Law suits Archives - Miami Payroll Center

HR’s Role in the Wells Fargo Debacle

October 10, 2016

By now we’ve all heard numerous tales of the fake accounts created by Wells Fargo employees in order to meet unrealistic sales quotas and the subsequent firing of more than 5,000 as a result. Millions of phony deposit accounts. Hundreds of thousands of phony credit card accounts. Phony pin numbers and email addresses too.

If you’ve ever worked in an environment where meeting goals, especially sales quotas, was given high priority, then you know what that type of culture can breed. Even the best of employees can engage in dishonest practices when their paycheck is on the line.

The workplace psychology experts at the Faas Foundation say that the bank is a perfect example of systemic bullying, defined in this case as “setting unreasonable expectations to get rid of employees who do not deliver and causing others to resort to questionable practices to meet the expectations.”

As more details become available, it turns out that the fraudulent accounts weren’t the only issue. If we’re talking about things that fit the definition of phony, perhaps we need to look at the company’s Code of Conduct and its Ethics Hotline as well.

As the dust settles around this case and the investigation and hearings play out, we find a CEO who assumes little to no responsibility, customers who are due recompense, hundreds of millions of dollars in fines assessed and past employees whose voices are finally being heard. From these past employees we now know that multiple attempts were made to blow the whistle on these fraudulent accounts through calls to the company’s ethics hotline and emails to their human resources staff. In return for following the company’s ethics policies (let’s not mention the law!), those employees were reportedly rewarded with termination[1].

Reporting under the condition of anonymity, a former Well Fargo Human Resources employee told reporters at CNNMoney that the bank had a plan in place to retaliate against those who used the tip line for reporting sales related issues. To make a long story short, the HR staff helped managers find ways to fire those tipsters.

All of this only proves what we already know: The existence of a code of conduct isn’t enough to create ethical behavior. The code must be also enforced and supported by company culture. And if a company’s upper management isn’t enforcing the code, then it is HR’s job to do so.[2]

Enforcement is one thing, but creating a supportive company culture is another. The experts at the Faas Foundation suggest that not only was the culture at Wells Fargo not supportive, but that it actually had all the necessary components of a hostile work environment (unreasonable expectations put on employees, an acceptance of questionable practices, and reluctance to complain out of fear of retaliation). According to Andrew Faas of the Foundation, “Wells Fargo has a much bigger issue than the fraudulent accounts—they have a culture of fear. If this is validated, it puts to question the credibility of their leadership’s response[3].”

Pointing the finger directly at the CEO is easy and justified, but it doesn’t change this simple fact: A very different story would be playing out in the news right now if the HR staff had been responsive to the complaints and willing to take a stand the very first time they heard of a violation.

This extends beyond HR’s role in building corporate culture, helping managers with realistic goal setting and providing code of conduct training. If the accounts of former employees are true, then complaints from internal whistle-blowers were communicated to Wells Fargo’s HR staff many times over the past several years.

While standing up to corporate executives requires tremendous courage, it is a professional responsibility of HR professionals to do so. We, too, are safeguarded by laws that provide strong protections for those who face retaliation for reporting these issues up the chain of command.

[1] https://my.capital.org/community/advice-resolution/newsletter/blog/2016/09/26/retaliation-lessons-from-the-wells-fargo-debacle

[2] https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/Wells-Fargo-code-of-conduct.aspx?utm_source=SHRM%20Wednesday%20-%20PublishThis_HRDaily_7.18.16%20(15)&utm_medium=email&utm_content=September%2014,%202016&SPMID=&SPJD=&SPED=&SPSEG=&spMailingID=26504954&spUserID=ODY2OTYwOTQ1NDkS1&spJobID=882202904&spReportId=ODgyMjAyOTA0S0

[3] https://www.fastcompany.com/3064175/how-wells-fargos-cross-selling-scandal-grew-out-of-workplace-culture

Florida’s Tipped Minimum Wage

September 22, 2016

Each year by October 15^th the State of Florida determines what the following year’s minimum wage rate will be. Take a minute to check your calendar – we can expect this announcement soon! While many would like to think these decisions are completely left to politics and protesters, the minimum wage determination in Florida is actually made using a formula that ties the minimum wage to the consumer price index (CPI).[1]

Last October it was announced that there would be no minimum wage increase in Florida for 2016. The decision was a surprise to some, especially those in the hospitality industry which contains a large number of the state’s minimum wage workforce. However, since Florida has already established a minimum wage higher than the federal minimum, news of a flat year was welcomed by employers.

tips Employers in the hospitality industry have come to terms with Florida’s higher-than-federal minimum wage, but many struggle with the tipped minimum wage and how to ensure compliance when paying tipped employees. The current minimum wage in Florida is $8.05 per hour, with a minimum directly paid wage of at least $5.03 per hour for tipped employees (with tips making up the difference).

