Frequently Asked Questions

About Employee Relations

Copyright ©1995-2010, Ethan A. Winning, All Rights Reserved

 

 

Acceptance of a Resignation Before the Date of Resignation

Access to Personnel FilesLabor Pains 2003 Edition

At-Will and Good Faith

Charging an Employee for Making Mistakes

COBRA: Notices and Payments

Deductions from Final Pay for Employee Loans

Direct Deposits: Can They Be Mandatory?

Figuring Turnover Rates

Jury Duty

Monitoring E-Mail

No "Use It Or Use It Or Lose It States" (Vacation and Sick Leave Accruals)

On Call Time

Paying Overtime to Exempt Employees - 9th Circuit Court Decision

Probationary vs. Orientation Periods - Regular Employees

Record Keeping Requirements

Right-To-Work States

Severance Pay

Tracking Exempt Employees Attendance (Vacation, Sick Leave,etc.) Time sheets for exempt employees

When Do You Have to Pay for Travel Time?

Who Has to File an EEO-1 Form

HIPAA

Federal Court Districts


Note: As the number of topics has become cumbersome, most have been moved into the latest editions of Labor Pains or can be found in the subscriber's section. Updates to information on this page can only be found in the subscriber's section. To subscribe, click here.


Access to Personnel Files: Eighteen states have labor codes regarding an employee's right to have access to documents in his or her personnel files. Certainly, from a fairness and common-sense standpoint, even without a regulation to force the issue, an employee should be able to see all counseling reports and performance evaluations.

Some states allow employees to copy their entire files. One, California, until 2005 when the code changed, allowed the employee to have copies of documents which they have signed, a code which I particularly liked. This forced the employee to either sign appraisals and warning reports or not be able to get copies of them. Our Bulletproof Employee Handbooks include this kind of policy for most states which do not have contrary regulations.

In essence the personnel files belongs to the company, not the employee. Therefore, in states which have no code, the employer has a right to withhold the file. The employee is then forced to request the file in writing and, barring that have an attorney request the file. See article, "Access to Personnel Files" for a complete discussion.Top


COBRA Payments and Notices: Other than who qualifies (see subscriber's section), the three most asked questions have to do with the company's responsibilities to notify employees of their obligations in paying for the insurance, the "decision-making period," and when the employee must actually make the first payment.

The initial premium payment must be made within 45 days after the date of the COBRA election by the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event. Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments. Payment is considered to be made on the date it is sent to the plan. If premiums are not paid by the first day of the period of coverage, the plan has the option to cancel coverage until payment is received and then reinstate coverage retroactively to the beginning of the period of coverage. If the amount of the payment made to the plan is made in error but is not significantly less than the amount due, the plan is required to notify the qualified beneficiary of the deficiency and grant a reasonable period (for this purpose, 30 days is considered reasonable) to pay the difference.

The plan is not obligated to send monthly premium notices. COBRA beneficiaries remain subject to the rules of the plan and therefore must satisfy all costs related to co-payments and deductibles, and are subject to catastrophic and other benefit limits.


Tracking Exempt Employees' Attendance: Exempt Employee's Time Sheets There seems to be some misconception about whether or not exempt employees can be made to fill out time (or attendance) sheets. While one would not have exempt employees punch a time clock, a company can certainly require that exempt employees turn in attendance sheets on a weekly or monthly basis. Since the use of vacation or sick leave or PTO can be docked from an exempt employee's accrual, there is no better way to keep track of just how much time off the exempt employee has taken.

Many firms -- mostly consulting, advertising, engineering, or law -- have exempt employees filling out time sheets for billable hours and project costs, there is nothing that would stop other types of companies from using the same methodology. This is not the same as treating exempt employees in the same way that you do nonexempt or hourly, and there is no danger of losing an exemption by forcing exempts to fill out attendance sheets. The companies that I work with which do not have such attendance records have someone in each department keep track of attendance which is the same as making out time sheets, once removed. It isn't the best method but let's face the fact that there are some exempt employees who will take advantage of the lack of sick leave, vacation or PTO tracking. See full discussion in for subscribers, "Tracking Exempt Employees' Attendance." See also docking exempt employees. (Top)


*At-Will Employment and the Concept of Good Faith and Fair Dealing: Many have questioned the legitimacy, legality, and fairness of at-will employment. It's been around since 1894 (Payne v. Western & Atlantic Railroad, 81 Tennessee 507) and it is accepted as one of the bases of employment in all states except Montana. At-will employment simply states that employment without a definite term may be terminated at the will of either the company or the employee. In other words, neither have to give notice. (See "Severance" below.)

