Five Strategies to Avoid
Being Sued by your Employees

These five strategies you can implement immediately to limit your risk and exposure to employee lawsuits.  Useful tools are provided to you to use as checklists, tips and worksheets.  This is the first part in a five part series.  If you desire the entire series immediately at no cost, please contact Tamara L. Harper directly.

Strategy 1:
Make Sure Employees are Taking Meal and Rest Breaks
It is the employer’s responsibility to track employee’s work hours and to maintain all records, even if using an outside payroll or administrative agency. Timecards are vital to an employment litigation defense, especially in light of the fact that most outsourcing payroll agencies contain an indemnification and hold harmless clause in their contracts with employers.

Employers need policies and timekeeping records that demonstrate that an uninterrupted 30 minute meal period was provided no later than the end of the fifth hour of work. Require all employees to record the start and end of their meal and rest breaks on their time sheets or other time records. Inform employees that failure to record breaks will result in disciplinary action and do not permit working “off-the-clock.” It is strongly recommended to have employees sign their time records and verify that they have reported all time worked and that they understand that off-the-clock work is not permitted. A preprinted statement on time records can be printed as a footer with this representation.

One way to ensure such is to pre-print the following statement upon on all timecards, I hereby certify that [insert employer name] has made a 30 minute meal period available to me and that I have been afforded the opportunity to take such period free from [insert employer name] control for the above pay period.”

During meal periods California employers must relieve the employee of all duty, relinquish control over the employee’s activities, and permit the employee a reasonable opportunity to take an uninterrupted 30-minute break, and not impede or discourage the employee from taking the meal period. Provide the meal period to the employee no later than the end of the employee’s fifth hour of work. Only employees who work more than five (5) hours in a day must be provided a meal period. If an employee works more than ten hours in a day, the second meal break must be provided no later than the end of the employee’s 10th hour of work.

New for 2014:  A recent Supreme Court decision has clarified the employers obligation, namely, that the employer’s must make the meal period available and afford the opportunity to take such period. An employer must clearly communication to employees that the employer has the obligation to provide meal and rest breaks.

There still will be the problem of an employee simply asserting that they did not take or were not allowed to take their meal period.  An employer still must show that the opportunity was afforded to take the break and it will come down to an employers’ word against the employee’s word. Employers still have a duty to record their employees’ meal breaks.

An employer must pay one additional hour of pay at the regular rate to the employee as a penalty for each workday the employer does not provide the meal break. Additionally, it is a misdemeanor to not allow the lunch break.

Tamara Harper, Esq. has prepared a “Meal Break Checklist for Employers,” which identifies the steps employers should take to ensure compliance with California Labor Codes regarding meal breaks.  This Meal Break Checklist will be provided to you at no charge by sending an email to Tamara L. Harper and requesting such.

You cannot rely upon an outsourcing payroll company to ensure your compliance. Not only do their contracts contain disclaimers that they are not able to give you legal advice, they will not defend you in a lawsuit, and most importantly, they will not be the employer named in a lawsuit nor audited by the Department of Labor or Department of Labor Standards Enforcement. You must take your own action to ensure that your company and your assets are protected from liability.

Strategy 2:
Know How to Effectively Handle a Termination
A poorly handled termination can have a severe impact, leaving a disgruntled employee who might be tempted to sue.  Additionally, there is low morale among the employees who remain and potential damage to your reputation.

Once you decide to terminate, you must pay special attention to the actual termination process.

Tamara L. Harper has written an article entitled, “Effectively Terminating an Employee,” that outlines seven steps employers should follow and the five required handouts you must give to an employee upon termination. This article will be provided to you at no charge by sending an email to Tamara L. Harper and requesting such.

If you are not clear about the timing of payroll and terminations, whether voluntary, or involuntary, and what needs to be paid such as vacation pay, and what can or cannot be deducted, you should consult labor/ employment counsel.

Strategy 3:
Investigate Sexual Harassment Complaints Promptly;
Conduct Mandatory Annual Training
Under federal and state law, employers are required to investigate harassment, discrimination and retaliation complaints. Employers can avoid liability for sexual harassment if the employer can show it took reasonable steps to prevent the harassment and promptly correct the sexual harassment in the workplace, and the employee did not take advantage of employer’s measures to address harassment.  

Failure to fully investigate puts you at risk. Consult employment counsel before deciding to not investigate. Conduct the required annual training of supervisors for sexual harassment prevention and keep evidence of attendance in the form of written records. Consult your employment counsel for details.

Strategy 4:
Correctly Classify Sales People – Exempt vs. Non-Exempt
Under California Labor law, for an employee to be exempt as a manager s/he must: 

1. Have primary duties and responsibilities that involve the management of the enterprise.

2. Customarily and regularly direct the work of two or more other employees.

3. Have the authority to hire or fire other employees or make suggestions, which will be given particular weight, about personnel decisions regarding other employees.

4. Customarily and regularly exercise discretionary power.

5. Spend more than 50 percent of his or her time engaged in managerial duties that meet the tests in the items above, and

6. Earn a monthly salary equivalent to at least two times the state minimum wage for full-time employment.

A clear job description should be communicated in writing or contained within your policy manual for each exempt position.

There is critical and detailed analysis to be made for each exemption claimed, whether it is for a salesperson, administrative position, computer professional, executive/managerial position, or professional. Tamara L. Harper uses a worksheet for each of the above type classifications in order to determine if the position is truly exempt.  The worksheets are quite detailed.  Each position has separately defined criteria and a different worksheet. Please contact Tamara L. Harper directly to discuss the availability of these worksheets as they are specific to each particular situation and not for general use.