Thus, in Florida, the employer can claim $3.02 toward the $8.05 minimum wage as long as the employee actually receives $3.02 in tips per hour. If the employee does not receive $3.02 per hour in tips the employer must pay the difference so that the full minimum wage is met.

While we wait to see if the state minimum wage (as well as the tipped minimum wage and tip credit amounts) will change for next year, now is a good time to review related Department of Labor Rules.

To begin with, employers must provide tipped employees specific information from the start of employment[2]:

Notice of the amount of direct hourly wages it is paying a tipped employee, which must be at least $5.03 in Florida
The additional amount it claims as a tip credit, which cannot exceed $3.02
An explanation that the tip credit it claims cannot exceed the amount of tips actually received by the tipped employee;
A statement that all tips received by the tipped employee are to be retained by the employee unless there is a valid tip-pooling arrangement in place; and
An explanation that the tip credit will not apply to any tipped employee unless the employee has been informed of the tip credit provisions.

Two aspects seem to be at the root of many tipped minimum wage and hour disputes: Dual jobs and tip pools.

Many employers don’t consider their tipped staff to have dual jobs. However, if tipped workers are expected to spend some of their shift completing work that does not provide tips, they may have a dual job. Take a server for example. The server may spend four hours waiting tables, but then two additional hours cleaning, taking inventory, stocking table condiments, etc. The employer must pay the server the full minimum wage, without taking a tip credit, for those two hours.[3]

Another issue is tip pooling. Although tip pooling has potential benefits for employees, it can also be misused by employers. While many believe that back-of-house staff (line cooks, dishwashers, bussers, etc.) deserve a cut of the tip for their role in the dining experience, this practice cuts wait staff tip wages by more than 50%, which is definitely not in accordance with the law. According to the Federal Department of Labor, only employees who regularly receive tips can be part of the pool and employees must receive notice that they will be pooling. The law says that employees cannot be required to share their tips with employees who do not receive their own tips, like dishwashers or cooks.[4]

Whether or not the minimum wage (and tipped minimum wage!) will change next year as a result of the CPI formula or the presidential election, employers should review their payroll practices to ensure compliance and minimize the chance of wage and hour issues!

[1] http://www.orlandosentinel.com/business/brinkmann-on-business/os-florida-minimum-wage-20151019-post.html

[2] http://hr.blr.com/HR-news/Compensation/FLSA-Fair-Labor-Standards-Act/Florida-court-FLSA-rules-valid-tip-credits-pools/#

[3] http://www.nolo.com/legal-encyclopedia/florida-laws-tipped-employees.html

[4] http://www.danzlaw.net/blog/2016/06/understand-the-tipped-minimum-wage-laws-and-common-florida-violations.shtml

Political Debate in the Workplace: More at Stake than Lost Productivity

August 26, 2016

It’s election season and, unless you’ve mastered the art of conversation avoidance, it’s likely that you’ve been invited (or forced!) into a political discussion in the course of an average day. This election is a little “louder” than those of the past. With the constant media attention given to our current Republican and Democratic Presidential candidates, the campaign trail seems to have barged right into our homes and workplaces, mostly uninvited.

According to a new CareerBuilder survey, 3 in 10 employers (30%) and nearly 1 in 5 employees (17%) have argued with a co-worker over a particular candidate this election season, most often about Donald Trump.[1] This same survey reports that male employees (20%) reported a higher incidence of arguing about politics at work than female employees (15%). Comparing age groups, at 24% younger workers (those between the ages 18 and 24) are the most likely to report engaging in heated political debates at work.

loss_productivity Beyond potential morale and productivity issues, political debate in the workplace may create a potential liability for employers. Conversations around our current Presidential candidates can easily focus on race, sex or religion. This can provide grounds for harassment, discrimination or other types of workplace complaints.[2]

Before we pull out our pens to write a new policy on political debate, let’s remember one thing: Employees don’t have a Constitutional right to free speech or freedom of expression at work.[3] The first amendment applies to government censorship, not workplace censorship. The Constitution allows private businesses to regulate speech in the workplace, and even to bar political discussion entirely. Public employees are more protected by free-speech rules, but even government offices can impose limits.

