Texas Employer Handbook

Insight on Employment Law for Texas Businesses

New Overtime Regulations Frozen – to Death? What You Need to Know About the Overtime Rule Injunction Issued Nov. 22, 2016

Posted in In the News

On March 13, 2014, President Barack Obama issued a presidential memorandum directing the Secretary of Labor to “modernize and streamline the existing overtime regulations”.  The Department of Labor (DOL) took action and, in new rules set to become effective Dec. 1, 2016, raised the minimum salary threshold for exempt workers in many categories.  Since then, employers have been gearing up for the change — modifying pay rates, altering job responsibilities, switching formerly exempt employees to hourly and restructuring their workforce.

In response to the new regulations, 21 states and a coalition of business groups filed a federal lawsuit in Texas seeking to prevent the regulations from going into effect. On Tuesday, their wish was granted. The judge (an Obama appointee) issued a nationwide preliminary injunction halting the implementation of the new overtime regulations.

What Does This Mean for Business Owners and HR Professionals? 

It means you can hold off on implementing any changes you planned for compliance for the moment. Though the DOL could file an emergency appeal, the states were smart by suing in Texas. The appeal must go before the conservative judges of the 5th Circuit Court of Appeals who we expect will be unlikely to disturb the District Court’s ruling in the short run.

President-elect Trump is vehemently against these regulations and, with a Republican Congress that largely agrees, he has promised to repeal them. Assuming an emergency appeal is unsuccessful, the preliminary injunction then affords Congress and President-elect (then President) Trump a window of opportunity to stop the new regulations from ever taking effect.

Is This Outcome Guaranteed?

Not at all, but it is likely given the views expressed by the incoming administration. If for some reason the new administration does not act and the 5th Circuit chooses to reinstate the regulations they would only  go into effect after the decision is made. If the 5th Circuit does not take on the emergency appeal, the decision will be left to the District Court at a trial some time from now.

For more information on the now halted overtime regulations, click here.

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Federal Changes to Overtime Exemptions

Posted in In the News

Businessman working late signing a document or contract in a dark office with a fountain pen by the light of a lamp, close up view of his hands.

For the last year, the U.S. Department of Labor (DOL) has been working on proposed rule changes related to overtime exemptions. These changes are designed to substantially decrease the number of employees who are exempt from overtime. Today, the Department of Labor released the final rule changes. Employers are required to be compliant with these changes by December 1, 2016.

Below are the key points to the changes in the law employers should know and address:

Higher Minimum Salary for Overtime Exemptions

In addition to the other requirements for an employee to be exempt from overtime, the minimum salary requirement is increasing. What used to be a minimum of $455 per week will now be $913 per week or $47,476 per year. This doubles the current salary threshold level, but is slightly lower than that proposed in the rule. This is the primary reason many currently exempt employees will lose their exemption.

Automatic Updates to Salary Levels Every 3 Years

In an effort to maintain a salary level that is equal to the 40th percentile of full-time salaried workers in the lowest-wage Census region, the minimum salary to be exempt will be increased every three years. This is better than what the DOL originally proposed which was annual increases. The first of these updates will go into effect on January 1, 2020.

Duties Test Unchanged

Though the DOL discussed changing the other specific requirements associated with exemptions from overtime, it decided not to make any changes to those requirements.

Change to Highly Compensated Employee Exemption

One of the exemptions from overtime relates to highly compensated employees. The threshold for this exemption was set at $100,000 per year. The new threshold is set at the 90th percentile of full-time salaried workers nationally, $134,004 per year.

If you have questions or concerns about complying with the new law, Gray Reed’s employment team will be glad to audit your present practices and ensure you are compliant before the December 1, 2016 deadline.

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Employment Law 101: National Origin, Citizenship & Immigration Status Discrimination

Posted in Handbook Articles

Who, What, Why . . .

Business People Diversity Team Corporate Communication ConceptWho does it apply to: Part of the protection comes from Title VII, which applies to employers with 15 or more employees. An overlapping part of the protection comes from the Immigration Reform and Control Act (IRCA), which applies to employers with four or more employees.

What is the issue: Title VII was passed in the 1960s to protect against discrimination based on race, color, religion, sex or national origin. The IRCA was passed to resolve a number of immigration-related issues but includes a provision that protects against employers discriminating in hiring or discharging an employee based on citizenship or immigration status (not including unauthorized aliens).

What am I required to do: Employers are required not to discriminate against employees on the basis of national origin. More specifically, employers are required not to treat an employee adversely with any consideration of his or her national origin, citizenship or immigration status in relationship to any significant aspect of employment.

What constitutes a violation: There are two kinds of violations: direct mistreatment and disparate impact. Direct mistreatment is straightforward. If an employer affirmatively mistreats an employee because of national origin, citizenship or immigration status by failing to hire or firing the employee, it can be actionable discrimination. Similarly, employers who demote or otherwise significantly slight an employee based on national origin may be liable for disparate treatment.

Disparate impact is more subtle. If an employer creates a policy that is neutral or non-discriminatory on its face, that policy might have a consequence of negatively impacting workers of one national origin more significantly than others. If an employer institutes a policy that employees must have clear English diction, the policy itself does not seem discriminatory because it may affect any worker. That said, certain national origins might be adversely affected because of their accent. This facially neutral rule has a disparate impact against workers of certain national origins and may create a claim.

