What do you need to know about Equal Pay laws?

woman ready to take notesWith the current surge of women’s rights issues in the news, equal pay laws have been receiving a lot of attention. As an employer, you should be aware of both state and federal laws governing this area.

For example, California Labor Code 1197.5 prohibits the payment of wages at rates less than the rates paid to employees of the opposite sex in the same establishment if the job requires equal skill, effort, responsibility, and similar working conditions. Different pay rates may be allowed where they arise under a merit or seniority system, a system which measures earnings by quantity or quality of production, or a differential based on any factor other than sex (or else be faced with a sex discrimination lawsuit). The Federal Equal Pay Act is nearly identical to the California Statute.

Due to these laws, lawsuits regarding an employer’s failure to enact equal pay laws have steadily been on the rise. Typically in these cases, the focus is on the work product and qualifications of the employee filing the lawsuit versus the employee/gender of employees who are receiving better pay. The greater the disparity in pay, the more justification the employer will have to prove for such a disparity.

Judgments for these cases typically include not only the recovery of any wages lost  but also liquidated damages. A party bringing such a suit may also recover attorney’s fees in a private action to enforce this section.

As a result of these laws and the recent Lilly Ledbetter Fair Pay Act which essentially resets the statute of limitations to file a discrimination lawsuit with the receipt of each new paycheck, class actions lawsuits are steadily on the rise. These can be very painful suits to defend. They are long, time consuming, comprised of multiple former employees and a lot of work. The fallout of such a lawsuit can be both devastating to you personally and to you business.

At the risk of being redundant, employers should audit their workforce!  I’m going to keep saying it until they start doing it.  It’s the best way to protect and defend against these types of suits.  Remember that these lawsuits start with the big companies and slowly work their way down to small companies, so you aren’t safe simply by virtue of the fact that you have 20 employees instead of 20,000.  Many of my clients know this by personal experience.

If you want to know whether you are at risk for an equal pay lawsuit (or any other lawsuit), sign up today for a free Business and Employment Law Planning Session, or contact our employment law attorneys at (800) 449-8992 for a consultation.

Medical Leave and Disability Laws Still a Source of Confusion

sick dogThrough our blog, we always want to keep you up to date on new laws and/or cases that will affect the way you do business.  Today’s post is on an old topic that still creates huge liability problems for employers every day. If I were to make a Greatest Hits List of the top employment law mistakes that businesses make, Medical Leave/Disability Accommodation mistakes would top my list.

Here’s a common scenario: you have a California employee on a medical leave for some type of illness or disability.  The leave can be for any condition, ranging from depression to cancer to a bank injury to pregnancy complications. Generally, the employee begins taking leave for a serious medical condition under the Family Medical Leave Act (“FMLA”) or California Family Rights Act (“CFRA”).  In this common scenario, the employee has taken and exhausted their allowable leave under these acts.  The employee is unable to return to work at the end of that leave and needs to remain on medical leave.

WHAT NOT TO DO: Do NOT summarily send the employee a letter from Human Resources, stating something to the effect of, “You have exhausted your FMLA/CFRA leave and are unable to return to work.  Therefore, we are terminating your employment.”  This is a common mistake that even large companies make.  Let’s refresh your disability laws savvy.

Why is this letter so devastating for your business?  Because the leave laws are different than the disability accommodation laws. Sometimes the disability laws require longer leaves, even if the leave laws have been satisfied. If your Human Resources personnel misses doing a disability accommodation analysis, that letter is going to be answered with a lawsuit for disability discrimination.

In my practice I have seen this occur an astounding number of times. The worst part of this scenario is that the best evidence the plaintiff employee will have against you will be the letter from your HR Department that basically admits you terminated that employee because of a medical leave of absence or because of their disability.

Writing letters such as these is like putting a bulls-eye target on your business.  You might as well just send out a flyer to Plaintiff’s lawyers that says, “Please sue me and use the smoking gun document that I just sent out to my former employee to prove your case.”  Plaintiffs’ lawyers salivate when a disabled potential client brings in such a letter from their former employer. And disability discrimination claims are the largest category of discrimination claims brought by both the EEOC and plaintiffs.

WHAT TO DO: Instead of sending such a letter, what you should and must do, if an employee is unable to return to work after exhausting their FMLA/CFRA leave, or even if they do not qualify for FMLA/CFRA leave in the first place, is to turn to an ADA analysis.  A disability is generally defined as any condition that interferes with a major life activity, which includes interfering with working and sleeping.  This definition is very broad and encompasses most health conditions.  The law was expanded in recent legislation and is constantly growing to include new conditions and facts. A disabled employee can ask their employer for an accommodation for their disability, and they are entitled to a reasonable accommodation, as long as it does not create undue hardship for your business.