Still, the potential liability should not be dismissed. It would be nearly impossible to ban all political discussion in the workplace. Chances are that your current policies already have you covered, but here are a few things to keep in mind:

Ensure your harassment policy and harassment complaint procedure are visibly posted and that employees have been trained on both. Take this opportunity to remind employees of any guidelines that prohibit bringing campaign materials into the workplace.
While employers can implement dress code policies that prohibit the display of political items at work, the National Labor Relations Act says that employees have the right to display Union insignia while at work. So, for example, if what Donald Trump said is true, and “the men and women of the Teamsters are with Trump,” that “Teamsters for Trump” lapel button is allowable in the workplace regardless of dress code.
Remind managers and supervisors to avoid political discussions with their subordinates and to limit discussions that harm productivity or otherwise disrupt work.
Review your electronic communications and computer use policies to ensure that they mention that company computers and systems are for business related use only and that the use of systems for political campaigning is prohibited.
Review your non-solicitation policy to ensure that it prohibits all forms of solicitation, including political campaigning, during work hours.

November will be here before we know it, and the results of the election may bring about even more heated, political debate. Perhaps the most important thing we can all do is create a culture of open dialogue and respect for differing opinions. If that fails, perhaps we teach our employees the art of knowing when to walk away!

[1] http://www.prnewswire.com/news-releases/political-talk-heats-up-the-workplace-according-to-new-careerbuilder-survey-300298209.html

[2] http://www.acc.com/legalresources/publications/topten/TopTenQuestionsRegardingPoliticalDialogueintheWorkplace.cfm

[3] http://www.hrexaminer.com/is-there-free-speech-at-work/

Do your managers qualify for their exempt status?

June 27, 2016

Small business owners without any HR expertise and without seeking outside counsel tend to classify their employees on a whim, believing that granting someone “exempt” status will save the business on overtime expenses. Little thought is given to whether their “exempt” employees actually qualify for their exempt status. This is a problem that unfortunately, many of them don’t realize the severity of until there’s a claim of overtime that allows for them to learn about the qualifications for the exemption. By then, its usually too late and they are well on their way to losing a case.

Salary Test

Generally, an employee is paid on a salary basis if s/he has a “guaranteed minimum” amount of money s/he can count on receiving for any work week in which s/he performs “any” work. To qualify as exempt, employees must generally be paid a predetermined amount over $455 per week each pay period not-dependent on the quality or quantity of the work performed. Starting December 1st, 2016, the salary threshold of $455 a week will rise to $913 ($47,476 per year) making an additional 4.2 million workers eligible for overtime pay.

The Duties Tests

An employee who meets the salary level tests and also the salary basis tests is exempt only if s/he also performs exempt job duties.

There are three typical categories of exempt job duties, called “executive,” “professional,” and “administrative.”

Exempt executive job duties.

Job duties are exempt executive job duties if the employee

regularly supervises two or more other employees, and also,
has management as the primary duty of the position, and also,
has some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignments).

“Mere supervision” is not sufficient. In addition, the supervisory employee must have “management” as the “primary duty” of the job.

Business owners should remember to look at the job duties of the position, not the job title of an employee to determine whether an exempt status applies. The Fair Labor Standards Act (FLSA) also provides certain exemptions for outside sales personnel, certain specialized computer personnel, certain highly compensated employees, certain retail sales employees, and employees covered by the Motor Carrier Act (MCA); Qualifying for these and documenting your rationale can get a little technical, and business owners should consult with an HR or Labor Attorney to ensure the exemption will hold up if ever challenged.

With the new salary threshold becoming effective in a few months, the time is perfect for employers to reevaluate their exempt/nonexempt classifications. If you are concerned that some of your exempt workers may be misclassified, the new regulations will give you another reason to revise their classification without necessarily creating liability for past wages.

