Texas Employment Law. When an employee returns to. Never skip ADA accommodations process

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1 HR SPECIALIST Trusted compliance advice for Texas employers In the News Austin rates as one of best cities for LGBT rights Austin scored a perfect 100 in the Human Rights Campaign s (HRC) annual rankings of American cities with local laws and policies that protect lesbian, gay, bisexual and transgender (LGBT) people from discrimination. The gay-rights advocacy organization s Municipal Equality Index ranked 353 cities nationwide on several categories including nondiscrimination laws, relationship recognition, employment practices, municipal services and programs and law enforcement practices. Dallas came in second among Texas cities, earning 91 points. Other highly rated Texas cities included Fort Worth (83 points), San Antonio (72) and Houston (54). The national average was 59. Learn about the practices HRC considered at municipal-equality-index. Starbucks customers to see a latte more ink In response to employee feedback, Starbucks has changed its employee appearance policy to allow employees to show more of their tattoos. The move comes after Starbucks received an online petition signed Continued on page 5 Texas Employment Law is published by HR Specialist and is edited by Michael W. Fox, a shareholder in the Austin office of Ogletree Deakins. He has more than 35 years experience representing employers in court and designing employment law policies. Contact him at (512) or Texas Employment Law Never skip ADA accommodations process When an employee returns to work with restrictions after an illness, he or she may be disabled and entitled to reasonable ADA accommodations. Don t make a mistake and skip the interactive accommodations process, even if you believe no accommodation is possible. You are still required to consider the possibility before taking action like terminating the employee. Recent case: Kristy worked as a registered nurse, delivering home health care services for ill clients. She then began training to become a nurse supervisor a job that No such thing as too many reasons to fire Sometimes, employers make mistakes and fire employees for a reason later deemed illegal. But if that same employer finds evidence after the fact that would have supported the termination decision on its own, that may serve as a get-out-of-jail card. Just make sure you can have someone testify that you definitely would have terminated the employee had you known what you know now. Recent case: Thomas worked as a pilot scheduler and reported alleged scheduling and other violations to authorities. Transgender bias still not illegal...2 Don t hold breath to recover attorneys fees..3 4 progressive discipline principles...4 IN THIS ISSUE January 2015 Vol. 10, No. 1 Editor: Michael W. Fox, Esq., Ogletree Deakins, Austin required far less travel between clients than her prior position. Then she had a grand mal seizure at work and was transported to a hospital via ambulance. She was discharged two days later and returned to work, albeit with a driving restriction and orders not to climb ladders. She also began taking anti-seizure medications. She arranged for rides to and from work and to client homes as needed and asked for help with the computer as she was adjusting to her meds. Kristy was fired shortly after she Continued on page 2 The company decided to terminate him. A few months after the termination, someone found an Thomas had written. In it, he urged subordinates to quit over their schedules and referred to his supervisor in derogatory terms. The company introduced this as proof it would have fired Thomas no matter what. The company was liable for firing wrongly terminating Thomas and hoped to use the to cut off back pay as of the day it discovered the . Continued on page 2 High Court: No pay for security screening...6 Paying employees for bad weather days...7 The Mailbag: Your questions answered...8 (800) Business Management Daily

2 ADA accommodations (Cont. from page 1) missed a day of work. A supervisor told her the reason was she had become a liability for the company. The EEOC sued on Kristy s behalf, pointing out that no one from the company had offered any help or held discussions on how her driving restriction and her medication adjustment could be accommodated. Her former employer argued that driving was an essential function of the job and that there were no accommodations possible. The court disagreed and said the employer should at least have discussed possible accommodations before discharging her. A jury will now get the case. (EEOC v. LHC Group, No , 5th Cir., 2014) Back-up reasons to fire (Cont. from page 1) The 5th Circuit Court of Appeals said that doing so works in theory, but in this case it did not. That s because the former employer never called anyone to testify about why it would have fired him over this alone. Instead, it relied solely on the itself. That wasn t good enough. (Amistar Airways v. Administrative Review Board, No , 5th Cir., 2014) The lesson here: If you uncover new information that would have led you to fire an employee you have already terminated, hang on to it. If sued, you can use it as additional evidence that your decision was right, even if you were wrong in initially terminating the employee. Always bring such evidence to your attorney s attention right