What counts as a national origin, citizenship, or immigration status: The law goes way beyond what most employers would think:

  • National origin includes birthplace, ancestry, culture, linguistic characteristics and accent.
  • Citizenship includes U.S. citizenship and citizenship of another nation for individuals legally in the country under U.S. law.
  • Immigration status includes any type of U.S. government-authorized visa or other work authorization that declares the intention to become a U.S. citizen.

What if my employee violates without consent: Choose carefully who you place in charge. Employees placed in positions of authority with the power to control the circumstances of other employees are not personally liable. Their liability is placed with the employer even if the employee acts without authority. The same is true of independent contractors (whether properly characterized or not) placed in positions of authority over employees.

What if national origin or citizenship is a requirement of the job: Sometimes an employer may require a person to have a certain national origin, citizenship or immigration status to obtain a position. An exception is made in the law for what are called Bona Fide Occupational Qualification’s (BFOQ). BFOQs are complicated, however. You should always check with your employment counsel before enacting a BFOQ.

Can retaliation play a part: Title VII and the IRCA protects employees who engage in protected activities such as supporting another employee’s claim of discrimination, resisting instruction to discriminate, and filing a complaint about discrimination with the employer or the appropriate governmental agency. Employers cannot negatively impact a significant aspect of employment for an employee who supports another’s national origin, citizenship or immigration status or their complaint against discrimination based on these characteristics. Employers also cannot retaliate against an employee for complaining of discrimination based on these characteristics or making a charge of discrimination with the appropriate governmental agency.

What about harassment: Even if an employer does not discriminate against an employee directly, the employer may be liable if its employees harass an employee about his or her national origin, citizenship or immigration status. The harassment must be significant enough to interfere with the employee’s working conditions or ability to handle his or her job, but little harassing actions can add up to enough harassment to support a claim. An employer has a responsibility to be aware of what is going on with its employees and discipline employees for harassing conduct.

Common Situations:

Only English spoken here: USA Construction institutes a policy that all employees must speak English only, at all times. Is there a problem? Maybe. English only policies are subject to very strict scrutiny and are presumed invalid by the EEOC. Employers are better off making requirements that employees be capable of speaking English so that all staff can communicate in one language, but even these policies must be made for a demonstrable business reason. Advise employees of the requirement and explain the consequence of breaching this policy to all employees.

What was that you said: Borat accepted a position at Phonetics, Inc. Within the first week, however, problems arose. Borat, a recent immigrant from Kazakhstan, has a very, very thick accent and is hard for employees and customers to understand. His co-workers begin to ridicule him and the company lets him go. National origin claim? Yes and maybe. If Borat complained of the harassing ridicule, he may have a claim. If Phonetics, Inc. truly terminated Borat because no one can understand him, and it significantly impedes business with no way to adjust or fix it, there may be no claim on the termination.

Illegal failure to hire: Mike, an undocumented citizen of another country, applies for a job with Tourism Unlimited. He is qualified for the position but is not hired because he is an undocumented worker illegally in the US. Does he have a claim? Generally, undocumented workers who are not hired because of their undocumented status have no claim since it is illegal for businesses to hire them in the first place.

What Should I Do:

Good: Count up your workers every few months to know whether the law applies to you. Institute an anti-discrimination policy including national origin, citizenship or immigration status discrimination.

Better: In addition to developing a policy, control who is permitted to interview and make material decisions about employees to be sure they are aware of the concerns of these types of discrimination.

Best: In addition to the items above, create job descriptions for each position. Use the job descriptions to prepare advertisements for positions, to ask objective interview questions, and to create a uniform and objective performance review system to avoid accidentally discriminating against someone based on national origin, citizenship or immigration status.

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Employment Law 101: Race Discrimination

Posted in Handbook Articles

racial discrimination in the workplaceWho, What, Why . . .

Who does it apply to: The law applies to all employers regardless of size.

What is the issue: The Civil Rights Act of 1866 was passed to prohibit racial discrimination in contracts of employment and applies to all employers. The Act was later codified under Section 42 USC § 1981. Title VII was passed in the 1960s to protect against discrimination based on race, color, religion, sex or national origin by employers with 15 or more employees.

What am I required to do: Employers are required not to discriminate against employees on the basis of race or color. More specifically, employers are required not to treat an employee adversely with any consideration of his or her race or color in relationship to any significant aspect of employment.

What constitutes a violation: There are two kinds of violations – direct mistreatment and disparate impact. Direct mistreatment is straightforward. If an employer affirmatively mistreats an employee because of race or color by failing to hire, firing, demoting, or any other type of significant slight someone might dream up, it can be actionable as race or color discrimination.

Disparate impact is more subtle. If an employer creates a policy that is neutral or non-discriminatory on its face, that policy might have a consequence of negatively impacting workers of one race or color more significantly than others. If an employer institutes a policy that its employees must be clean shaven, the policy itself does not seem discriminatory because it may affect any applicant. That said, a lot of Black people have a skin condition that makes it difficult for them to shave and hence the rule has an adverse effect on Black applicants. This facially (no pun intended!) neutral rule has a disparate impact against Black applicants and may create a claim.

What counts as a race or color: Under Title VII, race and color include what most people think of differences based on race or color and may include Black, Hispanic, Indian (both kinds), etc. It even includes White, though many people mistakenly perceive that Whites are unprotected under the law. Under § 1981, “race” is more broadly defined than color and can include ancestry or ethnicity.

