supervisors and managers watch out for potentially harassing conduct and are trained to intervene as necessary. 

  • Respect Religious Differences and Keep the Party Neutral  

Although many holidays toward the end of the year are religious in nature, be sensitive to your employees’ varying religious beliefs and avoid any conduct that could be construed as favoring one religious group over another.  Refrain from calling your party a “Christmas Party” and stick with the neutral “Holiday Party” instead.  Do not make attendance at the company-sponsored events such as parties, volunteer activities, food drives or other holiday outings mandatory.  Make sure the timing of the company party does not exclude any employees for religious reasons.  For example, because the Jewish Sabbath starts on Friday night, a party on a Friday evening may exclude Jewish employees.  Avoid decorating with religious symbols, such as nativity scenes, menorahs or angels.  There are plenty of neutral decorations, such as snowflakes, holly and reindeer, that can be used instead.  

  • Be Wary of Gift Exchanges 

Gift exchanges between employees may seem innocuous enough, but consider the potential issues a gift exchange may cause.  Employees may not be able to afford to participate, even within a recommended cost guideline.  Other employees may give sexy or “funny” gifts that end up offending others.  The best practice is to avoid a company or department sponsored gift exchange altogether.  If you decide to allow one among your employees, make sure it is entirely voluntary and no one is pressured or made to feel uncomfortable for not participating.  Set cost guidelines and remind participants that gifts must be appropriate for the workplace. 

  • Remember Wage and Hour Laws 

If you assign any non-exempt employees to plan, prepare for and staff the party, their hours are likely work hours for which they must be paid.  For example, if your office receptionist is required to be at the door of your holiday party to greet guests and hand out name tags, that individual is likely working and you need to include those hours in his or her weekly work hours when determining regular and overtime wages.  You do not need to pay employees who are attending the party if their attendance is voluntary and they are not expected to provide services that benefit your organization. 

Follow this checklist and you’ll avoid last minute holiday headaches and keep your organization out of trouble.

(Note: This is a re-post of this author's article that previously appeared on this blog.)

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November 30, 2015

Unlimited Vacation Policy: Is It Right For Your Company?

Hobbs-Wright_E Wiletsky_MBy Mark Wiletsky and Emily Hobbs-Wright

Paid vacation time is a perk that can attract and retain the best and brightest employees. It can also impact your balance sheet, as earned but unused vacation days remain a liability until used or paid out. A small, but growing number of companies are trying a new approach, offering unlimited vacation to certain segments of their workforce. Netflix, Best Buy, Virgin America, LinkedIn, General Electric, and others have adopted unlimited vacation policies, or “discretionary time off (DTO),” as it is sometimes called.

Colorado employers, along with organizations in other states, may be wondering whether to scrap existing paid time off or vacation policies and replace them with unlimited vacation. That is especially true given the recent—and sometimes conflicting—information from the Colorado Department of Labor and Employment concerning “use-it-or-lose-it” policies. To help you decide whether unlimited vacation policies are right for your organization, we’ll highlight the pros and cons. But first, some background.

Legal Implications For Vacation Pay

Generally, employers are not required by law to provide paid vacation time to employees. If you choose to provide paid time off for vacation purposes, you get to decide what your vacation policy will be. This includes specifying how much paid vacation you’ll provide, any eligibility requirements, which categories of employees are entitled to it, when it accrues or is “earned,” in what increments it may be taken, the request and approval procedures, whether it carries over from year to year, and other vacation procedures.

That said, state laws will factor into the implementation of your vacation policy. For example, many states classify accrued vacation as compensation or wages and will specify that earned vacation pay may not be forfeited. Such provisions mean that unused, earned vacation must be paid out upon separation of employment. These state laws also can prohibit “use-it-or-lose-it” vacation policies where an employee who fails to use his or her accrued vacation time within a specified time frame loses the accrual of paid time.

By way of example, Colorado wage law states that vacation pay earned in accordance with the terms of any agreement is considered “wages” or “compensation.” Colorado employers who provide paid vacation to employees must pay all vacation “earned and determinable” upon separation of employment. Although the Colorado Department of Labor and Employment recently indicated that a “use-it-or-lose-it” vacation policy is permissible, the Department also noted that such a policy may not operate to deprive an employee of earned vacation time. The Department will look to the terms of the agreement between the employer and employee to determine when vacation pay is “earned.”