Overhauling the “Zero Tolerance for Violence” Policy

June 21, 2016

Most HR Professionals would prefer to stay out of the gun control debate. In light of recent gun related violence in the US, however, we once again find ourselves “caught in a legal crossfire between the need to maintain safe workplaces and the right of employees to possess firearms.[1]”

Until recently, many employers attempted to prevent violence in the workplace with Zero-Tolerance policies, but policy alone will not prevent violence, nor will it help in a time of crisis.

Although the gun control debate has taken center stage, gun violence is only one type of violence we may encounter. Here are a few recommendations for preventing and preparing to respond to violence in the workplace.

1. Train your managers and staff to identify the behaviors that may be predictors of potential violence and encourage employees to report conduct that makes them feel uncomfortable. Investigate all complaints and act if needed. Include the reporting structure in policy, and be sure to make employees aware that there will not be retaliation for following the policy.

2. Provide training for employees that goes beyond a zero-tolerance policy. In today’s climate, this means providing training and conducting drills on what to do in an active shooter situation. This may require consulting with your local law enforcement agency, especially if no one on your team is an expert in active shooter preparation. Many agencies will provide active shooter training free of charge.

3. Form a management response team to conduct a threat assessment as well as respond to threats or reports of potential violence.[2] The members of this team may need specialized response training as well. Hire an external party to conduct a threat assessment if your organization is not comfortable conducting it internally.

4. Ensure that your management team understands your state’s laws regarding guns in the workplace. Legal experts say employers have a right to prohibit guns and other dangerous weapons on private property.[3] However, many states have laws allowing employees to have weapons locked in a personal vehicle in the company parking lot. If you are going to implement a no-guns-at-work policy, be sure to post a conspicuous sign prohibiting weapons at work.

5. Consider adopting background check requirements for all new hires. A thorough check may weed out someone with a history of violence or behaviors often associated with a heightened potential for violence.[4]

No employer is immune from workplace violence and no employer can totally prevent it.[5] Taking measures to prevent violence is not enough. We must also prepare to respond and act when faced with a violent situation.

Sources:

[1] https://www.shrm.org/hrdisciplines/safetysecurity/articles/pages/hr-conflict-guns-workplace.aspx#sthash.ZakEiJFJ.dpuf
[2] https://www.shrm.org/legalissues/federalresources/pages/3-ways-to-reduce-risk-of-workplace-violence.aspx
[3] https://www.shrm.org/hrdisciplines/safetysecurity/articles/pages/hr-conflict-guns-workplace.aspx#sthash.f2sh1QW0.dpuf
[4] http://topics.hrhero.com/workplace-violence/
[5] https://www.dol.gov/oasam/hrc/policies/dol-workplace-violence-program.htm

5 Ws That Are Key to Employee Investigations

May 23, 2016

While working at your office one day an employee quietly enters and closes the door behind him. He asks for a few minutes of your time, and detecting the urgency in his voice you grant him the time- he proceeds to tell you a harrowing tale of harassment and bullying allegedly going on right beneath your nose. Right now, he just wants you to do something about it. Time for you as a Manager to jump into action and immediately contact your HR Business Partner.

I cannot stress the importance of conducting a quick, thorough, and documented investigation into any and all claims of harassment by an employee. While HR professionals are trained to perform these investigations, Managers should at the very least be knowledgeable on the 5 Ws that will determine the success of said effort.

The 5 Ws refer to the questions that must be asked during any investigation-

Who – was there, who made the offending comment, who witnessed the comment being made, etc.
What – preceded the comment, what was said exactly, what do you think the offending party was trying to convey with the comment, what was hurtful about the comment, what did you do about being hurt at the time, what in your opinion would be the ideal resolution to this situation, etc.
When – was the comment made, when did you decide to complain, when did you tell the offending party that their comment was hurtful, etc.
Where – did the incident happen, where did you go afterwards, where did they go afterwards, etc.
Why – didn’t you tell them you were hurt by their behavior, why did you not say something sooner, why did you …, etc.

Your employee investigations should be executed quickly, your interviews well-planned and remember the 5 Ws. Your employees must perceive you as unbiased and objective in the performance of reviewing these claims- or you will not get the information or cooperation you need from them in order to get to the bottom of the situation. It almost goes without saying, but document every step along the way of your investigations and it helps if you always assume that the matter will end up in court.