If your employee requests an accommodation for their disability, such as a leave of absence, you MUST engage in the interactive process with them. This means, simply, having a dialogue with the employee (and potentially their physician) on how you may be able to accommodate their disability.  Then, it’s your duty to provide a reasonable accommodation for their disability. A leave of absence of reasonable length (which is sometimes well beyond a few months) has been held by courts to be a reasonable accommodation.

And even if your employee does not request accommodation, but simply states that they cannot work, the onus is on the employer to begin the interactive process. Once you are on notice of a potential issue, you must act to comply with the law.

This is only a snapshot of these rules, and there are other intricacies.  As you can see, this is clearly not a simple analysis to perform and having lawyers involved who are well-versed in the application of these laws is extremely helpful in your attempt to insulate yourself as much as possible from liability.

SUMMARY: The lesson to be learned here is to make sure that your HR personnel and business managers are knowledgeable that there are numerous laws that apply to disabled employees who are on medical leaves of absence.  Employees on medical leave have a great many rights, and to take steps toward terminating an employee who is on medical leave, you must jump through all the hoops under Americans with Disabilities Act (ADA) and you should document this process well.  Protect yourself by preparing yourself with evidence to defend a disability discrimination case that may be brought later.  Do this by documenting the interactive process and your attempts to accommodate the employee.  When you find yourself in this situation, involve a lawyer and go through these steps meticulously.  Disability discrimination cases, if successful, can have a lot of jury appeal and be very costly to your business.

Does It Matter If I Have An Employee Handbook?

4 Good Reasons To Have An Employee HandbookIt shouldn’t surprise you that an employment lawyer will advise you to have an employee handbook.

But it may surprise you is that I would rather you have no handbook than one you write yourself.

Why would I say that?

Well, a handbook is an important legal document in lawsuits and labor audits. If you have non-compliant policies, it can create presumed liability automatically. In other words, non-compliant policies are like an admission of guilt.

In some cases, no written policies (for example, with respect to certain breaks, required notices, and pay policies) can also create a presumption of guilt. But non-compliant policies are a greater danger.

By far, my recommendation is that you have a lawyer-drafted, compliant employee handbook. Here is a short video on four good reasons why:

So now you know why you should have an employee handbook. Is downloading one off of an internet resource good enough?

NO! Employment laws are complex and numerous. Boilerplate employee handbooks often have provisions that sound reasonable to you as the employer, but are in fact illegal in some jurisdictions or may mislead you into doing something illegal.

I write several handbooks a year. I have never found a good template off a website (and I have tried several). I ended up creating my own template and checklist for management decisions. (You can choose different policies depending on how you want to run your business, and I advise on the financial, business and legal implications of those decisions as part of the drafting process.)

An employee handbook is a 50 page legal document that you should not attempt to DIY. Call a pro. And keep it updated!

Video Transcript:

Does it matter if I have an employee handbook?

“Does it matter if I have an employee handbook?” Yes! Here are four good reasons why. 1. A handbook teaches your managers and your employees the proper and legal way to do things. It’s not always commonsense. 2. A handbook empowers you to politely tell an employee “No” to a special request because it is against policy. This keeps everything fair. 3. A handbook can be used to defend you, should an employee lie about a situation to a court or governmental agency. 4. Employers are required to provide certain notices in writing to their employees, and a handbook is a good way to do it. Failure to provide these notices can result in lawsuits, fines and even criminal penalties. So yes, a handbook is essential and it should be reviewed by an employment lawyer annually. Does your business need employment law help? Visit us at bellatrixlaw.com to apply for our Employer Protection services.

You can find the full video on Employee Handbooks on YouTube.

How to Say "You're Fired"

Just FiredIf you’ve ever watched reality TV, you know the producers go for a big shock factor on each show. Nothing shocks someone more than hearing those two dreaded words:

“You’re Fired!”

There’s one show in particular, on which the “boss” actually utters those words and makes a cobra-like gesture when he let’s a contestant know they been fired.

Queue the dramatic music. Cut to the scowl on the face of the “boss.”  Pull the camera back to catch the look of shock on the face of the “employee.”

It’s good television for sure.

But in real life that is a dangerous scene.

In real life, in real business, that scene should never happen.  Any time an employee is separated from his position, there should be an orderly process void of snap judgments and surprises.

