Internal Employment Audit

3254

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• management
• managers

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• Publié par: Naphog
• Nombre de lectures: 30
• Langue: English

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    ______________________   EMPLOYMENT ISSUES FOR EMERGING BUSINESSES _________________________________________         Saul Ewing LLP 100 South Charles Street Baltimore, Maryland 21201 www.saul.com   Contact Information:   Harriet E. Cooperman Phone: [phone] Fax: [phone] E-mail: [e-mail]   Robert A. Spar Phone: [phone] Fax: [phone] E-mail: [e-mail]   Eric G. Orlinsky Phone: [phone] Fax: [phone] E-mail: [e-mail]             Copyright © SAUL EWING LLP 2003

Table of Contents   I.   Introduction . Perhaps one of the most effective actions an employer can take to prevent and deal with potential liability issues is to conduct an internal audit of its workplace. This audit should cover all facets of the business that affect employees including: analysis of workforce by position and demographics, legal compliance issues, application, interpretation of and compliance with company policies, review of human resources functions, review of personnel actions, and internal complaint process. This program and these materials are neither comprehensive nor all-inclusive. They are intended to provide you with an introduction and overview of some of the key items that should be considered when assessing or auditing your employment practices, policies, and procedures. You should consult legal counsel when developing or updating workplace policies and procedures to ensure they are compliant with not only federal laws and regulations but also the laws of the state(s) and local jurisdiction(s) in which you operate your business. 1 A.   Human Resources/Personnel Administration  1 B.   Managerial and Supervisory Staff  1 C.   Non-Supervisory Employees  1 D.   Employment Process 2 E.   Employment Practices  2 F.   Employment Documents  2 II.   Federal Employment Laws  4 III.   General Policy Recommendations  4 A.   Value of an Employee Handbook. An Employee Handbook serves as a very useful tool for the Employer. It is an effective means of communicating with your employees on many matters affecting their employment with the Company. The handbook can be used to: 4 B.   Avoid Creating a Contractual Obligation.  The handbook must be viewed simply as setting forth general guidelines, rather than constituting a legally binding contract. To accomplish this it is essential that the handbook contain a contractual disclaimer.  5 C.   Acknowledgement of Receipt of Handbook. At the time the handbook (including any supplements or changes) is distributed to employees, each employee should sign a document acknowledging his/her receipt of the handbook. This receipt should state that the employee recognizes his/her obligation to read the handbook, become familiar with its terms, abide by it, and to bring any questions to the designated Employer representative. This Acknowledgement also should include the Disclaimer language stating that the employee recognizes that the handbook does not create a binding employment contract , that it is subject to change at any time at the Employer's sole and absolute discretion and that his/her employment is at will . 5 D.   Drafting Guidelines  6 F.   Employee Communication and Complaint Resolution. Many times problems arise in the workplace as a result of a lack of communication. Management may have policies, procedures, or expectations of which employees are not aware or informed. Proactive measures will ensure that the employer has taken all reasonable measures to prevent problems from arising, such as providing employees with resources for resolving problems when they do arise (See Section D: EEO and Anti-Harassment, p. 9). Some of these measures and procedures to consider are: 10

   