At-will has been extended by many companies to cover any and all aspects of employment including the right to change policies, benefits, and general terms and conditions of employment with or without notice, with or without cause. But both employer and employee should note that there are caveats to this seemingly all-inclusive loophole in the balance of the rights of employer and employee. Although employment may be terminated essentially without "good cause" or any "cause," it may not be terminated based on illegal premises. In other words, at-will employment does not extend to termination based upon a discriminatory pretext such as age, sex, or race discrimination. The downsizing that we've experienced over the past 10 years has certainly been countered with (some) legitimate claims of termination with has discriminated in one of these areas.

Further, as some recent Ohio, Pennsylvania, and other states' Supreme Court rulings have shown, the employer is still under the general tenet of good faith and fair dealing, a concept which is at the basis of most contracts. It is what it says: underlying all employment relationships -- which are essentially contractual -- is the condition that there be no misrepresentations, that the relationship is entered into in good faith, and that the employer (for the most part) will treat the employee fairly. During the heyday of "wrongful discharge" claims, i.e., prior to Dec. 31, 1989, many suits were won by long-term employees who had been summarily dismissed without any justification. (Most courts' decisions in that period defined "long-term employment" as being at least 12 years.) It wasn't the lack of justification per se that did the companies in; it was the lack of good faith and fair dealing which long-term employment emphasized over any at-will clause. Top


Right to Work States: There is a common misconception that the right to work has something to do with the literal right to work. Well, there's no such thing as a right to work in any state. "Right-to-work" laws are those which outlaw closed union shops. An Open Shop is a company or enterprise that employs workers without regard to whether they are members of a labor union. Right to work states are AL, AZ, AR, FL, GA, ID, IA, KS, LA, MS, NC, ND, NE, NV, OK, SC, SD, TN, TX, UT, VA, and WY. The National Labor Relations Act , 29 U.S.C. 164(b) permits each state to adopt an open shop, i.e., right-to-work, policy or law. State laws vary from very strict to simply not allowing companies to collect union dues.


Probationary vs. Introductory Periods: Historically the first 90-days of employment have been called the "probationary period," but this is a dangerous misnomer. First, why a misnomer?

Yes, new employees are under scrutiny, but they are not really on probation. Probationary periods should be imposed after the individual has failed to perform and is, therefore, "placed on probation." The new employee needs guidance and one cannot expect him or her to be able to complete all tasks or understand the procedures for doing so in the first couple of days, weeks, and sometimes months. Therefore, the first 90-days is an introductory or orientation period, allowing for training and adjustment to the corporate climate.

In 1982, in Walker v. Northern San Diego County Hospital District, the judge held that a probationary period established an implied-in-fact contract requiring just cause for termination when such a policy was included in an employee handbook. Admittedly a California case, within months of the ruling, companies nationwide had changed their handbooks from "Probationary Period" to "Introductory" or "Orientation Period."

Further, according to the court, completion of the probationary period implied a contract for continued employment and, therefore, undermined any at-will employment statements (along with the "just cause" reasoning). Considering that a "regular employee" is defined as one who has completed the introductory period, companies should play it safe (and logical) by only using the term "probationary period" for employees who have been placed on probation. Top


On-Call Time: Just because an employee wears a pager in his or her off-hours does not mean that the company has to pay for on-call time. As an example, many high tech firms have service personnel on call after hours. After they are paged, they have to call in to see if they are required to report to work. Basically, it all boils down to the freedom which the employee has while being on call. If the employee can control the use of his time, then the time is not payable. If, on the other hand, the employee has no control (almost like being on "house arrest" as one person said), then the time is payable.

There are some close calls which have to be made. Recently we were asked about a situation in which the employee had to stay within the area to call in and was required to return the page within 15 minutes of being beeped. My judgment on that would be that the time is compensable because it is too restrictive, and my call would be upheld in every Circuit Court of Appeals district...except the Fifth (Louisiana, Mississippi, and Texas) which, in a similar case decided last month, decided that this "did not significantly restrict the activities of the employee." Go figger. Top


No Use It Or Lose It States: This is a list of states which do not allow for the deduction or loss of payment for vacation time which has been accrued but unused at the time of termination or resignation. "No Use It Or Lose It States" include 30 states. Some are strictly no use it or lose it; others allow the loss of accrued vacation if there is a written policy stating so; still others simply allow the loss of earned vacation. That, as far as I'm concerned, may be legal, but completely contrary to and fairness doctrine as well as common sense. A full discussion of the concept can be found in Labor Pains. Which states have which codes and the actual state labor codes are listed in the subscriber's section.

