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Exorcise "Ghost Policies" from Your Employee Handbook

Is your employee handbook or policy manual haunted by shadowy policies and provisions that are treated as if they aren’t even there? Such “ghost policies” can creep into a handbook in any number of ways. They may be relics of the past that once lived useful lives—the legacy of long-ago-departed HR managers—their original purpose now unknown. They may be more-recent additions that never caught on. Or they may simply be the result of error (not yours, of course).

You should be afraid—be very afraid—of ghost policies. Left floating in your handbook, they can give rise to legal claims or liability.

‘Dord’: A Ghost Word

What is dord? According to the second edition of Webster’s New International Dictionary, it’s a noun that means density, as used in physics and chemistry. But it was never a real word. Dord is what lexicographers call a “ghost word”—a word that comes into use or gets published because of misinterpretation, misreading, typographical or linguistic confusion, or other error.

So how did the non-existent word dord end up in the dictionary? In the first edition of Webster’s, entries for abbreviations and words were intermingled. But in the second edition, abbreviations were moved to a separate section at the back of the book. An editor created a card with the notation “D or d, cond/density,” meant to indicate that the new edition should include D and d as abbreviations for density. The note card mistakenly ended up in the words pile, and the phrase “D or d” was misinterpreted      Continue Reading...

DOL Proposes New Rules for Tipped Employees

If your business has employees who receive tips, you need to know about the Department of Labor’s (DOL) proposed changes to its tip regulations.

As background, the Fair Labor Standards Act (FLSA) generally requires covered employers to pay employees at least the federal minimum wage, which is currently $7.25 per hour. However, the FLSA allows employers to pay tipped employees as little as $2.13 per hour and apply their tips as a credit toward satisfying the full minimum wage (the “tip credit”).

In 2018, the FLSA was amended to provide that an employer “may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.” The 2018 amendment also rescinded DOL regulations that prohibited employers from requiring tipped employees (such as servers and bartenders) to share their tips with traditionally non-tipped employees (such as cooks and dishwashers), even when the employer does not take a tip credit.

The proposed new regulations would further implement and clarify these 2018 statutory changes. The main provisions are as follows:

  • Employers, managers, and supervisors are prohibited from keeping employee tips (including participating in tip pools) under any circumstances.
  • If the employer pays all employees at least the full federal minimum wage (meaning the employer is not taking a tip credit), then the employer can establish required tip pools between all workers, including customarily and      Continue Reading...
Misclassifying Employees as Independent Contractors Under the NLRA

Merely misclassifying employees as independent contractors, by itself, does not violate the National Labor Relations Act, according to a new ruling by the National Labor Relations Board.

The issue in this case arose after a logistics company fired a driver after she complained about being misclassified as an independent contractor. The Board agreed that the act of firing the driver for complaining violated the NLRA, but disagreed that the initial act of misclassification itself violated federal law for interfering with workers’ rights to organize. The Board determined that the act of telling workers they are independent contractors is not considered a threat of reprisal unless there is more. For example, the Board has found in other cases that an employer violates the NLRA if it expressly prohibits workers from engaging in otherwise protected activities because they are independent contractors.

The Board agreed with employer advocates who argued that if misclassification alone violates the NLRA, then it would significantly curtail the use of independent contractors and penalize employers for honest mistakes. The Board recognized that whether a worker is legally considered an employee or an independent contractor is not always clear cut and depends on a variety of factors.

Labor law violations are one less thing for employers to worry about when classifying workers as independent contractors. However, misclassification still poses many other concerns for employers, such as tax law issues, workers’ compensation issues, employee benefit issues, and numerous wage-and-hour law issues.

Recap: Foulston's Discrimination Mock Trial at 2019 SHRM State Conference

HR Professionals are often called upon to make difficult decisions that are legally compliant. Occasionally, however, personnel decisions lead to charges and lawsuits that may go to trial, where a jury will scrutinize those decisions. 

On September 13, 2019, Foulston’s Employment Law Team presented a mock trial of an age discrimination lawsuit to a packed room at the Kansas Society of Human Resources Management (SHRM) State Conference in Overland Park.
During the first hour, attorneys for the employer and former employee presented their cases as they would in a real trial – but in a much-abbreviated fashion – including opening statements, direct and cross-examination of witnesses, and closing arguments.
In the second hour, audience members were divided into 10-member juries. The juries received instructions from the judge, selected a foreperson, and deliberated until they reached a verdict.
In case you’re wondering, 30% of the juries found for the employee, and 70% for the employer. The fact that so many juries, all consisting of HR professionals, reached different results underscores how difficult it is to predict how a particular jury might see things. And why it’s important to make and implement HR decisions in a way to lessen the possibility that they will be second-guessed by a jury.  
Participants reported that the mock trial provided a good reminder about the need for ongoing management training (especially for new managers), the importance of keeping personnel policies updated,      Continue Reading...
New Overtime Rule Increases Salary Level to $35,568

On September 24, the U.S. Department of Labor announced its new rule to increase the earnings thresholds necessary to exempt executive, administrative, and professional employees from the Fair Labor Standards Act’s minimum wage and overtime pay requirements. Here are the main points you need to know.