Pros – Why Unlimited Vacation May Make Sense

Some organizations have implemented a single paid time off (PTO) policy, allowing employees to accrue a set amount of paid time off to be used for virtually any purpose, such as vacation, sick time, attending kid’s school events, going to appointments, etc. Getting away from traditional (and separate) vacation and sick time policies is believed to offer employees more flexibility while cutting down on administrative headaches for employers. Unlimited vacation, or DTO, goes even further. Here are the potential benefits of an unlimited vacation policy:

  • More Flexible Work Schedules – employees can take advantage of more flexibility to manage their work and personal time; often a great recruiting and retention tool
  • Avoid Keeping Accrued Vacation On Your Books – in many states, because vacation time is no longer “earned,” you arguably will no longer need to pay out any unused vacation time upon separation of employment, effectively eliminating the liability of carrying accrued vacation time on your balance sheet
  • No Cost/Little Cost Perk – if employees take about the same amount of time off under an unlimited vacation policy as under a traditional accrued vacation and sick time policy, employers do not experience any additional cost for the program; as long as the perk is not abused, there may be little financial cost to the company
  • Increased Productivity – reports suggest that employees become more efficient and productive while at work in order to ensure that they suffer no ramifications when utilizing their time off under the unlimited vacation policy
  • Morale Booster – trusting that employees can properly manage their time on and off the job can build morale and loyalty; it can shift the focus from putting in hours to getting results
  • Streamlining of Record Keeping Practices – by eliminating the need to track vacation accruals and usage, you may cut down on the administrative headaches associating with a traditional vacation policy

Cons –  Why Unlimited Vacation May Not Work

An unlimited vacation policy may not be appropriate for all organizations. Depending on the nature of your business and the make-up of your workforce, you may determine that the following risks negate any good that could come from an unlimited vacation policy:

  • Perception That Unlimited Vacation Means No Vacation – some employees may feel that taking away a specific accrual for vacation means that they’ve lost an important perk, especially if they believe that the company or their supervisor will not truly allow them time off when they want it
  • Additional Cost If Abused – if overall time off exceeds previous accrual amounts, and that additional time off is not offset by increased productivity, the perk may cost you more and be less predictable than an accrual-based vacation policy
  • Less Black and White – whether an employee is “abusing” unlimited vacation can be rather subjective; one employee may produce excellent work product while taking six weeks off per year while another employee fails to meet expected output taking only three weeks of vacation; as a result, supervisors may struggle with how to handle discipline and performance issues and create a perception of unfair or, even worse, discriminatory treatment
  • Not Tested, So Liabilities Unknown – it is unclear how state agencies and courts will handle potential wage claims based on an unlimited vacation policy
  • Scheduling Uncertainties – it can be difficult to cover shifts, schedule projects and meet production deadlines when employees have greater flexibility to use unlimited time off
  • Pay Issues For Non-Exempt Workers – an unlimited vacation policy would be difficult to apply to non-exempt hourly employees (e., employees who are eligible for overtime pay) as you need to track all hours worked and ensure that you pay minimum wage and an overtime premium according to applicable state and federal law

Bottom Line: Use Caution

If your workforce utilizes exempt employees (i.e., employees who are not eligible for overtime) who have a great deal of autonomy, such as in technology and creative fields, an unlimited vacation policy may attract and incentivize your employees. If you employ mostly non-exempt hourly workers, have a lot of turnover, or need more predictability in covering shifts and positions, an unlimited vacation policy may not work for you. Your best bet is to compare the pros and cons with the nature of your business to evaluate whether this new type of employee perk is appropriate for your organization. If in doubt, it’s always a good idea to consult with your employment counsel.

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September 15, 2015

Wyoming Discrimination Charges: A Look at the Numbers

Cave_BBy Brad Cave 

Mark Twain is credited with saying that “facts are stubborn things, but statistics are more pliable.” The Wyoming Labor Standards Division and the EEOC both keep statistics of the types of discrimination charges the agencies receive from Wyoming employees. When it comes to discrimination charges, the allegations are almost always pliable, but the statistics show us some interesting things for employers to ponder.

Wyoming Labor Standards Charges 

The Wyoming Fair Employment Practices Act makes it unlawful for employers to discriminate on the basis of age, sex, race, creed, color, national origin, ancestry, pregnancy or disability. The Wyoming Department of Workforce Services’ Labor Standards Division is the state agency that processes and investigates most complaints of employment discrimination filed by Wyoming workers. 

