Saturday, 28 January 2012
Can My Company Really Do That?
Employees are often woefully ignorant or mistaken about what really constitutes labor and employment law concerning their own rights and obligations and, conversely, their employers rights and obligations. Its often the case, especially at smaller firms with fewer resources, that employers are equally as ill-informed. Here are some areas of confusion that often leave employees scratching their heads and asking, "Can my company really do that?PAID SICK TIME"Can a company get away without offering me paid sick leave?" The answer is yes, except in San Francisco and Washington, D.C., which have passed local ordinances mandating all employers offer seven sick days a year to their employees. A similar law in Milwaukee, which offers up to nine paid sick days, is undergoing a court challenge and is scheduled for a court date in May 2009. Otherwise, no laws mandate paid sick days, although Barack Obama is pushing legislation that would either require employers to offer sick days or reward them if they do and/or punish them if they dont. Also, every firm with 50 or more employees within a 75-mile radius is obliged by the Family Medical Leave Act (FMLA) to offer up to 12 weeks of unpaid leave for sickness and other reasons with guaranteed job protection. Some states have similar laws with a lower employee-count threshold. Legislation is currently being considered in Washington, D.C., that would lower the threshold nationally to 20 employees and convert the unpaid leave into paid leave.VACATION TIME"My friend told me his company offers no vacation time. Is this legal?" Like paid sick time, there is no law in the United States obliging employers to give employees vacation time, though it would be hard to imagine that any company could attract quality or long-lasting employees without offering vacation days. However, if a business does offer vacation days, states generally regulate how the vacation plan is managed to ensure that employees are treated consistently, uniformly and fairly. In every state of the union, vacation is considered a private enterprise policy. Also, the Fair Labor Standards Act (FLSA) does not require an employer to pay employees on vacation; this is a matter between employer and employee in the eyes of the law.OVERTIME PAY"My company put me on a salary and told me Im not entitled to overtime pay. Is this legal?" The answer is-it depends. The Fair Labor Standards Act (FLSA) recognizes two classifications of employees, exempt and non-exempt. The exempt status means the employee is paid a salary no matter how many hours he or she works in the work week, which is defined as any five days in any predetermined seven-day period, be it one hour or 70 hours. Non-exempt employees must be paid time and a half for every hour over 40 in the work week, and in some states, laws mandate overtime for any time worked over eight hours in a day.So, what is an exempt employee? The FairPay Overtime Rules of 2004 set up two sets of tests to determine exempt status. First is salary, but that salary must be at least $455 a week. The second test is called the duties test. Here is where both employers and employees often get confused. Exemptions are recognized for executive, administrative and professional employees, but the duties tests generally question whether these employees have independent decision-making and supervisorial authority. So an employer cannot, for instance, give a receptionist a salary and refuse to pay overtime. A receptionist generally has no supervisorial or decision-making authority. Exemption tests also exist for outside sales personnel and computer personnel. Again, however, simply labeling someone as exempt is not always sufficient. The pharmaceutical industry just lost an overtime lawsuit when the court ruled that pharmaceutical representatives do not sell but merely promote products and therefore are non-exempt law and court precedent, employers are obliged to make good-faith efforts to classify each employee correctly and then to regulate working hours for non-exempt employees. For instance, if an hourly employee decides to arrive an hour early each day to drink coffee and read the newspaper, he or she must be paid overtime for that hour. Its up to the company to regulate the hours of work through affirmative supervision and stated policies. In this case, the employee must be informed not to punch in until his or her workday begins and to use the break room for reading the newspaper and drinking coffee before work.The answer in your particular case depends on whether you fall into any of the exempt categories and whether you pass the salary and duties tests.OFF-THE-CLOCK WORKING"My employer is asking all of us to work for free after 5 p.m. once or twice a week to chip in during the recession. Is this legal?" You may want to read the answer to overtime pay above for further clarity, but the answer here is yes and no. Yes pertains when youre an exempt, salaried employee. Being exempt and earning a salary means you must be paid your salary no matter how few or how many hours in a week your job demands you to perform. If youre a non-exempt, hourly employee, you must be paid time and a half for each hour or portion of an hour beyond 40 in the work week (and in some states each hour or portion thereof after eight hours each day). If youre non-exempt and somehow paid a salary, your employer still must compute your hourly rate and pay overtime at time and a half.FURLOUGHS"My company is furloughing each employee one day each month to save money and avoid layoffs. Is still legal?" Its