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.

Who, What, Why . . .

Who does it apply to: According to the Patient Protection and Affordable Care Act, all employers with more than 50 employees nationwide are required to comply. Employers with less than 50 employees may not comply if it would be an undue hardship.

What am I supposed to do: Employers must offer reasonable time for breaks to nursing mothers who need to express milk and must provide an appropriate space to do so.

Who is entitled to the breaks: Employees who are not exempt from overtime. (See the EH Edition on Overtime Exemptions for more information on that topic). Employers are not required to offer the breaks to exempt employees.

How many breaks per day must be given: There is not a specific requirement in the law. The employer must offer a break “each time the employee has need to express the milk.” According to the US Department of Health and Human Services (“DHHS”), an average employee will have the need to express milk two to three times per day for 15 to 20 minutes excluding set up and take down time and the convenience of the location. Employers should err on the side of caution granting as much time as necessary.

Do I have to pay: Strictly speaking, no. Non-exempt employees may be asked to clock out unless they use an already offered, paid, work break for lactation. Employers who choose to offer lactation breaks to exempt employees, however, may not dock their pay for the time.

What type of space is required: The law requires that the space be shielded from view and free from intrusion by co-workers and the public. The space may be temporary and created when needed by an employee. A lock is not required, but is suggested to avoid intrusion. It is important to note, however, that the space must be offered in any location where an employee requiring lactation breaks is stationed – even if there is only one employee at the location.

How long do I have to offer breaks: Breaks must be offered up to one year following the birth of the employee’s child.

What is sufficient to show “undue hardship”: As noted above, employers with fewer than 50 employees nationwide who show undue hardship may opt out of the Act. There have been no cases reported on this subject yet, but employers must at least show “significant difficulty or expense, when considered in relation to size, financial resources, nature or structure of the employer’s business.” The Department of Labor (“DOL”) openly states it believes this to be a stringent standard available in very limited circumstances.

Are there any signs to post: There are no employer posting or notice requirements in the law. The DOL encourages employees to provide advance notice to their employers so the employer can prepare for compliance. Employers can likewise ask a pregnant employee whether she intends to take lactation breaks after the baby is born.

Is there any upside: While many employers will perceive this as one more encroachment upon their ability to get work done, there may be tangible monetary benefits other than helping employee morale. According to the DHHS, employers are likely to have lower health insurance claims because breastfed infants have up to three times fewer medical visits. Turnover rates are likely to be lower because 86-92% of breastfeeding employees return to work when offered lactation break options versus 59% otherwise.

Common Situations:

Ewww, not there: Commodes Unlimited is splitting at the seams with staff. There are very limited spaces available to offer for worksite lactation breaks. The company puts a lock on the women’s restroom to create the space. It complies with the law in every respect . . . except one. The law specifically states the space for lactation breaks cannot be a restroom. Sanitation is a concern.

Seriously? How can I do that: United Parcel Express has delivery drivers in trucks all day, every day. Janet, a delivery driver, has recently returned from having a child and would like to express milk. The company has more than 50 employees, but no real means to provide a space. What is it supposed to do? Comply. The law has no pity for inconvenient businesses. I searched on-line to try to find ideas for a scenario like this. The only thing I found about shipping companies was a UPS driver’s use of dressing rooms in various shops along her route. That hardly sounds compliant. Through a little looking, I did discover there appear to be “Workplace Lactation Consultants” who may be able to help with troublesome situations.

What should I do:

Good: Consult with employees who plan to return to work after giving birth. Work toward a mutually agreeable solution. If you have buy-in from the employee, you are unlikely to have a complaint from the employee or the DOL. Create a temporary place to meet the employee’s needs and offer adequate time for the employee to express milk daily. If you plan to claim undue hardship, please consult with your legal counsel about the appropriate path.

Better: Create a permanent space for employees to express milk. Consult with a lactation consultant to work through more difficult workplace scenarios such as traveling employees.

Best: Consider becoming a recognized Texas “Mother-Friendly Business.” In addition to the requirements of the federal law, employers only have to add access to a clean, safe water source and a sink in the space and a hygienic place to store expressed milk to meet the standard.

A disagreement between two federal appeals courts regarding whether payroll taxes must be paid on severance payments made to laid-off workers has landed the issue in front of the U.S. Supreme Court. Oral arguments began January 14th, 2014.  How the Supreme Court decides the case, called United States v. Quality Stores, Inc., may result in payroll tax refunds being owed to both employers and employees who paid or received severance over the past few years.

Pending the outcome of the Supreme Court’s decision, the IRS has suspended action on payroll tax refund claims involving severance payments filed by employers in the Sixth Circuit (Kentucky, Michigan, Ohio, and Tennessee).  For employers outside the Sixth Circuit, the IRS is continuing to disallow employers’ refund claims.  However, employers both inside and outside of the Sixth Circuit should promptly file amended employment tax returns to preserve their rights.  For employers outside of the Sixth Circuit who file a refund claim, if the end of the two-year period for filing a refund suit after a notice of disallowance is approaching, then the employer should use IRS Form 907, Agreement to Extend the Time to Bring Suit, to extend this deadline.

Individuals laid off in the past three years can file IRS Form 843 to make a refund claim for his/her individual portion of payroll tax overpayments due to receipt of severance payments.  However, the employee should first ask his/her former employer if the company is pursuing a payroll tax refund.  Some companies have alerted former workers that they are doing so, but they are not required to notify former employees unless the IRS agrees to pay a claim (and the IRS is unlikely to pay any claims until after the Supreme Court decides the Quality Stores case).  At that point, the employer generally asks the former workers for consent to include their claims with its own.  This sets up a process so that the company can pay former workers their shares of refunded payroll tax. If the individual’s former employer did not file a refund claim, then the individual can file IRS Form 843 to make his/her own claim.  Note that the individual must make this claim within the statute of limitations, which is generally three years after he/she files the tax return reporting the severance payments.  Also note that if a taxpayer is successful and receives a payroll tax refund, the refund is not taxable, but the interest paid on the refund is taxable.