There are also 15 states (MT and TN added in last three years) which do not allow for a use it or lose it policy for sick leave accrual. That is, should an employee have sick leave left at the time of termination, accrued but unused sick leave must be paid. Subscribers have access to the full list and the various nuances of the no use it or lose it laws for both vacation and sick leave. (Top)


Direct Deposit: The following states have laws which, in general require that an employer have either a written consent or a written request before having payroll checks directly deposited or electronically transferred into an employee's account. Some of these states do allow for direct deposit without the employee's consent, but the financial institution must be of the employee's choosing. Arizona, Alaska, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Maryland, Michigan, Montana, New Hampshire, North Dakota, New Jersey, New Mexico, New York, Oregon, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia, and Wyoming. A discussion of the differences in these state laws can be found in the subscriber's section. (Top)


EEO-1: Standard Form 100 must be filed by -

  1. All private employers who are: (1) subject to Title VII of the Civil Rights Act of 1964 (as amended by the Equal Employment Opportunity Act of 1972) with 100 or more employees EXCLUDING State and local governments, primary and secondary school systems, institutions of higher education, Indian tribes and tax-exempt private membership clubs other than labor organizations; OR (2) subject to Title VII who have fewer than 100 employees if the company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees. and/or
  2. All federal contractors (private employers), who: (1) are not exempt as provided for by 41 CFR 60-1.5, (2) have 50 or more employees, and (a) are prime contractors or first-tier subcontractors, and have a contract, subcontract, or purchase order amounting to $50,000 or more; or (b) serve as a depository of Government funds in any amount, or (c) is a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Notes.

Only those establishments located in the District of Columbia and the 50 states are required to submit Standard Form 100. No reports should be filed for establishments in Puerto Rico, the Virgin Islands or other American Protectorates. Top


Severance Pay: There are no laws which require that an employer pay severance to an employee who has been terminated or laid off or who has resigned. An employer has no obligation for severance unless he has entered into a contract which requires such payments or unless there is an implied contract in an employee handbook or other policy manual.

The most common form of implied contract is discussed in "Giving Notice" or, in Labor Pains, under "pay in lieu of notice."


Acceptance of a Resignation Earlier Than the Date of the Resignation: An employee hands in a resignation stating that she will be leaving the company in three weeks. You decided it's in your best interests to accept the resignation immediately. Can you? Yes. Do you have to pay? Not unless you require notice of resignation. This is a variation on "Severance" above. A complete discussion is in every edition of Labor Pains. See "Pay in Lieu of Notice" in Labor Pains. Top


Record Keeping: The following chart shows federal employment record keeping requirements. These same requirements vary from state to state, but always more restrictive than the federal, i.e., records must be kept longer.

 

Record
Minimum Amount of Time to Retain
Time Cards, Time Sheets, Overtime etc. 2 years required under the FLSA, 29 CFR
Employee Earnings Statements 2 years under the FLSA
Payroll records 3 years under the FLSA, ADEA and EPA
Personnel files 1 to as many as 6 years after termination*
I-9 (Immigration) Form 3 years or 1 year after termination
Injury Records 5 years under OSHA and Workers' Comp.
EEO-1 Reports Forever under '64 & '91 Civil Rights Acts.
Summary Plan Descriptions Under ERISA 6 years

 

*The safest course is to retain all records for 4 to 6 years realizing, of course, that you will have destroyed the record the day before some federal or state agency asks for it. Some states dictate that individual personnel files for terminated employees be kept for a minimum of 3 years. A complete discussion is in the subscribers' section of this site. (Top)


Jury Duty: I don't know where so many employees have gotten the idea, but the only states which have laws requiring an private employer to pay an employee's wages (usually partial wages) while serving on a jury are Massachusetts, Alabama, Colorado, Connecticut, Nebraska, New York, Tennessee, and Washington, DC. In most states under the newer jury selection system, even if one is called, one may not have to serve on a day-to-day basis. Therefore, on days when the employee is not called, s/he must report to work and, since the employee knows the night before, there is no excuse for tardiness or absenteeism. See "Jury Duty" in the Subscriber's Section for full details.


Charging an Employee for Making Mistakes: Many employers want to know whether or not they can deduct costs of damages of employee mistakes from an employee's paycheck. Generally, no. Most states do not allow unilateral deductions from an employee's paycheck for anything but gross negligence or an patently illegal act (and even then, one has to be very careful). "Gross negligence" is difficult to define, so I'd stay clear of that. As for deductions due to illegal acts, well...if you catch an employee with his hand in the till, it's doubtful that he'd come after you for deducting the loss from his final paycheck (although I've seen it happen).

The principles also apply in part to loans made to employees. If you do make a loan to an employee, be certain that you have an agreement in writing signed by the employee that states that any amounts due at the time of termination will be deducted from the final paycheck. Top


When is Travel Time Compensable? To start with, commute time is rarely paid for. "Rarely," because there are situations in which a nonexempt employee will travel from his home to a job site and, if the travel time is greater than "normal" commute time, then most companies in most states will have to pay for the extra time.