generally legal if theres no collective bargaining agreement (CBA) or contract regulating pay and working hours-and if youre a non-exempt employee. (Please review the overtime and off-the-clock answers above for further details on exempt and non-exempt classifications.) If youre an exempt, salaried employee, however, you must be paid your regular salary whether your job requires one hour or 72 hours in a work week. This is all covered in the Fair Labor Standards Act of 1938. Absent a CBA or contract, however, your employer can require you to use paid time off (usually vacation or personal days) during the furlough time. Otherwise, the furlough would have to be for an entire week for the employer to withhold pay.HOLIDAY PAY"I had to work on Thanksgiving. Shouldnt I be paid overtime?" The FLSA does not require any employer to pay any employee for time off, whether its for holidays or vacation. Likewise, the FLSA does not require overtime or extra pay for Saturday, Sunday or holiday work. Overtime applies only to work performed by non-exempt employees who exceed 40 hours of labor in any given work week. However, employees at many businesses are covered by CBAs that govern working hours and pay, and state law may have something to say in the matter as well.SEVERANCE PAY"My company gave us each just two weeks pay when they laid us off, no matter how long we had worked for the joint. Is this legal?" Yes, severance pay is completely discretionary; no law exists mandating that companies award severance pay. However, most companies, unless theyre shutting down, will offer some kind of severance package not only as a gesture of good will but also as a form of legal protection. Severance packages usually come with legal strings attached, requiring the laid-off employees to sign a no-legal-action pledge before they receive their checks.HEALTH INSURANCE"My company has about 100 employees but offers no health insurance. Shouldnt a place that large insure their employees?" Again, whether or not to offer health insurance is usually a companys decision. No law on the national level mandates that employers offer employees health insurance, though some states have various types of health insurance mandates. Youd have to check your states law. (San Francisco also has a mandate.) Once a company does offer health insurance, however, it is subject to regulation by several federal laws, specifically ERISA, COBRA and HIPAA. For further details on these, please check the other white papers in this section.Things could well change in the near future as Congress is forging a health care reform initiative that may or may not mandate employers to offer health insurance or pay into a federal fund to help subsidize health care. There may also be an individual mandate forthcoming that would force each adult not covered by a spouses or other plan to purchase health insurance. The landscape might be rapidly changing.TERMINATION WHILE ON FMLA LEAVE"My friend was laid off while on FMLA leave. I thought her job was supposed to be protected. What gives?" Under the Family Medical Leave Act, the same job or a job at least equal to the one vacated while on leave must be given those returning after their time off. However, if during the leave period the employer decides to downsize, a person on FMLA leave could be included in the round of layoffs if uniform standards are applied fairly to all being terminated. If the employers motive is to retaliate, then the FMLA leave-taker would have a legal standing. Proving retaliation, of course, would be the sticking point. A recent court case also affirmed that employers have the right to terminate for cause during FMLA leave. In this case, while the person was on leave, his temporary replacement worker discovered abuses and gross negligence that had been covered up by the leave-taker. The employer investigated, verified the facts, and terminated the employee the day he returned from leave. The employee sued and lost.ENGLISH-ONLY POLICIES"Can a company adopt and enforce an English-only policy?" The answer is yes if the policy is applied uniformly and serves a legitimate purpose. Generally speaking, an English-only rule is okay if supported by a legitimate business justification such as promoting communication with customers, coworkers, or supervisors who only speak English, enabling employees to speak one language to promote safety or cooperation, or facilitating supervisors ability monitor job performance. To be certain, though, be sure to check state regulations and court decisions.Though this paper was written as if to benefit and inform employees, employers too can gain quick insight into the questions and concerns that routinely arise among their workforce, along with prevailing law pertaining to those questions.For further details on the laws and regulations mentioned in this paper, please refer to Personnel Concepts comprehensive and concisely written HR Desk Reference and other powerful tools available online.Note: The details in this white paper are provided for informational purposes solely. All answers are general in nature, not legal advice and not warranted or guaranteed. Readers are cautioned not to rely on this information. Because laws change over time and in different jurisdictions, it is imperative that you consult an attorney in your area regarding legal matters and an accountant regarding tax matters. About Author: Gary McCarty is a researcher and Web content provider for Personnel Concepts, the nations leader and pioneer in the labor law poster compliance industry. He is also the blogger behind http://www.LaborLawGuy.com.