Articles Posted in Employee Policies & Practices and Defending Employment Claims

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Crisis.Business.Man.Umbrella.Dollar.Photo.Club.1.20.16.jpgYou can face a serious crisis if you do not know the difference between an employee and independent contractor and misclassify your workers. Our Award Winning New York Misclassification Lawyer has educated companies and employees on legal issues affecting both sides of the working relationship.

The IRS believes that millions of workers have been misclassified as independent contractors instead of as employees and in doing so, the government has been denied substantial payment of employment-related taxes. The federal and state government have increased their efforts to crackdown on misclassification cases. Today’s blog post will discuss the IRS’ SS-8 Program (i.e., The Determination of Worker Status Program), which enables a company or a worker to request that the agency issue a determination letter stating whether an employee or an independent contractor for federal purposes. This determination can have significant tax implications for the worker and company and can cause a number of other issues for the company. It is important to get experienced employment law counsel from the outset because of the severity of the potential ramifications including class-wide claims in other forums.
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Private.Employee.Personnel.File.Access.jpgYou are hoping to get a promotion. Or maybe you were just passed up for one. You’re thinking about getting a new job, or maybe you don’t remember if you signed a non-compete agreement sometime during your employment. Maybe you are not sure what disciplinary records are contained in your file. Whatever your reason, you may want to access your personnel file. You have some idea of what’s inside – employment documents, payroll information, contact information, performance appraisals – but what else is in there and what haven’t you seen before? Do you have any rights to see it and/or make copies? As our Award Winning New York Employment Attorney has noted before it all depends on where you work and your workplace.
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Update: Facebook has responded to this controversy: It is warning employers not to demand passwords of job applicants and employees because it is an invasion of privacy. The Company’s Chief Privacy Officer, tells applicants to never reveal their password to an employer.

above-the-bar-logo.jpgOur White Plains Employment Lawyers have been asked about whether employers should use social media in hiring decisions. Many employers have been reluctant to use Facebook or other social media sites to investigate prospective job applicants for fear of discrimination claims. For example, if an employer viewed and considered the contents of a candidate’s Facebook page and then rejected the applicant, the company could face an employment discrimination claim. Specifically, the prospective employee could allege that Company learned information about him or her that it is could not use in the hiring process (e.g., applicant’s race, age, gender, disability status, etc.). Despite the risk, some employers still prefer to view a candidate’s online profile. In order to minimize legal exposure, companies will assign a HR employee who is separate from the hiring manager to review a candidate’s online profile to verify it is consistent with the job application. Under this system, this HR employee does not speak with the hiring manager unless a red flag is detected such as a material misstatement in the employment application.

However, recently, many companies are taking a more aggressive approach towards social media and asking for employees to provide their personal passwords or allow access to private profiles on sites such as Facebook, Twitter, and LinkedIn, to name just a few. Many applicants and employees believe that it is an invasion of privacy and have to balance a possible invasion of privacy versus possibly getting employment in a tough job market. Many Facebook users are creating two accounts, one for their personal use and one to provide to employers if asked. Employees have the right to refuse; however, private employers may have the right deny the employee employment or continued employment. Employers argue they have a legitimate need to view online profiles. For example, they may want to ensure that employees are not disparaging the company, its products or harassing other employees. In addition, studies have shown that a brief review of a candidate’s online profile can be very useful in revealing more information than a personality test.

More than ever, it is imperative for companies to have a well-crafted social media policy. Our attorneys have helped many companies develop and implement policies depending on their companies’ needs. These policies coupled with best practices can help many employers avoid costly litigation including claims of discrimination.

Illustration of an Organization Using Facebook: Last year, a corrections officer at Maryland’s Department of Corrections (“DOC”) complained to the ACLU that he was forced to provide his Facebook user name and password during an interview. The DOC wanted to make sure that they did not hire anyone affiliated with a gang. After the ACLU intervened, the DOC suspended the policy but came up with another one. Potential hires are now asked during their interviews to log into their Facebook accounts and allow the interviewer to watch the potential hire go through posts, friends, pictures and any other material that may be behind the privacy wall.

