Where is Your Proof?

“I have an ex-employee asking to see which days off she had while working for me. She believes I owe her more vacation. What do I have to provide her?”

Your HR Survival Tip

Technology can be our friend or a pain, depending on what you’re using and what you need from it. Payroll processing is much easier now that it’s online and doing those calculations for us. However, we still need our backup.

Everyone seems to love using cell phone apps for timekeeping. They can certainly eliminate a lot of data entry but you also may be losing something. Test yourself: stop right now and pull a detailed report of each employee’s hours and time off for this calendar year.

Was it difficult? Did you even know how to do it? This is one of the problems. You are legally obligated to retain at least 3 years of payroll records. However, do you actually make sure you have those records? When you change payroll companies, there’s a very good chance you let previous payroll history disappear unless you made an effort to pull those reports yourself.

The other problem with the tech is that most of these timekeeping apps don’t allow you to add a disclaimer. It’s to your benefit to ensure your employees agree that all workplace accidents or injuries have been reported and they have taken their rest breaks. True, this isn’t the only way to ensure this but it does help to have them agreeing to that statement every pay period.

Review your processes and technology. Do you have a request for time off from your employees for every day you entered a vacation day in payroll? You should. Worked time and vacation time equal money to the employee. Supervisors can edit an entry but they need backup to do it…otherwise, you may have a legal battle on your hands. You want to be very careful about what you put into payroll and confident you can prove the employee actually requested that time off and was paid for all hours worked.

The Good and The Bad

As is so often the case, we nervously await the votes and decisions of our legislature each year. Usually, in California, the bad outweighs the good. And some bills chugging through the legislative process are just downright scary. Here are a few things to consider:

The Good

  • We have another whole year to finish our sexual harassment prevention training. They have moved the deadline out to the end of 2020. This doesn’t mean you should put it off but at least you don’t have to end 2019 in a manic rush to complete the training.
  • AB5 has information that keeps changing, but several professions have been given clearance to be independent contractors. Real estate agents and insurance producers are a couple of them. It adds several more new exemptions so other professions can be added to the list. However, don’t assume. Wait for changes to be completed before moving anyone to contractor status.

The Bad

We like to mention the crazy job-killer bills out there. We prefer to assume these are proposed by a legislator who heard something and wanted to fix it…however, they usually didn’t think it through or pay any attention to the potential unintended consequences of their bill. Here are a few:

  • AB51, if passed, will not allow us to make signing the company’s arbitration agreement a condition of employment. This would mean you have to request (nicely) that an employee give up their right to a trial in exchange for mediation. This is the second year in a row a bill like this has been introduced.
  • AB1066 was passed and allows striking workers to receive unemployment if the strike is more than 4 weeks. Not only will it affect the unemployment pool (which could eventually lead to higher unemployment taxes on payroll), but it encourages strikes.
  • AB1478 was passed and adds job protection for more leaves of absences, such as jury duty, victims of a crime, and stalking. We can only hope the details of this law will limit the amount of time.

We’ll let you know when we find out how to implement any new laws once they are in effect. Meanwhile, this is a good time to start reviewing your handbook for changes to your practices and processes, then we can follow that up with a legal review.

Discriminatory Offers

“I think I’ve found a fabulous candidate for a position. However, he’s asking for an extra week of vacation each year. Do I just add that to the offer letter?”

Your HR Survival Tip

When you have a hard time finding good candidates, it’s easy to feel you must bend over backward to give them everything they want. However, before you bend, sit and think about how that wish list plays out.

Discrimination can hit many different areas within the workplace. When you look at the various equal pay laws, you see how much both the state and federal governments are trying to level things out. Even the Affordable Care Act (aka “Obamacare”) originally required all levels of employees to be offered exactly the same coverages for the same premiums.

When you are considering offering different levels of any benefit, you need to make sure the employees offered each level are clearly separate and identifiable. For example, you can create differences based on length of employment, field vs. office, management vs. non-management, etc.

When you choose to offer or give one employee more vacation time, you are creating a case for discrimination. Are you prepared to provide the same level of employees that extra week, too? Eventually, other employees will notice the amount of vacation this employee takes and will start asking questions.

Consider changing your offer to something that might not be discriminatory. Perhaps offer a signing bonus equal to that extra week of pay. Or maybe he just wants the time off and doesn’t even need to be paid for that week…did you ask? Or have you tried explaining how it wouldn’t be fair to others? If you’re really considering that extra vacation, maybe it’s time to review your policy and raise it for everyone.