In 2014, the Wyoming Labor Standards Division received a total of 203 discrimination charges. It processed 182 of those charges and deferred the remaining 21 charges to the federal Equal Employment Opportunity Commission (EEOC) because they were either untimely under state law or contained allegations of Equal Pay Act violations. The Division reports the breakdown of 2014 charges by allegation as follows: 

Type

No. of Charges

Percentage of Total Charges

Retaliation

76

41.8%

Sex

55

31.2%

Disability

46

25.3%

Age

33

18.1%

National Origin

27

14.8%

Race

21

11.5%

Religion

  7

  3.8%

You math wizzes in the audience have already exclaimed that the percentages exceed 100%, and the author must be numerically challenged. But, many charges include allegations of multiple types of discrimination. Indeed, charges often include an allegation of discrimination on the basis of protected class, and an allegation of retaliation in response to complaints about the discrimination. As you can see, Wyoming had more retaliation charges than any other type of charge. That mirrors the nationwide statistics where retaliation charges lead the list of most-filed charges. Not far behind are sex discrimination charges, with disability charges as the third most-frequently filed. 

EEOC Charge Statistics for Wyoming Charges 

The EEOC also maintains charge statistics for each type of discrimination that is alleged under the federal discrimination laws that it enforces, and annually publishes those statistics on a state-by-state basis.The EEOC count includes charges under Title VII, which prohibits discrimination on the basis of sex, race, color, religion and national origin, as well as charges under other federal discrimination laws such as the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Genetic Information Nondiscrimination Act. 

The EEOC’s most recent data for fiscal year 2014 (Oct. 1, 2013 through Sept. 30, 2014) shows that the federal discrimination charges for Wyoming received by that agency track the Labor Standards Division’s statistics, with retaliation charges leading the list. With a total of 69 discrimination charges filed with the EEOC by Wyoming workers in FY2014, here are the numbers by type:

Type

No. of Charges

Percentage of Total Charges

Retaliation

30

43.5%

Sex

29

42%

Disability

25

36.2%

Age

20

29%

Race

14

20.3%

National Origin

  6

  8.7%

Color

  4

  5.8%

Equal Pay Act

  3

  4.3%

Religion

  2

  2.9%

Wyoming employers received significantly more sex discrimination charges in 2014 than compared to 2013. The percentage of sex discrimination charges filed with the EEOC went up from 29.2% in FY 2013 to 42% in FY2014. Retaliation charges topped the list in both FY2013 and FY2014. The full list of EEOC charge receipts for Wyoming for the last five years may be viewed on the EEOC’s website at  http://www1.eeoc.gov/eeoc/statistics/enforcement/charges_by_state.cfm#centercol

Lessons Learned 

The charge statistics from the Wyoming Labor Standards Office and the EEOC reflect discrimination complaints filed by applicants and employees, not cases in which discrimination was determined to exist. Even so, the charge numbers for Wyoming suggest a number of action items for employers who want to avoid being included in next year’s statistics. 

First, retaliation gets a lot less attention from employers than it should, as these numbers show.  Whenever an employee complains about something at work that implicates a statutory right, like the right to be free from discrimination or harassment, or requests an accommodation or FMLA leave, the employee has engaged in protected activity. Most discrimination laws prohibit adverse actions because an employee has engaged in protected activity. And, it makes little difference whether the employee’s underlying complaint or request was valid – the employee is still protected against retaliation. 

Employers need a strong, stand-alone anti-retaliation policy, not just a couple of sentences at the end of the policy prohibiting discrimination. Employers also need to train supervisors and managers about the significance of employee complaints, and how the law protects employees. And careful consideration should be given to any adverse employment action for an employee who has opposed discrimination in the workplace, been interviewed as part of an investigation, or participated in a discrimination proceeding. 

Second, the prevalence of sex discrimination charges, which includes harassment charges, suggests that employers should review and update their discrimination and harassment policies, and continue periodic harassment prevention training. A strong harassment prevention policy, with understandable definitions and examples and multiple reporting options, is usually the best defense against a charge of sexual harassment. Of course, any observed or reported harassment must be investigated and any behavior which violates your policies must be stopped. 

Finally, adopt a policy that guides employees who wish to request an accommodation, and train supervisors how to recognize employee requests that could be interpreted as a request for accommodation. Once a request is made, follow a thorough interactive process to explore reasonable accommodations that do not place an undue burden on your organization but will allow the person to perform their job. Only when you are absolutely sure that no reasonable accommodation is available should you terminate a disabled employee. 

These action items will go a long way toward keeping you from becoming a statistic!

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