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G.  Employment Status.  Avoid using terms such as "permanent" or "life long" employment. Consider using "regular" instead. You do not want to give your employees any indication that you are modifying the at will employment relationship in any manner whatsoever. 10 H.   Medical Examinations.  Remember that the standards for what disability-related questions an employer may ask or medical exams may be required vary at the pre- employment, post-offer, and employment stages. For the latter, the handbook should indicate that the employer has a right to compel medical examinations when the employee: 11 I.   Nepotism  while not expressly prohibited, be cautious of anti-nepotism policies. In states that prohibit discrimination based on marital status, these policies may be construed to be discriminatory. Any exclusions should include domestic partners as well as spouses. 11 J.   Orientation and Training Programs  11 K.   Polygraph/Lie Detector Tests  12 L.   Protected Concerted Activity and Other Union-related Issues.  Even if your employees are not unionized, the federal labor laws still apply to your Company and limit certain policies you may desire to adopt or actions that you seek to take. Here are some do's and don't's: 12 M.   Surveillance and Searches. To maintain the security of the business, many Employers desire to utilize various means of surveillance. Such means may include:  13 N.   Termination.  Creating a policy that describes the termination process will help ensure uniform treatment of employees within your organization. The policy should cover the following: 13 B.   Compensation Issues. It is essential that you carefully review your state and local laws on the payment of wages. They vary widely and frequently are violated.  14 C.   Deduction from wages . A number of states prohibit deductions from an employee's paycheck unless specifically required by law or authorized by the employee. In most instances an Employer may not deduct for such things as failure to return tools, uniforms, cash shortages, or damage to vehicles, without a specific authorization by the employee to do so. Consider having employees sign a separate agreement whereby the employee authorizes such deductions. Even where you have a specific authorization, your deductions may not bring the employee's wage below the minimum wage in any applicable pay period. 14 D.   Overtime . 15 Workplace Policies  Benefits and Leave  15 A.   Benefits  15 B.   Jury Duty/Witness. A number of states prohibit employers from discharging an employee for taking leave in response to a subpoena to be a witness at a trial or to serve jury duty and impose a fine for violations. 15 Workplace Practices 17 A.   Company-Sponsored Activities  17 B.   Facilities  17 C.   Federal Labor Postings  18

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D.  Records Retention. A variety of federal and state laws regulate where employment records are (not) to be kept and for how long. Some of the records addressed by these laws include: 18 E.   Employment References  18

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Conducting An Employment Audit   Introduction . Perhaps one of the most effective actions an employer can take to prevent and deal with potential liability issues is to conduct an internal audit of its workplace. This audit should cover all facets of the business that affect employees including: analysis of workforce by position and demographics, legal compliance issues, application, interpretation of and compliance with company policies, review of human resources functions, review of personnel actions, and internal complaint process. This program and these materials are neither comprehensive nor all-inclusive. They are intended to provide you with an introduction and overview of some of the key items that should be considered when assessing or auditing your employment practices, policies, and procedures. You should consult legal counsel when developing or updating workplace policies and procedures to ensure they are compliant with not only federal laws and regulations but also the laws of the state(s) and local jurisdiction(s) in which you operate your business.   A.   Human Resources/Personnel Administration   1.   Identification of staff members 2.   Functions performed 3.   Professionalism, quality and training of individual(s) Managerial and Supervisory Staff   1.   EEO categories (race, sex, age, religion, national origin, citizenship, disabilities) 2.   Effectiveness, performance, employee issues 3.   Personnel functions performed 4.   Selection process 5.   Training and knowledge of employment laws and issues Non-Supervisory Employees   1.   Educational level 2.   EEO categories (race, sex, age, religion, national origin, citizenship, disabilities) 3.   Family issues 4.   Job categories 5.   Seniority 6.   Skill levels, promotional opportunities

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Employment Process   1.   Advertisements 2.   Applicant flow data 3.   Applicant pool 4.   Decision makers/ approval process 5.   Drug testing 6.   EEO issues 7.   Employment sources (how do your applicants know of company and employment opportunities) 8.   Hiring personnel 9.   Interviewing process 10.   Job-related testing 11.   Offer letters/employment contracts 12.   Physical examinations 13.   Psychological testing 14.   Selection criteria

Employment Practices   1.   Coaching, counseling and corrective action 2.   Orientation 3.   Performance evaluations 4.   Promotions 5.   Review these policies and practices, criteria involved, consistency, actual implementation 6.   Training 7.   Transfers

Employment Documents   1.   Acknowledgements  2.   Background checks (FCRA Release) 3.   Contracts, if used 4.   Disciplinary form 5.   Employee Handbook