Uber will pay up to $100 million to settle labor suits

April 22, 2016

Uber has agreed to pay millions of dollars to settle two class-action lawsuits that would have defined the relationship between the company and its drivers.

Uber has survived a major threat to its business model, settling two legal suits brought by drivers who sought to be classified as employees instead of independent contractors.
The ride-hailing firm will pay up to $100 million to the 385,000 drivers, but their employment status will not change.

The class actions were brought in California and Massachusetts. Uber, which is valued at up to $70 billion, is on the hook for a $84 million initial payment, and another $16 million if it goes public.

Source: Uber will pay up to $100 million to settle labor suits

Is love in the air at your office?

February 15, 2016

It’s Valentine’s Day, let’s recognize that love is not just in the air this time of year – it may also be in your office. Workplace romances are more common than you might think. Last year’s Vault Survey of Office Romances found that 51% of respondents had been involved in an office romance. The scary part is that 32% of those folks had a relationship with a superior or subordinate.

Before you change the annual Sexual Harassment Prevention training to the week of Valentine’s Day each year, let’s consider a more realistic option: A policy on workplace romance. This type of policy is an addition to your policy on harassment, not a replacement.

According to SHRM, when developing a policy on office romance, employers should consider both the legal implications associated with sexual harassment and retaliation claims under Title VII of the Civil Acts of 1964 and similar state and local laws, as well as the day to day events associated with consensual relationships in the workplace. A good policy starts with prohibiting romantic or sexual relationships between supervisors and direct subordinates. Preventing all office relationships seems improbable, but you can clearly identify workplace expectations.

Already have an office romance policy? If it hasn’t been revised in a while, now might be a good time to align it with your technology policy. If there is an office romance, it is likely to play out through an internal messaging system, e-mail, texting or social media. While your technology policy may already address the use of these in the workplace, your office romance policy can serve as a reminder of the policy and should serve to further minimize any expectations of employee privacy.

If you have an older “love contract” and not a formal policy, it’s time to rethink your approach. Love contracts were designed to allow employees to disclose their relationship and provide protection to the employer in the event that the relationship ended. While they may still have a place in your organization, a love contract alone will not shield you from liability.

As you rethink your current policy, or think about developing a new one, always remember to keep the culture of your organization in mind. While you have to abide by related laws, you should carefully consider what will fit your organization best.

A policy, a love contract and employee training might not sound romantic, but it’s a great Valentine’s Day gift for your business!

Store or Delete? How Long Should We Keep HR Records?

December 7, 2015

As the beginning of a new year approaches, many of us will try to organize our offices, de-clutter both our physical desktop and our virtual one, and simply get rid of the unnecessary. One thing that Human Resources is known for is lots and lots of paperwork. While a large part of it is stored electronically these days, it’s still there, taking up space. Hey, record keeping is part of our job – we need to keep those records! That’s true. But are we keeping them longer than necessary?

Before we talk about how long to hold onto certain items, a quick reminder of the types of information that should be in an employee’s personnel file: Only information that can be legally used as a basis for an employment-related decision should be in an employee’s file. That means that information related to EEO, disability records and wage garnishments – all things that we cannot base employment decisions on – should be in separate files. A good practice is to keep I-9s in a separate file as well.

The list below outlines a few of the federal guidelines, although it is important to note that if state guidelines are different, you should pick the one with the longer time frame. Better to keep it longer than necessary than not long enough. Of course, some industries or circumstances come with their very own sets of requirements (such as Federal Contractors) and those do not follow the guidelines offered below.

Hiring Records – 1 Year. Yes, you will need to save all of the cover letters, resumes, interview notes, etc. from the hiring process for one year after the hiring decision is made. Among other things, this serves as a means to protect businesses from claims of discrimination.
Basic Employee Documentation such as I-9s or work permits for minors – 3 years after hire or 1 year after termination, whichever is longer.
Drug Testing – 1 Year (longer for transportation related jobs). If you require drug testing as part of the pre-employment process, then it is considered part of the hiring process (See first bullet). If you do additional drug testing after employment has commenced, you will need to maintain these records for one year as well.
Payroll Records – 3 Years Minimum. Payroll records include daily schedules, regular rate of pay (and basis for determining it), overtime pay, weekly compensation, amounts and dates of payments, daily and weekly hours, overtime hours and pay, annuity and pension payments, benefits, deductions and additions and more. Please note that 3 years is the minimum time to hold on to these records. In our highly litigious workplace, the best practice is hold on to them for at least five years after termination!

