Tag Archives: Employment Policies

Conducting an HR Audit for 2019

Contributed by Jeffrey Risch, December 17, 2018

When was the last time you conducted an HR audit for your organization?

We’re all busy and get distracted easily. Often times HR considers a thorough review of the Employee Handbook is enough to ensure all is well from a legal compliance perspective as to personnel policies and practices. Not quite. A closer examination of an employer’s forms, contracts, procedures, practices and actual day-to-day management is essential. In other words, a deeper dive into an organization’s HR-universe is necessary these days. In a world of increased workplace regulation and litigation risks, a more thorough review and audit is required.

For a sample of a comprehensive checklist of the subjects, topics, and issues that a common HR audit entails, please take a moment and familiarize yourself with our HR Audit Checklist here.

Expense Reimbursements – Time to Update Policies

Contributed by Noah A. Frank, October 17, 2018

Effective January 1, 2019, the Illinois Wage Payment and Collection Act requires employers to reimburse “necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.”

56133528 - travel expenses design, vector illustration eps10 graphic

Travel expenses design, with airplane and money

Here’s what you need to know now to prepare

While the law requires reimbursement of expenses which are for the primary benefit of the employer, employers are not responsible for expenses due to (i) the employee’s negligence, (ii) normal wear, or (iii) theft (unless the theft was the result of the employer’s negligence). Employees have at least 30 calendar days to submit supporting documentation, or a signed statement as to why such support is nonexistent, missing, or lost.

An employee is not entitled to reimbursement if he/she fails to comply with an established written expense reimbursement policy. The policy may set guidelines and specifications on what is reimbursable, as long as it is not de minimus or nonexistentBut, if the employer authorizes or requires the employee to incur an expense, or fails to comply with its own policy, then the expense may become reimbursable.

While the Illinois Department of Labor has not clarified what types of expenses are reimbursable, the statute closely tracks California’s Labor Code 2802, which has been interpreted to require reimbursement for: personal automobile use at the IRS rate or the actual costs if higher; personal mobile phones and service used for work (even where minimal); training; business travel; tools; equipment; and uniforms (including apparel and accessories of distinctive design and color).  This list is not exhaustive, nor is it necessarily controlling on Illinois employers.  Both states’ laws provide for attorney fee shifting and penalties for violations.

What to do?  Spoiler alert – Enforce written policies

Review existing policies and procedures:

  • How, when, and where do employees submit receipts?
  • Are there limits on reasonable meal reimbursements?
  • What about class of travel for domestic vs. international flights?
  • Are these policies that the company can and does effectively, fairly, and consistently apply?

As BYOD (Bring Your Own Device) policies become more prevalent, employers must evaluate whether they are required to reimburse for the cost of all or a portion of the device (mobile phone, tablet, computer) and related voice, data, and internet services. Similarly, consider educational and business development expenses which are primarily for the employer’s benefit such as trade and industry subscriptions and memberships. Also address expenses currently incurred without forethought: e.g., curbing practices where employees purchase office supplies as they deem necessary.

Employers should consider having competent employment counsel review expense policies and ancillary documents for compliance and best practices. For example, update template release agreements to acknowledge that an employee received complete expense reimbursements.


The NLRB’s Latest Target? Dress Codes and Already Rescinded Policies

Contributed by Suzanne Newcomb, July 13, 2016

The Federal Court of Appeals for the First Circuit recently upheld a National Labor Relations Board decision finding a car dealership’s dress code ban on “pins, insignias, and message clothing” was, in and of itself, an unfair labor practice. The case is another in a long line of NLRB decisions striking down policies as unfair labor practices because, the board claims, employees might interpret them as infringing upon their right to unionize or engage in other concerted activity protected by Section 7 of the National Labor Relations Act.

The board concluded the dealership’s interest in maintaining its public image did not justify the outright ban. Adding insult to injury, the Board found a second violation for the dealership’s failure to properly repudiate overly restrictive policies contained in an earlier version of its handbook.