Remember the hiring process is a negotiation. Just because a candidate is asking for something doesn’t mean they absolutely must have it. However, your candidate will never get anything extra if he doesn’t ask so don’t hold it against him for asking. If you made a fair offer and your company is a good place to work, there’s a very good chance your candidate will accept your non-discriminatory offer.

Lacking Policies?

written policy picture

Employment law and lawsuits continue to challenge employers in California. While an Employee Handbook isn’t legally required, it is the best method for ensuring all employees are receiving the same information. A Handbook also eliminates a lot of questions from employees and could be a training tool for supervisory personnel who don’t fully understand California’s laws.

Even without an Employee Handbook, there are a few policies you are either required or need to seriously consider having in writing (with a signed receipt):

  • Sexual Harassment Prevention
    • A written policy has been legally required for at least a couple of years. California issued fairly detailed guidance about what the policy must include. In addition, this was really the first policy that included a translation requirement.
  • Meal and Rest Breaks
    • A recent lawsuit brought up the fact that the employer did not have a meal and rest break written policy. The company, instead, told employees not to work more than 5 hours without taking a break. In this case, the court initially granted judgment in favor of the employer. However, the employees are appealing on the basis that merely telling employees isn’t sufficient to meet California law.
    • When something new comes up in court where there isn’t a direct precedent, the court can refer the case (or specific question) to the California Supreme Court. This issue is now awaiting the CA Supreme Court’s response but we don’t have a timeline.
  • Paid Sick Leave
    • California has required paid sick leave for several years now and about 30 localities have expanded on the state law with their own version. We know companies are able to limit usage each plan year to 24 hours (CA) or whatever the local minimum might be. However, there is a legal possibility that you might not be able to enforce that minimum without a written policy stating your minimum. This would mean employees could use everything they accrue, rather than be restricted to a more limited number of hours.
  • Commission Plan
    • For years, California’s Labor Commissioner received numerous complaints from sales reps about underpaid commissions. Several years ago, a written commission plan became a legal requirement for anyone earning commissions. The plan must be easy to read and understand so everyone fully understands exactly how commissions are calculated and when they are earned and paid out.

Badly written policies may work against your company in court and attorneys often say no policy is better than a badly written or illegal policy. However, a well-written policy frequently carries weight in court and can help reduce your risks and potentially save you legal fees. We can create written policies or a customized Employee Handbook for your company so let us know if you would like to become more compliant!

I’m Resigning…Someday

“One of my employees told me she plans to resign and is looking for another job. Can I hire someone now?”

Your HR Survival Tip

i quit sign

While you might feel you can move forward with replacing your employee, you’ll want to wait. You don’t have an actual resignation at this point and she could change her mind…or take months to find another job.

This is the one time when the employee is holding all the cards. And you dropped the ball by not locking down the resignation. Legally, until the employee gives you a resignation date, you’re on hold.

How do you control this situation? Be prepared. Here are a few examples:

  • Employee: I don’t like working here and I’m going to resign as soon as I find a new job. You: Let’s talk about an actual date so we both can plan for your transition.
  • Employee: I’m so mad, I should just resign! You: I’ll accept your resignation and will consider this your two-week notice.
  • Employee: I’m planning on retiring one of these days. You: Let’s talk about this and set up a schedule so we’re both prepared.

Whenever possible, lock down a resignation date. If you change the date the employee gives you, you are turning that resignation into a discharge (firing or termination)…and made them eligible for unemployment. You can avoid that by waiting for that resignation date or by paying out their remaining work days.

Don’t forget to have the employee put their resignation in writing so you have the backup. Once you have an agreed upon resignation, you can start searching for that employee’s replacement. If the employee wants to change that date, you don’t need to agree but you can re-negotiate if it works for you.

Have a POP

“I just started offering health insurance to my employees. Now my broker is trying to sell me something called a POP. Do I need it?”

Your HR Survival Tip

First, congratulations on providing health insurance for your employees. We know that’s a big financial hit but it does make your company better able to recruit and retain employees.

Yes, you want a POP. This is a “Premium-Only Plan” that allows you to deduct an employee’s share of the premium on a pre-tax basis. Without having a POP in place, you must deduct from the after-tax, net pay. Since a POP is typically only about $150 per year, it’s a very low amount to spend to ensure your employee’s save money when they elect your insurance.

