Overview of New York Employment Laws

Transcription

1 Overview of New York Employment Laws

2 OVERVIEW OF NEW YORK EMPLOYMENT LAWS EQUAL OPPORTUNITY EMPLOYER It is an unlawful discriminatory practice for an employer, because of the age, race, creed, color, national origin, sexual orientation, military status, sex*, disability, predisposing genetic characteristics, or marital status of any individual, to refuse to hire or employ or to bar or to discharge from employment such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment (Sec. 296(1)(a)). Also, the New York City Human Rights Law defines the term "gender" to include actual or perceived sex and also a person's gender identity, self-image, appearance, behavior or expression, whether or not that gender identity, self-image, appearance, behavior or expression is different from that traditionally associated with the legal sex assigned to that person at birth (Administrative Code of the City of New York, Title 8, Sec (23)). AT-WILL EMPLOYMENT STATUS New York is an at-will employment state and there is no liability for breach of contract for terminating an employee. EMPLOYER JOB REFERENCES New York does not have a job reference liability law. NEW-HIRE REPORTING Employers must report all new hires or rehires (N.Y. Tax Law Sec. 171-h(1)). Reports must be submitted within 20 calendar days of the first day on which compensated services are performed by the employee. Employers transmitting reports magnetically or electronically must make two monthly transmissions (if necessary) not less than 12 days or more than 16 days apart. (N.Y. Tax Law Sec. 171-h(3)(c)). CRIMINAL BACKGROUND CHECKS Except as otherwise provided by law, no person, as a condition of securing employment or of continuing employment must be required to be fingerprinted (NY LabLaw, Sec. 201-a). It is an unlawful discriminatory practice, unless specifically required or permitted by statute, for any person, agency, bureau, corporation or association, including the state and any political subdivision thereof, to make any inquiry about, whether in any form of application or otherwise, or to act upon adversely to the individual involved, any arrest or criminal accusation of such individual not then pending against that individual which was followed by a termination of that criminal action or proceeding in favor of such individual, or by a youthful offender adjudication, or by a conviction for a violation sealed pursuant to Sec of the Criminal Procedure Law in connection with the licensing, employment or providing of credit or insurance to such individual; provided, however, that these provisions do not apply to the licensing activities of governmental bodies in relation to the regulation of guns, firearms and other deadly weapons or in relation to an application for employment as a police officer or peace officer; provided further that the provisions of this subdivision shall not apply to an application for employment or membership in any law enforcement agency with respect to any arrest or criminal accusation 1

3 which was followed by a youthful offender adjudication, or by a conviction for a violation sealed pursuant to Sec of the Criminal Procedure Law (Executive Law, Art. 15, Sec. 296(16)). ELECTRONIC MONITORING Employers must obtain consent from at least one party to employees' telephone conversations before monitoring or recording the conversations (N.Y. Penal Law Sec , ). POLYGRAPH TESTING It is unlawful for any individual to knowingly administer or participate in the administration of a psychological stress evaluator examination of an employee or prospective employee (NY LabLaw, Sec. 734(1)). ACCESS TO PERSONNEL RECORDS New York does not have a general access to personnel files law for private employers. CHILD LABOR When school is in session, no minor 14 or 15 years of age may be employed during school hours, outside 7:00 a.m. and 7:00 p.m., or more than: (1) 3 hours on a school day; (2) 8 hours on a nonschool day; (3) 18 hours a week; or (4) 6 days a week. When school is not in session, between June 21 and Labor Day, they may not be employed outside 7:00 a.m. and 9:00 p.m., or more than: (1) 8 hours a day; (2) 40 hours a week; or (3) 6 days a week. When school is in session, no minor 16 or 17 years of age may be employed during school hours, outside 6:00 a.m. and 10:00 p.m. (12:00 p.m. with written parental consent) or more than: (1) 4 hours on a school day; (2) 8 hours on any day when school is not in session; (3) 28 hours a week; or (4) 6 days a week. If the minor works past 10:00 p.m. on the day proceeding a school day they must provide the employer with a certificate of satisfactory academic standing from school. When school is not in session, between June 21 and Labor Day, they may not be employed outside 6:00 a.m. and 12:00 p.m., or more than: (1) 8 hours a day; (2) 48 hours a week; or (3) 6 days a week (NY LabLaw, Sec. 142). Employers must make a schedule for all minors employed by the employer, setting forth the hours of beginning and stopping and the time allowed for meals. This schedule must be kept conspicuously posted in each establishment where such persons are employed (NY LabLaw, Sec. 144). COMPANY BENEFITS Pay Days Except as noted below, non-railroad workers must be paid at least semi-monthly. For manual workers, wages must be paid weekly not later than 7 days after the end of the week earned. Manual workers employed by nonprofit organizations may be paid in accordance with the agreed terms of employment, but not less frequently than semimonthly (NY LabLaw, Sec. 191). Employers must pay commissioned salespersons all money earned or payable in accordance with the terms of employment (which must be in writing), but not less frequently than once each 2

4 month and not later than the last day of the month following the month in which they were earned (NY LabLaw, Sec. 191-c). Payment Of Wages Upon Separation Of Employment If employment is terminated, the employer must pay the wages not later than the regular payday for the pay period during which termination occurred. If requested by the employee, the wages must be paid by mail (NY LabLaw, Sec. 191). Overtime Employers must pay most employees overtime compensation at the rate of 1 1/2 times the employee's regular rate, as provided in the federal Fair Labor Standards Act (FLSA). In addition, employers must pay employees subject to the FLSA's Section 13 exemptions overtime at a rate of 1 1/2 the basic minimum hourly rate (NY CompCodesR&Regs, tit. 12, Sec ). Restaurant employers: Employers must pay overtime compensation at the rate of 1 1/2 times the employee s regular rate for hours worked in excess of 40 per workweek (NY CompCodesR&Regs, tit. 12, Sec ). Hotel employers: Hotels must pay overtime compensation at the rate of 1 1/2 the employee s regular rate for hours worked over 44 for residential employees, and for hours worked over 40 hours for nonresidential employees. Employees of resort hotels must be paid overtime for hours worked on the 7th consecutive day in any week (NY CompCodesR&Regs, tit. 12, Sec ). Tipped Employees in Restaurants and Hotels Tips may be considered a part of the minimum wage, subject to the following conditions: (1) the occupation in which employees are engaged is one in which tips have customarily and usually constituted a part of their remuneration; (2) substantial evidence is provided that employees received in tips at least the amount of the allowance claimed; and (3) the allowance claimed by the employer is recorded on a weekly basis as a separate item in the wage record. Food service workers must receive a cash wage greater or equal to $4.60 if, when combined with their tips, their total wages equal or exceed $7.15 per hour. Chambermaids in resort hotels must receive a cash wage greater or equal to $4.85 if the average tips of the worker are more than $4.05 per hour. If a Chambermaid s tips are between $1.10 to $4.05 per hour, the worker must receive a cash wage greater or equal to $6.05. Other service workers must receive a cash wage greater or equal to $7.15 if the average tips of the employee are less than $1.60 per hour. Workers whose tips are between $1.60 to $2.30 per hour must receive a cash wage greater or equal to $5.55. Workers must receive a cash wage greater or equal to $4.85 if the average tips of the worker are $2.30 or more per hour. Exception for resort hotels: the allowance for tips shall not exceed $2.85 per hour for an employee whose weekly average of tips exceeds $4.05 (NY CompCodesR&Regs, tit. 12, Secs.137-1, 138-2, 142-2). 3

5 Wage Garnishments/Deductions No employer can discharge, lay off, refuse to promote, or discipline an employee or refuse to hire a prospective employee because one or more wage assignments or income executions have been served against the employee or prospective employee (NY CPLR, Sec. 5252). Paid Vacation New York laws do not require nor prohibit paid vacation leave. However, under the "wages" definition, vacation pay is included as a "wage supplement," and thus it may be due upon termination if owed under the parties agreement (NY LabLaw, Secs. 190(1) and 198-c(2)). Health Insurance The State of New York does not require employers to provide health insurance for their employees. Health Insurance Continuation An employee or member, and his or her dependents, covered by a group plan, are generally eligible. However, coverage will cease when the employee, member or dependent first becomes, after the date of election, entitled to coverage under Medicare or under another group plan that contains no exclusion or limitation on preexisting conditions of such employee, member, or dependent (NY Insurance Law, Sec. 3221(m)(1)(A) and (B)). A group policy may not terminate the coverage of a dependent spouse when the spouse or employee attains the minimum age for Medicare eligibility for so long as the policy remains in force and the spouse is ineligible to receive any of such Medicare benefits. In order for this provision to apply, proof of the spouse's Medicare ineligibility must be submitted to the insurer within 31 days of the date notice of termination of coverage is sent by first-class mail (NY Insurance Law, Sec. 4235(f)(3)). Coverage is triggered when an employee or member ceased to be insured under a group policy because of termination of employment or membership in the class eligible for coverage (NY Insurance Law, Sec. 3221(m)). Continuation coverage generally last for 18 months after group coverage terminates. For dependents whose group coverage terminated due to: (1) the death or divorce of the covered person; (2) dependent ceasing to be eligible under the plan; or(3) the covered person's eligibility for Medicare, coverage will last for 36 months. An employee who is determined to be disabled at the time of termination of employment is entitled to coverage until the employee is not longer disabled, up to a maximum of 29 months of coverage (NY Insurance Law, Sec. 3221(m)). Worker s Compensation No compensation is allowed for the first seven days of disability. If the injury results in a disability of more than 14 days, compensation is allowed from the date of disability (Sec ). The waiting period for occupational loss of hearing is three months after removal from the harmful noise exposure or after separation from work for the last employment in which exposure to harmful noise occurred (Sec bb). 4

6 The employee may choose a physician from a state list and may transfer to another authorized physician (Sec a). An employer must record and report any injury or illness to an employee incurred in the course of employment and retain the record for 18 years. A report of accidents that will cause a loss of one day or more or will require medical treatment beyond first aid or two or more first aid treatments must be made by the employer to the chair of the workers' compensation board (Sec ). Jury Duty Employees may not discharge or penalize employees because of absences due to juror service, provided the employer is notified in advance. Employees summoned to serve as jurors must notify employers to that effect prior to the commencement of service (NY JudLaw, Sec. 519). Employers may withhold employees' wages during jury service; however, employers with more than 10 employees may not withhold the first $40 of a juror's daily wages during the first 3 days of jury service (NY JudLaw, Sec. 519). Trial and grand jurors (except town and village courts) are entitled to an allowance of $40 per day for each day of attendance in court. Employed jurors are not entitled to the allowance if their employers are prohibited from withholding the first $40 of wages and daily wages equal or exceed $40. If daily wages are less than $40, they are entitled to an allowance of the difference between $40 and daily wages. Employed jurors are not entitled to the allowance for regular workdays on which jury service is rendered if wages are not withheld on account of the service (NY JudLaw, Sec. 521). Voting Employers must allow employees Sufficient time off to vote, unless such time exists during nonworking hours; 4 consecutive nonworking hours while polls are open is sufficient. Employees must be compensated for up 2 hours. Employees must notify their employers 2-10 work days prior to election day, and employees must specify hours at beginning or end of shift, unless mutually agreed otherwise (NY ElecLaw, Sec ). Sick Pay/Leave New York law does not require nor prohibit sick pay or sick leave. Donor Leave Employees who work an average of 20 or more hours per week are eligible for a leave of absence to undergo a medical procedure to donate bone marrow. The combined length of the leaves shall be determined by the physician, but may not exceed 24 work hours, unless agreed to by the employer. Employers are free to provide leave for bone marrow donations in addition to leave allowed under any other provision of law. Employers may require verification by a physician for the purpose and length of each leave requested by employees to donate bone marrow (NY LabLaw, Sec. 201-a). An employer must grant 3 hours' leave of absence in any 12-month period to an employee who seeks to donate blood. The leave of absence may not exceed 3 hours, unless otherwise agreed to by the employer, and must comply with specific notice requirements. Those employees without 5

7 use of accumulated leave time to donate blood during work hours are allowed to do so at least 2 times per year at a convenient time and place set by the employer including allowing an employee to participate in a blood drive at the employee's place of employment (NY LabLaw, Sec. 202-j, as amended by S.B. 6490, L. 2007, enacted March 17, 2008). Family, Medical and Parental Leave Adoptive parents of children age 5 and under are eligible to take adoption leave if their employers provide parental leave for birth parents. If the child is hard-to-place or handicapped, the maximum age for leave eligibility is 18 (NY LabLaw, Sec. 201-c). Employees who are pregnant, parents, or in the process of securing legal custody of a child under 18 years of age are protected under New York s human rights laws if they work for a covered employer (NY ExecLaw, Sec. 292). Adoption leave must be on the same terms and conditions as parental leave for biological parents (NY LabLaw, Sec. 201-c). Military Leave of Absence Employers must reinstate former permanent employees who left to perform military service and who: (1) receive a certificate of completion of military service duly executed by an officer of the applicable force of the armed forces or the organized militia; (2) are still qualified to perform the duties of their position; and (3) apply for reemployment within 90 days after being relieved from military service. They must be restored to their former position or to a position of like seniority, status, and pay, unless the employer's circumstances have so changed as to make it impossible or unreasonable to do so (NY MilLaw, Sec. 317). Military Service Discrimination Employers may not willfully deprive organized militia members of employment; prevent or obstruct their employment because of military status; or dissuade enlistment by threat of injury (NY MilLaw, Sec. 251). In addition, employers and associations may not impose rules that discriminate against state militia members based on military status (NY MilLaw, Sec. 252). Employers may not discriminate against or refuse to employ persons because they are subject to military duty under state or federal law (NY MilLaw, Sec. 318). An employer or licensing agency, employment agency, or labor organization, may not discriminate on the basis of military status, refuse to hire or employ or to bar or to discharge from employment such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment (NY ExecLaw, Sec. 296). Family Military Leave The spouse of a member of the armed forces of the United States, National Guard or reserves who has been deployed during a period of military conflict, to a combat theater or combat zone, is eligible to take up to 10 days unpaid leave. An employer may not retaliate against an employee for requesting or obtaining family military leave (NY LabLaw, Sec. 202-i). Disaster and Emergency Services Leave There is no disaster or emergency services leave law for private employers in New York. 6

