Alexandria Ocasio-Cortez’s campaign was fined $1,500 for failing to obtain the required worker’s compensation coverage from March 31, 2018, to April 30, 2018. As Congresswoman Ocasio-Cortez found out, being a new employer is not easy. There are tons of laws to follow, multiple entities that make and enforce the required rules and regulations, and tens of thousands of court cases explaining and refining these laws. Not only is it important to follow employment requirements because you do not want to break the law; ensuring your employees are equipped, prepared; and welcomed on their first (and every) day, has long-term implications for employee retention; satisfaction; and helps to prevent liability in the future. New employers need a hiring checklist.
What New Businesses Must Consider When Hiring New Employees: A Hiring Checklist
Let’s talk about some of the many tasks that new businesses need to do to ensure they do not make a mistake when they hire their first employee. (For the sake of this piece I am going to assume that the company has already created a legal entity, opened a company bank account, applied for an employer identification number, registered with any required state or local agencies, obtained any required business licenses, and is basically at the point of being ready to hire its first employee.)
Here is a hiring checklist that any new business should review when hiring its first employee:
1. Employers need an employee handbook. The employee handbook should outline the various requirements that employees must follow and explain what the company will do for its employees including that the company will follow all the required laws and regulations regarding employment. A handbook tells employees how to request leave, the discipline structure, how to report complaints, what company holidays will be, what benefits employee have, and any pertinent information that all employees need to know. This is the guide that helps employees know what is expected of them.
2. Companies need a plan to motivate employees. A motivated workforce performs better. A lack of employee engagement is responsible for $450-550 billion in lost productivity each year in the U.S. Here are some things to ask yourselves related to employee motivation:
How will employees grow at the company? If there is no room for employees to grow, then they will not be motivated and will eventually look for a new job. Helping employees grow can help retain your best employees, which improves your business. (This includes things like room for promotions, learning new skills, opportunities to manage or train, utilizing employee strengths, etc.)
How will you treat them as employees? Employees want and need recognition and feedback. You shouldn’t just talk to an employee when there’s a problem, in fact, you should share with them how you feel about their successes (formally and informally).
3.
Make sure that employees fill out all of their
required paperwork correctly. Think about the I-9s. Section 1 on the I-9 must
be completed on the first day of the employee’s employment. Employers have three
days to complete Section 2. You can review what to do here in my earlier post.
New employees also must complete the W-4 form for their
tax withholding.
4.
Businesses also need to run any necessary background checks, drug tests, motor
vehicle reports, and other checks that are required for your particular business or these employees. You
should get the employee’s written permission to run drug tests and background
checks.
5. Employers also need to set some formal processes that the employees will follow (and great employers also include not only adequate, but exceptional, training). This training/support should detail for employees how they successfully do their jobs. What are the processes for things that require step-by-step actions to perform them correctly? Who do they report to in the event of a problem? Who do they refer people to based on particular needs? What are the communication norms and expectations within the business/department/team? Essentially, how do they do their jobs? You should not expect an employee to be able to exercise their own discretion to do their new job. Just like anything else, learning to do a job takes time.
Think about Chick-Fil-A. They have a very particular way they want their employees communicate with their customers. Rather than saying “you’re welcome” when a customer says, “thank you” every employee is instructed to say “my pleasure.” This is something that is readily identifiable and special about Chick-Fil-A. People remember it. There are also a slew of memes about it. Employees would not do this with the consistency required for this brand recognition without the training and feedback they receive.
6. Employers need a
personnel file and a recordkeeping system for the employees. When you hire an
employee, you need to ensure that they sign any necessary documents for your
company including:
Noncompetition and nondisclosure agreements
Employee handbook acknowledgement (stating that the employee received a copy of the handbook)
Life and health insurance plan information documents
401(k) documents
7. Ensure that the workers
have a safe place to work and the tools that they need. Nothing makes an
employee feel unwelcome more quickly then showing you didn’t put any
thought into their arrival, first day, and needs. Do
you have enough equipment for the employee on their first day? Is their
computer set-up? Is there someone to train them? Have you showed them where to
put their lunch? There is nothing worse than feeling like an afterthought on
your first day of work because no one was told that you were starting, or
nobody cared to figure out how to orient you. It makes you feel a bit like Milton when he gets moved down to the basement in Office
Space.
8. And don’t
forget to get worker’s compensation coverage for your business. Workplace
accidents can get expensive.