A POP is one part of what the IRS allows under Section 125 in the Internal Revenue Code. The other parts are usually just called Section 125 plans or Flexible Spending Accounts (FSA). These allow employees to set money aside on a pre-tax basis for healthcare expenses that may not be covered by insurance, such as over-the-counter medications, eyeglasses, contact lenses, etc. Another portion can be used to pay for childcare with pre-tax monies.

While employees may like the sound of implementing an FSA, do so very carefully and after you fully understand it. Since the IRS rules this, there are pros and cons for your company and for your employees with the healthcare FSA. For example:

Sam wants to set aside $1,500 so you divide that between all his paychecks for the plan year. Sam could use the whole $1,500 in January and the company is covering that…and waiting to be paid back throughout the year by Sam’s deductions. However, if Sam quits in March, the company has no way to recover the full amount used by Sam. On the other hand, if Sam didn’t have the medical needs he thought he would have and only has $200 in eligible expenses to submit, Sam would lose the excess he set aside and it reverts to the company.

The IRS feels the healthcare FSA balances out because sometimes the company is the loser and sometimes it’s the employee. However, if the plan is explained to employees carefully, they are less likely to lose much money. The IRS sets the maximum allowed for use in this plan but the company can set a lower maximum to lessen the risk.

The dependent care FSA is much simpler. The employee cannot submit a receipt for more than they have already put into the plan. Therefore, the company doesn’t provide any advance. If the employee understands the plan and knows their expected expenses, this works great for them, too.

While the FSA plans can be very good, you want to fully understand the risks and limit your exposure. Buy the POP because you and your employees will save on taxes. Don’t assume you have one just because you are taking those deductions pre-tax or you may end up paying back taxes. Ask your broker to be sure.

Who Pays?

“I want employees to wear red jeans (or slacks) with a white shirt while working so they match our logo colors. Two of my employees are refusing to buy red pants and say I should buy them. Can I make this a requirement of working here?”

Your HR Survival Tip

While you can make wearing a specific outfit a requirement of the job, who has to pay for that “uniform” depends on what it is. This is another side of the dress code issue and your solution will be a combination of the type of company and type of job, plus how much public exposure your employees have.

There are fairly simple rules for dress codes when you are requiring a particular look. If the items are an industry-standard or if the clothing is something most people would own or wear, the employee usually pays for it. If you are asking employees to wear or have something that has your logo or is less common (like red pants), you must pay for it.

California doesn’t believe it should cost the employee anything to work for you. A lot of the decisions come down to whether you are requiring a certain look or just wanting a standardized look. Let’s look at a few items:

  • Logo wear — You must provide anything with your company logo. You can charge a deposit but must pay it back to the employee once they return the items. If you expect them to always wear the logo gear to work, the standard for something like a logo shirt is to provide enough of them so the employee has a clean one for each workday in their workweek. You also want to provide replacements when the item is not looking so great anymore…remember that’s your logo on it.
  • Shoes — Steel-toed shoes are a standard for warehouse work and the construction industry so employees working in those areas are expected to buy their own. The same is true of slip-resistant shoes in the food and beverage industry. This is a safety issue and you really can’t work in those industries without owning the proper shoes. Some companies may choose to offer a stipend toward that expense but they are not required to do so.
  • Uniforms — If you require an actual uniform or costume, the company must provide it. This also includes unusual clothing, such as the red pants, or when you are very specific about the brands or styles. Technically, the company is even responsible for the cleaning of that uniform…read your IWC (Industrial Welfare Commission) orders for your industry.
  • Safety gear — The company is typically responsible for providing personal protection equipment (PPE), such as safety glasses, hard hats, certain gloves, etc. This is a safety issue but it’s often reusable gear the company keeps and redistributes.

What can you require your employees to wear that works in your company? You can require a lot of things but you may pay for what you want. The accepted standard that shouldn’t cost you anything is white shirts and dark/black pants, black shoes, black belt. The courts have agreed this is a pretty basic look that can be worn to most jobs in most industries so employees should already own the outfit and, therefore, the company doesn’t need to provide it. Look around and you will see many stores and restaurants who use this standard…with the possible addition of a logo T-shirt.

Timing is Everything

“I have an employee on maternity leave who is being released by her doctor in a few days. She put in writing that she didn’t want her previous schedule upon her return so we hired someone to help with the workload. However, now the employee is asking for her old schedule. What can I do?”