Employee handbookThe NLRB had earlier challenged several provisions in the dealership’s handbook. The dealership worked closely with the NLRB to draft new NLRA-compliant policies and issued a whole new handbook. In fact, the NLRB’s own General Counsel stipulated that, with the exception of the dress code policy, the new handbook was NLRA-compliant. So, even though the employer rescinded the offending policies and replaced them with policies the NLRB explicitly approved, the employer was still found to have engaged in an unfair labor practice because it had previously maintained policies the Board viewed as overly restrictive and the employer did not properly repudiate those policies.

The Board ordered the employer to issue a notice that specifically addressed the policies it found to be unlawful, advised employees of their Section 7 rights, and assured employees there would be no future interference with those rights. The Federal Appeals Court upheld the Board’s ruling, concluding that to be relieved of liability for unlawfully restrictive policies, even policies that have since been discontinued or appropriately revised, an employer must “signal unambiguously to employees that it recognizes it has acted wrongfully, that it respects their Section 7 rights, and that it will not interfere with those rights again.”

Notably, no employees were alleged to have actually suffered discipline or any other adverse action under the ban. The policies alone formed the basis for finding the employer liable for two distinct unfair labor practices.

In light of the NLRB’s aggressive approach, employers are again reminded to review handbooks and employment policies regularly. Anything the Board believes employees could reasonably interpret as improperly constraining Section 7 activity could form the basis for an unfair labor charge. If any of your policies are questionable, consult legal counsel to determine how best to revise those policies to bring them into compliance and, if necessary, to devise a strategy to effectively repudiate any policies that run afoul of the Board’s broad interpretation of Section 7 rights.

Holiday and Weather Closures – Do Employees Get Paid?

Contributed by Noah A. Frank

Every year at this time, employers ask us the same set of questions: Do we have to pay employees for holiday time off, or overtime if they work on a holiday? What about inclement weather closings?

Non-Exempt Employees

Non-exempt employees are those that are covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA) and its state counterparts.  These are the bulk of the workforce, and typically hourly workers.  Non-exempt employees generally (exceptions follow) only need to be paid for hours they actually work – and not for holidays or weather-related office closings. For example:

  1. Non-exempt employees do not need to be paid for New Year’s Day if they are given the day off.
  2. If the business is closed during inclement weather (e.g., snow days, burst pipes), non-exempt employees do not need to be paid when the business is closed and they are not working.
  3. If employees report to work and are sent home early (e.g., due to imminent ice storm), then non-exempt employees only need to be paid for the hours they worked, and not for the time that they were sent home early and are not working.

Where non-exempt employees do work on a holiday (federal, state, etc.), they only need to be paid overtime (time-and-a-half) if they have worked over 40 hours in the workweek (or 8 hours in a day in some states):  An employee who works New Year’s Eve and New Year’s Day does not receive a shift premium (sometimes referred to as “overtime”) merely by virtue of working a holiday, unless the employee has actually worked more than 40 hours – in which case, overtime is paid only for those hours worked over 40 in the week.

Exceptions: Various state wage laws, employer policies (e.g., employee handbooks) and other contracts may obligate an employer to pay employees for certain holidays or business closings, and even pay shift premiums for working on holidays.

Exempt Employees
Exempt employees are those who are not covered by the FLSA’s overtime requirements.  When paid on a salary basis, these employees’ salaries may not be reduced in any week in which they work, except for limited circumstances (e.g., the employee’s personal absence not for sickness or disability, first/last week of employment).  These exceptions do not permit an employer to reduce a salaried, exempt employee’s wages for holiday or inclement weather closures.  Thus, these employees must be paid their regular, full salary, even though the business is closed for a holiday or due to weather (assuming the weather closure was for less than a week).

And of course, other than the exceptions noted above, there is no overtime or shift premium required for an exempt employee working on holidays.