8 Witness Leave and Leave For Crime Victims Employees who are crime victims or subpoenaed to attend criminal proceedings as witness are eligible for leave to appear as witnesses, consult with the district attorney or exercise rights under the law, if proper notice is given. Victims include next of kin if the aggrieved party is deceased as a result of the offense; victims' representatives; good Samaritans; or persons pursuing application/enforcement of protective orders (NY PenalLaw, Sec ). Employers may not discharge or penalize employees because of absences for jury or subpoenaed witness service (NY JudLaw, Sec. 750). Employees who are crime victims or subpoenaed to attend criminal proceedings as witnesses must notify employers of their intent to take leave prior to the day of attendance. Upon employer request, the party who sought the employee's attendance or testimony must provide verification of the employee's service (NY PenalLaw, Sec ). Meals & Rest Breaks Mercantile and other non-factory employers must provide employees, who work more than 6 hours, with at least 30 minutes for a noon-day meal, between 11 a.m. and 2 p.m. They also must provide employees, who work 6 or more hours between 1 p.m. and 6 a.m., with a meal period of at least 45 minutes, mid-shift. Employers must provide employees, who start before 11 a.m. and continue past 7 p.m., with an additional meal period of at least 20 minutes, between 5 p.m. and 7 p.m. The labor commissioner may issue permits for shorter meal periods (NY LabLaw, Sec. 162). Employers must provide employees with at least 24 consecutive hours of rest per calendar week. Exceptions apply to certain industries and occupations. Employers that operate on Sundays must designate a day of rest for each employee. Employers may not permit employees to work on their designated day of rest (NY LabLaw, Sec. 161). Breastfeeding A mother may not be prohibited from breastfeeding her baby in any location, public or private, where the mother is otherwise authorized to be present, irrespective of whether the nipple is covered during or incidental to the feeding (NY CivRightsLaw, Sec.79-e). An employer must not discriminate in any way against an employee who chooses to express breast milk in the workplace (NY LabLaw, Sec. 206-c). An employer must provide reasonable unpaid break time or permit an employee to use paid break time or meal time each day to allow an employee to express breast milk for her nursing child for up to 3 years following childbirth. The employer must make reasonable efforts to provide a room or other location, in close proximity to the work area, where an employee can express milk in privacy (NY LabLaw, Sec. 206-c). SMOKING POLICY Smoking must not be permitted and no person must smoke in the following indoor areas: (1) places of employment; (2) bars; (3) food service establishments; (4) enclosed indoor areas open 7

9 to the public containing a swimming pool; (5) public means of mass transportation, including subways, underground subway stations, and when occupied by passengers, buses, vans, taxicabs and limousines; (6) ticketing, boarding and waiting areas in public transportation terminals; (7) youth centers and facilities for detention; (8) any facility that provides child care services (provided that such services provided in a private home are excluded when children enrolled in such day care are not present); (9) child day care centers; (10) group homes for children; (11) public institutions for children; (12) residential treatment facilities for children and youth; (13.) all public and private colleges, universities and other educational and vocational institutions; (14) general hospitals and residential health care facilities and other health care facilities licensed by the state in which persons reside; (15) commercial establishments used for the purpose of carrying on or exercising any trade, profession, vocation or charitable activity; (16) indoor arenas; (17) zoos; and (18) bingo facilities (NY LabLaw, Sec o). New York law requires that "Smoking" or "No Smoking" signs, or the international "No Smoking" symbol, which consists of a pictorial representation of a burning cigarette enclosed in a circle with a bar across it, be prominently posted and properly maintained where smoking is regulated by this law, by the owner, operator, manager or other person having control of such area (NY LabLaw, Sec p(1)). In addition, employers may not discharge, discriminate with respect to compensation, promotion, terms, conditions or privileges of employment, or refuse to hire an individual because the individual uses legal consumable products (tobacco included) off the employer's premises during non-working hours (NY LabLaw, Sec. 201-d). Notice of Layoffs The New York Worker Adjustment and Retraining Notification Act (WARN) requires employers of 50 or more employees (excluding part time employees) to provide 90 days advance notice of an employment loss which includes (1) a termination other than for cause, voluntary departure or retirement; (2) a layoff affecting 33% of the workforce which is also at least 25 full time employees or at least 250 full time employees; and 50% reduction in hours of work for each month of six consecutive months. Notices must be provided to the affected employees and their representatives, the state Department of Labor and the local workforce investment boards. There are specific requirements for the notice in terms of content and method of delivery. Liability for violation includes back pay and benefits to the employees and civil penalties in certain circumstances. (NY LabLaw, Sec. 860-A-I) (enacted 5/13/08). 8

10 Guidelines for the Hiring Process

11 HIRING PROCESS GUIDELINES Using proper hiring techniques ensures that the Company screens out undesirable employees and protects the Company against hiring practices that illegally screen out applicants or disproportionately affect applicants based on age, race, religion, gender, national origin or other similarly protected attributes. I. GOALS AND OBJECTIVES OF A PROPER HIRING PROCESS The Company s hiring process should screen out individuals who will be a detriment to the organization. Applicants who will be detrimental are those individuals who will offend guests, distract other employees, generate litigation, and so forth. These individuals may be identified by the following characteristics: 1. Persons who have a history of unsuccessful employment; 2. Persons who blame their prior failures on others (especially their employers); 3. Persons who appear to be whiners, gripers, and complainers as opposed to people who are flexible; 4. Persons who are less than fully honest about themselves and others; 5. Persons who have likes and dislikes which do not match your work environment; 6. Persons who present a risk of injury to guests, co-workers or others; 7. Persons who will not take pride in their job no matter where they work in the organization; 8. Persons who will not present a positive image to your guests; and 9. Persons who are insubordinate to their superiors. These characteristics are readily identifiable in the hiring process. The procedures described below are designed to help you identify these characteristics so that you are hiring defensively. II. EMPLOYMENT APPLICATION AND RELATED FORMS A. Getting the Forms Filled Out A sample employment application form is included in this guide. The employment application (and Fair Credit Reporting Act forms discussed below) should be completed prior to any interview taking place. Be sure that the applicant completes each section of the application. Do not allow the applicant to refer to a resume or some other document rather than supplying detailed information. Also, be sure that the applicant signs the application. B. Employee Data Reporting Employers with 15 or more employees are required by federal law to keep records and information concerning their employees. In addition, if your Company: (1) employs 100 or more employees, (2) has fewer than 100 employees but is owned or affiliated with another company, or there is centralized ownership, control or management so that the group legally constitutes a single enterprise and the entire enterprise employs a total of 100 or more employees, or (3) employs 1

12 50 or more employees and has federal contracts totaling more than $50,000, then you are required to complete and file a Federal EEO-1 Report with the Joint Reporting Committee by no later than September 30 of each year. The attached Collection of Data for Federal EEO-1 Report Form is provided to assist you with the collection of employee data and preparation of the Federal EEO-1 Report Form. The Collection of Data for Federal EEO-1 Report Form should be completed by the Supervisor at the time of completion of an employment application. The employee completes the top portion by providing his or her social security number, date of birth, sex and race. The Supervisor must then complete the bottom portion of the form by placing an X in the proper box. This document should not be kept as part of any personnel records, but instead should be sent directly to Human Resources and/or others responsible for the completion of the EEO-1 Report Form. If you have any questions about this report, contact Human Resources. Further information regarding the filing of EEO-1 reports for single and multiple establishment employers, including reporting instructions and report forms in various formats, can be obtained by visiting or contacting: Joint Reporting Committee PO Box 779Norfolk VA Phone , Fax III. REFERENCE CHECKS Both personal and professional references should be checked on every applicant. Even though many former employers whom you call may refuse to provide substantive information regarding their former employees, the reference check attempt must be made for at least three prior employers on every applicant you wish to hire. The reference information obtained, or lack thereof, should be recorded on the form included in this guide. IV. DRUG TESTING If your Company has a drug testing policy, then all applicants hired and/or put to work must first receive a clean drug test result from the clinic. All medical information regarding an employee, including drug test results, should be kept in a separate folder which is either stored with the personnel file (if the files are secure ) or in a separate location. V. BACKGROUND INVESTIGATIONS AND REJECTION OF APPLICANT A criminal, driving, and background investigation of an applicant can be a vital tool for employers, especially in the hiring process. They provide useful information that can allow a Company to screen and filter-out problematic applicants before they are hired. Employers are required to comply with the federal Fair Credit Reporting Act ( FCRA ) in conducting background checks on applicants and employees. Included in this guide is 2

13 an Employer s Compliance Guide to the FCRA to assist you in your efforts to comply with the laws in this area. VI. EMPLOYMENT FORMS AND PROCESS After completing all of the steps referenced in the Section above, if the employee is approved for hire, the Company may then extend an offer of employment to the applicant. A. I-9 Compliance Once the applicant has been made an offer of employment by the Company and has indicated his or her acceptance of the offer of employment, Section 1 of the INS I-9 form included in this guide must be filled out by the employee and forwarded to the Human Resources Manager for review and approval BEFORE the Company may permit the employee to begin any work for the Company. If you have any questions regarding these procedures, please contact the Human Resources Manager BEFORE permitting any prospective employee to begin work for the Company. 1. The I-9 form is deceptively easy to complete. The prospective employee completes Section 1 of the form when the employee shows up for the first day of work, which elicits name, address, date of birth, and Social Security number. In addition, the prospective employee must attest to immigration status and the validity of documents presented to establish identity and employment eligibility. The employee then signs and dates the form. The Company is ultimately liable for proper completion of the I-9 form and must ensure that Section 1 of the form is properly completed by the employee. 2. Prospective employees are required to present documents proving identity and employment eligibility within three days of starting employment. Note that some documents prove only identity; some prove only employment eligibility; and some prove both. 3. The Human Resources Manager completes Section 2 of the I-9 form by examining the documents presented by the prospective employee and recording the document numbers and expiration dates in the appropriate column(s) in Section The Human Resources Manager should copy the documents presented by the prospective employee for purposes of proving compliance with verification requirements. Mere copying of documents, however, does not constitute compliance and will result in penalties if the I-9 form is not also properly completed. 5. The Human Resources Manager should complete the date of hire information in the certification after review of the I-9 form and supporting documents have been successfully and acceptably completed. 6. The Human Resources Manager must then sign and date a certification stating that the documents: (1) reasonably appear to be genuine; (2) relate to the individual; and (3) authorize the individual to work. 3

14 B. Employee Withholding Forms Form W-4: Employee Withholding: This form must be given to all employees for purposes of federal income tax withholding. C. Notice of Cobra Rights An Initial Notice of COBRA Rights form must be given to your employees at the time they are hired. In addition, a copy of this Initial Notice of COBRA Rights should be sent to the spouse of a married employee, preferably by registered mail. Most insurance carriers have a Notice of COBRA Rights form tailored to their plan. We recommend that you contact your carrier to obtain the appropriate notice. We have also included a sample Initial Notice of COBRA Rights form. D. Health Insurance and Benefits Information At the time of hire, you should also provide your employees information concerning the Company s health insurance and benefits. This information is often provided to employers by their health insurance companies. E. Employee Emergency Form At the time of hire, the Company should provide to the employee an Emergency Information Form for the employee to complete containing the employee s name, address, and preferably the names, addresses, and contact information for two individuals that may be contacted in case of emergency. This Employee Emergency Form should be placed in the employee s personnel file after it is completed, and should be updated periodically. F. Employee Handbook With Acknowledgment and Receipt Form If you do not already have one in place, we strongly recommend that you implement an employee handbook. A handbook is critical because it provides guidelines to your employees about what they can expect from the company, and can in certain circumstances, protect you against liabilities that may arise from the employment relationship. An Acknowledgment Form should also be executed by the employee at the time the Company provides the employee his or her employee handbook. It provides verification that the employee has received a copy of the employee handbook and agrees to be bound by the policies contained therein. Fisher & Phillips would be happy to assist you in customizing a handbook. 4

15 Employment Application

16 APPLICATION FOR EMPLOYMENT Position Desired: [ ] Part time [ ] Full time [ ] Year round [ ] Seasonal WE ARE AN EQUAL OPPORTUNITY EMPLOYER APPLICANT'S STATEMENT I understand that if I am hired, my employment will be for no definite period, regardless of the period of payment of my wages. I further understand that I have the right to terminate my employment at any time with or without notice, and the Company has the same right. No one other than the President of the Company has authority to modify this relationship or make any agreement to the contrary. Any such modification or agreement must be in writing. I understand that the Company reserves the right to require me to submit to a drug test at any time and also reserves the right to require me to submit to an alcohol test and/or medical examination to the extent permitted by law. I authorize the Company to investigate my driving record, my criminal record and my credit history, and I understand that an investigative consumer report may be prepared whereby information is obtained through personal interviews with neighbors, friends and others with whom I am acquainted. This inquiry would include information as to my character, general reputation, personal characteristics and mode of living. I understand that I have the right to make a written request within a reasonable period of time to receive additional detailed information about the nature and scope of this investigation. I further understand that the Company may contact my previous employers and I authorize those employers to disclose to the Company all records and other information pertinent to my employment with them. I also authorize the Company to provide truthful information concerning my employment with it to my future prospective employers and I agree to hold it harmless for providing such information. I certify that all of the information that I provide on this application and in any interview will be true and accurate. I understand that if I am employed and any such information is later found to be false or misleading in any respect, I may be dismissed. DO NOT SIGN UNTIL YOU HAVE READ AND UNDERSTAND THIS STATEMENT Date Signature of Applicant Name (Print) Last First Middle Present How long have Address you lived there? Street and Number City State Years Months Previous How long did Address you live there? Street and Number City State Years Months Telephone No. Social Security No. Can you work [ ] Overtime? [ ] Weekends? Do you have a shift preference? If so, which shift? Have you ever worked for this Company before? [ ] Yes [ ] No If Yes, please give dates and position: Have you ever pled guilty or no contest to, or been convicted of a felony? [ ] Yes [ ] No If Yes, please give the date(s) and details: Have you ever pled guilty, or no contest to, or been convicted of a misdemeanor resulting in imprisonment within the last five years? [ ] Yes [ ] No If Yes, please give the date(s) and details:

17 Have you been arrested for any matters for which you are out on bail or on your own recognizance pending trial? [ ] Yes[ ] No If Yes, please give the date(s) and details: NOTE: Answering "Yes" to these questions does not constitute an automatic bar to employment. Factors such as when the alleged offense occurred and age at the time of the alleged offense, seriousness and nature of the violation, and rehabilitation will be taken into account. (Do not include minor traffic citations and arrests or convictions which have been sealed or expunged in answering this question.) RECORD OF PREVIOUS EMPLOYMENT Please list the names of your present or previous employers in chronological order with present or last employer listed first. Be sure to account for all periods of time including military service and any period of unemployment. If self-employed, give firm name and supply business references. [Add additional page if necessary] Present or Last Employer Address City, State, Zip Code Telephone Employed From (mo/yr) To (mo/yr) Pay Start $ Final $ Your Title or Position Name and Title of Last Supervisor Exact Reason for Leaving Previous Employer Address City, State, Zip Code Telephone Employed From (mo/yr) To (mo/yr) Pay Start $ Final $ Your Title or Position Name and Title of Last Supervisor Exact Reason for Leaving Previous Employer Address City, State, Zip Code Telephone Employed From (mo/yr) To (mo/yr) Pay Start $ Final $ Your Title or Position Name and Title of Last Supervisor Exact Reason for Leaving Previous Employer Address City, State, Zip Code Telephone Employed From (mo/yr) To (mo/yr) Pay Start $ Final $ Your Title or Position Name and Title of Last Supervisor Exact Reason for Leaving Previous Employer Address City, State, Zip Code Telephone Employed From (mo/yr) To (mo/yr) Pay Start $ Final $ Your Title or Position Name and Title of Last Supervisor Exact Reason for Leaving

18 Have you ever been terminated or asked to resign from any job? [ ] Yes [ ] No If Yes please explain circumstances: Please explain fully any gaps in your employment history: May we contact your current employer? [ ] Yes [ ] No. If No, please explain: Please indicate any actual experience, special training and qualifications that you have which you feel are relevant to the position for which you are applying. Have you ever used another name? [ ] Yes [ ] No Is any additional information relative to change of name, use of an assumed name, or nickname necessary to enable a check on your work and educational record? [ ] Yes [ ] No If yes, please explain: Can you supply proof of eligibility to work in the United States? [ ] Yes [ ] No If hired, can you furnish proof that you are over 18 years of age? [ ] Yes [ ] No Are you capable of satisfactorily performing the essential job duties required of the position for which you are applying? [ ] Yes [ ] No Do you have adequate transportation to and from work? [ ] Yes [ ] No How many days of work have you missed in the last three years due to reasons other than paid holidays and vacation? YEAR NUMBER OF DAYS EDUCATION YEAR NUMBER OF DAYS YEAR NUMBER OF DAYS School Name Years Completed (Circle) Diploma/Degree Describe Course of Study or Major Describe Specialized Training, Experience, Skills and Extra-Curricular Activities Elementary: High School: College/University: Graduate/Professional: Trade or Correspondence: Other:

19 PERSONAL REFERENCES Please list persons who know you well -- not previous employers or relatives Name Occupation Address (Street, City and State) Telephone Number Number of Years Known THIS APPLICATION WILL BE CONSIDERED ACTIVE FOR A MAXIMUM OF THIRTY (30) DAYS. IF YOU WISH TO BE CONSIDERED FOR EMPLOYMENT AFTER THAT TIME, YOU MUST REAPPLY. I CERTIFY THAT ALL OF THE INFORMATION THAT I HAVE PROVIDED ON THIS APPLICATION IS TRUE AND ACCURATE. Date Signature of Applicant ADDITIONAL INFORMATION. Please indicate any actual experience you have in any of the following positions: [ ] Administrative [ ] Sales [ ] Driver [ ] Banquets [ ] Accounting [ ] Server [ ] Recreation [ ] Landscape/Grounds [ ] Front Desk [ ] Housekeeping [ ] Maintenance [ ] Computer Services [ ] Reservations [ ] Cook [ ] Telephone/PBX [ ] Purchasing [ ] Bell staff [ ] Security DRIVING INFORMATION Complete the following if applying for position which requires driving: Do you have a current driver s license? [ ] yes [ ] no State: Lic. No. Expiration Date: Has your driver s license ever been suspended or revoked? [ ] yes [ ] no If yes, please explain circumstances: Have you ever been cited for driving under the influence (DUI) or driving while intoxicated (DWI)? [ ] yes [ ] no If yes, please explain the outcome: Please list all moving traffic violations in the last five (5) years: Offense Date Location Offense Date Location Offense Date Location Offense Date Location

20 Fair Credit Reporting Act Compliance Guide

21 FAIR CREDIT REPORTING ACT TABLE OF CONTENTS Page I. INTRODUCTION...1 A. Increased Applicant and Employee Rights...1 B. What is a "Consumer Report?"...1 C. What is an "Investigative Consumer Report?"...1 D. What if an Employer Obtains Information Directly From Public Records?"...2 II. IMPORTANT DEFINITIONS...2 A "Consumer Report"...2 B. "Investigative Consumer Report"...2 C. "Consumer Reporting Agency"...2 D. "Adverse Action"...3 III. USING CONSUMER REPORTS...3 A. Provide Prior Written Disclosure to the Applicant and/or Employee...3 B. Obtain signed Authorization from the Applicant and/or Employee...3 C. Make the Certification to the Consumer Reporting Agency...4 D. Give Written Notice Before Taking "Adverse Action"...4 E. Give Written Notice After Taking "Adverse Action"...4 F. Special Rule for Workplace Misconduct Investigations...5 IV. USING INVESTIGATIVE CONSUMER REPORTS...6 V. DOT-COVERED EMPLOYEES...6 VI. EFFECT OF STATE LAWS...7 VII. THE COSTS AND PENALTIES OF NON-COMPLIANCE...7 A. Liability...7 B. Limitation on Liability...7 C. Managing Potential Liability...8 APPENDICES 1 DISCLOSURE OF INTENT TO OBTAIN CONSUMER REPORTS OR INVESTIGATIVE CONSUMER REPORTS (AND AUTHORIZATION) 2 CERTIFICATION TO CONSUMER REPORTING AGENCY i

22 3 A SUMMARY OF YOUR RIGHTS UNDER THE FAIR CREDIT REPORTING ACT 4 PRE-ADVERSE ACTION NOTICE 5 ADVERSE ACTION NOTICE 6 RESPONSE TO REQUEST FOR INFORMATION REGARDING INVESTIGATIVE CONSUMER REPORT 7 WARNING MEMO TO EMPLOYEES HANDLING INFORMATION ii

23 FAIR CREDIT REPORTING ACT I. INTRODUCTION Applicant/employee background reports can be vital tools for employers, especially in the hiring process and sometimes during employment. The following pages contain guidelines and sample documents for obtaining and using certain background reports, known as consumer reports in accordance with the Fair Credit Reporting Act ( FCRA ). A. Increased Applicant and Employee Rights Amendments to the FCRA significantly increased the rights of applicants and employees to receive certain disclosures and to choose whether to authorize certain background reports. Given the increase in litigation over privacy interests, employers (as well as their attorneys and investigators) are well-advised to pay close attention to the detailed requirements of the FCRA. B. What is a Consumer Report? An employer triggers FCRA obligations when it requests a consumer report, a term which includes a broad category of reports from a consumer reporting agency containing any information "bearing on a consumer s credit worthiness, credit rating, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. Reports such as driving records, criminal records, credit reports, and many other reports normally constitute consumer reports when an employer obtains them for employment purposes from a third-party, consumer reporting agency such as a credit-reporting company, an insurance company, or an investigative firm. C. What is an Investigative Consumer Report? A special subset of consumer reports, called investigative consumer reports, contain information obtained by a consumer reporting agency through personal interviews with neighbors, friends, associates, acquaintances, or others with knowledge of the consumer. For example, an investigative consumer report could include a report prepared by an investigator who interviews an applicant s former employers on behalf of the prospective employer. If an employer intends to obtain an investigative consumer report, the FCRA imposes additional disclosure requirements in addition to all of the requirements that apply to ordinary consumer reports. D. What if an Employer Obtains Information Directly from Public Records? Sometimes employers themselves go directly to original governmental sources to obtain records (such as department-of-motor-vehicles records, local or state criminal records, courthouse records, etc.). Based upon recent informal opinions of staff attorneys at the Federal Trade Commission ( FTC ), as well as a few older court decisions, reports obtained in this manner are not FCRA-covered consumer reports (although there is a slight risk of a contrary interpretation by the FTC based on an early, informal FTC guideline which we have questioned before the FTC without receiving a formal answer). On the other hand, if an employer retains a third party to obtain and evaluate reports for employment purposes, the third party who goes to governmental sources 1

24 for such reports will normally be considered a consumer reporting agency providing consumer reports. II. IMPORTANT DEFINITIONS The Fair Credit Reporting Act defines many key terms in the text of the statute itself. A. Consumer Report The term consumer report means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used, or collected in whole or in part, for the purpose of serving as a factor in establishing the consumer s eligibility for (A) credit or insurance to be used primarily for personal, family, or household purposes; (B) employment purposes; or (C) any other purpose authorized in the FCRA. B. Investigative Consumer Report The term investigative consumer report means a consumer report or portion thereof in which information on a consumer s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on, or with others with whom he is acquainted or who may have knowledge concerning any such items of information. C. Consumer Reporting Agency The term consumer reporting agency means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. D. Adverse Action For employment purposes, the term adverse action means a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee. III. USING CONSUMER REPORTS For employers using consumer reports, the FCRA requires the following steps: A. Provide Prior Written Disclosure to the Applicant and/or Employee. The disclosure of intent to obtain reports must be a stand-alone document containing only this disclosure, but it may also include a section for the applicant s or employee s authorization. (See attached sample Disclosure of Intent to Obtain Consumer Reports or Investigative Consumer Reports and Authorization at Appendix 1). The 2

25 disclosure must tell the applicant/employee that a consumer report or an investigative consumer report may be obtained for employment purposes. The attached disclosure document covers both consumer reports and investigative consumer reports, and it offers the applicant/employee the opportunity to request additional information regarding the nature and scope of an investigation if the employee checks the appropriate box. For hiring purposes, employers should give this document to applicants along with the employment application. This document may also be given to current employees, and it is designed to be usable for multiple reports over time. B. Obtain Signed Authorization from the Applicant and/or Employee. The employer must obtain the applicant s or employee s signed authorization before requesting either a consumer report or an investigative consumer report. For convenience, we combined this authorization with the disclosure described in Step A, above. See, Disclosure of Intent to Obtain Consumer Reports or Investigative Consumer Reports and Authorization (Appendix 1). C. Make the Certification to the Consumer Reporting Agency. An employer must certify to the consumer reporting agency that the employer follows proper procedures and uses the reports only for employment purposes. An employer may send a consumer reporting agency a single certification to cover all future reports requested for employment purposes. Most consumer reporting agencies will provide employers with a certification form, however, we attach a recommended certification at Appendix 2. D. Give Written Notice Before Taking Adverse Action. Before taking an adverse action (such as not hiring the applicant) based in whole or in part on information contained in a consumer report, an employer must give the applicant or employee the following documents: A copy of the consumer report or investigative consumer report A copy of the Summary of Your Rights Under The Fair Credit Reporting Act (copy included in Appendix 3). The FCRA does not require a cover letter for this step, but we recommend that you use a cover letter to provide some explanation and a written record. Appendix 4 contains a suggested Pre-Adverse Action Notice for this purpose. An employer must provide the report and the Summary of Rights to the applicant or employee a reasonable period of time before actually taking adverse action. A reasonable period of time depends on the circumstances including such factors as 3