However, when a nonexempt employee reports into a central office and then goes to a job site, the travel time to get to the site is considered as time worked and is compensable (and also counts toward overtime hours). The simple rule of thumb is that the employee's day starts when s/he reports into the office.

Most employers seem confused about travel time spent getting to out-of-town travel to seminars or workshops or trade shows. The fact that nonexempt employees must be paid for such travel time as time worked is probably one more reason why so few nonexempt employees are sent to anything but local workshops.

The last problem is, just what is "travel time" when one goes out of town? Is it from the time the employee leaves his house to the time that he checks into a hotel, or is it from the time the employee leaves his house until the plane lands? What if he lands, has dinner, rents a car, and then gets to the hotel three hours after touchdown? These questions are answered in the latest edition of "Labor Pains" as well as in the Subscriber's Section. In the meantime, keep the nonexempt employee closer to home. (Top)


How to Figure Turnover Rates: Don't be embarrassed if you can't remember how to figure turnover rates. If you want to figure annual turnover, take your average number of employees on payroll for the year and divide into the average total of separations (discharges, layoffs, resignations - we don't talk about retirements anymore). So, if you had an average of 130 employees on payroll and you "lost" 35, your turnover rate would be 27%. This can be done quarterly, of course, but why drive yourself crazy unless you have to.

Just remember that statistics can be deceiving. There was a time when some state Departments of Labor determined unemployment insurance rates by turnover. If you only had 10 employees and you lost 4, that would be a 40% turnover rate, and your insurance rates would go up to the max. I'm assuming that this is no longer the case, but assumptions can get you into as much trouble as statistics. Remember, statistics are like the drunk and the lamppost. The lamppost gives some support, but not much illumination. This is one more reason why many companies are redefining turnover by taking out discharges from the separations.

Now that you have figured your turnover rate, what are you going to do with it? What can you do with it? Turnover today is much like the weather. We talk about it, but there doesn't seem to be much we can do about it. The time, effort and expense spent in stemming turnover rates may be futile, and there is a major pitfall in determining why you're losing employees: when you conduct an attitude or motivation survey, employees come to expect that some actions will be taken to retain them and, mentally at least, that equates to more benefits or higher salaries or other costs that many employers simply cannot afford. (Top)


Monitoring Email: Simply stated, the federal and state governments have not caught up to the electronic age. Email on an employee's computer is the property of the company, just as his or her desk would be. Don't expect privacy rights legislation in this area for many years to come. In the meantime, because of harassment and other similar issues, employers are encouraged to enhance their at-will statements and add policies regarding the company's "ownership" of email. Note: This is discussed in full along with an "E-Mail Policy" in the Subscriber's Section. An "E-Mail and Internet Usage" policy is included in every Bulletproof Employee Handbook. (Top)


HIPAA: Sorry, but this section has been moved HIPAA Regulations and the Privacy Act.


Circuit Court Districts by State and Alphabetically Top

 

By District Court

 

1st Maine, Massachusetts, New Hampshire, Rhode Island
2nd Connecticut, New York, Vermont
3rd Delaware, New Jersey, Pennsylvania
4th Maryland, No. Carolina, So. Carolina, Virginia, West Virginia
5th Louisiana, Mississippi, Texas
6th Kentucky, Michigan, Ohio, Tennessee
7th Illinois, Indiana, Wisconsin
8th Arkansas, Iowa, Minnesota, Missouri, Nebraska, No. Dakota, So. Dakota
9th Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington
10th Colorado, Kansas, New Mexico, Oklahoma, Utah, Wyoming
11th Alabama, Florida, Georgia

 

Paying Overtime to Exempt Employees is now possible without losing the exempt status for the position under a 9th Circuit Court ruling (see state listings above). Under Abshire v. County of Kern (9th Cir. 1990), the court said that payment for extra hours worked, i.e., hours in excess of 40 in a week, to an exempt employee was not consistent with the salaried status (and criterion) of an exempt position.

In October 1997, the U.S. Court of Appeals for the Ninth Circuit ruled in Boykin v. Boeing Co. saw nothing inconsistent with 29 CFR (Fair Labor Standards Act) which says that an exempt employee may receive compensation in addition to his or her regular salary so long as the salary is not reduced for hours missed. Therefore, under Boykin, employers in the Ninth Circuit can indeed pay "overtime" to exempt employees. Overtime, by the way, does not have to be paid at time-and-one-half to exempt employees if the employer decides to pay at all. Top

This is certain to be taken up by other Circuit Court Districts, but for the time being, only the nine western states' employers can proceed. (Top)


More Complete Answers Are Found in Labor Pains and/or the Members Only Section of This Site

 

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