An employer cannot just call a position exempt or give an employee an exempt “sounding” job title. In order for the position to be truly exempt, several criteria as set forth by California law must be met.

This area has high potential for employer liability. Remember, just because every other employer in your industry “does it,” does not mean that they will not be sued or audited, and it is your liability and your assets.  Is it worth it to protect your assets? Consult your employment counsel before paying an employee as an exempt individual.

Strategy 5:
Have and Effective Employee Handbook
One of the most important tools that you can have as an effective defense to an employee lawsuit is a policy manual or handbook that has been updated to be in compliance with all of the 2014 new legislation, including all the new medical laws that affect leave. The cost is nominal when compared to the average attorney retainer for employment defense litigation – $35,000.00 and up.  The average employment litigation settlement is approximately $85,000.00 and litigation through trial can run over $300,000.00 not including appeals, for a wrongful termination claim. 

Without a written policy manual, or employee handbook, or even a poorly drafted one, you are at a disadvantage to defend yourself when faced with a lawsuit based upon your policies, procedures, or accusations of discrimination or sexual harassment.

The employee handbook should provide employees and supervisors with a clear understanding of the performance and behaviors you expect of them and what they can expect of the company in return. This common understanding of goals and expectations enhances productivity and reduces the opportunity for conflict.

Without an employee handbook, you are significantly more vulnerable to a variety of wrongful termination lawsuits. Make sure that your statements of at-will employment in the handbook are consistent with other policies and statements in employment applications, employment contracts and other materials.  All such materials should be reviewed during the preparation of the handbook to ensure consistency in preserving the at-will relationship.

One universal handbook may not be sufficient. Manuals for supervisory employees often are needed as they may include further information not needed for non-supervisory employees such as information of hiring policies, appropriate pre-employment inquiries, drug testing, physical examinations, U.S. Citizenship and Immigration Service regulations, day to day procedural matters such as vacation or leave requests or addressing on the job injuries, performance evaluations, disciplinary procedures, etc.  Supervisor’s manuals should also include proper methods of response to employee complaints of discrimination, harassment in violation of company policy, and other types of employee grievances, to help ensure company policies are consistently administered and that supervisors are aware of what is expected of them.

There is no one policy or collection of policies that is appropriate in all employment settings. Policies that are appropriate for inclusion in employee handbook likewise may vary.

Critical to the defense of wrongful termination actions is to establish that employees had notice of your policies, expectations, and prohibitions. One way to do this is through the use of an Acknowledgment and Receipt of the manual form that each employee signs and returns.

Due to the extensive increase in employment litigation and the ever changing canvass of California employment law, policy manuals should be updated at the beginning of each year.

For example, for those handbooks Tamara L. Harper was updating for the past year, she is restricting the confidentiality policies that are now prohibited. An employee handbook that includes a broad confidentiality policy or restricts reasonable employee speech such as discussing bonus pay, raises or wage pay, violates both state and federal law. California law prohibits employers from publishing or enforcing policies that limit the employee’s right to discuss wages and working conditions.

Recent employment laws have broadly
expanded the canvas of employee rights.
Equal employment opportunity and anti-harassment protected classes now includes gender identity and gender expression; medical condition now includes cancer and genetic characteristics and information; the language for accommodation and the discussion of essential functions has changed to engaging in an interactive process. Leaves of absence have been expanded and there are new family medical leave laws. New law requires an employer to continue to maintain and pay for health coverage under a group health plan for an eligible female employee who takes Pregnancy Disability Leave (PDL), at the same level and under the same conditions as such coverage would have been provided if the employee had continued in employment continuously for the duration of the leave. Under current law, employers must provide benefits for pregnancy leave to the same extent and for the same length of time as they would for other temporary disability leaves. The new law requires group health insurance continuation coverage for all employers with five or more employees regardless of how they treat other temporary disability leaves. The coverage will extend for the length of PDL, up to four months during a 12-month period commencing on the date the leave begins.

Electronic and Social Media – Recently, there has been a great deal of activity by the National Labor Relations Board in the area of social media policies. The NLRB has filed unfair labor practice charges against employers (including non-union employers) who have disciplined employees for discussing working conditions on social media sites, such as the employees’ Facebook or Twitter account. This is an evolving area of the law.

These are just a few of the new developments in the law. Tamara L. Harper, has written a detailed review of the California Labor law changes in her articles entitled, “Checklist to Help California Employers Comply with New Labor Laws.”  This checklist can be provided to you at no cost by sending an email to Tamara L. Harper.

Staying in compliance with California labor laws is overwhelming. Tamara L. Harper understands how you all feel, as she is an employer too. Many of her clients felt the same way too before they worked with her. Ms. Harper’s clients have found as a result of working together, that they feel confident in the final outcome of their situation.

Tamara L. Harper’s unique competitive advantage is that she is very approachable as an attorney, which makes her clients feel at ease and in capable hands and further brings twenty years of litigation experience as a trial attorney to the drafting table. Tamara Harper, Esq. is an aggressive fighter that is reliable and ethical. Ms. Harper not only offers quality work, but enjoys a good location in Westlake Village, California on the border of Los Angeles and Ventura County. Tamara L. Harper prides herself on her good personal and business relationships with clients, and uses her insight and knowledge to obtain successes for each client.

Tamara L. Harper specializes in solving problems proactively without extensive and costly litigation. Ms. Harper offers you the opportunity to be proactive in creating an employment manual now, and not just reactive in defending your company against a Department of Labor or Department of Labor Standards Enforcement audit or against an employee lawsuit.