26 the industry, the employer s business needs and past practice, and the information in the report. E. Give Written Notice After Taking Adverse Action. When an employer actually takes adverse action based in whole or in part on a consumer report or investigative consumer report, the employer must give the applicant or employee a written notice of the adverse action along with specific information about the consumer reporting agency which provided the consumer report. Appendix 5 contains a sample Adverse Action Notice. F. Special Rule for Workplace Misconduct Investigations Employers have always been free to conduct internal investigations using their own employees without risk of triggering the FCRA. Effective March 31, 2004, Congress stepped in to ensure that employers who want to hire an outside expert to investigate certain types of workplace misconduct should not be bound by all of the FCRA s notice, authorization, and disclosure requirements. The amendment to the FCRA provides a simpler procedure for handling certain types of reports to employers. Specifically, the amendment applies to a report from an outside investigator hired by an employer where: (1) the oral or written report is made to an employer in connection with an investigation of (A) suspected misconduct relating to employment or (B) compliance with federal, state, or local laws and regulations, the rules of a self-regulatory organization, or any preexisting written policies of the employer; (2) the report is not made for the purpose of investigating a consumer s credit worthiness, credit standing, or credit capacity; and (3) the report is not provided to any person except (A) the employer or an agent of the employer, (B) a government officer, agency, or department, (C) any selfregulatory organization with regulatory authority over the employer or employee, or (D) as otherwise provided by law. For reports such as those described above, there is no advance-notice or authorization requirement, and the only disclosure obligation on the employer will be this: After taking any adverse action based in whole or in part on such a report, the employer must disclose to the employee a summary containing the nature and substance of the report. In that summary, the sources of information acquired solely for use in preparing the report do not need to be disclosed. IV. USING INVESTIGATIVE CONSUMER REPORTS Using an investigative consumer report may require an additional step if the applicant or employee requests additional information. The applicant or employee may request (1) disclosure of the nature and scope of the investigation to be conducted and/or (2) a summary of consumer rights prepared by the Federal Trade Commission. If an applicant or employee requests this information, 4

27 provide the attached Response to Request for Information Regarding Investigative Consumer Report (Appendix 6) with appropriate enclosures. To satisfy a request for information regarding the nature and scope of the investigation, you may attach a blank copy of the form that the consumer reporting agency will use in making its investigative consumer report. If the consumer reporting agency does not have an investigation form, you should contact your Fisher & Phillips LLP attorney for alternative nature and scope disclosure suggestions. To satisfy disclosure number (2), you should provide a copy of A Summary of Your Rights Under the Fair Credit Reporting Act at Appendix 3. When an applicant or employee makes a proper written request for information regarding an investigative consumer report, an employer must respond in writing within five days after one of the following: (a) receiving the applicant or employee s request for the information, or (b) the date on which the employer first requests the investigative consumer report, whichever date is later. V. DOT-COVERED EMPLOYEES. For employers considering applicants for driver positions subject to DOT regulation or state transportation or safety regulations, the FCRA allows for oral (instead of written) disclosures to applicants, and oral authorizations from applicants, regarding some consumer reports. Also, the written pre-adverse action notice may be replaced with an appropriate notification given to the applicant within three business days after the adverse decision. These oral procedures may be used if, at the time of procuring the consumer report or causing the report to be procured, the only interaction between the driver applicant and the employer in connection with the employment application has been by mail, telephone, computer, or other similar means. In contrast, if the driver applies in person, these oral procedures may not be used, and the employer must use written FCRA disclosures, authorizations, and notices. VI. THE COSTS AND PENALTIES OF NON-COMPLIANCE The FCRA provides the following remedies and penalties: A. Liability For negligent failure to comply, the FCRA authorizes individual suits for actual damages, attorney s fees, and costs. Federal and state agencies are also authorized to sue for such relief, to seek injunctive relief, and to recover up to $1,000 per violation in lieu of actual damages. For a willful failure to comply, an individual may also recover punitive damages and may recover up to $1,000 in lieu of proving actual damages. For a knowing violation involving a 5

28 pattern or practice of noncompliance, the FTC may also bring an action seeking a civil penalty of up to $2,500 per violation. For obtaining information from a consumer reporting agency under false pretenses, the penalties include a fine and/or imprisonment for up to two years. For unauthorized disclosure of information by a consumer reporting agency, the penalty is also a fine and/or imprisonment for up to two years. B. Limitation on Liability The FCRA contains a limitation on liability for certain users of consumer reports who maintain reasonable procedures for compliance. The FCRA states that no person may be held liable for a violation of certain disclosure and certification requirements if the person shows by a preponderance of the evidence that the person maintained reasonable procedures to assure compliance with those subsections of the law. C. Managing Potential Liability Some employers maintain in-house access to consumer reporting databases. Because of the potential for abuse, employers should warn employees with such access about the potential liability and that they must not obtain information on an individual without the proper disclosure, authorization, and purpose. We suggest a memo as set out in Appendix 7. 6

29 APPENDIX 1 Attached: DISCLOSURE OF INTENT TO OBTAIN CONSUMER REPORTS OR INVESTIGATIVE CONSUMER REPORTS (AND AUTHORIZATION) Two pages (Copy A and Copy B of the following document) are provided together to the applicant/employee (one copy to sign/return and one copy to keep).

30 Copy A - - Sign and Return this Page for Filing DISCLOSURE OF INTENT TO OBTAIN CONSUMER REPORTS OR INVESTIGATIVE CONSUMER REPORTS For employment purposes, the Company may obtain consumer reports on you as an applicant or from time to time during employment. Consumer reports are reports from consumer reporting agencies and may include driving records, criminal records, etc. For such employment purposes, the Company may also obtain investigative consumer reports. Some reference checks by a consumer reporting agency fall into this category. An investigative consumer report is a consumer report in which information as to character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, associates, acquaintances, or others. You have a right to request disclosure of the nature and scope of an investigation and to request a written summary of consumer rights. AUTHORIZATION I authorize the Company to obtain consumer reports and/or investigative consumer reports regarding me from time to time for employment purposes. Signature: Print Name: Driver s License Number: Date: SSN: State: Other Driver s Licenses Held in Past 5 Years: Print Maiden or Other Names Under Which Records May be Listed: Date of Birth (to be used only for proper identification): If the Company requests an investigative consumer report and you would like to receive a disclosure of the nature and scope of the investigation and a written summary of consumer rights, check here: 1

31 Copy B - - Applicant/Employee Keeps this Page DISCLOSURE OF INTENT TO OBTAIN CONSUMER REPORTS OR INVESTIGATIVE CONSUMER REPORTS For employment purposes, the Company may obtain consumer reports on you as an applicant or from time to time during employment. Consumer reports are reports from consumer reporting agencies and may include driving records, criminal records, etc. For such employment purposes, the Company may also obtain investigative consumer reports. Some reference checks by a consumer reporting agency fall into this category. An investigative consumer report is a consumer report in which information as to character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, associates, acquaintances, or others. You have a right to request disclosure of the nature and scope of an investigation and to request a written summary of consumer rights. AUTHORIZATION I authorize the Company to obtain consumer reports and/or investigative consumer reports regarding me from time to time for employment purposes. Signature: Print Name: Driver s License Number: Date: SSN: State: Other Driver s Licenses Held in Past 5 Years: Print Maiden or Other Names Under Which Records May be Listed: Date of Birth (to be used only for proper identification): If the Company requests an investigative consumer report and you would like to receive a disclosure of the nature and scope of the investigation and a written summary of consumer rights, check here: 2

32 APPENDIX 2 [COMPANY LETTERHEAD] [CONSUMER REPORTING AGENCY] [STREET ADDRESS] [CITY, STATE, ZIP] Date RE: CERTIFICATION TO CONSUMER REPORTING AGENCY To Whom It May Concern: For employment purposes, our Company seeks to obtain consumer reports and/or investigative consumer reports on applicants and/or employees. In accordance with the Fair Credit Reporting Act (FCRA), our Company certifies to you as follows: 1. Our Company has complied with FCRA Section 604(b)(2) by providing the consumer an appropriate disclosure of intent to obtain consumer reports. We have also complied with FCRA Section 606(a)(1) by disclosing the definition of investigative consumer reports and informing the consumer of the right to request additional disclosures regarding an investigation and to request a written summary of consumer rights. The Company will provide those additional disclosures as required. 2. The consumer has authorized us in writing to obtain consumer reports, including investigative consumer reports. 3. The Company will comply with FCRA Section 604(b)(3) by providing the consumer a copy of the consumer report and the FTC s written description of consumer rights before taking any adverse action based in whole or in part on the report. 4. Information from the consumer report will not be used in violation of any applicable federal or state equal employment opportunity law or regulation. 5. Our Company will use the consumer report for employment-related purposes and for no other purpose. Sincerely, For the Company

33 APPENDIX 3 Attached: A Summary of Your Rights Under the Fair Credit Reporting Act A copy of the following document, along with a copy of the individual s consumer report, must be provided to the individual before taking adverse action based in whole or in part on information contained in the individual s consumer report.

34 A SUMMARY OF YOUR RIGHTS UNDER THE FAIR CREDIT REPORTING ACT The federal Fair Credit Reporting Act (FCRA) is designed to promote accuracy, fairness, and privacy of information in the files of every consumer reporting agency (CRA). Most CRAs are credit bureaus that gather and sell information about you such as if you pay your bills on time or have filed bankruptcy to creditors, employers, landlords, and other businesses. You can find the complete text of the FCRA, 15 U.S.C u, at the Federal Trade Commission s web site ( The FCRA gives you specific rights, as outlined below. You may have additional rights under state law. You may contact a state or local consumer protection agency or a state attorney general to learn those rights. You must be told if information in your file has been used against you. Anyone who uses information from a CRA to take action against you such as denying an application for credit, insurance or employment must tell you, and give you the name, address, and phone number for the CRA that provided the consumer report. You can find out what is in your file. At your request, a CRA must give you the information in your file, and a list of everyone who has requested it recently. There is no charge for the report if a person has taken action against you because of information supplied by the CRA, if you request the report within 60 days of receiving notice of the action. You also are entitled to one free report every twelve months upon request if you certify that (1) you are unemployed and plan to seek employment within 60 days, (2) you are on welfare, or (3) your report is inaccurate due to fraud. Otherwise, a CRA may charge you up to eight dollars. You can dispute inaccurate information with the CRA. If you tell a CRA that your file contains inaccurate information, the CRA must investigate the items (usually within 30 days) by presenting to its information source all relevant evidence you submit, unless your dispute is frivolous. The source must review your evidence and report its findings to the CRA. (The source also must advise national CRAs to which it has provided the data of any error.) The CRA must give you a written report of the investigation, and a copy of your report if the investigation results in any change. If the CRA s investigation does not resolve the dispute, you may add a brief statement to your file. The CRA must normally include a summary of your statement in future reports. If an item is deleted or a dispute statement is filed, you may ask that anyone who has recently received your report be notified of the change. Inaccurate information must be corrected or deleted. A CRA must remove or correct inaccurate or unverified information from its files, usually within 30 days after you dispute it. However, the CRA is not required to remove accurate data from your file unless it is outdated (as described below) or cannot be verified. If your dispute results in any change to your report, the CRA cannot reinsert into your file a disputed item unless the information source verifies its accuracy and completeness. In addition, the CRA must give 1

35 you a written notice telling you it has reinserted the item. The notice must include the name, address and phone number of the information source. You can dispute inaccurate items with the source of the information. If you tell anyone -- such as a creditor who reports to CRA -- that you dispute an item, they may not then report the information to a CRA without including a notice of your dispute. In addition, once you ve notified the source of the error in writing, it may not continue to report the information if it is, in fact, an error. Outdated information may not be reported. In most cases, a CRA may not report negative information that is more than seven years old; ten years for bankruptcies. Access to your file is limited. A CRA may provide information about you only to people with a need recognized by the FCRA usually to consider an application with a creditor, insurer, employer, landlord, or other business. Your consent is required for reports that are provided to employers, or reports that contain medical information. A CRA may not give out information about you to your employer, or prospective employer, without your written consent. A CRA may not report medical information about you to creditors, insurers, or employers without your permission. You may choose to exclude your name from CRA lists for unsolicited credit and insurance offers. Creditors and insurers may use file information as the basis for sending you unsolicited offers of credit or insurance. Such offers must include a toll-free phone number for you to call if you want your name and address removed from future lists. If you call, you must be kept off the lists for two years. If you request, complete, and return the CRA form provided for this purpose, you must be taken off the lists indefinitely. You may seek damages from violators. If a CRA, a user or (in some cases) a provider of CRA data, violates the FCRA, you may sue them in state or federal court. 2

36 The FCRA gives several different federal agencies authority to enforce the FCRA: FOR QUESTIONS OR CONCERNS REGARDING: CRAs, creditors and others not listed below National banks, federal branches/agencies of foreign banks (the word National or initials N.A. appear in or after bank s name) Federal Reserve System member banks (except national banks, and federal branches/agencies of foreign banks) Savings associations and federally chartered savings banks (the words Federal or initials F.S.B. appear in federal institution s name) Federal Credit Unions (the words Federal Credit Union appear in institution s name) State-chartered banks that are not members of the Federal Reserve System Air, surface, or rail common carriers regulated by former Civil Aeronautics Board or Interstate Commerce Commission Activities subject to the Packers and Stockyards Act, 1921 PLEASE CONTACT: Federal Trade Commission Consumer Response Center FCRA Washington, DC Office of the Comptroller of the Currency Compliance Management, Mail Stop 6-6 Washington, DC Federal Reserve Board Division of Consumer & Community Affairs Washington, DC Office of Thrift Supervision Consumer Programs Washington, DC National Credit Union Administration 1775 Duke Street Alexandria, VA Federal Deposit Insurance Corporation Division of Compliance & Consumer Affairs Washington, DC FDIC Department of Transportation Office of Financial Management Washington, DC Department of Agriculture Office of Deputy Administrator - GIPSA Washington, DC

37 APPENDIX 4 PRE-ADVERSE ACTION NOTICE [COMPANY LETTERHEAD] Date [APPLICANT/EMPLOYEE] [STREET ADDRESS] [CITY, STATE, ZIP] Re: Consumer Report Dear : You authorized us to obtain a consumer report on you in connection with your application for employment or current employment with us. This letter is to inform you that [COMPANY NAME] is considering making an employment decision about you based in whole or in part on information contained in this consumer report. We provide you with the attached information: (a) (b) a copy of the consumer report; and a description in writing of your rights under the Fair Credit Reporting Act, as prescribed by the Federal Trade Commission. If you believe the information in the report is incorrect, please provide written documentation IMMEDIATELY. If an adverse decision affecting your employment occurs based in whole or in part on the report, you will receive additional information. Sincerely, For [COMPANY NAME]