What if my employee violates without consent: Choose carefully who you place in charge. Employees placed in positions of authority with the power to control the circumstances of other employees are not personally liable. Their liability is placed with the employer even if the employee acts without authority. The same is true of independent contractors placed in positions of authority over employees.

What if race or color is a requirement of the job: Race or color cannot be a condition of a job. The Bona Fide Occupational Qualification (BFOQ) concept does not apply to race and color. Even stereotyping for language by race and color is problematic. There are plenty of Whites, Blacks, Asians and Hispanics that speak, say, . . . Farsi.

Can retaliation play a part: Title VII protects employees who engage in protected activities such as supporting another employee’s claim of discrimination, resisting instruction to discriminate, and filing a complaint about discrimination with the employer or the EEOC. Employers cannot negatively impact a significant aspect of employment for an employee who supports another’s race or color or their complaint of discrimination. Employers also cannot retaliate against an employee for complaining of race or color discrimination or making a charge of race or color discrimination with the EEOC.

What about harassment: Even if an employer does not discriminate against an employee directly, the employer may be liable if its employees harass an employee about his or her race or color.

Common Situations:

No criminals here: SuperSoda, a mega soft drink company, has a policy that it will not hire anyone who has ever been arrested. The EEOC gets wind of the policy and decides to make an example out of SuperSoda. It sues the company on the basis that a disproportionate number of Blacks and Hispanics have histories of arrests to other races and colors. Is the EEOC right? I don’t particularly think it is right to tell employers they cannot exclude for arrest records, but Pepsi Co. found out otherwise when they were audited under the same circumstances. The EEOC takes the position that an arrest is not a conviction and should not be used as a factor to weed out applicants. Only applicants who have criminal histories should be excluded, and then, only when it is particularly relevant to the job at issue. See the Employer Handbook edition on Discriminatory Use of Background Checks for more information on this topic.

Over his head: Danny is a Hispanic gentleman who was hired at SuperSoda to act as a purchasing manager by another Hispanic person, Joe. Joe did not do a very thorough job of screening or even interviewing applicants and Danny is not even close to being qualified for his job. While he works with Joe, Danny’s poor performance is covered by Joe’s unwillingness to confront Danny as a fellow Hispanic. Joe is a non-confrontational person who gives Danny above average ratings that he knows Danny does not deserve. Later, Joe leaves SuperSoda to pursue a musical
career after succeeding on an audition for the television program, American Super Singer. Danny’s new supervisor, Frank, quickly discovers Danny’s inadequacy and begins counseling Danny to improve. Danny is passed over for a promotion when a new position is created under Frank, and Danny brings a claim. Is he right? Does SuperSoda have a chance? Certainly SuperSoda has a chance, but Joe’s reluctance to confront Danny has done nothing to help the company. This is why it is important to supervise the supervisors with the conduct reviews to make sure they are not giving people a pass and understand the dangers if they do so. There are few supervisors confrontational enough to be truly honest in reviews. Most of us confrontational types are lawyers!

Pay attention to listeners: Megan, a Black woman, works for Manly Manufacturing. Two Manly employees, Josh and Tim, who are both also Black, sometimes use racially charged words to poke fun at each other. Neither is offended by the other. They are just joking around. Manly’s management takes no issue with it, thinking Josh and Tim are both Black so there can be no discrimination. Megan hears the barbs regularly and takes great offense based on stories of discrimination told by her father. She complains to management, but the company takes no action because the comments are not directed at her personally. Problem? Of course. Manly needs to think not just of the individuals involved (who could tire of the jokes and make their own claim), but also of those in ear-shot. Megan has a claim for race discrimination by harassment against Manly, and Josh and Tim have no worries since they are just employees.

What Should I Do:

Good: Even though other discrimination laws do not come into play until 15 or 20 employees, consider implementing an antidiscrimination policy including race and color discrimination right from the start.

Better: In addition to developing a policy, control who is permitted to interview and make material decisions about employees to be sure they are aware of the concerns of race, color and other discrimination.

Best: In addition to the items above, create job descriptions for each position. Use the job descriptions to prepare advertisements for positions, to ask objective interview questions, and to create a uniform and objective performance review system to avoid accidentally discriminating against someone based on race or color.

Employment Law 101: Voting Rights

Posted in Handbook Articles

Who, What, Why . . .vote button

Who does it apply to: The Texas Election Code rules for employee voting rights and time off apply to all Texas employers.

Can I do it myself: Who is protected: All employees, including temporary or seasonal workers, are protected.

What is protected: Basically there are three protections. First, an employer must give employees time away from work to vote if the employee does not have otherwise sufficient free time while the polls are open. Second, an employer must allow the employee to take the time off without threats, intimidation or any other penalty. Third, an employer cannot reduce or threaten to reduce an employee’s wages or other benefits for voting for or against a particular candidate or refusing to disclose how they voted.

How much time must I give my employee to vote: An employee must be given a reasonable amount of time off of work in order to vote. Reasonable is not defined by any law, but the Texas Workforce Commission recommends allowing up to two hours. Employers do not have to give employees time off during the workday if the employee has already voted in Early Voting or if the employee has two hours of uninterrupted time during a day to vote. Finally, employers can define when the employee takes the time during the day as long as it reasonably gives the employee enough time off to vote.