Whether a payroll tax refund is owed to an employer or an individual will be specific to each employer and each individual.  To determine if you may be entitled to a payroll tax refund and how to best preserve your right to a refund, we encourage all employers to contact Jason Luter at Gray Reed & McGraw, P.C.  jluter@grayreed.com; 469-320-6076.


Who, What, Why . . .

Who does it apply to: Any employer faced with letting an employee go. In this edition, I am taking a break from my regular format to pass on advice about handling terminations. 

Before the Termination Meeting:

• Plan when. An employee humiliated during termination is much more likely to feel the desire to seek revenge by suing. Fire on shoulder hours – at the beginning or end of the day when fewer people are around. Don’t fire an employee on their birthday or adjacent to a holiday.

• Plan where. It is usually best to pick a private place on neutral territory that way either side can leave without a problem. If you do it in your office, you are trapped if they won’t leave. If you do it in theirs, it will be more uncomfortable to them.

• Plan for any security concerns. If the employee is particularly volatile, it may be appropriate to warn building security and have them on standby. In a very bad case, call the police or sheriff, they will usually send someone out to oversee the event. Terminate this type of employee before they make it into the building if possible.

• Check payroll. Does the employee have any outstanding loans to the company or borrowed vacation they have not yet repaid? If they do and the loans are not memorialized, be sure to plan to get an agreement for repayment in writing at the meeting. This may include an agreement to deduct from final pay.

• Company property. If the employee has a laptop, uniforms, company car, or cell phone, make arrangements to have the employee bring them to the meeting. Make something up if you have to. Getting that property will be costly and a pain after the employee leaves.

• Limit computer access. Think of all the ways the employee has access to your computer system from the outside. Turn all access off before the meeting.

• Complete documentation. Be sure that you have documented the employee’s file for all the factors and reasons that support separation. Be sure the documentation is consistent with your employee handbook.

• Consider potential claims. Is the employee in a protected class? Is there anything the employee could argue you have done wrong? What can you do to limit your exposure before you terminate them? Call your legal counsel to talk it over if you have any concerns. It will likely cost less with your lawyer to do so before the termination than after.

• Do you need a release. If there is a potential claim for which you want to get a release, prepare the release document in advance. Remember, you are buying a release from a claim – not paying additional wages or “severance” so the payment should be a lump sum with no taxes taken out. You will want to “1099” the payment. DO NOT tie receipt of a final check to signing off on a severance agreement. You do not want the former employee arguing that the money paid for the release was just additional regular pay that was owed. And, use a round number – if you want to use 2 or 4 weeks pay, round to the nearest $500 up or down as you see fit.

During the Termination Meeting:

• Always have two people in the room. Two recounts of what happened are better than a he-said she-said fight between a former employee and the employer in a later lawsuit.

• Always try to have a person of the same sex, and if possible, race, religion, etc., as the employee in the room. A jury will like that person’s perspective better than a boss of a different gender or race in a lawsuit against a former employee of the opposite gender or race.

• Do not give a reason. This is the hardest one for clients to follow. There is a strong urge to treat termination like a high-school break up with the “it’s not you, it’s me” excuse or some other excuse made to help the terminated employee feel better about their separation and ease the conscience of the terminating employer. For later defending a claim, employment lawyers are then hemmed into a polite excuse, rather than the real reason which is likely that the employee was no good. To preserve a clean slate for the employment lawyer to use, don’t give a reason.

• Keep it short. The fired employee will likely want to know why. Much like the teenager who is told he can’t spend the night at a friend’s house, he wants to know why so he can debate you about why the reason you have is not good enough. After all, the person is about to be unemployed. Don’t take the bait. Every word uttered in the meeting just clutters the landscape in a future case. You want as few words spoken as possible to decrease the words for the employee to use against you later.

• Be professional and polite. The terminated employee is going to make a decision about whether to sue, or report your company for any violation he or she can think of to governmental agencies based on how he or she feels shortly after the separation. You need to avoid making the employee feel badly as much as possible.

• Present any severance and release agreement you’ve determined to offer. Put it in an envelope and hand it to the employee. Invite them to read it after they leave and have a chance to consider it. You don’t want the employee arguing you forced them to sign it. If they are over 40, they have at least 21 days to consider it anyway.

• Clear any debts. Present any agreement you prepared to collect any loans from the last paycheck and make payment arrangements beyond that.

• Don’t offer the employee help finding another job. Doing so either means you think the former employee was not so bad at the job that they should be fired, or that you are going to lie to someone to suggest he or she should be hired even though you fired them.

After the Termination Meeting:

• Do not make the employee do the walk of shame. Studies show that a former employee’s desire to sue is somewhat related to how they felt about the termination. If you humiliate the person, they will have a stronger motivation to get revenge. As noted above, fire at the edge of business hours when there are fewer people around and allow the employee to leave after the meeting to return later for their belongings, which you can box up, if they prefer.

• Do not allow computer access. It never ceases to amaze me how many people let the employee go back to their office after a termination. An angry employee might do damage.

• Prepare a memo. Each person who is in the meeting should sit down and prepare a short memo about exactly what happened in the meeting. A lawsuit involving the meeting will not come for months or a year. It will help a jury believe your recitation of what happened if you can point to a memo about what transpired.

• Final Pay. Deliver the final paycheck within 6 days after termination. It is the law.