38 APPENDIX 5 ADVERSE ACTION NOTICE [COMPANY LETTERHEAD] Date [APPLICANT/EMPLOYEE] [STREET ADDRESS] [CITY, STATE, ZIP] Dear: : 1. Your recent application for employment has been denied, or your current employment has been terminated, based in whole or in part on information contained in a consumer report. 2. The consumer reporting agency providing this report was: Name: Address: Phone: Toll-free phone [if applicable]: 3. The above-named consumer reporting agency did not make the decision to take the adverse employment action and is unable to provide you the specific reasons why the action was taken. 4. You have the right under law to obtain an additional free copy of your consumer report from the above-named consumer reporting agency. You have sixty (60) days from the date you receive this notice to request this free copy of your consumer report. 5. You also have the right under law to dispute with the above-named consumer reporting agency the accuracy or completeness of any information contained in your consumer report. Sincerely, For [Company Name]

39 APPENDIX 6 RESPONSE TO REQUEST FOR INFORMATION REGARDING INVESTIGATIVE CONSUMER REPORT [COMPANY LETTERHEAD] DATE NAME ADDRESS CITY, STATE, ZIP CODE Re: Your Request For Information Regarding Investigative Consumer Report Dear : This letter responds to your written request for information concerning the nature and scope of investigation requested to prepare an investigative consumer report in connection with your employment or application for employment. 1. A report has been requested from, whose street address is. A copy of a blank report form used in the investigation may be attached for your reference if it is available. The investigation will seek interviews with neighbors, friends, associates, acquaintances, or others who may be able to provide information concerning your character, general reputation, personal characteristics, mode of living, prior employment, or occupation. More specifically, the investigation will seek information regarding. 2. As you requested, we enclose a summary of consumer rights prepared by the Federal Trade Commission. Sincerely, For [Company Name]

40 APPENDIX 7 WARNING MEMO TO EMPLOYEES HANDLING INFORMATION [COMPANY LETTERHEAD] MEMORANDUM Date: To: From: Subject: FAIR CREDIT REPORTING ACT The Fair Credit Reporting Act, a federal law, regulates the use of credit information and other personal information from consumer reporting agencies. The law now provides LIABILITY for any person who misuses such credit information or personal information. Any person who obtains such information under false pretenses can also be fined and sentenced to prison for up to two years. In addition to potential civil or criminal liability, employees who handle this kind of information also are subject to IMMEDIATE TERMINATION if they violate the Fair Credit Reporting Act by obtaining or using such information without proper disclosure, authorization, and purpose. If you have any questions about these matters, please discuss them with your supervisor.

41 Reference Check Form

42 REFERENCE CHECK/VERIFICATION NAME: DATE: POSITION APPLIED FOR: EMPLOYER-1 EMPLOYER-2 EMPLOYER-3 NAME OF EMPLOYER NAME OF CONTACT PHONE NUMBER LAST JOB TITLE EMPLOY DATES FROM/TO LAST RATE OF PAY WOULD YOU REHIRE? REASON FOR LEAVING QUALITY OF WORK QUANTITY OF WORK WORK ATTITUDE ATTENDANCE RECORD ANY OTHER COMMENTS? PERSON MAKING INQUIRY: DATE:

43 Applicant Checklist

44 Applicant Checklist Applicant Name: B Employment Application completed and reviewed for: Supervisor Initials S Signatures S Missing Information S Gaps in Employment S Prior Terminations S Criminal Record S Scratch-Outs S Inconsistencies B Disclosure of Intent to Obtain Consumer Reports or Investigative Consumer Reports Completed B Certification to Consumer Reporting Agency Completed B B B Summary of Your Rights Under the Fair Credit Reporting Act provided Interviews conducted by at least two supervisors and interview comment forms completed Employment and personal references checked and Reference Verification form completed B Background investigation report obtained and reviewed B Driving record obtained and reviewed (if applicable) B Drug test results obtained and reviewed (if applicable) B Credit report obtained and reviewed (for applicable positions) B Federal EEO-1 Data Collection Form Completed 1

45 APPROVAL TO HIRE Department Manager Date General Manager/Human Resources Date OR REJECTION B Pre-Adverse Action Notice B Adverse Action Notice and Notice of Rights Department Manager General Manager/Human Resources Date Date 2

46 EEO-1 Data Reporting Form

47 COLLECTION OF DATA FOR FEDERAL EEO-1 REPORT NOTICE The following information relating to race/ethnic origin, sex, and job category is collected in order to demonstrate compliance with Federal and State agency regulations. The information is in no way used in the evaluation of the employee. Completion of this form is entirely voluntary, and all information will remain confidential and will not affect the employee s application for employment. In addition, this form will not become a part of the personnel record of the employee, if the employee is hired. Employee to complete the following: NAME: SEX: Male Female RACE: (W)White: also includes, by definition, persons having origin in North Africa, Europe, or the Middle East. (B) Black or African American: all persons having origins in any of the black racial groups of Africa (S) Hispanic or Latino: all persons of Cuban, Mexican, Puerto Rican, Cuban, South or Central American, or other Spanish culture or origin regardless of race. (A) Asian: a person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian Subcontinent. (P) Native Hawaiian or Other Pacific Islanders: a person having origins in any of the peoples of Hawaii, Guam, Samoa, or other Pacific Islands. (I) American Indian or Alaskan Native: a person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment. (T) Two or More Races: all persons who identify with more than one of the above five races. Government contractors must take affirmative action to employ and advance certain qualified individuals subject to the Rehabilitation Act of 1973 and the Vietnam Era Veterans Readjustment Act of Completion of the following information is voluntary, and will assist us in proper placement and reasonable accommodation. If you wish to be identified as qualifying for such placement or accommodation, please check where applicable: Individual with a Disability Vietnam Era Veteran Disabled Veteran 1

48 Supervisor check the appropriate designation below (check only one) Office or Manager Sets broad policy, exercises overall responsibility for unit (ex. executive, middle managers, plant or department managers, superintendents, salaried supervisors who are members of management) Professional Occupations requiring college degree (ex. architect, accountant, lawyer, teacher, engineer). Technician Requiring basic scientific knowledge and manual skill, may be acquired through two-year college program or on-the-job training (ex. computer programmers, drafters, engineering aids, photographers, technical illustrators, medical and dental technicians). Sales Workers Occupational engaged primarily in direct sales (ex. sales representatives, cashiers, clerks, real estate agents and brokers). Office and Clerical Includes all clerical type work regardless of difficulty (ex. bookkeepers, collectors, messengers and office helpers, office machine operators including computer, secretary, legal assistant, shipping and receiving clerks). Trainee (White Collar) Persons engaged in formal training for officer, manager, professional, technical sales, or office and clerical occupations. Craft Workers (Skilled) Manual workers of relatively high skill: exercise independent judgment; have extensive period of training (includes building trades, hourly paid supervisors and lead operators who are not members of management, mechanics, skilled machinists, typesetters, electricians, painters, etc.). Operative (Semi-skilled) Operate machine or procession equipment that can be mastered in a few weeks and receive limited training (ex. apprentices of skilled craft workers). Laborer (Unskilled) Manual occupations which require no special training or may be learned in a few days with little or no independent judgment (ex. garage laborers, car washers and greasers, gardeners and grounds keepers, stevedores, laborers performing lifting, digging, mixing, loading and pulling operations). Service Worker Workers in protected and non-protected service occupations (ex. hospital attendants, personal service attendants, nurses aids and orderlies, cleaning people, cooks, counter and fountain workers, firefighters, guards, doorkeepers, janitors, police officers, waiters and waitresses, guides, ushers). Trainee (Production) Those in formal training to become a craft (skilled) worker B when not trained under apprentice programs B operative laborer and service occupation. 2

49 Department of Homeland Security U.S. Citizenship and Immigration Services OMB No ; Expires 06/30/08 Form I-9, Employment Eligibility Verification Instructions Please read all instructions carefully before completing this form. Anti-Discrimination Notice. It is illegal to discriminate against any individual (other than an alien not authorized to work in the U.S.) in hiring, discharging, or recruiting or referring for a fee because of that individual's national origin or citizenship status. It is illegal to discriminate against work eligible individuals. Employers CANNOT specify which document(s) they will accept from an employee. The refusal to hire an individual because the documents presented have a future expiration date may also constitute illegal discrimination. What Is the Purpose of This Form? The purpose of this form is to document that each new employee (both citizen and non-citizen) hired after November 6, 1986 is authorized to work in the United States. When Should the Form I-9 Be Used? All employees, citizens and noncitizens, hired after November 6, 1986 and working in the United States must complete a Form I-9. Filling Out the Form I-9 Section 1, Employee: This part of the form must be completed at the time of hire, which is the actual beginning of employment. Providing the Social Security number is voluntary, except for employees hired by employers participating in the USCIS Electronic Employment Eligibility Verification Program (E-Verify). The employer is responsible for ensuring that Section 1 is timely and properly completed. Preparer/Translator Certification. The Preparer/Translator Certification must be completed if Section 1 is prepared by a person other than the employee. A preparer/translator may be used only when the employee is unable to complete Section 1 on his/her own. However, the employee must still sign Section 1 personally. Section 2, Employer: For the purpose of completing this form, the term "employer" means all employers including those recruiters and referrers for a fee who are agricultural associations, agricultural employers or farm labor contractors. Employers must complete Section 2 by examining evidence of identity and employment eligibility within three (3) business days of the date employment begins. If employees are authorized to work, but are unable to present the required document(s) within three business days, they must present a receipt for the application of the document(s) within three business days and the actual document(s) within ninety (90) days. However, if employers hire individuals for a duration of less than three business days, Section 2 must be completed at the time employment begins. Employers must record: 1. Document title; 2. Issuing authority; 3. Document number; 4. Expiration date, if any; and 5. The date employment begins. Employers must sign and date the certification. Employees must present original documents. Employers may, but are not required to, photocopy the document(s) presented. These photocopies may only be used for the verification process and must be retained with the Form I-9. However, employers are still responsible for completing and retaining the Form I-9. Section 3, Updating and Reverification: Employers must complete Section 3 when updating and/or reverifying the Form I-9. Employers must reverify employment eligibility of their employees on or before the expiration date recorded in Section 1. Employers CANNOT specify which document(s) they will accept from an employee. A. If an employee's name has changed at the time this form is being updated/reverified, complete Block A. B. If an employee is rehired within three (3) years of the date this form was originally completed and the employee is still eligible to be employed on the same basis as previously indicated on this form (updating), complete Block B and the signature block. C. If an employee is rehired within three (3) years of the date this form was originally completed and the employee's work authorization has expired or if a current employee's work authorization is about to expire (reverification), complete Block B and: 1. Examine any document that reflects that the employee is authorized to work in the U.S. (see List A or C); 2. Record the document title, document number and expiration date (if any) in Block C, and 3. Complete the signature block. Form I-9 (Rev. 06/05/07) N

50 What Is the Filing Fee? There is no associated filing fee for completing the Form I-9. This form is not filed with USCIS or any government agency. The Form I-9 must be retained by the employer and made available for inspection by U.S. Government officials as specified in the Privacy Act Notice below. USCIS Forms and Information To order USCIS forms, call our toll-free number at Individuals can also get USCIS forms and information on immigration laws, regulations and procedures by telephoning our National Customer Service Center at or visiting our internet website at Photocopying and Retaining the Form I-9 A blank Form I-9 may be reproduced, provided both sides are copied. The Instructions must be available to all employees completing this form. Employers must retain completed Forms I-9 for three (3) years after the date of hire or one (1) year after the date employment ends, whichever is later. Submission of the information required in this form is voluntary. However, an individual may not begin employment unless this form is completed, since employers are subject to civil or criminal penalties if they do not comply with the Immigration Reform and Control Act of Paperwork Reduction Act We try to create forms and instructions that are accurate, can be easily understood and which impose the least possible burden on you to provide us with information. Often this is difficult because some immigration laws are very complex. Accordingly, the reporting burden for this collection of information is computed as follows: 1) learning about this form, and completing the form, 9 minutes; 2) assembling and filing (recordkeeping) the form, 3 minutes, for an average of 12 minutes per response. If you have comments regarding the accuracy of this burden estimate, or suggestions for making this form simpler, you can write to: U.S. Citizenship and Immigration Services, Regulatory Management Division, 111 Massachusetts Avenue, N.W., 3rd Floor, Suite 3008, Washington, DC OMB No The Form I-9 may be signed and retained electronically, as authorized in Department of Homeland Security regulations at 8 CFR 274a.2. Privacy Act Notice The authority for collecting this information is the Immigration Reform and Control Act of 1986, Pub. L (8 USC 1324a). This information is for employers to verify the eligibility of individuals for employment to preclude the unlawful hiring, or recruiting or referring for a fee, of aliens who are not authorized to work in the United States. This information will be used by employers as a record of their basis for determining eligibility of an employee to work in the United States. The form will be kept by the employer and made available for inspection by officials of U.S. Immigration and Customs Enforcement, Department of Labor and Office of Special Counsel for Immigration Related Unfair Employment Practices. EMPLOYERS MUST RETAIN COMPLETED FORM I-9 Form I-9 (Rev. 06/05/07) N Page 2 PLEASE DO NOT MAIL COMPLETED FORM I-9 TO ICE OR USCIS