Do I have to pay my employees when they take time off during the workday to vote: Yes, the law says that an employer may not penalize an employee for attending polls on Election Day. That said, employers do not have to pay if the polling place is open for two consecutive hours outside of the employee’s regular work schedule.

Does the time my employee is out count towards overtime: Yes, but an employer generally has the right to set the time that an employee may have off to vote.

What about time an employee takes off to attend political conventions: An employee may take unpaid time off to attend a precinct convention or other political convention. Such an employee may not be retaliated against or dismissed for taking the time. Note, employers must be careful when deducting pay like this for employees exempt from overtime. See the Employer Handbook editions on Overtime and Exemptions from Overtime for more information.

Can I make my employee show proof that he voted: There is nothing in the law that prohibits an employer from requesting proof of voting; however, it is not mandatory that an employee provide such proof.

How much notice must my employee give me: There is no requirement that an employee give notice to their employer of their intent to vote, but employers can create a policy requiring notice and discipline an employee for failing to follow that notice policy.

Common Situations:

Voting for overtime pay: J.D. is coming in at 7:00 a.m. for his daily shift and asks his boss for an extra hour at lunch to vote. Following the law, the boss-man lets J.D. have the extra time. That night, J.D. decides to work an extra hour to make up the time. Does J.D. get credit for the hour to vote and the extra hour he worked? Does it count toward overtime? Yep and nope. An employee who voluntarily turns in extra time in addition to the time off for voting gets credit for the hour worked and the voting time, but does not get extra pay or the overtime associated with it. Strange rule.

Controlling the masses: Mary Jane is undecided about who she will vote for in the upcoming election. Her supervisor, Phil, is very involved in politics and often engages the employees in political discussions and encourages all of the employees to vote for his favorite candidate. As Mary Jane leaves for the day, he shouts, “You better vote for my guy or you are FIRED!” Mary Jane calls into work the next day, unsure if she still has a job. Phil tells her it was just a joke and tells her to report for work that morning. Has the supervisor violated the law? There is a fine line here. Mary Jane has not been subjected to any penalty, but she has been intimidated by her supervisor. An employer may not threaten the loss wages or another benefit of employment in retaliation for voting a particular way. It may not get very far, but Mary Jane has a claim and the company will be on the hook for the legal fees to fight it.

Do it on your own time: Betsy is scheduled to arrive for her shift at 9:00 a.m. She says that given the morning traffic, there is no way she can vote and be on time. Traffic doesn’t matter for poor Betsy. As long as the polls are open for two consecutive hours when Betsy is not scheduled to be at work, she doesn’t get the time. Texas polling places are open from 7:00 a.m. to 7:00 p.m.

What Should I Do:

Good: Encourage your employees to exercise their Constitutional right to vote. Warn managers and other supervisory personnel that they cannot restrict any employee’s ability to vote, nor can they intimidate or harass the employee for voting for a particular party or candidate or failing to reveal for whom the employee voted.

Better: Create a written policy that clearly spells out what will happen when an employee needs time off to vote. Cover when the employee needs to notify you, the time you will pay for an employee to be out, if any, and how you will deal with requiring proof of voting.

Best: Good and Better get it done for this edition.

Employment Law 101: Religious Discrimination

Posted in Handbook Articles

ReligiousDiscriminationWho, What, Why . . .

Who does it apply to: The law applies to all employers with 15 or more employees.

What is the issue: Title VII was passed in the 1960s to protect against discrimination based on race, color, religion, sex or national origin.

What am I required to do: Employers are required not to discriminate against employees on the basis of religion. More specifically, employers are required not to treat an employee adversely with any consideration of his or her religion in relationship to any significant aspect of employment.

What constitutes a violation: There are two kinds of violations – direct mistreatment and disparate impact. Direct mistreatment is straightforward. If an employer affirmatively mistreats an employee because of religion by failing to hire, firing, demoting or any other type of significant slight someone might dream up, it can be actionable as religious discrimination.

Disparate impact is more subtle. Even if an employer creates a policy that is neutral or non-discriminatory on its face, that policy might have a consequence of negatively impacting workers of one religion more significantly than others. If an employer institutes a policy that employees must all be clean-shaven, the policy itself does not seem discriminatory because it may affect any worker. That said, certain religions require their adherents to grow beards. This seemingly neutral rule has a disparate impact against workers of certain religions and may create a claim.

What counts as a religion: Good question. What counts as a religion goes way beyond what most employers would think. Observances are protected regardless of whether the employee belongs to the particular body or sect whose observance they claim. Any observance based on a strong moral or ethical belief that is sincerely held with the strength of religious views may count.

What if my employee violates without consent: Choose carefully who you place in charge. Employees placed in positions of authority with the power to control the circumstances of other employees are not personally liable. Their liability is placed with the employer even if the employee acts without authority. The same is true of independent contractors (whether properly characterized or not) placed in positions of authority over employees.

What if religion is a requirement of the job: Sometimes a person’s religion may affect his or her ability to get a job. With religion, this usually occurs with churches and other denomination- focused businesses. Under Title VII these business are exempt from the religious toleration requirement. This exemption is complicated, however. You should always check with your employment counsel before acting under the exemption.