Effective January 1, 2020, the “standard salary level” will increase from the current level of $455 per week to $684 per week (equivalent to $35,568 per year). However, employers may use nondiscretionary bonuses and incentive payments, including commissions, if paid at least annually, to satisfy up to 10% of the standard salary level.

The U.S. DOL estimates that the new rule will affect 1.3 million American workers, who will either become eligible for overtime pay, or must receive a salary increase to the new level to remain exempt from overtime pay.

If your organization has overtime exempt employees who currently earn less than $684 per week, you need to be considering your options and strategy for complying with the new rule now, so you can formulate and implement a compliance plan before the end of the year. This may also be a good time to audit whether your salaried employees satisfy the “job duties test” to be exempt from overtime pay as bona fide executive, administrative, professional, and outside sales employees.

Have You Updated Your Employee Handbook Recently?

As a part of the 2019 HR Training Series, Foulston recently provided a session on employee handbook basics to a group of HR professionals. Here’s a recap of some of the highlights.

Employee handbooks should be updated yearly. It is also important to have employees sign an acknowledgement of receipt after each update. This is because the acknowledgement the employee signed when he or she first started likely applied to a handbook that looked different than the current version.  

Updating the handbook should be a collaborative effort between HR, management, and legal counsel. If the handbook says one thing, but your managers are doing something else, that is a problem. Management buy-in also helps ensure that your policies are being consistently and even-handedly enforced.
Do you have these “must have” policies?
  • At-will employment disclaimer
  • Anti-harassment/productive work environment
  • Equal employment opportunity (EEO)
  • Family and Medical Leave Act (if you have 50 or more employees)
  • Wage deductions
  • Smoke-free workplace
Follow your handbook unless there’s a compelling reason to make an exception. Inconsistencies between the policy and practice could come back to bite you.
For information on upcoming sessions in the 2019 HR Training series, visit www.foulston.com/hrtraining.
New Whistleblower Protections Under Taxpayer First Act

On July 1, President Trump signed the Taxpayer First Act, giving new protections to IRS whistleblowers. Before this act, the IRS could only protect whistleblowers by concealing their identity.

Even without protections against retaliation, the Whistleblower Office of the IRS has still been able to collect over $5 billion in unpaid taxes under the program. This may have something to do with the requirement that the IRS award the whistleblower a percentage of the unpaid taxes collected by the IRS. For 2018, the Whistleblower Office reported that it paid 217 awards to whistleblowers, totaling more than $300 million. The IRS pushed for additional protections for employers in an effort to incentivize more employees to come forward.
The Act creates a private right of action for whistleblowers to sue their employers for retaliation. Employers can no longer discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee for assisting the IRS without risk of liability. Not only does the private right of action apply to the employer, but it applies to individuals as well, such as officers, employees, contractors, subcontractors, or agents of the company. Employees are free to report a company, provide information, or assist a government agency in an investigation for tax underpayments and tax fraud. The employee is also protected from retaliation for reporting anything else the employee reasonably believes is a violation of the IRS tax laws.
Remedies for violations include: reinstatement; 200 percent of back pay and all lost benefits;      Continue Reading...
Teresa Shulda: Wonder Woman in Business

In case you missed it, our very own Teresa Shulda was recently recognized by the Wichita Business Journal as a 2019 Women in Business honoree. Teresa and 26 other commendable Wichita women were awarded for creating successful careers and working to improve their companies and their community. 

Not only is Teresa an active member of our employment and labor team, where she serves as Vice-Chair, she also supports many firm initiatives as a part of the firm’s Associates, Recruiting, Strategic Planning, and Diversity and Inclusion Committees. Outside of the office, she’s a wife, mother, and board member for the Boys and Girls Club of South Central Kansas. Wonder Woman or Teresa Shulda, you say? It’s difficult for us to tell the difference.

If you have attended our annual Employment Law Institute, HR Trainings, or other sessions, you may recognize Teresa as our employment discrimination, FMLA, and ADA guru. We are proud to recognize our lawyer and friend for her well-deserved achievement.