There are many more types of records that we hold on to, and each has guidelines regarding how long you need to retain them.

Attendance at the Holiday Party is Optional…. But We EXPECT you to be there!

November 22, 2015

Are you ready for the annual holiday party? In today’s multicultural, highly litigious workplace, some employers have chosen not to celebrate the holidays at the office at all. Trying to figure out how to celebrate Christmas, Hanukkah, Kwanzaa, Ramadan, and Bodhi Day in one event is reason enough to consider pulling the plug on holiday celebrations altogether. Still, it’s hard to break a habit and many businesses still revere the party as a time honored tradition to be upheld. Not all employees, however, may be eager to attend.

Holiday_Party While employers don’t normally require their employees to attend a holiday party, many strongly encourage it, creating an expectation of attendance. If you’re one of those organizations, we suggest you reconsider the message on your holiday party invitation for two reasons. The first is related to liability and the second is related to wage and hour laws.

As an employer, your liability for something that happens at a holiday party is going to depend primarily on whether the party can be considered within the course and scope of employment. If employees are required or expected to attend, then it’s a safe bet that the party is within the course and scope of employment. If an employee is injured at your party it could be compensable under your workers’ compensation policy. If an employee hurts someone who is not an employee, you could be legally responsible for their negligence.

If there is no expectation of party attendance, then the party may not be in the course and scope of employment, which may relieve you of some of these liabilities as an employer (Of course, an employer can always be held liable for harm resulting from negligence).

No one expects to pay employees an hourly rate for attending a party, but if non-exempt employees are required or expected to attend then, by law, you should pay them for the hours they attended the party. If those party hours, on top of their normal work hours, put their weekly hours over 40, you could find yourself paying overtime for party attendance.

If there is no expectation of party attendance then you shouldn’t have to pay for the party time unless the employee performed actual work. Two months ago we posted about meal breaks, and the same concepts apply here. If you have your staff working at the party to register party-goers, hand out name tags or table numbers, decorate or perform any other duties that you assign to them then, legally, they should be paid for their time.

So make your holiday party optional…the fun people will attend regardless and you will have two fewer headaches to worry about!

Merry Christmas everyone.

Avoiding a Halloween Scare

October 21, 2015

It’s that time of the year again- Halloween, also known as “All Hallows’ Evening”. Many a CEO or business owner is tempted to let employees “dress up” for the day, humanize the workplace a little bit. Allow their teams to display some personality, and bring some pizazz to the office. Overall, this is not a bad time of the year to allow a little fun.

Don’t let the fun turn into a nightmare scenario for you. When adults come out and play, Halloween costumes can get overly sexy (I know, I know- you’ve never seen this happen), or mock racial, religious, or political beliefs that may offend another employee. Before you know it, you’re getting served with a workplace discrimination lawsuit. How can you avoid this spooky situation, and still allow for a little fun at the office?

As with most things Human Resources related, an ounce of prevention is worth a pound of cure. While you cannot completely eliminate the risk that an employee will get offended, you can certainly mitigate that risk by following a few easy steps.

First things first. If you’re going to allow for a little fun in the workplace this Halloween, communication with your Managers is key. Meet with your Management staff and Elvira discuss the holiday, and how some in the workplace might find the holiday objectionable due to their religious beliefs. For this reason, Managers should communicate to their teams that it is perfectly okay NOT to participate in dressing up to work on that day, and if an employee requests to work from home and it won’t impact their work- this reasonable accommodation should be made. Any costume contests, office décor contests, parties, or activities related to the holiday should be communicated to staff as “voluntary” and no employee should be forced to partake.

Next, you should communicate that Halloween is not a day (or an excuse) to toss the company dress code out the window. While it is okay for them to dress up, it should be communicated to all staff that the main parts of your company’s dress code will still be enforced. You want to get the message across to your staff that costumes that may offend a colleague, or worse- a client, will not be tolerated. Period. If possible, give examples of costumes that comply with your dress code, and those that don’t. I suspect this being a Presidential election cycle and with the new Star Wars movie set to be released in December, you’re going to be seeing a lot of Donald Trump and Hans Solo costumes.