Can retaliation play a part: Title VII protects employees who engage in protected activities such as supporting another employee’s claim of discrimination, resisting instruction to discriminate, and filing a complaint about discrimination with the employer or EEOC. Employers cannot negatively impact a significant aspect of employment for an employee who supports another’s religious views or their complaint against religious discrimination. Employers also cannot retaliate against an employee for complaining of religious discrimination or making a charge of religious discrimination with the EEOC.

What about harassment: Even if an employer does not discriminate against an employee directly, the employer may be liable if its employees harass an employee about his or her religion. The harassment must be significant enough to interfere with the employee’s working conditions or ability to handle his or her job, but little harassing actions can add up to enough harassment to support a claim. An employer has a responsibility to be aware of what is going on with its employees and discipline employees for harassing conduct.

Are there any special state laws on religious rights: The Texas Labor Code mimics Title VII’s protections, but goes one step farther. Retail employers must respect an employee’s request to be off to attend regular worship service on one day per week.

Common Situations:

Tattoo me religious: Dot is a sales representative for Mae’s Ink Works, a purveyor of the finest inks. She decides on a whim to get a tribal tattoo around her bicep. She likes it so much that she insists on wearing sleeveless shirts all the time. Mae is not hip to tattoos and feels the customers who buy her inks will be put off by Dot’s tat. Mae insists that Dot cover the tattoo at all times while working. Dot does not like Mae’s policy and talks to her tattooed friends about the issue. They turn her on to the Church of Body Modification. Dot joins and tells Mae she would be violating her religious beliefs not to show the tattoo. What happens? No employer’s life is complete until he or she has a run in with the Church of Body Modification. This is a common dodge for employees. Unfortunately, the answer is unclear. If Mae can show lost sales or complaints about the tattoo, she may have an out. Of course, the beliefs of this church present a problem for Dot. She is not required to show her tattoo. Unless she can show a strong belief and moral basis, she may be out of luck.

Google liability: Rosie is in the habit of Googling applicants to see what she can learn about them before an interview. In her examination of one applicant, she discovers that the person is a regular runner in a group through her church. Knowing that running is not a protected class, Rosie displays her knowledge in the interview of the prospect. Ultimately, Rosie chooses to hire someone else and the applicant files an EEOC charge claiming religious discrimination and relying on what Rosie must have found on the Internet. Has Rosie done anything wrong? Yes and maybe. Rosie should not Google applicants or at least she should not tell the applicants what she finds. If she did not feel the need to show off her knowledge, the applicant may have never known she looked. As to discrimination, it will be up to the EEOC and a jury to decide – after Rosie spends thousands on the assistance of counsel.

Hanukkah vs. Christmas: Michael is Jewish and a faithful adherent to all Jewish holy days. His employer, like so many companies, closes for Christmas, not Hanukkah. Michael requests that the company allow him to be off in celebration of Hanukkah and other Jewish holy days. The employer offers Michael the opportunity to take those days off without pay as a reasonable accommodation to his request. Michael, in turn, offers to work over Christmas to make up some of that time. His employer agrees. All is well. However, what happens if the company’s closure for Christmas prevents Michael from doing his job? Must the company pay Michael for his time off? Generally, no. It is considered reasonable accommodation to allow employees unpaid leave (or the use of vacation) during those days if the company is closed over Christmas.

What Should I Do:

Good: Count up your workers every few months to know whether the law applies to you. Once you have more than 15 workers, institute an anti-discrimination policy including religious discrimination.

Better: In addition to developing a policy, control who is permitted to interview and make material decisions about employees to be sure they are aware of the concerns of religious and other discrimination.

Best: In addition to the items above, create job descriptions for each position. Use the job descriptions to prepare advertisements for positions, to ask objective interview questions, and to create a uniform and objective performance review system to avoid accidentally discriminating against someone based on religion.

Employment Law 101: Jury Duty

Posted in Handbook Articles

jury dutyWho, What, Why . . .

Who does it apply to: The Jurors Right to Reemployment Act and the Jury System Improvement Act of 1978 applies to all employers in Texas. These laws protect the employment status of those employees serving jury duty in either state or federal court.

Who is protected: All permanent employees serving jury duty are protected. Temporary or seasonal employees, those that work for a specific length of time or until a specific project is completed, are not protected.

What are they protected from: Not only are the employees protected from being fired, employers cannot threaten, intimidate or attempt to coerce employees to avoid jury duty.

Do I have to pay employees out on jury duty: Federal law does not require covered employers to pay employees for days that they do not work except as noted here:

  • Salaried Exempt Employees: If an employee works any part of a week (5 minutes would count) and misses the rest of the week for jury or witness duty, he must receive “regular wages” for the workweek, but if the employee misses a full week, no pay is due for that week. “Regular wages” means the standard salary for the week, but does not include performance bonuses or services performed on any day the employee would not have earned wages, such as a scheduled day off. See the Employer Handbook editions on Overtime and Exemptions from Overtime for more guidance on what “exempt” means.
  • Salaried and Hourly Non-exempt Employees: Employers do not have to pay the wages of non-exempt employees during jury service.
  • Temporary Employees: Employers are not required to pay temporary or seasonal workers for jury service. Further, the job protection provisions of the laws do not apply to these workers.

Employers can opt to have employees use paid vacation or other paid time off for jury duty leave as long as it is not contrary to any existing company policies or labor agreements (this includes salary exempt employees). That said, an employer may not terminate healthcare benefits during jury service leave.