away. Discrimination based on transgender status still not illegal in Texas While there is growing acceptance of same-sex marriage and homosexuality in the United States, being transgender is still not a protected status under federal law. That may be changing in the coming years as more states adopt protection for transgender individuals and as the EEOC pushes cases based on its interpretation of Title VII (see below). However, there is as yet nothing preventing a Texas employer from discriminating against a transgender applicant or employee, as the following case shows. Recent case: Loretta was born female, but now presents as male. She was hired to work as a truck driving instructor and did an excellent job. She was hired in part for her skills, including the ability to speak two languages. Her supervisor praised her work. Then a national director came to campus and saw Loretta dressed as a man. The director expressed surprise that Loretta s supervisor had approved hiring a cross gender and, referring to Loretta, exclaimed, What is that? and added, Who hired that? The director then told the supervisor that there would be consequences for hiring Loretta even though the supervisor explained that she was a skilled and valuable instructor. When Loretta found her schedule reduced, she complained about discrimination. She was called to a meeting during which she asked whether her transgender status was a problem. She never returned to work, but in - stead sued, alleging she had been dis - criminated against because of her sex. The employer argued that discriminating against the transgendered isn t illegal. The court reluctantly agreed. It explained that while it is illegal to discriminate against someone for not fitting into traditional gender roles, that wasn t what happened in this case. Instead, the alleged discrimination was based on Loretta s status as transgender. The case was dismissed. (Eure v. Sage Corporation, No. 5: , WD TX, 2014) EEOC s push for transgender protection The EEOC has issued a Strategic Enforcement Plan for transgender discrimination, signaling that it intends to pursue litigation on transgender and other related statuses. Coverage of lesbian, gay, bisexual and transgender individuals under Title VII s sex discrimination provisions is a top enforcement priority. As a practical matter, this means that the commission is looking for blatant and egregious cases to pursue. In addition, the U.S. Department of Justice in December announced that it considers transgender status to be protected by the sex discrimination provisions of Title VII. While the EEOC hasn t filed a Texas case yet, it does appear eager to create binding court precedent recognizing transgender discrimination as a form of sex discrimination under Title VII. The EEOC has filed two lawsuits against employers, alleging transgender discrimination. In EEOC v. Lakeland Eye Clinic (filed in Florida) and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. (filed in Michigan), the EEOC claims that employees were terminated after informing their employer that they were transgender. These cases are both in the early stages, but employers should know they are being litigated and consider the risk that any overt and obvious discrimination against the transgender may get the EEOC s undivided attention. Finally, there has been legislation introduced in Congress just about every year that would add transgender status to Title VII. 2 Texas Employment Law January 2015

3 Courts reluctant to make losing employees pay for employers legal fees It can be frustrating to have to defend your organization against what you consider frivolous claims. Unfortunately, that s just another cost of doing business. As the following case shows, even when you win the case and thought it should never have been filed, you probably won t persuade a court to penalize the employee by having him pay your legal fees. Recent case: Carry worked as a municipal trash collector and was among a group of employees who belonged to a labor union. The collective bargaining agreement specified that qualified applicants could bid on promotion opportunities and the most senior employee would be awarded the job. Carry had a terrible attendance record and had come close to being fired because of it. Still, he was the most senior worker who applied for a new job opening. However, another worker was selected. Carry sued, alleging breach of contract. The city argued that while Carry was technically qualified, it wasn t limited to considering just experience; it could also consider other factors like reliability. Eventually, the court tossed out the case after agreeing with the employer s definition of qualified. The employer then asked for its attorneys fees, arguing that it had expended time and money defending against a frivolous claim. The court refused to make Carry pay. It reasoned that while his claim wasn t a winning one, it wasn t entirely frivolous. (Amos v. City of Monroe, No , 5th Cir., 2014) Court refuses to punish employer for scrubbing employee s cellphone federal court has dismissed a A former employee s claim under the Electronics Communication Privacy Act (ECPA) alleging that his employer illegally destroyed valuable information when it remotely wiped clean his iphone after he resigned. That s good news for IT departments that must protect company information that might be stored on former