There are four main reason people lose their jobs:

Reason 1:  A Reduction in Force

Reason 2: Elimination of a Position

Reason 3: Poor Performance

Reason 4: Misconduct

Just about every job termination can be fit into one of these categories so let’s look at the business implications of each of them.

Quick reminder: This is not legal advice. You pay for legal advice. These workplace observations are free.  Always consult an attorney (preferably me) before making a decision on terminating the employment of any employee.

1. Reduction in Force

Sometimes you have more employees than you need. Maybe sales have slowed. Maybe you have a seasonal shift in demand. Maybe you just hired too many people and you cannot pay all of them.

Regardless of the reason, if you have more employees than you can afford, it may be time to reduce the size of your workforce.

In this case, you can and should prepare written notification for each employee whose position is eliminated.  The documents should be personalized and they should contain the specific dates when employment will be discontinued. They should also detail what, if any, severance pay and benefit packages are available.

You want to take great care to be fair and consistent in the methodology you use to calculate any severance or continuing benefits.

You also want to have your attorney review any documents the employee will need to sign as he departs. This is particularly the case for large workforce reductions, but certain Federal laws may apply, requiring notice and severance revocation periods.

If there will be some positions eliminated and some positions retained within one job classification, you definitely want to make sure you review each employee being retained and each employee whose position is eliminated, with your attorney.  This should be done for a number of reasons (cough avoiding a discrimination lawsuit cough) not the least of which is fairness.

2. Elimination of a Position

Similar to a reduction in force, eliminating a position requires a legal review to test for fairness and objectivity.

You may need to prepare similar paperwork detailing the date the work period ends and what, if any, severance pay and benefits are available.

One of the things you want to focus on when you eliminate a position is how you will redistribute the workload from that position. Many employers expose themselves to liability when they simply change the title of the job but all the responsibilities remain the same.

Eliminating a position is not a shortcut to terminating a problem employee. It should only be done when a position is no longer required or when a job has drastically changed. Using that excuse for firing a poor performing employee can result in a wrongful termination lawsuit in which your defense (poor performance) looks like pretext or retaliation. It’s also cowardly.

3. Poor Performance

When an employee is not performing up to standard, his employment can be discontinued.

While it may not be required, it is always a good idea to have a documented discussion with the employee about his performance prior to job termination. This provides an opportunity for the employee to improve and it helps show your desire to correct the situation without additional disciplinary action.

Documentation should be carefully worded and you should always have your attorney review it before you present it to the employee.

In the event the employee’s performance does not improve, you have a record of the previous conversations and it should come as no surprise to the employee.

The key in addressing poor performance with an employee is to have a process in place and make the employee aware of the process at the outset of his employment. But that being said, you have to simultaneously make clear that the process is ideal, but not required, before a termination can occur. It’s a tricky line to walk, so a good handbook and training for you HR staff is key.

4. Misconduct

Rarely, you may need to address an incident of misconduct that warrants job termination. Incidents such as theft, harassment, dishonesty, violence and discrimination require immediate action. In fact, ignoring such conduct and not terminating right away can create serious liability issues for you as the employer. So take these things seriously and act swiftly.

These incidents almost always require the involvement of or guidance from an attorney. Other people’s rights may be implicated. Or you may get an excuse from the employee for his behavior (such as a disability) that make things tricky. You want to connect with your lawyer to review what to say, how to say it and what documentation to prepare and deliver to the employee.

In some cases, you may need to gather facts and investigate before making a final determination. Again, it is best to have an attorney involved in the matter to advise you on how to conduct and document this investigation.

The law, as it relates to employees, is complex and it varies from state to state. The best time to review these laws and address them with your attorney is before you hire your first employee. The second best time is right now.

Nobody likes surprises when it comes to employee issues. Let’s leave the drama to reality television.

Reach out to me today to discuss my Employer Protection Package. My employment law team and I will review your current state and make recommendations for improvement before they become expensive litigation matters.

Religious Discrimination Lawyer

RELIGIOUS DISCRIMINATION

Businesses often employ a staff that practices half a dozen different religions. Some employees are more religious and worship daily, while others seldom participate or do not participate at all. Regardless of the frequency of their employees’ worship, employers must ensure that their rules, regulations, and business practices align with both state and federal regulations prohibiting discrimination based upon religion. Both the law and morality dictate that employers not discriminate against employees who have religious practices and cultural customs different than their own.

Indian women in traditional wedding and henna

When a job applicant or former employee alleges religious discrimination, the legal and financial consequences for your business can be devastating.  It is critical that you approach the matter with knowledgeable professional support. At Bellatrix PC, our experienced employment attorneys are dedicated to creating comprehensive, effective, and personalized defense strategies, and are proud to serve entities of all sizes, structures, and industries.