You can view Teresa’s honoree questionnaire and get to know more about her here.

Foulston Presents: Employment Discrimination Mock Trial at SHRM State Conference

Will we be seeing you at the 2019 Kansas SHRM State Conference in September? We’re excited to bring you an interactive, two-part breakout session the last morning of the conference: an Employment Discrimination Mock Trial.

As an HR professional, you are trusted by your employer to make difficult decisions that are legally compliant. However, sometimes personnel decisions can lead to messy lawsuits that may go to trial where a jury will scrutinize your actions. At this Mock Trial, you will get the unique chance to weigh in on a case, learn how the trial process unfolds, and view your actions from a different perspective.

With Foulston attorneys cast as the judge, the trial lawyers, and the witnesses, you will take on the role of the jurors — you will hear the witnesses’ testimony, evaluate the lawyers’ arguments, and then you will deliberate with other jurors to analyze the evidence and reach a verdict.

Hope to see you there! Be sure to arrive early, as seating is limited. You can also catch us in the Marketplace at booth 59. Register now and learn more at: https://2019.ksshrm.org/

What: 2019 KS SHRM State Conference | Employment Discrimination Mock Trial
When: Friday, September 13 | 8:00 – 9:00 AM and 9:15 – 10:15 AM
Where: Overland Park Convention Center | Courtyard 1
EEO-1 Component 2 (Pay Data) Reporting Reminder

As if you could forget, we’re now less than two months from the court-mandated September 30, 2019, deadline to submit EEO-1 Component 2 data to the EEOC. Every employer with at least 100 total employees (across all locations) must submit a count of employees broken down by establishment, gender/race-ethnicity combination, EEO job category, and pay band, as well as the total number of hours worked for all employees in each one of those unique combinations. That’s more than 3,500 data points per establishment!

Here are a few reminders for you as you collect and prepare your information for filing:
  • You must select an employee snapshot from one pay period from October through December of each year (2017 and 2018); it does not have to be the same period you used for EEO-1 Component 1 reporting (which you previously filed).
  • You must count all full and part-time employees on your payroll for that period; you do not count “leased” employees (such as temp agency employees) or temporary or seasonal employees.
  • You must group employees by pay band based on their final, W-2 Box 1 wages for each calendar year. Do not prorate or otherwise adjust these amounts.
  • For non-exempt workers, you must count actual hours worked, which (under the FLSA regulations, which are used to count hours for this reporting) does not include, for example, paid time off, vacation, or holiday hours.
  •      Continue Reading...
Foulston Partner Assists in Kansas LLC Statute Revisions

Bill Matthews, partner at Foulston Siefkin LLP and subcommittee member of the Kansas Bar Association (KBA) Section on Corporation, Banking and Business Law, was the principal drafter on the team that prepared revisions to the Kansas Revised Limited Liability Company Act (KRLLCA) and the Business Entity Standard Treatment (BEST) Act that were recently made law. Other subcommittee members included Webb Hecker, Virginia Harper Ho, William Quick, and Garrett Roe.

“Updates to our business entity laws, like the recent updates to the Kansas Revised Limited Liability Company Act, are important because they provide access to the latest innovations in business law to Kansas businesses and help make Kansas an attractive jurisdiction to form and relocate businesses,” Matthews said. The new provisions include permitting the division of an LLC, establishing public benefit LLCs, and wholesale amendments for series LLCs, and modifications address consent/approval, blockchain technology, and default fiduciary duties, among others. Matthews testified in support of the proposed legislation on behalf of the KBA before the Kansas House and Senate Judiciary Committees this spring.

The KRLLCA, modeled after the Delaware Limited Liability Company Act (DLLCA), was adopted in 1999 and replaced Kansas’s original LLC act. The last significant revision to the KRLLCA occurred in 2014 with several amendments between 2014-16, including the adoption of the BEST Act. In 2017, a committee of the KBA’s Corporate, Banking and Business Law section considered amendments to the KRLLCA based on changes to the DLLCA that have occurred, and the resulting bill was introduced to the      Continue Reading...

Pay Data Reporting Is Back (For Now)!

After a tortured history, the EEOC’s pay-data collection requirements are back! At least for now.

Consistent with some recent federal court rulings, all employers with 100 or more employees, as of now, must submit summarized pay data for all employees for 2017 and 2018 to the EEOC by September 30, 2019. The government is appealing the court rulings, and there still is a possibility that the pay-data reporting will not happen. But pending appeal and further details regarding the format and process for reporting employee pay data, employers should begin now to collect and review 2017 and 2018 pay data and to clean up any errors.