employees smartphones. Recent case: Saman worked in residential construction for many years, collecting information about the industry. When he was hired to work for a construction company in sales and marketing, he had to use his own iphone to stay in touch. The device could access company computers and the system. When Saman gave two weeks notice, he was terminated. A few days later, the company remotely wiped clean the phone to its factory settings. Saman sued, alleging violations of the ECPA, arguing it was his personal phone and that he had lost photos, contacts and other valuable information when the employer wiped the phone clean. The court dismissed his lawsuit, reasoning that information stored on a smartphone isn t covered by the ECPA. Instead, that law is designed to punish hackers who break into computer servers that store electronic information. It doesn t prohibit deleting cellphone information, even if that phone wasn t company property. (Rajaee v. Design Tech Homes, No. H , SD TX, 2014) Final note: This is a rapidly developing area of the law. A safer bet is to provide phones to employees and take them back at termination. Legal Briefs Investigate all bias claims, even reverse discrimination It may not be common, but reverse discrimination does occur. Ignore it at your peril. Recent case: Young is Asian- American of South Korean national origin. She taught chemistry to consistently full classes and got excellent reviews early on. Then she began getting less desirable assignments and noticed that her supervisor seemed to favor black instructors. Her supervisor also once referred to her by a common slur di - rected at Asians. She was terminated, allegedly for substandard work. Young sued, alleging that she had been discriminated against in favor of black faculty. The court said that claim could go forward. (Buisson v. Board of Supervisors, No , 5th Cir., 2014) Final note: Investigate all bias complaints, no matter who files them. With handbook warning, it s OK to deviate from policy It s OK to occasionally deviate from the disciplinary process outlined in your employee handbook if you leave yourself some wiggle room by explaining that some infractions are so serious they warrant immediate discharge. Recent case: Melinda, who is black, was an apartment leasing manager. Her job was to get apartments ready and only lease those that had been prepared properly. The handbook said that employees would receive a warning before being terminated for violating rules. Melinda was fired after a supervisor discovered she had rented apartments that weren t ready. Melinda sued, alleging race discrimination and violation of the warning provision. The court tossed out her lawsuit. It explained that the handbook said deviation from the rules could happen and that Melinda hadn t shown that nonblack employees always got a warning, either. (Hamilton v. AVPM, No , 5th Cir., 2014) January 2015 Texas Employment Law 3

4 Compliance Corner Insight from TheHRSpecialist.com 4 principles for creating a progressive discipline system that works The most reliable way to protect your organization from wrongful termination charges is to establish and enforce a system of progressive discipline. It allows you to ensure that any employee fired because of inferior performance was treated fairly and in accordance with your policies. No state or federal law requires a company to establish a progressive discipline policy. But if you do promise one, make sure you follow it. Progressively harsher penalties are an important part of progressive discipline, but they are only one element of the overall system. An employee must understand the reason for the penalty and be given an opportunity to correct the behavior. Keep these four principles in mind when launching a new progressive discipline system or evaluating an existing one: Principle No. 1: Generosity The object of progressive discipline should be to rehabilitate employees, not punish them. Always ask an employee for the reason behind the problem. Never take it for granted or assume anything. If the problem is correctable by additional training, specify what steps you and the employee will take to resolve it. Docu ment everything that is said and done in case the problem persists and you have to go to the next step in the progressive discipline system. Principle No. 2: Clarity Employees must understand that their behavior violates company rules. Employment law differs from civil law in that employees can use ignorance of the law as a defense. In other words, if they didn t understand the consequences of their actions, they may be off the hook and you could be on it! To make sure your communications are getting through loud and clear, take these steps: LEAP 2015 The 11th Annual Labor & Employment Law Advanced Practices Symposium 30+ Expert Speakers 17 Certification Hours Breakout Sessions FREE Pre-Conference Workshops Comprehensive Course Materials $ in FREE Gifts Money-Back Guarantee And More! When: April 8-10, 2015 Where: Bellagio, Las Vegas, NV To register: LEAP2015.com or (800) Progressive discipline must happen in this order Progressive discipline uses five steps, all designed to inform the employee what he or she is doing wrong and providing every opportunity to improve: 1. Oral reprimand for a performance deficiency or behavioral infraction, explaining what went wrong and what needs to happen instead. 