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Employment Application

Evaluation Form

FMLA and Disability Leave Forms

Grievance/Complaint Forms

Internal Newsletter

Non-Competes

Offer Letter

Pay Withholding Agreement

Severance Agreement

Wage Deduction Authorization

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      II.   Federal Employment Laws   1.   Employers with 1-14 employees are covered and must comply with the following federal laws: Fair Labor Standards Act (FLSA); Immigration Reform & Control Act (IRCA); Employee Polygraph Protection Act; Uniformed Services Employment & Re-employment Rights Act; Equal Pay Act; Consumer Credit Protection Act; National Labor Relations Act (NLRA); Labor-Management Relations Act (Taft-Hartley); Employee Retirement Income Security Act (ERISA - if your company offers benefits); Uniform Guidelines of Employee Selection Procedures; Federal Insurance Contribution's Act (FICA - Social Security).   2.   Employers with at least 11 employees must also comply with the Occupational Safety and Health Act (OSHA).   3.   Employers with at least 15 employees must also comply with Title VII of the Civil Rights Act of 1964 and Title I of the Americans with Disabilities Act (ADA).   4.   Employers with at least 20 employees must also comply with the Age Discrimination in Employment Act (ADEA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA).   5.   Employers with 50 or more employees must also comply with the Family and Medical Leave Act.   6.   Employers with 100 or more employees must also comply with the Worker Adjustment & Retraining Notification Act of 1989 (WARN), as well as file annual EEO-1 reports.   7.   And federal contractors and subcontractors may be subject to Executive Order 11246 (affirmative action); Vocational Rehabilitation Act; Drug Free Workplace Act (covers employers who receive federal grants in any dollar amount); Vietnam-Era Veterans Readjustment Act; and more, depending upon the dollar amount of the contract(s) and the number of employees.   * Please note that state and local law may impose additional obligations upon employers (such as prohibiting discrimination on the basis of sexual preference and marital status) and may cover employers who employ fewer than the number of employees required under federal law.     III.   General Policy Recommendations   A.   Value of an Employee Handbook. An Employee Handbook serves as a very useful tool for the Employer. It is an effective means of communicating with your employees on many matters affecting their employment with the Company. The handbook can be used to:   1.   Present a positive image of the Employer, describing its history, structure and philosophy 2.   Emphasize to employees that they are part of a team  4  

     

     

         

   

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3.  Describe the Employer's policies and procedures 4.   Describe the benefits provided by the Employer to its employees 5.   Explain the " Rules of the Game " to employees 6.   Serve as a reference resource to members of management in dealing with employment issues and answering employee questions 7.   Serve as a valuable tool in proving that the Employer had established certain policies and took actions consistent with its policies and procedures, particularly where such actions may be the subject of an administrative agency investigation or a lawsuit.

Avoid Creating a Contractual Obligation.  The handbook must be viewed simply as setting forth general guidelines, rather than constituting a legally binding contract. To accomplish this it is essential that the handbook contain a contractual disclaimer. The Disclaimer should state the following:   1.   The handbook is not intended to create a binding contract, express or implied. 2.   An "at will" relationship between the Employer and its employees exists, whereby either party may terminate the employment relationship at any time in his sole and absolute discretion. No promises of continued or on- going employment have been made. 3.   The Employer has the right to change, modify, add to, or eliminate any or all terms, conditions, and benefits of employment at any time in its absolute and sole discretion.