Conclusion
Hiring a new employee is incredibly important, which is why all companies should have a hiring checklist. If a company fails to properly prepare for a new employee, then you start with an employee that already feels out of place and unwanted. The company may also set itself up for a lot of liability later on by not adequately ensuring successful orientation and onboarding. Great training, preparation, and navigation of the laws can ensure success for employer and employee alike.
The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.
The information provided is my own and does not reflect the opinion of my firm or anyone else.
Getting an unfair labor practice charge against you
can be confusing. Let’s start with the basics.
An unfair labor practice charge is filed by an employee or a union with the National Labor Relations Board alleging that an employer or a union violated the National Labor Relations Act. The National Labor Relations Act (NLRA) protects employees’ rights to “self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection” (otherwise known as protected concerted activity). It is illegal for a company to discipline or fire someone because they engage in protected concerted activity.
Some of the most common violations that employers
commit are:
Forbidding
employees to discuss their salaries
Firing
or disciplining employees that discuss the union or solicit employees to sign
union authorization cards
Disciplining
or firing employees that complain about working conditions, pay, or safety
issues with or on behalf of a group of employees.
You can read more about other ways that the NLRA
protects employees in one of my earlier posts.
The
Best Approach is to Avoid Unfair Labor Practices
If you do not violate the law, then it is less likely,
although not impossible, that an employee or a union will file an unfair labor
practice charge. Employees can and do file frivolous lawsuits and unfair labor
practice charges.
The best way to avoid an unfair labor practice charge
is to train your managers, supervisors, and HR staff on what they can and
cannot do. The easiest way to remember what can and cannot be done is to remember
TIPS.
Threaten
Interrogate
Promise
Spy
Employers cannot threaten employees with any adverse
action (discipline, termination, reducing pay) because they support a union or
engage in protected activity. Companies cannot interrogate employees on whether
they support a union. Employers cannot promise employees benefits or better pay
to encourage employees to stop supporting a union. Finally, employers cannot
spy on employees that are engaging in union or protected activity (like having
a meeting offsite about whether employees should join a union).
So, what happens when you have an unfair labor
practice filed against you?
The NLRB
has a chart that shows exactly what happens. Let’s review the steps
before a hearing occurs.
The
Investigation
Companies need to act fast when they receive an unfair
labor practice charge from the NLRB. Obviously, employers should seek legal
counsel if they are not represented. To
respond companies should:
Carefully read the unfair labor practice charge
Who was involved in the incident(s)?
When did they occur?
What violation does the charge allege that the company committed?
The employer will also receive a Questionnaire on Commerce Information. It is best to agree or stipulate that the company is subject to the jurisdiction of the NLRB rather than filling out the form. Employers typically do not want to reveal more information than they need to.
Employers
need to be careful about speaking to employees that were witnesses to the
events leading to the unfair labor practice charge.
Matt
Austin explains the basics of what employers need to do to speak
to employees in these situations:
Specifically, Johnnie’s Poultry allows questioning of employees only after the employer’s representatives: 1. communicate to the employee the purpose of the questioning; 2. assure the employee that no reprisals will take place for refusing to answer any question or for the substance of any answer given; and 3. obtain the employee’s participation in the interview on a voluntary basis.
Basically, employers need to let the employee know that they are interviewing the employee because of the incident within the unfair labor practice charges. Employers must inform the employee that they will get no benefit or punishment from speaking with the employer or the employer’s attorney. Finally, the interview is voluntary and can be stopped at any time. Employers should never speak with the charging party (the person that made the accusations) about the incident. None of this applies to members of management or human resources.
The NLRB will typically wish to speak with the members of the management team that are alleged to have committed the offenses committed by the company. Most employers benefit from conducting their own careful investigation of the events before they allow the NLRB to interview their employees.
The
NLRB will Want to Take Affidavits from Management Witnesses
As part of the investigation, the NLRB will seek to take affidavits or statements from management witnesses. Companies have a right to have an attorney present for all witnesses that are members of management or human resources staff (agents of the company) but attorneys cannot be present for any affidavits taken from employees that are not members of management. Employers cannot stop employees that are not members of management from speaking with the NLRB.