2. Written warning if the problem persists, detailing the objectionable behavior, along with the consequences. 3. Final written warning, perhaps accompanied by probationary status. 4. Termination review by both HR and the employee s supervisor. 5. Termination, the final step. Be thorough when you are disciplining employees. State exactly how the policy has been violated. Give clear-cut examples of what is unacceptable about the behavior. Set the standards to be met so the employees can t claim they didn t know they were doing something wrong. Spell out the consequences if problems continue. No matter what the communication situation, try to see it from both sides. Put yourself on the receiving end of your message and see if it makes sense, is complete and provides a solution to the problem. Principle No. 3: Transparency If employees are not warned about the consequences of poor performance, a judge or arbitrator may see it as an in - dication that there hasn t been any effort at rehabilitation. Principle No. 4: Fairness Progressive discipline must treat all employees equally. A boss can t slap one worker on the wrist, then fire another for the same offense. STAFF Editor: Michael W. Fox, Esq., Ogletree Deakins, Austin, (512) Contributing Editor: Anniken Davenport, Esq., Editorial Director: Patrick DiDomenico Senior Editor: John Wilcox, (703) , Vol. 10, No. 1 Copy Editor: Cal Butera Production Editor: Nancy Asman Publisher: Phillip Ash Associate Publisher: Adam Goldstein Customer Service: BusinessManagementDaily.com, (800) HR Specialist: Texas Employment Law (ISSN ) is published monthly by Business Management Daily, 7600A Leesburg Pike, West Building, Suite 300, Falls Church, VA , (800) , Annual subscription price: $ , Business Management Daily, a division of Capitol Information Group, Inc. All rights reserved. Duplication in any form, including photocopying or electronic reproduction, without permission is strictly prohibited and is subject to legal action. For permission to photocopy or use material electronically from HR Specialist: Texas Employment Law, please visit or contact the Copyright Clearance Center Inc., 222 Rosewood Dr., Danvers, MA 01923, (978) Fax: (978) This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal service. If you require legal advice, please seek the services of an attorney. 4 Texas Employment Law January 2015

5 In the News... Disabled SSA employees settle for $6.6 million Current and former employees of the Social Security Administration (SSA) will receive $6.6 million to settle charges the agency failed to accommodate disabled workers and denied them promotions. A federal judge has given preliminary approval to the deal. SSA employees first filed complaints with the EEOC in They alleged a pattern of discrimination throughout the SSA. EEOC investigators found that some disabled employees were denied promotions as many as 15 times. The deal will compensate 570 current and former employees affected by the SSA s actions. Additionally, SSA will create a supervisory board responsible for ensuring the settlement is carried out fully. The SSA will also overhaul its reasonable accommodation process and create a centralized office to handle disability issues. Starbucks tattoo policy (Cont. from page 1) by 25,000 employees requesting the change. Under the new policy, employees may show tattoos as long as they are tasteful and not located on the face or throat. Specifically, the policy advises em - ployees to treat tattoos like speech: Their ink shouldn t expose co-workers and customers to anything profane, hateful or lewd. Employees are allowed piercings within limits. Ear piercings are to be kept small and no more than two per ear. Ear gauges are permitted, but limited to 10 millimeters in diameter. A small nose stud is permitted, but no septum piercings or rings. Note: Starbucks charted a middle course with its tattoo policy by listening to its employees, but limiting the changes to those it felt its customers would be comfortable with. Unions on the rise: Prepare for ambush elections The National Labor Relations Board (NLRB) says a new controversial rule issued Dec. 12 will streamline union elections. Critics say the result will be ambush elections in which voting happens so quickly that employers stand little chance of persuading employees to reject union representation. The new final rule, which takes effect April 14, covers elections that certify a union to represent workers. Under current rules, an automatic one-month delay follows after the NLRB receives a petition for a union election. The new rule eliminates the one-month pause, clearing the way for so-called ambush or quickie elections, which usually come within days. (Read the NLRB fact sheet at ambush14.) Currently, the standard time period for elections is 42 days. After these rules take effect, most elections will likely be held within 10 to 21 days, experts say. Also, employers will have to provide more contact info to unions, including employee personal phone numbers and addresses. Practical impact: Employers interested in keeping their workplaces union-free must prepare in advance to react fast to the threat of union organizing. Online resource For tips on what employers still can (and can t) do to defend against a union campaign, go to Austin bus company to pay $655K to settle labor dispute Travis Transit Management of Austin has agreed to pay 