The Disclaimer must be clear and conspicuous . This means that it must be: 1. written in clear and simple language, so that it is understandable to an individual with limited education 2. in bold type and/or capitalized so that it stands out from the rest of the text (Do not hide in the fine print) 3. contained at the very beginning of the handbook and not buried elsewhere Acknowledgement of Receipt of Handbook. At the time the handbook (including any supplements or changes) is distributed to employees, each employee should sign a document acknowledging his/her receipt of the handbook. This receipt should state that the employee recognizes his/her obligation to read the handbook, become familiar with its terms, abide by it, and to bring any questions to the designated Employer representative. This Acknowledgement also should include the Disclaimer language stating that the employee recognizes 5

         

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that the handbook does not create a binding employment contract , that it is subject to change at any time at the Employer's sole and absolute discretion and that his/her employment is at will . Drafting Guidelines 1.   Use a conversational tone. 2.   Use simple, clear language that the employees will understand. Be brief. Employees will not read an overly long, technical manual. 3.   Use personal terms such as "you" not "employee." Refer to the Employer by name. 4.   Be careful to preserve Employer discretion. Avoid such terms as "shall" or "will'; use "may" instead. 5.   Limit who in management has the authority to modify the employment relationship. Identify the appropriate managers who can answer employment issues. 6.   Review Employer policies and procedures carefully. Make sure that what is included in the handbook is consistent with your practice and philosophy. Owners and management must be committed to adhere to the terms of the handbook. 7.   Avoid including in your handbook instructions to management on how they should handle certain situations. If you feel it is necessary to have such instructions in writing, include this in a separate document that is distributed only to management. Employees should not have access to this document. Note that this would be discoverable in a lawsuit (unlike advice given to management by its attorney on how to handle a situation or correspondence and other documents between attorney and client), so special care must be given in drafting such a document and adhering to its terms. 8.   Pre-employment matters need not be included in the Handbook. The purpose of the handbook is to communicate and inform current employees about their employment relationship with the Employer. 9.   Handbook should be reviewed by Counsel and reviewed annually

Workplace Policies  General A. Attendance and Punctuality Issues

10.  Is some minimal amount of notice required prior to an absence or lateness from work? 11.   If so, how much notice? One hour? Reasonable notice? 12.   Must the employee personally call in or may this be delegated to a friend or family member? 6

     

         

           

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13.  Can excessive absenteeism or lateness result in disciplinary action? 14.   If so, do you want to define "excessive"? 6. If so, will the standard be applied consistently within departments? Across departments?  Discipline and Discharge. The need to discipline and discharge employees is an ever-recurring problem of Employers. Too often, many Employers (or better put, their managers) do not want to go through the emotional strains of addressing a performance or disciplinary problem with the employee, and, thus, simply avoid the issue until it is too late. Such avoidance usually comes back to haunt the manager when he/she finds that there is nothing in the employee's file to support his/her claim of repeated and constant problems and to support his/her decision to terminate. This situation often is compounded by performance appraisals that do not honestly evaluate the employee. Many managers simply prefer to rate all employees "satisfactory" rather than to address their strengths, weaknesses, and areas for improvement. When this occurs employees may legitimately claim that they had no knowledge/notice of their deficiencies or of their manager's dissatisfaction. Prior notice to employees is a key ingredient in a properly administered disciplinary procedure. Make employees aware of what the rules are and what is expected of them.   1. Set forth examples of prohibited behavior that can lead to discipline and discharge. Emphasize that the list is not all-inclusive. 2. Retain your discretion to terminate at any time for any reason. Restate that the employment is at will . 3. Avoid using terms such as "cause" or "just cause." 4. Explain general disciplinary steps and procedure s that the Employer may follow. State that the Employer will take appropriate action depending upon the circumstances of each situation. You need to leave yourself substantial discretion to take any action you deem necessary, and, if you establish a progressive disciplinary scheme, to skip one or more steps if you so determine. The focus is on "guidelines" as opposed to mandatory rules--a balance must be struck between notifying employees and the Employer's need to freely manage its workplace and to discipline employees, as each situation warrants. General guidelines to be followed in disciplining and discharging employees: 1. Be consistent in applying your policies and in disciplining employees 2. Investigate offenses, poor performance, and/or recommended action. Be sure to get the employee's side of the story before issuing discipline. 3. Consider the following factors: a)   Discrimination concerns 7