Do I need a policy: It is a good idea to create a policy for employees called to jury duty, so that when the situation arises, expectations are clear for both the employer and the employee. A lot of issues and questions can arise on this subject – use of time off, when to report the summons, how is unpaid leave handled, what are employees to do if they are released early one day, etc.

Does jury service count towards overtime: No. The hours spent in jury service do not count toward overtime, just as other types of paid leave and paid holiday hours do not count toward overtime.

Do I get reimbursed if I pay for jury service: Yes, but not for the full wages. The government doesn’t have that kind of money or they would dole it out to the employee directly. Employers who pay the employee regular wages during jury duty are entitled to be paid the amount the employee was paid for jury duty – yippee an extra $6 a day!

Do employees have to give notice: There is no law that requires employees to give notice to the employer of jury service. For this reason it is important to have a policy instructing the employee to give notice as soon as possible. If they don’t, you can discipline or fire them for failing to give adequate notice and reasonable time for you to react.

What penalties is an employer subject to for a violation of jury duty? Criminally, an employer may be on the hook for a Class B Misdemeanor if it threatens, coerces, or terminates an employee over jury duty. In civil court, an employer may be liable for reinstatement and damages between one and five years compensation.

Common Situations:

Perception is reality: Bob is a salesman who has been with his company for five years. Over the past year his sales have decreased and he has been counseled several times, given two written warnings, and encouraged to increase his sales. Bob gets called for jury duty and is out of work for two weeks. When he returns, his employer, without a written reprimand, fires him, citing his low sales and lack of improvement. Although there may have been good reason for firing Bob before he left for jury duty, firing him so close to his absence may land you in hot water. An employee who serves jury duty is entitled to return to the same position as when he left. It would be better to wait to avoid the perception of impropriety and give Bob a claim that probably is unwarranted.

Supervisor gone awry: Jenna is one of Happy Dale’s most valued employees. She was summoned for jury duty and promptly notified her supervisor of the dates she would be required to be out of the office. In the weeks leading up to her service, her supervisor constantly makes negative comments to her about how she should lie and tell the court she is a racist to get out of jury duty. Jenna is then picked for a jury and is absent for three days. When she notifies her supervisor, he is furious and tells her that she has been assigned an important project that needs her immediate attention. When Jenna returns from jury service her supervisor fires her for failure to complete the project on time. Even if Happy Dale’s owners are totally ignorant, they can be liable. Supervisors and other employees should be counseled that jury duty is job-protected leave. Employers will face penalties for any intimidation, coercion or negative employment actions based on an employee’s jury service.

You lost your spot: Steve is a decent employee at Bob’s Account Temps. He is called for jury duty and gets stuck on the J.O. Simpson murder trial that goes on and on and on for months. In the interim Bob’s is forced to hire a temporary worker to cover Steve’s work. The temporary employee turns out to be exceptional and Bob (the owner in case you didn’t guess) hires the temp to replace Steve – permanently. Does the glove fit Bob? Unfortunately. Finding a better player does not warrant letting the employee go. That said, if Steve finishes jury duty and fails to call or return to work because he is working the interview circuit and writing a book about his experience, Bob may be in the clear. It is unfair that the employer does not have a right to know the employee’s intent, but the law allows the employee to count on the employer keeping his job open.

What Should I Do:

Good: Encourage your employees to fulfill their civic responsibilities and ensure that the employee is allowed to take time off for service and allowed to return to the same job and the same responsibilities, benefits, etc. Counsel supervisors about the law and let them know that it is illegal to intimidate or coerce an employee not to serve on a jury.

Better: Create a written policy that clearly spells out what will happen when an employee is called for jury service. Cover when an employee is expected to work if not at jury duty, when the employee needs to notify you of jury service, the time you will pay for an employee to be out, if any, how to deal with Court issued compensation, and whether use of paid time off will be required.

Best: Good and Better get it done for this edition.

Employment Law 101: Sex Discrimination

Posted in Handbook Articles

sexual discriminationWho, What, Why . . .

Who does it apply to: The law applies to all employers with 15 or more employees.

What is the issue: Title VII was passed in the 1960s to protect against discrimination based on race, color, religion, sex or national origin.

What am I required to do: Employers are required not to discriminate against employees on the basis of sex. More specifically, employers are required not to treat an employee adversely because of his or her sex in relationship to any significant aspect of employment.

What constitutes a violation: There are two kinds of violations – direct mistreatment and disparate impact. Direct mistreatment is straightforward. If an employer affirmatively mistreats an employee because of sex by failing to hire, firing, demoting or any other type of significant slight someone might dream up, it can be actionable as sex discrimination.

Disparate impact is more subtle. If an employer creates a policy that is neutral or non-discriminatory on its face, that policy might have a consequence of negatively impacting workers of one sex more significantly than others. If an employer institutes a policy that it prefers to hire people with military service, the policy itself does not seem discriminatory because it may affect any applicant. That said, there are statistically fewer women in the military and hence the rule has an adverse effect on women applicants. This facially neutral rule has a disparate impact against female applicants and may create a claim.

What counts as a sex: The answer appears straightforward but really is not. While homosexuality and gender identity are not expressly protected under Title VII, actions based on sexual stereotypes are permissible. For example, if a man brings a claim for being treated differently becuase he does not act manly enough (instead of alleging discrimination based on homosexuality) a jury may be allowed to award damages.

