Summers can bring a much-welcomed period of sunshine, good spirits, and vacation, but summer is no time to let good management practices take a vacation as well. Lawsuits are typically more difficult to defend than they are to prevent, and ensuring proper prevention generally falls on management’s shoulders—whether that be an entity’s owner, chief executive officer, chief operating officer, director, HR, or supervisor. Avoiding the following three missteps this summer may save employers significant money and headaches when the leaves fall from the trees and the snow sets in once again.
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Misstep #1: Failing to Follow Clear Written Policies
Having clear, well-drafted policies is critical to the prevention of legal issues in the workplace, but the work doesn’t end there. Policies are effective only if they are followed in practice. All written policies should be effectively communicated to employees and consistently followed, as underscored by the last couple of years’ wave of sexual harassment allegations and discrimination claims.
Unlawful sexual harassment and other forms of discrimination are not new concepts, but the #MeToo and #TimesUp movements provided cautionary tales of what happens when employers fail to properly craft and follow through in practice with clear policies and procedures.
Remember that you are liable for a supervisor’s workplace discrimination and harassment if it causes a significant change in employment status, such as firing, failing to promote, demotion, etc. If the supervisor’s alleged discrimination or harassment doesn’t significantly change the alleged victim’s employment status, but rather creates a hostile work environment, you are liable unless you can prove:
- You exercised reasonable care to prevent and promptly correct the unlawful behavior; and
- The victim unreasonably failed to take advantage of preventative or corrective avenues you provided.
When the discriminatory actor or harasser is a coworker, you are liable only if you knew or should have known about the harassment and did not act.
Regardless of the applicable standard for analyzing liability, however, having clear antidiscrimination policies in place is the first step (and first piece of evidence) in providing a defense and demonstrating your attempt to prevent and promptly address unlawful behavior. An effective policy requires identification of prohibited behaviors, a clear complaint procedure, prompt investigation procedures, antidiscrimination assurance, remedial-action assurance, and ongoing workplace training. An effective practice requires consistency and actual follow-through with each of the identified procedures outlined in policy. Spending some time this summer reviewing written policies and practices will be time well-spent for management.
Misstep #2: Failing to Train Supervisors Properly
Frontline supervisors are the “eyes and ears” of an organization. When employees request reasonable disability accommodations, report harassing behavior, request time off, identify an injury, or have policy questions, they usually speak with a direct supervisor. Supervisors need training on policies and red-flag issues that must be brought to management and/or HR for consistent and proper administration.
Common red-flag issues may include:
- Attendance;
- Discrimination, harassment, and retaliation;
- Electronic communications and social media;
- Family and Medical Leave Act (FMLA) leave;
- Military service leave;
- Paid and unpaid time off;
- Substance abuse;
- Workplace violence and safety; and
- Wage and hour compliance.
Proper training is critical, especially for supervisors who may be promoted directly from the workforce without outside supervisor-level training or background. Training can occur directly from management or HR, outside entities specializing in supervisor training, online training services, or even legal counsel who may come into the workplace and address specific areas of liability in connection with policies, practices, and supervisory-level responsibilities. Supervisors are key conduits for information between the employees and management. You should remember that if the frontline supervisor knows about something, the company is likely deemed to know about it, too, when questioned in a court of law.
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Misstep #3: Failing to Properly Classify Employees
Summertime paychecks become extremely important to employees’ summertime fun. Management generally knows that exempt employees aren’t entitled to overtime pay, but nonexempt employees are. Often, employers assume that if they pay employees a salary, they are exempt employees. But is this assumption correct? Maybe or maybe not.
An exempt employee:
- Must be paid a predetermined and fixed salary not subject to reduction because of variations in quality or quantity of work performed;
- Must be paid at least $23,660 annually or $455 per week (stay tuned for changes to this threshold soon!); and
- Must have job duties primarily involving executive, administrative, or other professional tasks, or other exempt classes as defined by federal regulations.
An employee can be properly categorized as exempt only if all three tests are satisfied. It isn’t the payment of a set salary versus an hourly wage that determines an employee’s classification. It’s the satisfaction of the three-prong test identified above.
Independent contractors pose another frequent misclassification. Employees are paid wages (subject to applicable tax withholdings) and provided workers’ compensation benefits, unemployment benefits, etc. Independent contractors, conversely, are contracted and paid to perform a specific project or service. Calling an employee an independent contractor doesn’t make her an independent contractor. Rather, there are lengthy, multipart tests primarily focused on whether the employer has “control” over the worker. The more control an employer has, the more likely the worker is actually an employee.
Misclassification often results in significant fines, penalties, back pay, and attorneys’ fees. Thus, you should spend some time this summer being proactive in ensuring proper employee classifications. Analyzing an employee’s job description, actual job duties in daily practice, wages, and the amount of control you have over the employment relationship are all important auditing techniques.
Bottom Line
Summer may provide leisure time, but it may also bring a time of proper assurance. Use some of those quieter, summer workdays to ensure (1) policies are clear, well-written, communicated, and followed, (2) proper supervisor training and communications are in place, and (3) employees and independent contractors are properly classified. Investing the time to follow these measures now will be time well-spent when summertime fades away.
KrisAnn Norby-Jahner is an Attorney at Vogel Law Firm. She also edits the North Dakota Employment Law Letter and can be reached at knorby-jahner@vogellaw.com.