To arrange for a confidential case evaluation, call Bellatrix PC today at (800) 889-8376.

FEHA and Title VII of the Civil Rights of 1964

There are two significant laws which all employers must be mindful of with regard to employees who practice a religion: Title VII of the Civil Rights Act of 1964 at the federal level, and the California Fair Employment and Housing Act, commonly referred to as “FEHA,” at the state level.  Together, these two laws encompass numerous anti-discrimination provisions.

As many employers are already aware, Title VII of the Civil Rights Act of 1964 famously prohibits discrimination upon the basis of race, sex, color, national origin, or religion.  More specifically, Title VII prohibits treating employees differently due to either religious practices or religious beliefs, including the lack thereof.  This applies to both your personal conduct as an employer, and to all aspects of employees’ job duties and employment.  This could include, but is not limited to, matters of:

  • Benefits
  • Disciplinary Actions
  • Harassment
  • Hiring
  • Firing
  • Job Assignments
  • Promotions and Demotions
  • Recruitment

Title VII applies to all businesses with a workforce of at least 15 employees, in addition to unions and employment agencies.

FEHA, or the Fair Employment and Housing Act, mandates similar requirements for employers in the state of California.  With several rare exceptions, FEHA is even more expansive in scope than Title VII, extending to small businesses employing as few as six employees.

Compliance with Employment Law: Avoiding Litigation

In addition to delineating prohibited acts of harassment, intolerance, and discrimination, Title VII also prohibits denying an employee’s request for religious accommodation, provided such a request is “reasonable” and does not burden the employer with undue hardships.  Therefore, in order to better avoid religious discrimination lawsuits under Title VII and/or the FEHA, covered employers must attempt to make reasonable accommodations for an employee’s religious beliefs or practices in the workplace.

However, demonstrating undue hardship can be a very difficult for employers.  Most of the time, at least some form of accommodation that is discussed will not be found by courts to create an undue hardship and employers should generally offer some type of accommodation where possible.  Employers should also be careful to remember not to ask employees about the specifics of their religious beliefs, their availability for future holidays based on religion, or to require a dress code that violates an employee’s religious beliefs or practices.

On a final note, it is critical to remember that Title VII also prohibits acts of retaliation against job applicants, current employees, or former employees in response to allegations of discrimination.

Contact Our Business Attorneys

Sometimes a former employee will claim in their lawsuit both religious discrimination and national origin or racial discrimination occurred, as many cultures have a national religion or a practice that is not reflected in mainstream American culture.  But no matter what the former employee is claiming, Bellatrix PC has years of experience aggressively defending employers in a variety of discrimination cases, including religious discrimination in employment.

Our attorneys will meticulously analyze the strengths and weaknesses of the case, focusing on the most efficient and cost-effective resolutions for your business.  In addition, Bellatrix PC can also provide proactive advice on how to prevent potentially costly employment discrimination claims in the future.

To start discussing your business objectives in a private legal consultation, contact the employment law attorneys of Bellatrix PC right away at (800) 889-8376.

Layoffs and Reduction in Workforce

LAYOFFS AND REDUCTION IN WORKFORCE (RIFs)

Reducing your workforce is never an easy decision. Many employers will do everything they can to cut costs, increase sales, secure loans, etc., in order to keep their workforce fully intact. However, sometimes these adjustments are simply not enough and a reduction in workforce, otherwise known as a layoff, becomes necessary.

Office staff

Before notifying the affected employees of the reduction in force, it is very important to make sure that your business is legally protected. There are a number of laws and acts that protect employees, not employers, in reduction-in-force or layoff situations. It is critically important to keep these regulations in mind when determining how you execute a reduction in force, which employees to include in the reduction, and how to structure severance agreements if you choose to offer them.

Don’t rush your business into a legally and financially disadvantageous situation. Before you commit to a potentially disastrous restructuring of your workforce, contact the experienced employment law attorneys of Bellatrix PC for assistance. We will help your company safeguard its interests, advise you through each stage of the legal process, and most importantly, keep you compliant with state and federal laws. To arrange for a private consultation, call our law offices today at (800) 449-8992.

Does the WARN Act Apply to Your Business?

The main objective of the WARN Act, or the Worker Adjustment and Retraining Notification Act, is to ensure that employees have sufficient time to prepare for the transition between jobs. The WARN Act generally applies to private for-profit businesses and private non-profit organizations, as well as quasi-public entities separate from the government, which employ:

  • A minimum of 100 full-time employees, excluding employees with fewer than six months on the job, as well as employees who work under 20 hours per week.
  • A minimum of 100 employees who collectively work a combined minimum of 4,000 hours per week.