Of the 2,689 applicants it reviewed through social media, the Maryland DOC denied jobs to 7 of them because their sites contained pictures of them with gang signs. It also did offer jobs to 5 out of 80 employees hired in the last three hiring cycles who did not provide social media access. Access could be a double edged sword for employers.

Given the impact of social media’s influence on individuals’ lives as well as businesses, the use of social media in employment settings is evolving. Maryland and Illinois have proposed legislation that would make it illegal for employers to ask job applicants to provide passwords to their social media sites during job interviews. Perhaps other states will follow their lead. In the meantime, companies must be smart as to how they use social media. If you would like to discuss how your online profiles were used in your hiring situation, contact our Social Media Employment Law Attorneys at (800) 893-9645.
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top.lawyers.arrive.mag.2011.jpgCracker Barrel Old Country Store, Inc. (“Cracker Barrel”) recently joined the list of companies who are part of the EEOC’s National Universal Agreement to Mediate (NUAM) program to resolve employment discrimination claims. Rather than the EEOC engaging in a lengthy, formal investigation and litigation, the agreement would allow the EEOC and Cracker Barrel to informally resolve any workplace discrimination claims through Alternative Dispute Resolution. If you’re interested in learning how a Universal Agreement to Mediate (“UAM”) can benefit your company, our attorneys can help you figure out if entering into a UAM is the right decision for you. Our attorneys have helped many companies enter into this type of agreement.

There are over 200 national and regional private sector employers, including several Fortune 500 companies who have a similar arrangement with the EEOC. Some of the companies include: Ford Motor Company, Frito-Lay, Inc., Hewlett-Packard Company, Intel Corporation, Northwestern Mutual Life Insurance Company, Quest Diagnostics, Inc, and Tyson Foods, Inc.

This type of nationwide mediation agreement benefits everyone. Nicholas Inzeo, Director of the EEOC’s Office of Field Programs has stated that “NUAMs are a nonadversarial and efficient way for companies to handle discrimination charge using the EEOC as a partner and adviser. EEOC mediation encourages a positive environment, and the company saves time and money.”

According to the terms of the NUAM, if anybody files an eligible discrimination charge with the EEOC naming Cracker Barrel as an employer or respondent, the matter would be referred to the EEOC’s mediation unit. As part of the NUAM, Cracker Barrel will name a corporate representative to handle any inquiries related to potential employment discrimination charges to help the EEOC with quick and efficient scheduling of mediation.

If your company is considering entering into a UAM with the EEOC, there are benefits to consider. Some of these include the following:

  • a UAM shows that you are willing to mediate;
  • the time involved in contacting an employer to see if they will mediate is shortened;
  • a UAM expedites the flow of information between the EEOC and the employer;
  • having a UAM expedites mediation scheduling; and
  • allows both the EEOC and the employers to opt out of mediation on a case by cases basis if one of the parties thinks that the claim is not appropriate.

Certain types of claims are not eligible for mediation. These include class and systemic charges, claims filed under the Genetic Information Non-Discrimination Act, or claims filed solely under the Equal Pay Act. The EEOC also has the discretion to opt out of mediation in cases where it serves the public interest to investigate the claim.

The EEOC is pushing its mediation program in order to improve it own efficiency and effectiveness in dealing with workplace discrimination claims. Currently, the EEOC has 233 national and regional Universal Agreements to Mediate with private sector employers. The EEOC’s district offices have entered into 1,743 mediation agreements with local level employers. Through its NUAM, the EEOC has mediated over 136,000 charges of employment discrimination since the program begin in April 1999. About 70% of these charges have been successfully resolved.

If you are interested in learning more about the NUAM program, call our Mediation Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you evaluate whether this program can help your company deal better and more cost effectively with employment discrimination claims.
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FAQ: I own a small business and recently discovered that I had misclassified some of my workers and was not paying them accurate minimum wages and overtime pay. Can I be held personally liable to these employees for their unpaid compensation?

above-the-bar-logo-no12You ask an excellent question that our Wage and Hour Attorneys are often asked by the heads of many of our family owned businesses as well as small to large sized companies. The Judge in the New York Southern District Court recently ruled in Torres et al. v. Gristedes Operating Corp., et al., that Mr. Catsimatidis, the president and CEO, of a grocery chain was personally and individually liable to his employees for unpaid wages. Depending on your factual circumstances, you are at risk of being personally liable for your employees’ unpaid compensation. Our Wage and Hour Attorneys have helped many companies properly classify their employees to avoid any potential personal liability.