600 current and former employees $655,000 to settle charges it unilaterally changed employee health, retirement and other benefits when it began providing bus service for Austin s Capital Metro in The changes affected employees health care premiums, out-of-pocket medical expenses and retirement-plan contributions. Amalgamated Transit Union Local 1091 filed a grievance with the National Labor Relations Board (NLRB) alleging Travis Transit s actions violated the existing collective bargaining agreement because the company failed to consult with the union before making the changes. The NLRB agreed with the union and the parties negotiated a settlement that was approved by an administrative law judge. Note: Employers that operate under collective bargaining agreements generally cannot make unilateral changes to employee benefits. It s an almost surefire way to provoke an unfair labor practices complaint. EEOC sues oilfield contractor over alleged sexual harassment An oilfield services company in Iraan, Texas, faces an EEOC lawsuit after its only female roust about was fired. The woman claimed a supervisor and co-worker at Gar ri son Con trac - tors subjected her to unwanted sexual advances. She alleges that when she complained to the company CEO, he fired her. She filed a complaint with the EEOC and the parties failed to resolve the dispute during the commission s conciliation process. The EEOC has now filed suit on her behalf. Note: Arguments in these kinds of EEOC cases proceed in a specific order. First, the employee must show that she made the complaint. Then the employer must demonstrate that it investigated it. If the employer cannot show evidence of an investigation, it will lose in court. Advice: Always offer multiple avenues employees can use to report har ass ment and discrimination. Establish procedures to investigate every harassment complaint. January 2015 Texas Employment Law 5

6 In the Spotlight by Hera S. Arsen, Ph.D., Ogletree Deakins Supreme Court: No pay for security screening time The U.S. Supreme Court on Dec. 9 unanimously ruled that the time workers spend waiting to undergo and undergoing security screenings is not compensable under the Fair Labor Standards Act (FLSA). According to Justice Clarence Thomas, who wrote the opinion in Inte grity Staffing Solutions v. Busk (No , U.S. Supreme Court, 2014), the security screenings at issue were not the principal activities the employees were employed to perform, were not integral and indispensable to those activities and, thus, were noncompensable. Preliminary, postliminary Two Integrity Staffing warehouse em ployees sued the company on behalf of a class of workers claiming federal and state law wage-andhour violations. They claimed their employer, which provided workers at an Amazon.com facility, violated the FLSA and state labor laws by failing to pay them for the time they spent in security screenings designed to prevent theft. The district court granted Integrity Staffing s motion to dismiss, holding that the time they spent passing through the security clearance was not compensable. The case was appealed to the 9th Circuit Court of Appeals, which noted that the FLSA, as amended by the Portal-to-Portal Act of 1947, does not require employers to compensate employees for activities that are preliminary or postliminary to employees principal activity or activities. But, those activities are compensable if they are integral and indispensable to an employee s principal activities. According to prior case law, to be integral and indispensable, an activity must be necessary to the principal work performed and done for the benefit of the employer. The 9th Circuit found that the security clearances were necessary to the employees primary work and were done for the benefit of the em ployer, as the screenings were intended to prevent theft by employees. Thus, the court ruled that the workers had a valid FLSA claim. Circuits courts disagreed In arriving at its pro-worker conclusion, the 9th Circuit distinguished cases from the 2nd and 11th Circuits holding that time spent clearing security is not compensable under the Portal-to-Portal Act. In those decisions, the security screenings were unrelated to employees primary work and had not been implemented for the employer s benefit. Noting that there was no blanket rule that time spent going through a security screening is noncompensable, the 9th Circuit said the integral and indispensable test should have been applied to analyze the warehouse workers claims. The Supreme Court s decision The Supreme Court reversed the 9th Circuit s decision, finding that time spent passing through the security clearance is not compensable. The Court started its analysis with the Portal-to-Portal Act s exemption for activities which are preliminary to or postliminary to said principal activity or activities. It noted that the Court has interpreted the exemption to include all activities which are an integral and indispensable part of the principal activities. The Court decided that an activity is integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities. Finding that Integrity Staffing did not employ its workers to undergo security screenings but to retrieve and package warehouse products, the Court ruled that the security screenings were noncompensable postliminary activities. In addition, the Court found that the screenings also were not