Thursday, April 16, 2009

Employment Issues and the Current Environment

By Judy L. Mina, Owner, HR Now!

We are all trying our best to run our businesses and stay on top of the myriad of legal challenges we’re faced with on a day-to-day basis, one of which is dealing with our employees. Unfortunately, as layoffs and reductions in staff continue to be on the rise, legal challenges are sure to follow.

As you are most likely aware, an estimated two-thirds of the nation's non-residential construction companies are planning to cut their payrolls, according to new employment and business forecast figures released recently by the Associated General Contractors of America. When said and done, those layoffs are forecast to result in a 30 percent decline in the number of people working on construction projects. And that’s just one industry.

Former employees from major U.S. banking institutions and Wall Street giants are seeking help from the federal government and employment lawyers. Employees who feel they have been discriminated against by their employers must file a claim with the federal government. In 2008 there was a 15% jump in federal claims and legal experts predict those numbers to skyrocket. With job layoffs in the hundreds of thousands and executives remaining employed, employees are asking the civil justice system to help maintain their workers’ rights.

Former employees for Lehman Brothers claim they were not given the required 60 days notice, under federal law, before being laid off. The Worker Adjustment and Retraining Notification Act, known as the Warn Act, was enacted into law in 1989, requiring an employer give workers 60 days’ notice before letting them go. After a recent layoff at Dell Computer, affected employees from Dell are suing the computer giant alleging age and sex discrimination.

President Obama recently signed legislation last Thursday to overturn a Supreme Court’s decision against a former Goodyear Tire and Rubber company worker. Lilly Ledbetter sued Goodyear citing she worked for the company for years while being paid significantly less than her fellow male employees. The U.S. Supreme Court ruled in 2007 against her sex discrimination lawsuit stating she needed to bring her claim within 180 days of Goodyears’ initial decision to pay her less than her male colleagues. This reversal by President Obama may give way to a renewal of workers’ rights in America.

The sad truth is that once a layoff occurs, some people will seek out any retribution they can find and if the company did not conduct the “RIF” (reduction in force) correctly they may leave themselves exposed to possible claims by the affected employees. In some cases the employees are not waiting to be affected by a reduction, they are seeking ways to “protect their rights” preemptively.

There are a number of ways in which past, present and prospective employees can involve the employer in employment disputes. These can run from serious sexual harassment situations costing millions to smaller frivolous claims. While accurate statistics are hard to determine, it is believed that the average EPL claim now settles for approximately $450,000. Frivolous claims rarely settle for less than $10,000 including legal fees.

Employers have been facing rapidly increasing liability for employment related claims. From sexual harassment to discrimination in hiring, employers are now legally responsible for a broader range of employment related acts. This change has resulted in an environment of rapidly increasing employment claims. Many small to medium sized businesses do not yet appreciate the significant employment exposure facing them. Employment litigation has increased by 400% in the last 10 years as a growing number of employees sue their employers for sexual harassment, discrimination and wrongful termination.

With the odds against us, as business owners how can we be expected to keep up on all of the ever-changing laws and regulations when it comes to dealing with our employees? The workshop “Top 10 Reasons Employers Get Sued” is designed with you – the business owner in mind (May 5th at the offices of SingerLewak, 2050 Main Street, 7th Floor, Irvine...4PM to 6PM). We will go in depth on the following topics and have an open forum for you to ask questions and receive your answers during the workshop.

The best way to make sure your company’s actions don’t become one of the top 10 things employers do to get sued is to become an informed employer. The best way to stay on top of the most up to date information regarding dealing with your employees is to have a solid strategy and a third-party that specializes in the information.

Here are some the topics we will cover in the workshop:

· Overall policy development – do’s and don’ts

· Having a “use-it-or-lose-it” policy which means employees lose accrued vacation days if the employee doesn’t take the days by a specific deadline.

· Failing to provide a final paycheck within the legal time limits, regardless of what company issued property the employee still holds, can be a costly and time-consuming mistake.

· An employer is not shielded from a lawsuit simply because the employee has returned to work for a period of time after a workers’ compensation injury.

· Wage and hour laws place many restrictions on the number of hours an employee may work each day and week without overtime pay.

· Training employees on such topics as sexual harassment, discrimination, safety and wage and hour laws.

· Certain employees are exempt from overtime requirements and can be paid a straight salary no matter how many hours a week they work. How to classify them?

· For each workday an employer doesn’t give an employee a required meal break, the employer owes the employee one additional hour of pay.

· An employee who signs a non-compete agreement is consenting not to work for one of your competitors for a certain period of time after leaving your company. While this practice is legal in many other states, California law specifically prohibits non-compete agreements.

· The consequences for misclassifying an employee as an independent contractor can be significant tax, wage and benefits liabilities, as well as massive fines that may be imposed by state and federal agencies.

To adapt a quote from the well-known 18th-century literary critic Samuel Johnson, the road to being sued by an employee is oft paved with good intentions. Whether it's agreeing to an employee's seemingly reasonable scheduling request, simplifying the payroll, or just saving a little money, an employer's good intentions easily can lead to lawsuits.

Our intention in providing you this information is to give you awareness of the possibility and tools to avoid the pitfalls.

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