The class action lawsuit alleged that Mr. Catsimatidis, Gristede’s owner, misclassified hundreds of hourly workers as managers to avoid paying them overtime. The lawsuit originally began in 2004 and was settled in June of 2009 resulting in a $3.5 million settlement structured with a lump sum payment of $425,000 followed by installments. The settlement plan fell apart when Gristede’s ran into financial trouble and missed its scheduled payments. Thereafter, the workers filed a motion for summary judgment seeking Mr. Catsimatidis personally liable for the payments.

Judge Paul A. Crotty found that under the Fair Labor Standards Act (“FLSA”), the owner, Mr. Catsimatidis was an employer under the law and thus jointly and severally liable for the millions due in overtime pay to the grocery workers.

In reaching its conclusion, the Court found that there was “no aspect of Gristede’s operations from top to bottom and side to side which is beyond Mr. Catsimatidis’ reach. There is no area of Gristede’s which is not subject to his control, whether he chooses to exercise it.” Mr. Catsimatidis’ own affidavit showed that he was the sole owner, president and CEO of Gristede’s and its parent company, which he owned for 20 years, and that he had the right to open, close and reopen stores. He also had the authority to set prices, pick out décor for the stores, and control the store’s signs and advertising.

Although Mr. Catsimatidis argued that he should not be held liable merely because of his title, the Court found that he hired management, reviewed financial documents, worked in the corporate office, dealt with the company’s day to day operations. The Court pointed out that even though he may have delegated certain power to others, Mr. Catsimatidis had the power to delegate. Thus, given all the circumstances and Mr. Catsimatidis’ ownership and authority, he was an employer under the FSLA.

Torres v. Gristedes teaches an expensive lesson to all business owners, officers, directors, and executives who are under the illusion that they cannot be personally liable for their employees’ unpaid compensation. If you have sufficient control and authority of your business, you are at risk for potential personal liability if your company is not financially strong enough to protect you. It is crucial that you classify your workers and pay them in accordance with state and federal law. Call our Wage and Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to help ensure that you are compliant with wage and hour laws to avoid any future potential personal liability.
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Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo-no12.jpgFAQ: Many of my employees and supervisors are on Facebook, LinkedIn and other social media sites and have been posting work-related comments in violation of my company’s social media policy, which prohibits employees from posting anything about the company. Can I fire or discipline an employee for violating the policy?

Your question raises an important and timely subject for employers as well as employees that our Social Media Employment Law Attorneys have been encountering lately. The proper use of social media sites by companies and its employees can have a significant positive impact. In today’s technological age with dozens of social media sites, employers should consider the benefits and risks of appropriate uses of social media before crafting their employee policies to maximize the value while limiting the risks. Simply having a policy is not enough, companies should train their employees on the legal and company considerations.

A recent case underscores the importance of having an effective social media policy. The National Labor Relations Board (“NLRB”) filed a complaint on behalf of Dawn-Marie Souza, an emergency medical technician, against her former employer, the American Medical Response of Connecticut (“AMR”), for firing her for violating its company’s Internet policy by criticizing her supervisor on Facebook. According to the complaint, Souza was denied union representation after her supervisor asked her to prepare an investigative report regarding a customer complaint about her job performance. Later the same day, she posted disparaging remarks about her boss on her Facebook page and then exchanged negative comments about him with other employees. AMR responded that Souza was fired because of complaints about her work and not because she violated company policy prohibiting employees from making any negative remarks about their bosses or discussing the company on the Internet.

However, the NLRB claims that Souza was illegally fired and that her comments on Facebook are protected speech under federal law. The NLRB’s acting general counsel has stated that “[i]t’s the same as talking at the water cooler” and that “employees have protection under the law to talk to each other about conditions at work.” According to federal law, both union and non-union workers have the right to talk to co-workers and make remarks about their employers on their own time.