51 Department of Homeland Security U.S. Citizenship and Immigration Services OMB No ; Expires 06/30/08 Form I-9, Employment Eligibility Verification Please read instructions carefully before completing this form. The instructions must be available during completion of this form. ANTI-DISCRIMINATION NOTICE: It is illegal to discriminate against work eligible individuals. Employers CANNOT specify which document(s) they will accept from an employee. The refusal to hire an individual because the documents have a future expiration date may also constitute illegal discrimination. Section 1. Employee Information and Verification. To be completed and signed by employee at the time employment begins. Print Name: Last First Middle Initial Maiden Name Address (Street Name and Number) Apt. # Date of Birth (month/day/year) City State Zip Code Social Security # I am aware that federal law provides for imprisonment and/or fines for false statements or use of false documents in connection with the completion of this form. Employee's Signature I attest, under penalty of perjury, that I am (check one of the following): A citizen or national of the United States A lawful permanent resident (Alien #) A An alien authorized to work until (Alien # or Admission #) Date (month/day/year) Preparer and/or Translator Certification. (To be completed and signed if Section 1 is prepared by a person other than the employee.) I attest, under penalty of perjury, that I have assisted in the completion of this form and that to the best of my knowledge the information is true and correct. Preparer's/Translator's Signature Print Name Address (Street Name and Number, City, State, Zip Code) Date (month/day/year) Section 2. Employer Review and Verification. To be completed and signed by employer. Examine one document from List A OR examine one document from List B and one from List C, as listed on the reverse of this form, and record the title, number and expiration date, if any, of the document(s). List A OR List B AND List C Document title: Issuing authority: Document #: Expiration Date (if any): Document #: Expiration Date (if any): CERTIFICATION - I attest, under penalty of perjury, that I have examined the document(s) presented by the above-named employee, that the above-listed document(s) appear to be genuine and to relate to the employee named, that the employee began employment on (month/day/year) and that to the best of my knowledge the employee is eligible to work in the United States. (State employment agencies may omit the date the employee began employment.) Signature of Employer or Authorized Representative Print Name Title Business or Organization Name and Address (Street Name and Number, City, State, Zip Code) Date (month/day/year) Section 3. Updating and Reverification. To be completed and signed by employer. A. New Name (if applicable) B. Date of Rehire (month/day/year) (if applicable) C. If employee's previous grant of work authorization has expired, provide the information below for the document that establishes current employment eligibility. Document Title: Document #: Expiration Date (if any): l attest, under penalty of perjury, that to the best of my knowledge, this employee is eligible to work in the United States, and if the employee presented document(s), the document(s) l have examined appear to be genuine and to relate to the individual. Signature of Employer or Authorized Representative Date (month/day/year) Form I-9 (Rev. 06/05/07) N

52 LISTS OF ACCEPTABLE DOCUMENTS LIST A LIST B LIST C Documents that Establish Both Identity and Employment Eligibility 1. U.S. Passport (unexpired or expired) OR Documents that Establish Identity 1. Driver's license or ID card issued by a state or outlying possession of the United States provided it contains a photograph or information such as name, date of birth, gender, height, eye color and address AND Documents that Establish Employment Eligibility 1. U.S. Social Security card issued by the Social Security Administration (other than a card stating it is not valid for employment) 2. Permanent Resident Card or Alien Registration Receipt Card (Form I-551) 3. An unexpired foreign passport with a temporary I-551 stamp 4. An unexpired Employment Authorization Document that contains a photograph (Form I-766, I-688, I-688A, I-688B) 5. An unexpired foreign passport with an unexpired Arrival-Departure Record, Form I-94, bearing the same name as the passport and containing an endorsement of the alien's nonimmigrant status, if that status authorizes the alien to work for the employer 2. ID card issued by federal, state or local government agencies or entities, provided it contains a photograph or information such as name, date of birth, gender, height, eye color and address 3. School ID card with a photograph 4. Voter's registration card 5. U.S. Military card or draft record 6. Military dependent's ID card 7. U.S. Coast Guard Merchant Mariner Card 8. Native American tribal document 9. Driver's license issued by a Canadian government authority 2. Certification of Birth Abroad issued by the Department of State (Form FS-545 or Form DS-1350) 3. Original or certified copy of a birth certificate issued by a state, county, municipal authority or outlying possession of the United States bearing an official seal 4. Native American tribal document 5. U.S. Citizen ID Card (Form I-197) 6. ID Card for use of Resident Citizen in the United States (Form I-179) 7. Unexpired employment authorization document issued by DHS (other than those listed under List A) For persons under age 18 who are unable to present a document listed above: 10. School record or report card 11. Clinic, doctor or hospital record 12. Day-care or nursery school record Illustrations of many of these documents appear in Part 8 of the Handbook for Employers (M-274) Form I-9 (Rev. 06/05/07) N Page 2

53 I-9 Guide

54 Guidelines For I-9 Compliance I. Introduction A Form I-9 must be completed and retained for every employee hired after November 6, The I-9 requirement was created by the Immigration Reform and Control Act of 1986 ( IRCA ). IRCA imposes stiff civil money penalties upon employers who fail to comply with the law s requirements. This memorandum will provide specific instructions for completing I-9 forms and other compliance aspects. II. The I-9 Form The I-9 form consists of two basic parts. Section 1 contains basic information about the employee, including information about the employee s date of birth, Social Security number, and citizenship/immigration status. Section 2 of the form contains several attestations by the employer regarding the documents presented by the employee and the employee s right to work in this country. The Bureau of Immigration and Customs Enforcement ( ICE ) requires that Section 1 of the I-9 form be completed before work commences. Section 2 is to be completed within 72 hours of work commencing. The law also allows for grace periods to replace or obtain missing documents. As a practical matter, these rules leave much room for error. Accordingly, the better policy is as follows: - The entire I-9 Form must be completed before a new hire commences work. - New hires who do not have the required documents with them should be sent home to get the documents and should not be allowed to work until satisfactory documents are produced and the I-9 form is complete. While this policy may occasionally cause inconvenience, it will also ensure that no forms are completed late. ICE fines for late completion are typically set at $300 or $400 per form. A. Section 1 of I-9 Form Section 1 of the I-9 form elicits the employee s name, address, date of birth, Social Security number, and citizenship/immigration status. Section 1 requires that the employee attest to immigration status and validity of documents presented to establish identity and employment eligibility. The employee must sign and date the I-9 Form. The employee must also attest to a status. These are the two most common errors in Section 1 of the I-9 form. If the employee fails to sign or date the form or fails to attest to a status, the employer will be fined by ICE. Therefore, it is vital that the employer ensure that the employee has properly completed Section 1 of the I-9 form. Be certain that the following fields are completed in Section 1: - Name and address - Date of Birth - Maiden Name (if applicable, and especially if new hire is presenting documents 1

55 with that name); - Social Security number - Citizenship/immigration status box, including alien number and/or expiration date, if applicable - Employee s signature and date If the employee needs assistance in completing the form or needs a translator, someone may assist the employee, but the employee must sign (or mark) the form in the appropriate section. The person assisting the employee must fill out the block marked Preparer/Translator Certification. If you add or revise anything in Section 1 of the form, complete the Preparer/Translator Certification. ICE wants to see forms that are properly completed, so do not be afraid to insert the current date even if you are revising a form that was completed previously. B. Section 2 of I-9 Form Once the employer is satisfied that Section 1 of the form is complete, the employer should give the new hire the choice of what documents to present. New employees must present documents proving identity and employment eligibility. A list of documents which may be accepted to satisfy this requirement is attached to this memorandum. It is often a good idea to post the list of acceptable documents where I-9 forms will be completed. You can also post it where applications are completed or submitted. The list can also be included in offer letters or correspondence with prospective new hires. It is also a good idea to post a notice where applicants complete or submit employment applications advising applicants that: We comply with U.S. immigration laws and do not employ persons unauthorized to work. If hired, you will be required to produce identity and work authorization documentation. There are three types of documents. List A sets forth documents that prove identity and employment eligibility. List B sets forth only identity documents. List C sets forth only employment authorization documents. NOTE: the new hire need only present enough documents to prove identity and employment eligibility. DO NOT ask for more documents if the documents presented establish identity and work authorization. If documentation under List A is used, do not ask for any additional documentation. If the new hire provides documentation under List B and C, ensure that there is only one document examined from each list. Do not accept two documents from List B or two from List C. Only accept the listed documents. Do not specify which of the acceptable documents you require of an employee. The employee must be allowed to select from the list. The employer completes Section 2 of the I-9 Form. You must examine the documents presented by the employee to establish both identity and employment eligibility. If the documents reasonably appear to be genuine, you should record the document number and expiration date (as required). If you have any doubts about the validity of any document presented by a new hire, please contact legal counsel or internal resources. Do not contact DHS or ICE. You should not accept an expired identity document (e.g., expired 2

56 drivers license) or work authorization. As the employer s agent, you will be signing a certification stating that the documents: (1) reasonably appear to be genuine; (2) relate to the individual; and (3) authorize the individual to work. The certification also contains a blank for insertion of the actual date work commenced. Please ensure that the date of hire information is inserted, as this is one of the most common errors in Section 2. Please also ensure that Section 2 is signed and dated by the person who examined the documents presented by the new hire. Be alert for the fact that the new hire may have already signed Section 2 inadvertently. If so, simply cross out the incorrect signature and date, and substitute your signature and date as appropriate. C. Special Situations An employee unable to produce an employment eligibility document may present a receipt from an application for a replacement document. New hires who have lost their Social Security card or birth certificate may apply for a replacement and present the receipt from the replacement application. In such a case, the receipt authorizes employment for 90 calendar days from the date it is presented. You should not, however, accept a receipt that is more than 90 days old. Note that receipts cannot be accepted for employees who will work three days or less. The employee must still complete Section 1 of the form prior to commencement of work. You should record the type of receipt, the receipt or document number, and the end of the 90 day grace period in Section 2. If an employee present a receipt, you should keep track of the expiration of the grace period so you remember to ask for additional documents when it ends. At the end of the 90 day grace period, the employee must present some valid work authorization document in order to continue employment. You should not specify what document the employee presents at any time in the I-9 process, including at the end of a 90 day grace period. Before the expiration of the 90 day grace period, you will complete Section 3 of the form in connection with reverification of the individual s right to keep working. Record the document type, number, and expiration date in Section 3 of the form, and sign and date Section 3. Reverification, and completion of Section 3, also occurs whenever an employee s employment authorization document expires. Some employees may have a limited right to work, which is reflected by means of an expiration date on their work authorization dates. To prevent the continuing employment of someone who lacks the right to work, the law requires the employer to reverify the individual s continuing employment eligibility. You should follow the same process followed for Section 2, i.e., ask the employee to produce a new employment eligibility document from the list. If the document reasonably appears to be genuine, record the document type, document number, and expiration date (if any) in Section 3, and sign and date the form. Note that reverification only applies to work authorization documents and not to List B identity documents. Note also that you do NOT reverify eligibility of persons who present a U.S. passport or Alien Registration Card (Form I-551) because although their card may expire, their right to work does not. 3

57 Some aliens receive Social Security cards with a legend restricting their employability. These cards will have the following legend: Valid for work only with [INS/DHS] authorization. In this case, you can accept the card as a valid List C document, but only if the employee presents some DHS document authorizing employment. Note that the DHS document need not be on the I-9 list and could take the form of a letter from DHS telling the employee that he or she is employment authorized. You should record the Social Security number on the form and also record the expiration date from the DHS document, if any. If there is an expiration date, you will need to reverify the employee s employment eligibility before it expires. You may also use Section 3 to avoid completion of a new I-9 form in the event that an employee is re-hired. You should show the form to the employee and ask if everything remains the same. If any information has changed, have the employee complete a new form. Otherwise, simply record the re-hire date in Section 3 and sign and date the form. This rule only applies if the individual is re-hired within three years of the completion of the original I-9 form. In the event that Section 3 is already completed, and you need to record re-hire or reverification information, simply complete Section 3 of a new form and attach it to the prior form. It is a good idea to write Reverification Form Only across the top of the new form. 4. Photocopies The regulations allow an employer to make photocopies of documents presented by employees in connection with the I-9 process. The regulations do not presently contain any specific retention requirement for photocopies. Therefore, photocopies can be kept or thrown out at any time. For most employers, keeping photocopies is a good idea because it helps in correcting forms during periodic self-audits. If you suspect you may be audited or if you suspect that your workers may be illegal, you should do a thorough self-audit to ensure your I-9 forms are completed correctly and then discard photocopies. Please also note that to avoid potential claims of discrimination, you should not make photocopies selectively; if you make photocopies of documents, you should do so for all new hires. 5. Retention of I-9 Forms I-9 forms must be retained for three years from the date of hire AND for one year from the date employment ends. This means that you must have an I-9 form for all current employees hired after November 6, 1986 when the law was enacted. You do not need a form for employees hired prior to that date if they have been continuously employed. Please note that both parts of the test must be met before you may lawfully discard an I-9 form. As part of the periodic self-audit process, you should discard I-9 forms that you are no longer required to keep. Before discarding the form, confirm that you have met the retention test. 4

58 It is a good idea to maintain a tickler file for I-9 forms indicating that an employee has a limited right to work. This makes it easier to ensure that timely reverification of employment eligibility occurs. Many employers accomplish this by keeping current employee forms alphabetically, but keeping tickler forms separately. These forms are then filed chronologically according to the date the individual s employment authorization document expires. III. Self-Audits The first step in a self-audit is to confirm that you have all the I-9 forms you should. Generate a list of all current employees and verify that you have a form for each. You should also generate a list of all persons hired during the three year period prior to the self-audit whose employment terminated during the year preceding the self-audit; you should have a form for each. If you are missing forms from current employees, obtain them as soon as possible. If you are missing forms for terminated employees, consider contacting them to obtain a form. It is a good practice to review the I-9 form during an exit interview or before an employee is terminated, as this helps ensure that you have the forms you should and that they are properly completed before the individual becomes unavailable. During periodic self-audits, examine I-9 forms to ensure they are properly completed. Insert any missing information omitted previously. If necessary, contact the employee to obtain missing information or to re-examine a document presented by the employee. If you have photocopies of documents employees presented, use them to obtain the missing information. If the employee neglected to sign or date Section 1, ask the employee to do so. Use correct dates to the extent possible. If you add or revise information in Section 1 of the form, complete the Preparer/Translator certification. Consider adding self-audit next to any form corrections. 5