What if my employee violates without consent: Choose carefully who you place in charge. Employees placed in positions of authority with the power to control the circumstances of other employees are not personally liable. Their liability is placed with the employer even if the employee acts without authority. The same is true of independent contractors (whether properly characterized or not) placed in positions of authority over employees.

What if gender is a requirement of the job: Sometimes a person’s sex may affect their ability to get a job based on a Bona Fide Occupational Qualification (BFOQ). There are, however, very few circumstances where such a requirement will stand up in court outside of the entertainment industry in which a particular sex is cast for a role. BFOQs are complicated and you should always check with your employment counsel before implementing one.

Can retaliation play a part: Title VII protects employees who engage in protected activities such as supporting another employee’s claim of discrimination, resisting instruction to discriminate, and filing a complaint about discrimination with the employer or EEOC. Employers cannot negatively impact a significant aspect of employment for an employee who supports another’s sexual identity or their complaint against sex discrimination. Employers also cannot retaliate against an employee for complaining of sex discrimination or making a charge of sex discrimination with the EEOC.

What about harassment: Even if an employer does not discriminate against an employee directly, the employer may be liable if its employees harass an employee about his or her sex. Sex harassment is such a pervasive concern that it receives its own topic. See the Employer Handbook edition on Sex Harassment for more guidance.

Common Situations:

Babymaker: Doowe Cheatum & Howe is a prestigious law firm filled with go-getter attorneys that are willing to sacrifice almost anything for their careers. The few women working at the firm gave up on having children from the outset to convince the firm’s leaders they would not take time to raise a family. Can the firm select only women disinterested in having children? Of course not, but businesses do it every day.

I ain’t working for her: Tom’s Construction is looking for a new superintendent to oversee two of its crews. Megan, a well qualified graduate of Texas Tech’s Construction Engineering department, applies for the position. Tom, who is interviewing applicants, takes a moment to call Megan to let her know she
shouldn’t get her hopes up because he simply cannot hire a woman for the position even though she is well qualified. Tom tells Megan almost apologetically, “Those men won’t work for a lady.” Has Tom strayed out of bounds? Yep. While we can identify with the concern he raises, it is Tom’s job to create an
environment in which women can work side by side with men, even if it means he has to make changes to his crews.

Equal pay: Sally has worked for Bob’s Banjos for 23 years. Ted started with the company at about the same time. Each has risen to the job of Shift Manager, yet while at lunch one day, Ted mentions to Sally how much he earns – 10% more each year. Does Sally have a claim? Yes, it is sex discrimination, but it is
also a violation of the Equal Pay Act, covered in more detail in the Employer Handbook edition on that topic.

What Should I Do:

Good: Count up your workers every few months to know whether the law applies to you. Once you have more than 15 employees institute an anti-discrimination policy including sex discrimination.

Better: In addition to developing a policy, control who is permitted to interview and make material decisions about employees to be sure they are aware of the concerns of sex and other discrimination.

Best: In addition to the items above, create job descriptions for each position. Use the job descriptions to prepare advertisements for positions, to ask objective interview questions, and to create a uniform and objective performance review system to avoid accidentally discriminating against someone based on sex.

Employment Law 101: Americans with Disabilities Act

Posted in Handbook Articles

Who, What, Why . . .

Who does it apply to: The law applies to all employers with 15 or more employees.

What is the issue: It is against the law to discriminate against an employee or a prospective employee based on a disability the person has, or that you view them as having (even if they don’t). The prohibition extends not just to hiring and firing, but to any discrimination in any significant term and condition of employment.

What is more, employers are required to reasonably accommodate any employee or prospective employee to assist that person in completing his/her job duties so long as the accommodation does not create an undue hardship on the business. Reasonable accommodations range from special keyboards for employees with carpal tunnel, to specialized monitors for employees with vision issues, and everything in between. What may be a reasonable accommodation is limited only by the imagination of the parties, what technology and devices are available, and the cost or hardship to the employer of implementing the accommodation.

What is a “disability”. . . under the law: Everyone has a personal view of what “disabled” means, but personal views do not count in the eyes of the government. The law defines disability as a physical or mental impairment that substantially limits one or more major life activities which may be permanent or temporary. Employers must be careful, however. Treating or “regarding” someone as though they have a disability is just as though the person actually has whatever malady the employer treats them as having. And, after changes in the law in 2009, almost anything can be a disability so employers should err on the side of viewing any malady as a temporary or permanent disability.

How does reasonable accommodation work: The process of accommodating an employee should be an interactive process. The employer and the employee are each required to work together to come up with solutions to accommodate the disability without undue hardship to the business. The goal is to help the employee to be able to perform the “essential functions” of the employee’s job so that the profitable relationship between employee and employer may continue. The process may involve consulting with a disability specialist and physicians to determine what can be done at what cost. And, be careful, too quickly deciding the accommodation creates an undue hardship on your business. The government’s view of an undue hardship is likely to be far higher than your own.

What are these “essential functions”: In any job there are critical or essential functions the employee was hired to perform and less critical functions the employee performs, which the employer could assign to another employee, if necessary. An employer can terminate a disabled employee or refuse to hire a disabled applicant if that person cannot perform the essential functions of the job even with accommodation. An employer cannot adversely affect a disabled person who cannot perform a non-essential function that can be assigned to another employee. For example, a person with a bad back who occasionally lifts a box of paper for the copier cannot be fired if the company can get another employee to do it.