The Bottom Line

Holiday time off and holiday pay are benefits offered by employers and have become all but expected by employees.  Employers should review their policies (or draft written policies) to ensure that they have carefully defined:

–          what (if any) holidays or types of business closures are paid;

–          what classes of employees (non-probationary, full/part-time) receive holiday or business closure pay; and

–          how much pay will be granted.

Advance Notice Policy Violates Illinois Workers’ Comp Law

Contributed by Jonathon Hoag

A judge from the Northern District of Illinois recently ruled that an employer’s policy requiring employees to notify management before seeking medical treatment violates the Illinois Workers’ Compensation Act (IWCA). The employee filed suit alleging he was fired in retaliation for exercising his rights under the IWCA. The employer explained that the employee was terminated for failing to adhere to an important workplace policy that was in place for the safety of its employees.

The employer’s policy required employees to immediately report workplace injuries and notify management before seeking professional medical treatment. The employee reported his workplace injury, but he failed to notify management before seeking medical treatment. The court acknowledged that an employer can lawfully require employees to report workplace injuries, but employees have a right under the IWCA to seek medical treatment and the employer cannot interfere with rights under the IWCA “in any manner whatsoever.” The court agreed that the “interference” related to the employer’s “advance notice” policy was probably minor in nature, but stressed that the act does not permit any type of interference.

Employers have a legitimate and lawful basis for requiring employees to report workplace injuries, but this recent Illinois case is a reminder that an employer’s policies must not discourage or interfere with an employee’s right to exercise protections under the IWCA.


Dear Employer: Is Your Door Open?

Contributed by Steven Jados

If not, it should be.  An open door policy, (essentially a policy through which the employer makes clear to employees that they can and should bring concerns and complaints to human resources or other appropriate managers) may be the difference between substantial legal liability and a relatively prompt resolution of an employee’s lawsuit.  Certain laws, including federal wage and hour and anti-harassment statutes, provide employers at least a partial defense to claims made by employees who refuse to use internal complaint procedures before filing a lawsuit.  Even in the absence of a legal defense, an open door policy may allow the employer to resolve employee complaints much more quickly (and economically) than would otherwise be the case.

Some essential elements of an open door policy are:

  • The open door policy should be written and, like other employment policies, it should include a contract disclaimer.  If the employer has an employee handbook, the open door policy should be included.  If there is no handbook, the policy should be handed to employees at the time of hire and at regular intervals thereafter.  The employees should also sign an acknowledgment form, to be retained by the employer, each time the policy is distributed.  Employers should also consider posting the policy conspicuously in the workplace, and having it translated into languages other than English if the workforce includes individuals whose primary language is not English.
  • The policy should be broad enough to apply to most (if not all) concerns an employee may have regarding employment policies and practices, managers and supervisors, co-workers, and customers.  Ideally, the policy will be phrased as applying to perceived discrimination, harassment, compensation errors, and all other work-related concerns, and instruct employees to bring such matters to the employer’s attention.
  • The policy should designate individuals to whom complaints should be made.  This aspect of the policy should also advise employees that they can go outside “the chain of command” and complain to someone other than a direct supervisor if an employee’s complaint involves her direct supervisor.
  • Managers must be trained on the policy.  An open door policy is only as good as its implementation, and the policy on paper will have little value if the employer does not make good faith efforts to take employee complaints under the policy seriously.  As such, managers at all levels must be trained to identify that employee complaints may take many forms, and that even informal or “off the record” complaints must be taken seriously and investigated in the same way formal complaints are investigated.
  • Managers must also be trained on how to document employee complaints and ensure that such complaints are promptly communicated to the human resources department or to another member of management charged with ensuring consistent and appropriate responses.
  • Employees and managers should also be trained to ensure that they know that retaliation in response to open door policy complaints is forbidden.

An open door policy is something every employer can implement.  In our experience, despite the potential for employees to make trivial complaints, open door policies have proven invaluable to employers that have implemented them.  In fact, an open door policy is likely to pay for itself if it prevents even one employee lawsuit.