Under the WARN Act, employers are generally required to provide the affected employees with 60 days’ advance notice, which must contain specific information, of the following:

  • The temporary or permanent closing of an employment site where a business intends to lay off 50+ full-time employees.
  • A mass layoff, where there will be at least 50-499 employees laid off at a single employment site and that number of laid off employees will be a 33% reduction in workforce at that employment site.
  • Any reduction in workforce of 500+ employees at a single employment site.

If adequate notice is not given, the employer could be liable for back pay and benefits for the time period of the violation, up to 60 days, which can be reduced by any wages the employer pays over the notice period. Employers can also be subject to civil penalties and paying an opposing party’s attorneys’ fees for WARN Act violations.

There are certain exceptions to providing WARN Act notice, including if a natural disaster is behind the plant closing or layoff, if the business could not have reasonably foreseen within 60 days the events leading to the layoff or closing, and when a business is actively seeking capital to try to avoid layoffs.

Avoiding Employment Discrimination Lawsuits

In California, employers are not permitted to layoff an employee solely based on sex, gender, age, national origin, religion, or sexual orientation. When a reduction in force impacts or targets employees in one of these protected classes, it can lead to claims of discrimination. The most common of these claims are made for age discrimination, when an employee states that he or she was eliminated because of the expense of their continued employment to their employer.

When planning for a reduction in force, employers should analyze their workforce to determine what it looked like before and what it will look like after making the reduction decisions. For example, if the employer statistically had 40% minorities before the reduction and 5% after, the employer needs to have a legitimate business rationale for this result that will withstand a charge of discrimination, if one is made. The employer may want to rethink their method of restructuring in a situation such as this one.

The Older Workers Benefit Protection Act (OWBPA)

The Older Workers Benefit Protection Act (OWBPA) is an amendment to the Age Discrimination in Employment Act (ADEA) directed at protecting the benefits of workers over the age of 40. Generally, whenever employers seek a release from federal age discrimination claims, such as in severance packages or settlement agreements, employers must comply with the OWBPA.

The requirements of the OWBPA are generally triggered in the four following release scenarios:

  • An employee is involuntarily terminated, but does not bring a lawsuit or file a complaint with the Equal Employment Opportunity Commission (EEOC).
  • A release by an employee who was involuntarily terminated in a mass layoff or group workforce reduction, but does not file a lawsuit or complaint alleging age discrimination.
  • A release in the settlement of a disputed claim, including lawsuits and EEOC claims.
  • A release by an employee who voluntarily quit the job as part of an incentive program.

Regardless of the originating scenario, when the OWBPA is triggered, the Act requires that releases be drafted in plain language contain certain provisions, including a written advisory for the worker to consult with an attorney prior to signing the release, state a specified period for the worker to review the release (21 or 45 days, depending on the circumstances), and provide for a seven-day period to revoke the release after signing. If a release is not in compliance with the OWBPA, it can be invalidated, so it is important to ensure that you comply with this Act.

Union Contracts and ERISA Compliance

Employers planning to lay off union workers should review the collective bargaining agreement (“CBA”), as it defines employee rights and ensures that they are not violating provisions of the CBA. Certain parts of the agreement may need to be renegotiated with the union, or you may have to adjust your method of laying off union workers.

Employers should also be aware that some severance and voluntary incentive pay plans may be plans covered by the Employee Retirement Income Security Act, commonly known as ERISA. This act generally establishes minimum standards for pension plans in private industry and gives extensive rules in the area of employee benefit plans.

All members of your management team that are given the responsibility of notifying employees of the reduction in force should be educated to ensure consistency. Your management team should know exactly what procedures to follow in conducting exit interviews, what statements should or should not be made, and how to answer employee questions.

Your team should also conduct the process as quickly as business conditions permit to maintain acceptable productivity levels and employee morale. Human resource administration should continue as normally as possible, administering performance reviews and counseling notices. Do not use selection for layoff as a substitute for incomplete performance management.

If your business is considering a reduction in force, or layoff, receiving advice from an employment attorney is recommended. Bellatrix PC can help ensure that your reduction in force is executed in compliance with all of state and federal laws. We can also help draft or review severance agreements for affected employees.

To arrange for a confidential legal consultation with the experienced business attorneys of Bellatrix PC, call us today at (800) 449-8992. We have offices in San Diego, St. Louis, and Riverside, CA.