Regulatory Background

In 2014, President Obama directed the EEOC to develop a tool for collecting pay data from employers. In September 2016, the EEOC announced that pay-data collection would be incorporated into employer’s annual EEO-1 reports, beginning in December 2017. The initial proposal required EEOC to collect pay data for at least twice before September 30, 2019.

The EEOC regulations required employers to report, within each of the 10 EEO-1 job categories and 14 gender, race, and ethnicity categories, how many employees gross W-2 wages for the prior 12-month lookback period fall within each of 12 different pay bands. The      Continue Reading...

USSC to Hear Trio of LGBTQ Cases

The Supreme Court recently agreed to hear three cases that address whether Title VII’s protections against sex discrimination extend to discrimination on the basis of an employee’s sexual orientation and gender identity. Lower courts have struggled with the question of whether “discrimination on the basis of sex” could include protections for LGBTQ workers, resulting in a split among the federal courts of appeal. The Supreme Court will now have the opportunity to resolve the question once and for all. Two of the cases involve gay employees who both claim that they were fired because of their sexual orientation. In one case, Zarda v. Altitude Express, the Scond Circuit Court of Appeals (covering northeastern states) ruled that Title VII extended to sexual orientation discrimination.  In the other case, Bostock v. Clayton County, the Eleventh Circuit Court of Appeals (covering southern states) ruled that Title VII did not protect employees from sexual orientation discrimination. The third case the Supreme Court will hear involves a transgender employee. In R.G. & G.R. Harris Funeral Homes Inc. v. EEOC, a funeral home owner terminated an employee because of her transgender status. The business owner relied on the Religious Freedom Restoration Act to argue that his personal religious beliefs supported his termination decision and RFRA provides a defense for employers with sincerely held religious beliefs. The Sixth Circuit Court of Appeals (covering midwestern states, but not Kansas), ruled against the business owner and found that Title VII protects transgender employees and RFRA did      Continue Reading...

Is It Time to Update Your Parental Leave Policy?

According to the United States Department of Labor (DOL), nine out of 10 new fathers in the United States took some time off work for the birth or adoption of a child, but the amount of time that new dads take off work is generally very low. Seven out of 10 fathers took 10 days or less of parental leave. The DOL notes that fewer employers offer paid parental leave for men than for women, and fewer men report receiving paid parental leave than women. While 21% of women take parental leave, only 13% of men do the same.

Updating your parental leave policy to offer leave for new dads could be good for your business. A recent study by Ernst & Young found that 83% of millennials would be more likely to join a company that offered paternity leave. Additionally, the Council of Economic Advisers found that allowing more expansive parental leave improved an employer’s recruitment and retention of employees and also improved employee motivation and productivity. Many companies are taking note: Netflix is offering “unlimited” paternity leave for fathers and mothers during the child’s first year. Microsoft offers 12 weeks of paid leave for mothers and fathers, Ford Motor Company offers eight weeks paid leave, and Amazon gives all parents six weeks of paid leave.
Ensuring your parental leave policy complies with the Equal Pay Act, Title VII, and the Family Medical      Continue Reading...
Failure to Accommodate an Employee’s Disability May Not Support a Discrimination Claim Under the ADA
In October 2018, a three-judge panel at the Tenth Circuit clarified that an employee cannot sue its employer merely for failing to provide a reasonable accommodation under the Americans with Disabilities Act. Now the court is going to take another look at that ruling.
Laurie Exby-Stolley, a county health inspector in Colorado, sued her employer for disability discrimination on the theory that it failed to accommodate her disability. She had broken her dominant right arm at work and had undergone two corrective surgeries, but the injury still impacted her ability to perform tasks like lifting, moving, or opening objects or writing. These difficulties prevented Exby-Stolley from keeping up with her workload. Her doctor ultimately identified several permanent restrictions that prevented Exby-Stolley from performing the inspector duties.
Over the course of several months, Exby-Stolley and her employer discussed various accommodations. At first, Exby-Stolley moved into a part-time office job that was within her restrictions, but she did not enjoy it. She claimed at trial to have proposed many other potential accommodations that would allow her to work as an inspector or in other roles, but the County rejected all of her suggestions without offering any alternatives. According to the County, the only accommodation Exby-Stolley requested was that the County create a new position for her, cobbling together light-duty tasks from various different jobs. The ADA does not require employers to create new positions as a reasonable accommodation, but the County indicated it would continue to look for other existing job opportunities within      Continue Reading...

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Don Berner, the Labor Law, OSHA, & Immigration Law Guy
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Jason Lacey, the Employee Benefits Guy
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