integral and indispensable to the employees duties as warehouse workers in that they were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment. The Court also noted that the employer could have eliminated the screenings altogether without impairing the employees ability to complete their work. Providing further clarification on the integral and indispensable test, the Court found that the test is tied to the productive work that the employee is employed to perform and not whether the employer required the particular activity. The Court also rejected the workers claim that they should have been compensated for the time they spent waiting to undergo the screenings because the employer could have reduced that time to a de minimis amount. The fact that the employer could have reduced the time, the Court found, does not change the nature of the activity or its relationship to the principal activities that an employee is employed to perform. What it means for employers Employers should be encouraged by this unanimous Supreme Court decision. Finding security screening time noncompensable validated practices many companies use to safeguard their inventory and minimize theft. The Court s clarification of which activities are integral and indispensable to an employee s principal activities is helpful guidance employers can use to evaluate which activities are an intrinsic part of the work activities that em - ployees cannot avoid or neglect when performing their principal activities and for which employees must be paid. Hera Arsen is managing editor of publications at Ogletree Deakins. 6 Texas Employment Law January 2015

7 Nuts & Bolts Let it snow! But make sure you know how to pay employees Parts of New York were inundated with feet of snow well before Thanksgiving. Buffalo businesses have dug out from under the lake effect by now, but they may still be dealing with lingering pay issues. THE LAW The Fair Labor Stand - ards Act requires employers to pay exempt personnel their regular salaries if they worked any part of the workweek. Nonexempt employees are generally paid for only the hours they work. Several states have enacted laws that entitle employees to receive pay if they show up for work and the business is closed due to weather. In most cases, employers can avoid the situation by informing employees of the closing. For example, New York law requires employers to pay workers who show up for work for at least four hours. California has a similar statute that requires two to four hours of pay depending on a number of variables. WHAT S NEW Much of North America, including areas not accustomed to harsh weather, have experienced extended cold spells and higher than normal winter precipitation. Should the pattern hold, employers throughout much of the country will have to make decisions about when to open, when to close, liberal leave and telecommuting policies. Additionally, the IRS and Depart - ment of Labor have been scrutinizing employers classification of employees as exempt or nonexempt. Those agencies are also looking closely at employers that classify em - ployees as independent contractors in order to avoid payroll taxes, benefit costs and workers compensation costs. HOW TO COMPLY Employers should review which employees are exempt and which are not. Gen erally, executive, administrative and professional workers are exempt. Cer tain highly skilled computer workers are also exempt. Confer with your attorney to ensure your classifications comply with the FLSA. Formulate a policy Employers should determine which operations must continue during inclement weather. From there, decide which workers have to report to work under those circumstances. Some functions can be performed remotely. Employees asked to work from home must be paid as if they came into work. For nonexempt workers, you must have a way to track employees time it s up to the employer to maintain time records. If an exempt employee performs any work during the week, he or she is entitled to a full week s salary. Most telecommuting policies include a list of jobs that can be done remotely. It s important to coordinate your hazardous weather policy with your telecommuting policy. You may wish to designate only some positions to operate remotely during emergency conditions. If so, note that in your policy. Establish notification protocols Especially if you operate in a state where employees are entitled to some pay if they show up for a regularly scheduled shift, you need a notification protocol. This can be via phone or . The laws in your state may have specific requirements. Check with your attorney to ensure your practices comply with the law. Travel liability Requiring employees to come to work during hazardous weather could potentially subject you to liability. Employers are potentially responsible for auto accidents in - volving employees who are on the clock. Include in your policy a limitation on travel during hazardous conditions. Again, include in your plan a protocol for notifying traveling employees when to stay in place. You may have to send employees home early if weather becomes inclement during the day. In certain cases, providing lodging for employees may be a better option. For example, last year a severe winter storm hit the Atlanta area. Because this was such a rare event, the state and city had no means to clear the roads and the entire area skidded to a