59 ACCEPTABLE DOCUMENTS Documents Establishing Identity AND Employment Eligibility (List A): 1. U.S. Passport (Expired or Unexpired) 2. Permanent Resident Card or Alien Registration Receipt Card (Form I-551) 3. Unexpired foreign passport with a temporary I-551 stamp 4. Unexpired Employment Authorization Document that contains a photograph (Form I-766, I-688, I-688A, I-688B) 5. An unexpired foreign passport with an unexpired Arrival Departure Record, Form I-94, bearing the same name as the passport and containing an endorsement of the alien s non-immigrant status, if that status authorizes the alien to work for the employer Documents Proving ONLY Identity (List B): 1. State-issued driver's license or I.D. card containing photo or basic data 2. I.D. card issued by federal, state or local government agencies or entities containing photo or basic data 3. School I.D. card with photograph 4. Voter Registration card 5. U.S. Military card or draft record 6. Military dependent's I.D. card 7. United States Coast Guard Merchant Mariner Card 8. Native American Tribal document 9. Driver's license issued by a Canadian government authority For persons under age 18 who are unable to present a document listed above: 10. School record or report card 11. Clinic, doctor, or hospital record 12. Day-care or nursery school record Documents Proving ONLY Employment Eligibility (List C): 1. U.S. Social Security card 2. Certificate of Birth Abroad issued by State Department (Form FS-545 or Form DS-1350) 3. Original or certified copy of a birth certificate bearing an official seal 4. Native American Tribal documents 5. U.S. Citizen I.D. card (Form I-197) 6. I.D. card for Resident Citizens (Form I-179) 7. Unexpired employment authorization document issued by D.H.S. (other than those under List A) 6

60 Emergency Information Form

61 Emergency Information Employee s Name: Date: In case of an emergency, please notify: AND/OR Name ( ) ( ) Telephone Telephone Address - City State Zip Name ( ) ( ) Telephone Telephone Address - City State Zip Employee Signature

62 Handbook Table of Contents

63 SAMPLE EMPLOYEE HANDBOOK TABLE OF CONTENTS INTRODUCTION Welcome Purpose Of The Handbook Mission Statement Our Guest Relations Philosophy WHAT YOU CAN EXPECT FROM US Our Employee Relations Philosophy If You Have A Problem Equal Employment Policy No Harassment Policy Orientation Employee Classifications Introductory Period Reinstatement Period Scheduling Recognizing Employee Performance Performance Reviews Salary Progress Promotions & Transfers Employee Reward Programs HOTEL BENEFITS Your Pay Payroll Procedures Overtime Pay Errors In Pay Bereavement Leave Civic Duties Jury Duty Voting Witness Duty Education and Training Company Reimbursed Education Training Employee Activities Employee Discounts Employee Meals Family Medical Leave Act Employee Eligibility Conditions Triggering Leave i

64 Duration Of Leave Benefits During Leave Job Restoration Notice And Medical Certification Other Employment Failure To Return After FMLA Leave Limited Nature Of This Policy Military Leave Paid Holidays Personal Leave Sick Leave Vacation Workers Compensation WHAT WE EXPECT OF YOU Rules to Protect Us All Attendance Your Work Schedule Absenteeism No-Call, No-Show Tardiness Breaks Leaving Property During Working Hours Company Property Package Pass Misuse Damage Information Telephone Theft Use Of Hotel Facilities By Employees Use of Public Restrooms Company Computers, , and Voice Mail Confidentiality Courtesy Dress/Grooming/Uniforms Nametags Uniforms Personal Appearance Standards- Female Personal Appearance Standards- Male Drugs and Alcohol Fraud, Dishonesty and False Statements Harassment Hotel Vehicle Operation House Bank/Cashier Procedures Insubordination Key Control ii

65 Lost and Found Personal Appearance Personal Communications, Websites and Web Logs Reporting Unsafe Conditions & Hazards Resignations Responsible Beverage Service Safety Reporting Injuries The Basic Rules Fire Prevention Hazardous And Toxic Materials Fighting, Threats and Weapons Safety Committee Satisfactory Job Performance Searches Sleeping and Inattention Smoking and Gum Chewing Socializing Guests Employees Soliciting Gratuities Solicitation/Distribution Theft Timekeeping Tip Reporting Transportation Unlawful/Indecent/Immoral Activities Updating Personal Information Witness to Acts of Vandalism, Theft, or Fire Incidents iii

66 A Guide to Tip Income Reporting for Employers in the Food and Beverage Industry

67 If you are an employer in the food and beverage industry, this guide is for you. The Internal Revenue Service (IRS) began its Tip Rate Determination/Education Program (TRD/EP) in October 1993 for the food and beverage industry. The objective of the Program has been to improve and ensure compliance by employers and employees with statutory provisions relating to tip income.

68 The Program of Tip Reporting What tip reporting options are available? Tip Rate Determination Agreement (TRDA) Tip Reporting Alternative Commitment (TRAC) Institute your own reporting system to comply with the tax law Under the Tip Rate Determination/Education Program (TRD/EP), you may enter into either the TRDA or TRAC arrangement. The IRS will help you understand and meet the requirements for participation. The next pages show you how these two arrangements differ. What s in it for me? A business tax credit for social security and Medicare taxes that you pay on certain employee tips Compliance with the law How does the program benefit my employees? Greater social security and Medicare benefits Increased income may improve their financing approval when applying for mortgage, car, and other loans Increased unemployment benefits Increased retirement plan contributions (if applicable) Increased worker s compensation 3

69 TRDA vs. TRAC (how they differ) TRDA TRDA requires the IRS to work with the establishment to arrive at a tip rate for the various restaurant occupations. TRAC TRAC does not require that a tip rate be established but it does require the employer to: establish a procedure where a directly tipped employee is provided (no less than monthly) a written statement of charged tips attributed to the employee. implement a procedure for the employees to verify or correct any statement of attributed tips. adopt a method where an indirectlytipped employee reports his or her tips (no less than monthly). This could include a statement prepared by the employer and verified or corrected by the employee. establish a procedure where a written statement is prepared and processed (no less than monthly) reflecting all cash tips attributable to sales of the directly-tipped employee. TRDA requires the employee to enter into a Tipped Employee Participation Agreement (TEPA) with the employer. TRAC does not require an agreement between the employee and the employer.

70 TRDA TRAC TRDA requires the employer to get 75% of the employees to sign TEPAs and report at or above the determined rate. TRAC affects all (100%) employees. TRDA provides that if employees fail to report at or above the determined rate, the employer will provide the names of those employees, their social security numbers, job classification, sales, hours worked, and amount of tips reported. TRAC provides that if the employees of an establishment collectively underreport their tip income, tip examinations may occur but only for those employees that underreport. TRDA has no specific education requirement. TRAC includes a commitment by the employer to educate and reeducate quarterly all directly and indirectlytipped employees and new hires of their statutory requirement to report all tips to their employer. TRDA participation assures the employer that prior periods will not be examined as long as participants comply with the requirements under the agreement. TRAC includes the same rule.

71 Example of a TRAC Statement Use the following guide to help you develop your statement to give to your employee. A TRAC statement is given to an employee showing tips attributed to him/her. This example not only fulfills the statement required for charged tips, but also for cash tip reporting and for indirectly-tipped employee reporting. title Employer Portion Employee Name: Employee Address: Mark Doe 123 Main Street City, State, Zip: Any Town, USA Employee SSN: Job Category: Restaurant Name: Food Server ABC Bar & Grill Employer EIN: Report Period: 01/01/00-01/31/00 Gross Sales $ 6,000. Charged Sales w/tips $ 2,000. Charged Tips $ 280. Charged Tip Rate 14% Sales Subject to Cash Tips $ 4,000. Employee Portion Cash Tips $ 520. Cash Tip Rate 13% Tips Shared w/others Name: Job Category: Amount: Johnny Noname Busser $ 120. Total (120.) Tips Received from Others Name: Job Category: Amount: Susie Cue Cocktail $ 100. Total 100. Net tips kept and reportable: $ 780. Employee Signature: Date: Employer fills out top portion. Gross Sales: only include food & drink amount. Do not include tax, tip, or nonfood/drink items. Charged Sales: include charged sales that show a tip on food & drink amounts only. Do not include tax, tip, or nonfood/ drink items. (A charged sale with no tip is included as a cash sale.) Employee fills out bottom portion. An indirectly-tipped employee would only receive (from the employer) the title portion of statement filled out, unless employer captured tips shared w/ others information from the directly-tipped employee s TRAC Statement and showed it as tips received from others. Employee signs statement and gives a copy to employer, retaining a copy for his/her records. This statement would satisfy employer s requirement under the TRAC arrangement and the employee s requirement under the law.

72 How To Get Your Program Underway How To Apply To enter into one of the arrangements, you may call for the IRS Stakeholder Liaison Field office in your area. A Stakeholder Liaison can assist you with more information about the Tip Program. You may also obtain information by sending an to [email protected]. Who Should Apply All employers with establishments where tipping is customary should review their operations. Then, if it is determined that there is or has been an underreporting of tips, the employer may apply for one of two arrangements under the TRD/EP TRAC or TRDA. Note: Employers currently under a TRDA, and wishing to switch to a TRAC, must first terminate their TRDA. When to Apply An employer may apply for either one of the two arrangements at any time. The effective date of the arrangement is determined by receipt and handling of the employer s application. For More Information The following is a list of IRS publictions and forms relating to tip income reporting that can be downloaded from the IRS Web site at and can be ordered through the IRS by dialing Pub 505 Tax Withholding and Estimated Tax Pub 531 Reporting Tip Income Pub 1244 Employee s Daily Record of Tips and Report to Employer. This publication includes Form 4070, Employee s Report of Tips to Employer, and Form 4070A, Employee s Daily Record of Tips. Form 941 Employer s Quarterly Federal Tax Return Form 1040ES Estimated Tax for Individuals Form 4137 Social Security and Medicare Tax on Unreported Tip Income Form 8027 Employer s Annual Information Return of Tip Income and Allocated Tips Form 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips Form W-2 Wage and Tax Statement; and separate Instructions for Forms W-2 and W-3 TRDA is effective as of the date the Employment Tax Territory Manager signs the arrangement. TRAC is generally effective as of the first day of the quarter following the date the Stakeholder Liaison Area Manager signs the agreement. 7

73 w w w. i r s. g o v Publication 1875 (Rev ) Catalog Number 22212G

74 Family and Medical Leave Act Compliance Guide

75 EMPLOYER S GUIDE FOR COMPLYING WITH THE FAMILY AND MEDICAL LEAVE ACT All Rights Reserved Fisher & Phillips LLP 2008

76 FMLA EXECUTIVE SUMMARY The Family and Medical Leave Act of 1993 ("FMLA") generally requires covered employers to provide eligible employees with up to 26 workweeks of unpaid, job-protected leave in any 12-month period for certain qualifying reasons. FMLA establishes a complex set of requirements on how to treat an employee who requests, takes and returns from leave. This Executive Summary outlines these basic requirements. FMLA applies only to covered employers. Currently, FMLA only applies to employers that employ 50 or more employees for each working day during 20 or more calendar workweeks in the current or preceding calendar year. FMLA leave is available only to eligible employees. Even if an employer meets the coverage test, not every employee is eligible. An eligible employee must work at a worksite that employs 50 or more employees within 75 miles, and he or she must have been employed for at least: (1) 12 months (need not be consecutive); and, (2) worked 1,250 hours during the previous 12-month period. The 12-month/1,250 hour test is determined on the day leave begins, while the determination of whether 50 employees are employed within 75 miles is made at the time leave is requested. Employees may take FMLA leave only for qualifying reasons. An employee is entitled to FMLA protection for any of the following reasons: (1) birth and/or to care for a newborn child; (2) placement of a child for adoption or foster care; (3) care for a spouse, son, daughter or parent with a serious health condition; (4) because the employee s own serious health condition renders him or her unable to perform one or more of the essential functions of the job, (5) to care for an injured or ill military service member, or (6) to handle a qualified exigency involving a call to active duty for a close family member. FMLA leave may begin before birth or placement if needed for such events as prenatal care, or for counseling sessions and court appearances to enable the placement process to proceed. If you employ a husband and wife who are both entitled to leave for birth or placement, you may limit them to a combined total of 12 workweeks for such leave. Entitlement to leave for birth or placement of a child expires one year after the birth or placement. Serious Health Condition is broadly defined. "Serious health condition" ("SHC") sounds simple, but can be difficult to apply. In short, a SHC is an illness, injury, impairment, or physical or mental condition that involves inpatient care (i.e., an overnight stay) or continuing treatment by a healthcare provider. Continuing treatment includes a period of incapacity of more than three consecutive calendar days, as well any incapacity due to pregnancy, prenatal care, a chronic health condition, a permanent or long-term condition, and multiple treatments for restorative surgery. As a result, common colds, minor ulcers and routine examinations are generally not SHCs, while asthma, diabetes, Alzheimer's, cancer and severe arthritis typically do qualify. Substance abuse also may be a SHC, if the other conditions for a SHC are met. Absences due to substance abuse, as opposed to treatment itself, do not qualify for FMLA leave. 1