Employers have a few options when it comes to determining whether to provide management witnesses. They can:
Refuse to provide any information to the investigator. This will usually result in a complaint being issued against the company because the only evidence will be from the charging party. Employers may wish to do this if they believe that this will go to a hearing because the NLRB will ultimately issue a complaint. Companies also need to be aware that the NLRB will often share information with the charging party. The NLRB rarely seeks an investigative subpoena to force the employer to provide information, so it is likely that you will be facing a complaint that will include all of the allegations from the charge.
Call the investigator and orally discuss the company’s position but refuse to make management witnesses available for affidavits or to provide any documents.
Provide the management witnesses for affidavits and have an attorney present to assist witnesses. If an employer plans to do this, then it should also file a statement of position explaining its defenses before the affidavits are taken.
Some
Tips If You Provide Management Witnesses for Affidavits
The affidavits are incredibly important to help the NLRB determine what happened. If something is said incorrectly in an affidavit, then the opposing party will use that against a company should the case go to a hearing. The NLRB or the union (if they are the charging party) will impeach company witnesses with incorrect statements. It looks a bit like this scene from My Cousin Vinny, but with documents. No company wants this to happen to its witnesses, which is why preparation for an investigation is crucial.
Each witness and any attorneys present can review the
affidavit that the NLRB takes. The NLRB takes affidavits using a computer, so errors
that a witness or their attorney find should be redone to make a clean copy of
the affidavit. Be sure to ask the investigator to do this.
Witnesses must be careful that the NLRB agent does not pin a witness down with statements like “I spoke with no other individuals about the incident.” A witness may remember more information later, so be careful of statements that lock a witness into a position unless the witness is absolutely sure that they will not remember more information later.
If the investigator does not ask a question or get
information that a witness believes is necessary for the investigation, then they
should speak up and get the information into the affidavit. The affidavit is
your chance to provide any information that will be helpful to the employer’s
case.
The
NLRB’s Conclusion of the Unfair Labor Practice Investigation
Once the affidavits are completed, the employer should
consider providing an additional statement of position concerning the facts of
the case. This will be the last chance to state its position and defense before
the NLRB reaches its conclusion on the unfair labor practice charge.
Once the NLRB makes a determination, then it will either
dismiss all of the allegations (i.e. the employer/defense wins) or the charging
party will withdraw the charge, dismiss some of the allegations, or dismiss none
of the allegations. If the NLRB dismisses all of the allegations, then there is
nothing left for the employer to do. If the NLRB dismisses some but not all of
the allegations or none of the allegations, then it will be time to consider
settlement. Each case is unique, so the best option is a fact specific
determination that will need to be carefully discussed.
Conclusion
Responding to an unfair labor practice charge from the NLRB is difficult, but there are a number of things that employers can do to respond. Employers must investigate allegations of unfair labor practices carefully before they decide the proper approach for their company.
The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.
The information provided is my own and does not reflect the opinion of my firm or anyone else.
2018 was a whirlwind year for labor and employment. There were 3 major Supreme Court decisions. One decision concerned overtime exemptions to the Fair Labor Standard Act where the court found that the exemptions should be interpreted broadly rather than narrowly. The Janus decision held that public sector employees could not be forced to pay an agency fee (public sector employees do not need to pay anything to a union that represents them). Finally, the Court found in the Epic Systems case that employers can require employees to settle employment disputes through arbitration agreements without violating the National Labor Relations Act.
While not as many changes will occur this year in labor and employment, there are still a number of exciting changes that could occur. Here are 10 labor and employment law predictions that I believe will happen next year.
Sexual Harassment Lawsuits Will Increase
The #Metoo movement is not going away in 2018. The preliminary
data from the EEOC showed that charges alleging sexual harassment
increased by more than 12% from 2017 into 2018. Unfortunately, this is an issue
that is not going away. My prediction is that there will be more of these
charges and lawsuits going into this year.
Starting in 2019, employers with five or more employees must provide two hours of training to supervisors and one hour to all other employees within six months of their hire (or promotion to supervisor) and every two years thereafter. Temporary and seasonal employees must be trained within their first 30 days or 100 hours, whichever comes first.
But in a Chapter 7 filing on Tuesday, which seeks to operate six restaurants through Dec. 27 before closing them permanently, Isabella argues that the local and national media relentlessly threw shade on his business operations even after he agreed to a confidential settlement in May with former Isabella Eatery manager, Chloe Caras, who sued for “extraordinary sexual harassment.” Isabella, documents note, apologized publicly to a local TV reporter and implemented new “zero tolerance” sexual harassment policies at all of his restaurants. He was ready to “restore confidence in Mike Isabella and his restaurants.”