Lastly, I can guarantee you that even though you take the two necessary precautions above- someone will still end up coming to work in an inappropriate costume. Consider when communicating the Halloween holiday’s work rules for the day asking those employees who will be coming in costume to bring a change of clothing in the event their chosen attire is deemed inappropriate. Also inform them that not doing so may result in their being sent home for the day should their costume not meet the company’s communicated guidelines.

I know what you’re thinking, all this for a day of fun? Yes, and believe me- you’ll thank me if you still end of with the nightmarish scenario of having an employee file a claim.

Is it Time for Employment Practices Liability Insurance (EPLI)?

August 21, 2015

The threat of being sued by an employee is an everyday reality for business owners, and small/mid-sized businesses are no exception. It only takes one event to turn a once happy employee into a disgruntled worker. Thinking you might be safe since you have a small, loyal staff? Think again. While your current staff may be happy and loyal, the threat of a lawsuit can come from past, present and even prospective employees.

Scales The idea that you could be sued by someone you’ve simply interviewed as a prospective employee may seem absurd, but employer liabilities begin before the employment relationship begins. Prospective employees can claim that you failed to hire them for an illegal reason such as their age or gender. Even though this claim may be hard to prove, it can still result in costly legal fees for your business.

Law suits from prospective employees are not extremely common, but law suits from current and former employees seem to be a mainstay in our current business climate. Employees who are terminated, passed over for promotion, or who feel harassed or slighted in some way may all take legal action.

One way to help mitigate the risks of an employee lawsuit is by purchasing Employment Practices Liability Insurance (EPLI). EPLI protects businesses against claims that the company is violating employee rights. While policies differ, EPLI in general will reimburse for court fees, judgment amounts and legal defense costs whether the company wins or loses. If you believe your current insurance already provides this coverage, be aware that many general liability policies exclude employee lawsuits and discrimination charges.

Every employer, regardless of size, can be the target of legal action. While cases against large, nationwide employers seem to be the only ones to make the headlines, insurance industry data suggests that mid-size business, those with at least 15 but no more than 250 employees, are sued frequently by current and past employees. These employees can often file a lawsuit without bearing any of the cost or risk involved.

According to the Conflict Solution Center, a nonprofit organization specializing in workplace mediation, the average cost to litigate an employment practices claim is $160,000. That doesn’t include settlement or judgment costs. When you start to think about the impact of those costs on your business, it makes sense to consider adding EPLI to your risk management strategy.

Speak to your insurance professional to see what your current coverage will cover and determine if EPLI is right for your business. Alternatively, give us a call at (305) 273-4066, and we would be more than happy to refer you to an insurance professional who will work with you to review your options for this type of coverage.

Misclassifying employees: An expensive proposition

March 8, 2015

Many small businesses believe they are getting a bargain on expenses and payroll taxes by classifying their employees as independent contractors. Some employers classify independent contractors as such in order to avoid paying overtime. They arbitrarily bring them on-board and figure they can simply provide them a 1099 at the end of the year and be done with it, completely oblivious to the perils to their business down the line.

Classifying employees and determining who is and is not an independent contractor isn’t a choice you are free to make in order to suit your business goals independent of the rules involved. If a hire is misclassified, a company can face hefty financial penalties and even lawsuits.

A number of factors must be taken into consideration in determining whether an individual should be hired as an independent contractor or an employee. It is also important to remember that no single factor is conclusive on its own- it’s sometimes very difficult for the hiring organization to make the correct determination on their own.

FEMA_Employees To determine whether an individual is an employee or an independent contractor under common law, the relationship of the worker and the business must be examined carefully. Generally speaking, an employee is subject to an employer’s control over what work gets done, how it is performed, with what tools and resources, and when the work gets performed. If on the other hand an individual is an independent contractor, the employer has the right to control or direct only the result of the work- and not the means and methods of accomplishing the result.

At Miami Payroll Center, we want to help you ensure you have properly classified your employees and/ or independent contractors. To this end, we’ve created a simple two-page job aid which can help you make the determination. To get this free tool, simply click here and fill out the short form. You will receive an email with a link to download the free job aid.

For more information on the proper classification of your employees, contact us or visit the IRS’s web site here.

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