halt. Many employers wisely opted to house employees at nearby hotels so they could easily get to work without incurring potential employer liability. Liberal leave policies Depending on how long an em - ployee s commute may be and what conditions the employee will face while commuting, employers should remain flexible. Many employers have liberal leave policies that allow employees to stay home from work if they determine commuting would be unsafe. (As a practical matter, parents often appreciate a liberal leave policy to care for their kids when inclement weather causes schools to close.) The absence is typically charged against employees available leave. Some make other arrangements, such as allowing workers to come in a specific number of hours late without docking their leave total. Generally, liberal leave is triggered when the employer determines that travel is hazardous enough to warrant it. Employees may not claim it unless the employer authorizes liberal leave for specific locations on specific days. The keys to handling winter weather are to plan in advance and have clear lines of communication in place. January 2015 Texas Employment Law 7

8 Can you recommend resources for classifying employees and independent contractors? Q The Mailbag I am assistant HR director for a small company that uses independent contractors as well as full- and part-time employees. In my role, I must ensure that these workers are accurately classified as either employees or contractors, and that my company fully complies with federal and state tax and labor laws. What is out there to assist me in accurately classifying the workers performing services for our firm? The IRS and Texas Workforce Commission utilize an A 11-factor test to determine the employment relationship of a particular person or entity. The 11 factors are grouped into three main categories: behavioral control, financial control and the type of relationship between the parties. Behavioral control Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of: 1. Instructions that the business gives to the worker. An employee is generally subject to the business s instructions about when, where and how to work. All of the following are examples of types of instructions about how to do work. When and where to do the work What tools or equipment to use What workers to hire or to assist with the work Where to purchase supplies and services What work must be performed by a specified individual What order or sequence to follow. The instructions needed may vary among different jobs. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. The key consideration is whether the business has retained the right to control the details of a worker s performance, or instead has given up that right. 2. Training that the business gives to the worker. An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods. Financial control Facts that show whether the business has a right to control the business aspects of the worker s job include: 3. The extent to which the worker has unreimbursed business expenses. Independent contractors are more likely to have unreimbursed expenses than are employees. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur by Michael W. Fox, Esq., Ogletree Deakins, Austin unreimbursed expenses in connection with the services they perform for their employer. 4. The extent of the worker s investment. An independent contractor often has a significant investment in the facilities or tools he or she uses in performing services for someone else. However, a significant investment is not necessary for independent contractor status. 5. The extent to which the worker makes his or her services available to other entities. An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location and are available to work for many clients. 6. How the business pays the worker. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission. An independent contractor is often paid a flat fee or on a time and materials basis for the job. However, it is common in some professions, such as law, to pay independent contractors hourly. 7. The extent to which the worker can realize a profit or loss. An independent contractor can make a profit or loss; employees cannot. Type of relationship Facts that show the parties type of relationship include: 8. Written contracts describing the relationship the parties intended to create. 9. Whether the business provides the worker with benefits, such as insurance, a pension plan, vacation pay or sick pay. 10. The permanency of the relationship. If you engage a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that the intent was to create an employer-employee relationship. 11. The extent to which services performed by the worker are a key aspect of the regular business of the company. If a worker provides services that are a key aspect of your regular business activity, it is more likely that you will have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney s work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship. Michael W. Fox practices employment law at the Austin office of Ogletree Deakins. He has more than 35 years experience representing employers in court and designing employment law policies. Contact him at (512) or at Michael. To submit your question to The Mailbag, it to 8 Texas Employment Law January 2015

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