Isabella lost his restaurants after he was accused of sexual harassment. Now, the accusations against him were very serious and he was the owner of the restaurant and was the one accused of sexual harassment. However, this can happen to any business and can be caused by employees at any level of the business. The issue of sexual harassment in the workplace is not going away. There will be more lawsuits, and charges regarding sexual harassment in 2019 than there were in 2018.
The Supreme Court Will Take a Case to Decide Whether Sexual Orientation is Protected under Title VII
The Supreme
Court is considering taking a case to determine whether Title VII protects
employees from discrimination based on their sexual orientation. The issue hinges
on whether “Because of … sex” includes sexual orientation or is limited to a
person’s sex.
The Supreme Court will grant the writ of certiorari and they will review the case. If the Supreme Court decides to review the issue, then it will be one of the most important cases that the Court considers next term.
The Department of Labor Will Increase the Salary Threshold for the Overtime Rule
The Department of Labor is still undergoing rulemaking
to raise the salary threshold that is required to meet the overtime exemption,
which allows companies to pay workers a salary and not have to pay employees
overtime regardless of the number of hours that they work in a week. Currently,
an employee must be paid at least $455 per week (which equals $23,660 annually) to meet the salary
threshold. In 2016, the Obama administration raised the salary threshold to $913 a week (or $47,476 a year). A
federal district judge eventually blocked that rule and questioned the DOL’s ability to set
any salary requirement to be exempt from overtime.
The DOL will attempt to raise the threshold to around $33,000 this year probably in March. The new salary threshold will be challenged again to determine whether the DOL even has the authority to set a salary threshold.
Paid Family Leave is Coming
As I said in a prior post, paid family leave is
coming. This is a question of when and not if. I believe that it
will be implemented either this year or next year. Here is what I said in my earlier
post.
Various politicians have expressed their support for paid family leave. Ivanka Trump and The White House have discussed their support for family leave. Marco Rubio introduced a plan to allow new parents to delay taking their Social Security benefits in exchange for two months of paid parental benefits. The Democratic Party Platform also called for paid family leave.
One poll showed that 54% of Americans think the government should require all employers to provide 12 weeks of paid family and medical leave. Only 29% of the respondents disagreed and 17% were undecided. With as much support as there is for paid family leave, it seems certain that Congress and the President will eventually enact a paid family leave law.
The National Labor Relations Board Will Issue a Joint Employer Standard
In September, the NLRB had issued a notice of proposed rulemaking to change the joint employer standard. The joint employer standard is important to determine whether companies are liable for violations of the law that are committed by staffing companies or franchises. For example, McDonalds has been combating a charge that it is a joint employer with its franchisees and is responsible for these small business owners firing employees that wanted higher wages.
Here is the release from the NLRB
with the proposed rule:
Under the proposed rule, an employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.
the question of whether there is a joint employment relationship under the National Labor Relations Act (NLRA) must be answered by applying the common law test for whether there exists an “agency” relationship. The Board has no special expertise relevant to defining the common law of agency. Therefore, according to the Court of Appeals, the Board is awarded no deference in this area. In other words, the Board does not have the right to define or redefine joint employment in a way that would be inconsistent with the common law meaning of “agency.”’
My prediction is that the NLRB moves forward with its
rulemaking and ignores the decision of the DC Circuit. This will have a big
impact on employers that use staffing companies because they will not
(generally) be liable for violations that the staffing company commits against
its employees unless the company exercises direct control over the employees
rather than merely having the ability to direct the staffing company employees.
To clarify, it is basically the difference between a
supervisor of a hotel telling the landscaping crew (that is employed by a
staffing company) how to perform their jobs and exactly what needs to be done
(direct control) versus the staffing company supervising, disciplining, and
directing the employees with the supervisor or owner of the hotel merely having
the authority to direct these landscaping employees (indirect control).
I know it is a bit convoluted, but it is incredibly important. Depending on how this decision turns out it could have a big impact on any company that franchises businesses. Yes, that means that it will impact every McDonalds and Chick-Fil-A owner.
Independent Contractor Issues Will Arise in Many States
Independent contractors are everywhere and the law
concerning them is far from settled. My prediction is that more states will seek
to limit the abilities of companies to use independent contractors especially
when these contractors form a part of the company’s core business (think UBER
drivers).