Your HR Survival Tip

hospital patient

This turns out to be a very tricky issue due to the protections of pregnancy disability leave. Speak with an employment law attorney before doing anything you might end up regretting.

The law states a pregnant employee’s job is protected while on disability leave. This means she has the right to the “same or similar position” with the same hours worked prior to the pregnancy. Even if she turned down that same or similar position and hours prior to being released to work by her doctor, it becomes a gray area since she made that decision while she’s still on leave.

Only after the employee has been released by her doctor and all other job-protection timing has passed can you lock her down to a decision of refusing her old job and hours. In other words, once she has returned to work, you can discuss whether or not she wants something different.

This can be really tough on a company because they have been waiting for, possibly, months for the employee to return…only to find out the employee won’t be returning or only wants to work part-time. Many companies would love to have employees on pregnancy leave commit to something so the company can make appropriate plans. However, the laws inhibit that option. No matter what is said while the employee is still on a pregnancy-related leave, ignore it and save that discussion until she returns to work.

Personal Leaves Defined

“I have an employee with a medical problem but I’m not sure if there is a leave of absence I need to provide.”

Your HR Survival Tip

There are so many different leaves available these days, it’s no wonder you’re confused. Eligibility for leaves of absence is often tied to the number of employees you have.

A personal leave of absence is that last option when nothing else fits. For example:

  • If they are having a baby … if you have 5+ employees, that’s pregnancy disability leave combined with state disability.
  • If they had the baby and want baby bonding … that’s New Parent Leave or FMLA/CFRA.
  • If they hurt themselves at work … that’s workers’ compensation leave and you need to file a claim.
  • If they hurt themselves at home … if you have 50+ employees, that’s FMLA/CFRA and you need to provide the appropriate paperwork.
  • If they hurt themselves at home … and you have less than 50 employees, that’s a personal leave and you need to keep reading.

A personal leave may be used for extended vacations (not recommended), baby bonding for companies with under 20 employees, personal medical leave for companies with under 50 employees, etc. The important thing to remember about a personal leave is that the time off is NOT protected, which means you aren’t legally obligated to hold their job. It is also the only leave where you have a choice of whether or not to approve the time off.

If you approve a request for a personal leave, there is an assumption the job will be waiting for their return. Therefore, you don’t want to rush out and replace them. If an extension of the initial leave is requested, that’s when you might want to consider your options. At that point, we suggest you make it clear (aka in writing) about the status of their leave and job. This isn’t something you should do on your own. Contact us for help in doing this correctly.

Personal Disability

“I just had another employee asking for a personal leave because she’s under a doctor’s care.  Do I have to give them the time off?”

Your HR Survival Tip

hospital patient

This can be a bit tricky and your options depend upon the number of employees you have. If you have fewer than 50 employees, this is a personal leave of absence and that will be this article’s focus. Just so you know, in companies of 50+ employees, the leave is likely to be protected under FMLA/CFRA.

As a first step, ask for a doctor’s note stating she will be unable to work from [start date] to [end date]. A doctor usually provides an initial note citing anywhere from 2 to 6 weeks. Make it clear to the employee that she will be expected back to work on [end date] or needs to provide another doctor’s note requesting an extension. Provide her the brochure about California’s state disability program and let her know it is up to her to file a claim.

If the employee has any sick time remaining, use the rest of it for work time missed. Companies frequently approve the initial leave request and, if you do, there is an assumption you will hold her job for her. However, we like to send out a certified letter explaining things related to the leave:

  • Doctor’s note – Cite the day she is expected to return to work or provide another note requesting an extension.
  • Health insurance – If the employee has coverage, explain how she would pay any co-pays and how long you’ll keep the coverage going.
  • Job protection – Explain you don’t believe there is job protection with this leave based on what you know.
  • Communication – How often do you want to hear from her, if the leave is more than a couple of weeks?

California’s EDD will send you a 2-sided form that’s printed in red ink. This is asking for basic information they will use to compare with the information on her claim. EDD will also notify her doctor of the claim and the doctor must provide EDD with the medical backup for the disability.

If an extension of the leave is requested, it’s time to talk with your HR consultant or attorney about your options. Even though there may not be job protection, you don’t want to just jump immediately toward termination. Every situation is different and you want to be able to fully justify any action you take.