An NLRB judge will hear this case on January 25, 2011. Given the controversial nature of this issue and the far reaching implications, the outcome could affect employers nationwide, especially employers who have a broad policy prohibiting any comments on the Internet. If you have a blanket social media policy, consult with your attorneys to ensure that you are not infringing on any of your employee’s rights or labor laws. In a survey by the Society of Corporate Compliance and Ethics, approximately 25% of employers surveyed stated that they had disciplined an employee for improper activities on social networking sites.
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Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo-no12.jpgFAQ: I am concerned that several of my employees are often under the influence of drugs or alcohol. At least one of whom I confronted told me that he was on a prescription pain killer prescribed by his physician, who told him it was okay to continue working. I am worried about workplace accidents and the potential liability I could incur. Should I implement a drug and alcohol policy?

You pose an excellent question that affects every employer in this country, no matter how large or small the company. On the one hand, employers don’t want to invade their employees’ privacy or make them think that they don’t trust them. On the other hand, drug and alcohol abuse at the workplace is a major safety concern. Every year, thousands of employees are injured from accidents caused by drug and alcohol abuse. Employers face enormous, potential liabilities caused by such accidents involving employees who test positive for drugs or alcohol. In fact, many insurance companies will not pay out benefits if an employee involved in a work related accident ends up testing positive for drugs or alcohol. Furthermore, the U.S. government estimates that companies lose $82 billion in productivity every year because of substance abuse.

Just last year, the EEOC brought a lawsuit against a Michigan automotive parts company, Dura Automotive Systems (“Dura”), who was drug testing all of its production employees for illegal drugs as well as legally prescribed medications. For the employees who tested positive for prescription drugs, Dura suspended their employment until they stopped their prescription medication and terminated the employees who continued to take their medication. One of Dura’s employees, Mrs. Bates who was an assembly line worker, was fired because she was taking hydrocodone, a narcotic for her back pain prescribed by her physician. Dura thought it was trying to keep its workplace safe. However, Dura’s blanket policy of all or nothing has attracted nationwide attention as well as scrutiny by the EEOC. The EEOC charged Dura with violating the Americans with Disabilities Act for conducting drug tests which ended up disclosing the identities of employees who tested positive.

There are dozens of reasons for employers to test employees for drug and alcohol abuse at the workplace. Drugs and alcohol at the workplace are a widespread, serious issue in today’s workplace. A great number of employees are coming to work on either illegal drugs or prescription drugs and posing a safety hazard in many industries. This is both a health hazard to employees as well a huge liability to employers. Quest Diagnostics recently reported that prescription opiates went up 18% from 2008 to 2009 and up 40% from 2005 to 2009. The same data also showed that workers tested for drugs after accidents were 4 times more likely to test positive for opiates than those tested before being hired. Mark A. de Bernardo, executive director of the Institute of a Drug-Free Workplace, has stated “Given the liability for industrial accidents or product defects or workplace injuries involving prescription drug abuse, employers cannot afford not to address this issue.”
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UPDATE: May 12, 2010: As expected, several unions representing New York State employees filed court challenges to the legality of the furloughs. U.S. District Court Judge Lawrence Kahn temporarily has blocked Governor Patterson from imposing furloughs on about 100,000 state workers.

Thumbnail image for Thumbnail image for above-the-bar-logo-no12.jpgFollowing in the paths of the auto industry and many other businesses, New York Governor Paterson has announced he will include one furlough day per week for most executive branch state employees. Affected state employees will not report to work on their designated furlough day and will not be paid for that day. Affected employees will not be allowed to use their paid-time off to offset the salary reduction, and state agencies are prohibited from using overtime to make up for the loss of productivity. In this recession, more and more employers are considering furloughs as a method of saving money. However, if an employer does not properly effectuate a furlough, it can have disastrous consequences and convert exempt employees under the Fair Labor Standards Act and State Labor Law into non-exempt employees under the FLSA and State Labor Law.

The issue of furloughs can be a minefield for employees and employers. At the outset, it is difficult for the employees as their salary will get cut yet none of their expenses will get proportionately cut. For guidance, the Department of Labor has issued several opinion letters on this topic but, it is important to remember, that the opinion letters only address issues under the FLSA and not applicable state laws. In one opinion letter, the United States Department of Labor’s Wage and Hour Division cautioned an employer who sought to reduce the salaries of exempt employees because it did not have enough work and offered to allow select employees to use paid-time off and not report to work.
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