The California Supreme Court issued a landmark decision last year and the effects are still being felt. Below is the new test (called the ABC test) that the court implemented. For a worker to be an independent contractor the company must show:
1) that the company does not direct the worker in the performance of her job, 2) that the worker performs work outside the scope of the company’s typical business (such as a freelance artist who designs fliers for a moving company), and 3) that the worker has made the affirmative decision to go into business for herself, perhaps by incorporating or starting an LLC.
New Jersey and Massachusetts also use the ABC test to determine whether a worker is an independent contractor. Many of the companies that use independent contractors have a bad reputation and it is likely that more state supreme courts and possibly legislatures will adopt the ABC test. Regardless, it will get harder (at the state level) for companies to employ independent contractors.
More States will Protect Medical Marijuana Users from Discrimination
More states will change their stance on medical
marijuana and whether employees that use it are protected from discrimination.
Currently Connecticut, Massachusetts, and Rhode Island protect employee use of
medical marijuana and prohibit employers from firing those employees for off
duty medical marijuana use. In December, a Delaware
judge allowed a case involving a medical marijuana user that was
fired after failing a drug test to move forward.
We may not get a decision on this case this year, but it
is likely that Delaware will join Connecticut, Massachusetts, and Rhode Island
in protecting off duty medical marijuana use, and more states will follow suit.
Unfortunately for employers, there is not a good test
that can measure impairment for marijuana, which is why more states protecting
off-duty marijuana use will cause problems for employers. Until there is a test
that can measure impairment, increased training will be critical so that
supervisors can observe employees that appear to be impaired.
There will be more Notices of Inspection (I-9 Audits)
against businesses this year. As
I said in a prior post about Notices of Inspection:
Immigration and Customs Enforcement (ICE) has increased the number of I-9 audits that it has conducted to around four times as many I-9 inspections (Notices of Inspection) in the first seven months of 2018 as it did in the prior fiscal year. ICE conducted 5,278 Notices of Inspection since January 2018.
Immigration enforcement is a priority for the Trump Administration.
The Supreme Court Will Issue a Decision About DACA. A Deal Will be Reached to Allow DACA Recipients to Remain in the US.
Either the Supreme Court will issue a decision about
DACA or there will be new legislation that will solve the DACA issue. DACA
holders will achieve some form of permanent or semi-permanent status that will
allow them to remain in the US.
DACA (the Deferred Action for Childhood Arrivals) protects certain people that were brought to the US as children from deportation and allows them to get a job or attend school. They cannot obtain permanent residency through the program but may obtain work authorization and continue to reside in the country. There are currently nearly 700,000 people that are in the DACA program. The program was slated to end before a judge ruled that the government must reinstate the program and accept applications again in August. Earlier today [(November 8)] the Ninth Circuit ruled that the Trump Administration cannot end the DACA program immediately. They found that California and the others challenging the Trump administration’s decision to end the program would succeed in their case against the administration.
The Trump Administration has already appealed the decision of the Ninth Circuit to the Supreme Court. This is an issue that will likely be decided within the next year or so through a bipartisan deal.
The Spouses of H-1B Visa Holders Will Lose their Work Authorization While They Wait for a Green Card
H-1B spouses will lose their lawsuit to retain their
work authorization while waiting for their green card.
There is currently a
lawsuit about whether spouses on H-4 visas will be allowed to obtain work authorization
while they wait for their green cards after their I-140 is approved. This is
especially important to immigrants from India and China as they may wait years
(sometimes even more than a decade) until they are able to get a green card
after their spouse’s immigrant petition has been approved. Unfortunately, I
believe that they will eventually lose their lawsuit. Administrative agencies
have a lot of authority to change their positions on regulations.
Conclusion
I do not believe that it will be a year with as many changes in labor and employment law (at the federal level) as last year because Congress is split. However, many states will undoubtedly try to fill in the gap. The Supreme Court could also cause major changes in labor and employment law by reviewing whether sexual orientation is protected under Title VII.
These are my 2019 labor and employment law predictions. I’ll write a post at the end of the year to let you all know whether my labor and employment law predictions came true.
Happy New Year Everyone!
The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.
The information provided is my own and does not reflect the opinion of my firm or anyone else.
Brett Holubeck (of Houston, Texas) is the attorney responsible for this site.