What if I need a prospective employee to take a physical: A prospective employee’s capacity to handle the work sometimes is not obvious from looking at them. A person may look okay on the outside to be a lifeguard, but you need to know how well they swim, and whether they can carry an injured person back to shore. To protect against disability discrimination, employers are required to consider all other hiring factors before administering the physical and make an offer of employment conditioned only on the result of the physical examination.

What constitutes discrimination: By now a familiar refrain in EH editions, there are two basic types of violation – direct mistreatment and disparate impact. Direct mistreatment is straightforward. If an employer affirmatively mistreats an employee because of a disability, it can be actionable.

Disparate impact remains more subtle. If an employer creates a policy that is neutral or non-discriminatory on its face, that policy might have a consequence of negatively impacting disabled workers more significantly than others. This is less likely in a disability situation, but it can happen.

What if my employee violates without consent: Also, a familiar refrain in EH editions on discrimination. Employers may be liable for the actions of their employees who commit discriminatory acts without the employer’s knowledge.

What if no accommodation works: If the employer and the employee engage in an interactive effort to find a reasonable accommodation and come up empty or discover the solutions are just too hard on the business to make them workable, the employer may terminate the relationship. Because of the risk of
a claim, however, it is strongly recommended that the employer consult a qualified employment attorney to be sure they have done everything possible before terminating the relationship.

Common Situations:

You’re outta here: Bob, who is blind, is called into his manager’s office and let go from the company. Bob’s manager is a nonconfrontational person. Instead of explaining to Bob that he is being fired for totally screwing up a major project, she tells him that the company is experiencing financial difficulty and cannot afford him anymore. She thinks this will be a softer blow and certainly will make for an easier termination meeting. Bob carries a chip on his shoulder about his disability and is convinced he was let go because of his blindness, so he files a disability discrimination claim. Bob’s employer is off the hook because disability wasn’t a factor, right? Hopefully, but the employer has made it much more difficult. When the lawyer explains the real reason Bob was let go, it will look like the employer is lying and a jury could infer discrimination.

But, that’s impossible: Derek runs Oil Express, an oil and gas drilling company. Henry, an employee of the company, is injured severely in an accident at a site. He is no longer able to use his right arm. Derek feels for Henry, but does not think Henry can return to work after he returns from worker’s comp leave. He spends some time on the internet looking for solutions, and asks Henry for his thoughts. Henry does not know where to start. Feeling he met his obligations, Derek lets Henry go. Henry files a claim. Did Derek do anything wrong? Maybe. Spending a little time on the internet is likely not enough to meet the requirement of working interactively. There are organizations that help answer these questions for employers at little or no cost. The Texas Department of Assistive and Rehabilitative Services, for example, can provide guidance to inexperienced employers.

What should I do:

Good: Establish a written policy notifying employees to bring disabilities requiring accommodation to the company. Be careful not to assume an employee’s health issue is a disability until the employee complains about it. Work with any disabled employee to find a reasonable accommodation – and be careful – a reasonable accommodation may be a period of unpaid time away from work for treatments.

Better: The above and train one employee to be knowledgeable about the ADA and address all complaints to that person to get a better result. Be wary of harassment or segregation. A disabled employee may still make a claim even with accommodation if the employer harasses or ostracizes him or her.

Best: All of the above and create job descriptions outlining the “essential functions of the job” and any physical requirements of the job. This will set the standard in case a claim for disability is made. Carefully sanitize job postings to avoid unnecessarily leaving out disabled persons.

The $185 Million – Yes – $185,000,000 Single Employee Discrimination Case

Posted in In the News

On November 17, a federal jury returned a verdict against AutoZone in favor of a single plaintiff for the insane amount of $185,000,000.00 in punitive damages. The plaintiff alleged gender and pregnancy-related harassment, discrimination, and retaliation. On November 19, a federal judge in the U.S. District Court for the Southern District of California upheld the jury’s verdict and finding on punitive damages. The case is entitled Juarez v. AutoZone (Case No. 3:08-CV-00417). An appeal will surely be filed.

Ms. Juarez was employed as an AutoZone store manager. Ms. Juarez alleged that when she became pregnant the district manager harassed her and attempted to force her resignation. She complained to AutoZone human resources department, but alleged that nothing was done. She further alleged that despite her complaints to human resources, she was demoted to parts manager while AutoZone promoted less qualified males. As a result of her perceived discrimination, Ms. Juarez filed a charge of discrimination with the California Department of Fair Employment and Housing and also filed suit. Subsequently, she was terminated and claimed that AutoZone retaliated against her for filing her charge and her lawsuit. The jury believed Ms. Juarez and returned a verdict in her favor finding that AutoZone was liable for discrimination, harassment, and retaliation. She was awarded $872,719.52 in compensatory damages and a whopping $185,000,000.00 in punitive damages.

While this is an extreme example, employer’s need to realize that there is real money at stake in a single plaintiff discrimination, harassment, or retaliation case. These cases must be taken seriously from the time a charge is filed with a state agency or the EEOC. As a practical matter, employers need to take measures in the workplace to avoid these claims ever being brought. A good employee handbook outlining an employer’s discrimination, retaliation, and harassment policies and a consistent application of those policies will certainly aid in prevention. While I doubt that the $185 million punitive damages award will hold up on appeal, it certainly should serve as an eye opener for employers across the country.