77 Employers may require certification of any SHC. An employer may require an employee to support a leave request based upon a SHC with certification from a health care provider. We recommend using the Certification of Health Care Provider Form contained in our FMLA Package. Failure to supply required certification may lead to delay of FMLA leave until the certification is provided. If certification is never provided, the leave is not FMLA leave. The employer may challenge the validity of the certification by requiring a second, and sometimes a third, certification by a health care provider. Both additional certifications are at the employer s expense, and the opinion of the third provider is final and binding. Employees must satisfy their notice obligations. Where leave is foreseeable, an employee must provide 30 days advance notice before the date leave is to begin (or a lesser amount if a collective bargaining agreement, state law, or applicable leave plan so provides). If leave is not foreseeable, the employee must provide such notice as "is practicable." An employee must explain the reasons for his or her leave to allow the employer to determine whether FMLA applies, and failure to comply with the notice requirement may result in a delay in commencement of FMLA leave until the requisite notice is given. The employer should document the leave request by using or customizing the Leave Request Form contained in our FMLA Package. Employees need not mention FMLA. While FMLA protection is typically initiated by a leave request, an employee need not expressly assert FMLA rights, mention FMLA, or even make a formal leave request, in order to obtain protection. Rather, FMLA imposes obligations on the employer as soon as it acquires knowledge that an absence may be FMLA-qualifying. If the employer lacks sufficient information to determine whether the leave qualifies under FMLA, then the employer must inquire further. For example, if an employee informs his employer that he needs time off to care for his sick child, the employer might have sufficient notice that the absence qualifies for FMLA leave. If the same employee said only that he needed personal time off, without mentioning his sick child, the employer would not be on notice and the leave might not qualify for FMLA leave. Employers have rights under FMLA. Although FMLA protects eligible employees who take qualifying leave, the law gives employers some rights. For example, employers have the right to count qualifying leave against an employee s annual 12/26-week FMLA entitlement. Employers also have the right to require medical certifications, recertifications, status reports and fitness for duty certifications. Under certain circumstances, employers may compel substitution of paid leave for FMLA leave, recover health insurance premiums paid during FMLA leave, and even deny job restoration to key employees as that term is defined by FMLA regulations. Employers need a written FMLA policy. An employer must have a written FMLA policy that informs an employee of his or her rights and obligations to enforce its rights as an employer. The FMLA Policy contained in our FMLA Package is designed to maximize the employer s rights. We recommend that employers review all employment policies before implementing the FMLA Policy to ensure that other policies, benefits, and state laws do not conflict with its provisions. An employer should also consider several strategic issues before adopting the Policy, such as whether to permit or require employees to take paid leaves of absence (such as vacation, disability leave or workers' compensation) concurrently with FMLA leave, and whether to require periodic status reports or recertifications during FMLA leave. 2

78 Leave must be designated to be counted. To begin running the employee s 12/26-week FMLA clock, the employer must promptly inform the employee that his or her leave is designated as FMLA leave. An employer that is either unsure that the leave qualifies under FMLA, or is awaiting requested certification, should preliminarily designate it as FMLA leave because retroactive designations rarely are permitted. An employer can designate leave verbally, but must do so promptly (within two business days after notice of leave, if feasible), and all designations must be confirmed in writing by the next regular payday. Written designations should identify specific employee obligations during leave. Employee rights during FMLA leave. During FMLA leave, employers must maintain group health benefits at levels that existed prior to commencement of leave. Although FMLA leave is generally unpaid, an eligible employee may elect, or may be required, to expend vacation, workers' compensation or disability benefits concurrently with FMLA leave. In certain circumstances, an employee may be entitled to take FMLA leave on an intermittent (or reduced) leave schedule. In such situations, only the amount of leave actually taken may be counted against the 12/26-week entitlement. Pay may typically be reduced to match the employee's decreased hours without jeopardizing any exempt status, and the employer may require an employee taking intermittent leave to temporarily transfer to available alternative positions for which he or she is qualified and that better accommodates recurring periods of leave. Of course, the employer must maintain the employee's existing pay and benefits while the employee is in this alternative position and when they return from intermittent leave. Employee rights upon returning from FMLA leave. An employee returning from FMLA leave is entitled to return to the same or an equivalent position with no loss of accrued benefits, and with no discipline imposed pursuant to no-fault or other attendance policies. In rare circumstances, "key employees" may be denied job restoration. While an employee is not entitled to the accrual of any additional seniority or benefits during leave, the employer must maintain coverage under any group health plan under the same conditions as existed before the leave. If the employee fails to return to work after FMLA leave expires, the employer may recover premiums paid for maintaining coverage, so long as the failure to return is not due to the serious health condition of a family member or the employee, or to other circumstances beyond the employee s control. An employee remains entitled to any unconditional pay increases granted during leave (e.g., cost of living adjustments), and they may not be disqualified from bonuses, such as perfect attendance or safety awards based on improperly drafted policies or practices, for taking FMLA leave. Pay increases conditioned on seniority, length of service, or performance need not be granted unless you grant it to others on unpaid leave. Employers may require fitness for duty certification. When an employee returns from leave (other than intermittent leave) for their own SHC, the employer may enforce a uniform, published policy requiring them to submit certification that they are fit to resume work, so long as the employer notified the employee of this requirement when leave was requested. The FMLA Policy and Notice and Designation Forms included in our FMLA Package fulfill both of these requirements. An employer may not delay an employee s return to work who submits certification of their fitness for duty. Under appropriate circumstances, however, the employer may seek a clarification. 3

79 Job and benefits protection may terminate. FMLA obligations end if the employment relationship otherwise would have terminated during leave for non-retaliatory reasons, such as a layoff or outsourcing of the position. FMLA permits an employer to discharge or deny benefits to any employee who fraudulently obtains leave, violates a uniformly-applied policy prohibiting outside employment, or is unable to perform an essential function of the position. Note, however, that an employer may still have obligations under the ADA, COBRA, workers' compensation, ERISA or other laws. Employers posting and recordkeeping obligations. Covered employers must post a specified notice of FMLA rights and failure to do so can result in fines and forfeiture of your rights under FMLA. Employers must also keep records for three years regarding leaves taken by eligible employees, notices furnished to such employees, and records of disputes regarding such leaves. All medical information must be kept in a confidential medical file separate from normal personnel files. FMLA does not affect other laws or agreements providing greater protection. FMLA does not affect federal or state laws prohibiting discrimination on the basis of race, religion, color, national origin, sex, age, or disability (e.g., ADA; workers compensation; Title VII of the Civil Rights Act). Similarly, FMLA does not supersede any state laws, collective bargaining agreements, or employment benefit plans which provide greater family or medical leave rights, and employers must still comply with COBRA on termination of FMLA health maintenance benefits. Employers remain free to adopt or retain more generous leave provisions than those mandated by FMLA. Numerous regulations, interpretations, and other authorities must be evaluated in applying these principles. This document is intended for general information purposes only. It is not a complete or all-inclusive explanation, and it should not be construed as legal advice on any specific facts or circumstances. You are urged to consult your Fisher & Phillips LLP attorney, concerning your specific situation and any specific legal questions you might have. 4

80 EXHIBIT 1

81 NOTICE TO ALL EMPLOYEES RE: AMENDMENT TO OUR FMLA LEAVE POLICY To reflect recent amendments to the federal Family and Medical Leave Act (FMLA), The Company s FMLA Leave Policy is hereby amended by incorporating the following provisions for employees in need of leave to care for a close family member who sustains an injury or illness in connection with active duty in the armed forces: Family Leave To Care For An Injured Or Ill Military Servicemember An eligible employee who is the spouse, son, daughter, parent, or next of kin of a covered servicemember shall be entitled to a total of 26 workweeks of FMLA leave during a 12-month period to care for the servicemember. The leave described in this paragraph shall only be available during a single 12-month period. During the 12-month period, an eligible employee shall be entitled to a combined total of 26 workweeks of FMLA leave (counting servicemember family leave and other types of FMLA leave). No more than 12 workweeks of leave in a 12-month period may be taken for the other types of FMLA leave. The term covered servicemember means a member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness. The term serious injury or illness, in the case of a member of the Armed Forces, including a member of the National Guard or Reserves, means an injury or illness incurred by the member in line of duty on active duty in the Armed Forces that may render the member medically unfit to perform the duties of the member s office, grade, rank, or rating. The term next of kin, used with respect to an individual, means the nearest blood relative of that individual. The type of family leave described above is subject to the other provisions in our FMLA Leave Policy (such as the requirements regarding employee eligibility, appropriate notice, medical certifications, definitions, etc.). This type of family leave will be governed by, and handled in accordance with, the FMLA and applicable regulations. Future Amendments: In future regulations, the U.S. Department of Labor is expected to implement another FMLA leave provision (regarding leave to handle a qualified exigency involving a call to active duty for a close family member). There may be further policy revisions at that time. In the meantime, an employee seeking leave for such purposes is encouraged to contact our human resources staff for further assistance.

82 EXHIBIT 2

83 FMLA COMPLIANCE CHECKLIST INITIAL COMPLIANCE Determine whether you are an employer covered by FMLA Post FMLA poster in a prominent location at each worksite. Reference FMLA rights and obligations in employee handbooks or policy manuals using Family and Medical Leave Policy and coordinate FMLA leave with other leave policies. Select a basis for measuring the 12 month period in which leave may be taken. (A rolling period measured backward from date of family or medical leave is suggested). Incorporate this information into written policy. RESPONDING TO A LEAVE REQUEST OR ABSENCE Train supervisors to recognize time off or leave requests that may implicate FMLA rights and the need to proceed with caution when FMLA rights may impact discipline or discharge. 1. Confirm Eligibility for and Availability of FMLA Leave. Document leave request or absence by having employee complete Leave Request Form, (Ex. 4), or complete form in the employee s absence. If employee or spokesperson telephones absence, complete form for employee and ascertain the reason for the absence. Determine whether employee is eligible for FMLA leave or will become eligible prior to commencement of leave. 1,250 hours worked in the past 12 months 12 months of employment (need not be consecutive) Employed at worksite with 50 or more employees within a 75 mile radius Determine whether employee has any remaining FMLA leave available. 1

84 If Employee is not eligible for or has exhausted available FMLA leave, inform employee in writing, (Ex. 5), at which point standard policies governing the absence would apply. 2. Evaluate Qualification for FMLA Leave. Review the Leave Request form (Ex. 4), and determine whether the leave of absence is potentially FMLA-qualifying by confirming whether it falls under one of six categories: Birth of employee s child, and/or to care for newborn child; Placement of a child for adoption or foster care with employee; Provide care for employee s spouse, child, or parent with a serious health condition ; or Employee s own serious health condition that makes employee unable to perform job functions; or To care for an injured or ill military servicemember; To handle a qualified exigency involving a call to active duty for a close family member. If employee fails to provide sufficient information to allow you to make this determination, then inquire further to ascertain whether the leave is potentially FMLA-qualifying. If the employee requests intermittent leave, confirm that this is medically necessary for the employee s own serious health condition, (Ex. 6), or to care for an immediate family member with a serious health condition, and consider temporarily transferring the employee to an alternative position that better accommodates his or her need for such leave. If the need for leave appears foreseeable, determine whether the employee provided 30 days advance notice. If not, consider delaying leave until 30 days have passed from the date of the request, and immediately notify the employee of your decision. If the absence is not FMLA-qualifying, process request pursuant to applicable policies, including other leave policies or no fault attendance policies and inform employee in writing that absence will not count as FMLA leave. 2

85 3. Designate FMLA Leave. If the absence is or might be FMLA-qualifying, notify the employee, orally or in writing, that you are designating or preliminarily designating the leave as FLMA leave within two business days of the request, if possible. Use the FMLA Notice and Designation Form (Ex. 5) to confirm any oral designation in writing no later than the next regular payday. Process the leave or absence as FMLA leave by giving the employee a completed FMLA Notice and Designation Form (Ex. 5), and, if appropriate, Certification of Health Care Provider Form 1 (Ex. 6). If you are still awaiting receipt of a completed Certification of Health Care Provider Form, (Ex. 6), make a preliminary designation of FMLA leave on the FMLA Notice and Designation Form (Ex. 5). Process other items on the FMLA Notice and Designation Form (Ex. 5) (for example, substitution of paid leave, informing employees of insurance issues). Give form to employee or send form to employee s last known address via certified mail by no later than the payday after the employee requests leave. Review any Certification of Health Care Provider Form (Ex.6) that is subsequently submitted. If appropriate, inform employee in writing that the form indicates that employee s leave does not qualify for FMLA, and therefore, will not be treated as such. If form is incomplete, ask employee to have health care provider complete it, or have company s health care provider seek clarification from employee s health care provider. Consider whether second medical opinion is warranted. Retain copies of all documents pertaining to FMLA leave for a 3-year period. Documents relating to medical certifications, recertifications, or medical histories must be maintained as confidential medical records in files separate and distinct from the personnel files. 1 The Certification Form should be used only for the serious health condition of the employee or immediate family member, and not for other FMLA-qualifying events. 3

86 DURING FMLA LEAVE Maintain health coverage at current levels and conditions. For extended leaves, consider requiring periodic reports on employee status and intent to return to work. (Ex. 7). Consider requiring recertification of the serious health condition, if applicable. (Ex. 7). Before 12/26 weeks of FMLA leave expires, consider writing employees to inform them that FMLA-protected leave will expire on a specified date. WHEN FMLA LEAVE ENDS If leave was for the employee s own serious health condition, request certification of fitness for return to duty. If fit for duty, restore the employee to the same or an equivalent position with no loss of accrued benefits. If employee requests an extension of leave, determine whether ADA requires such extension as a reasonable accommodation, or whether employee is entitled to extension pursuant to employer policy, past practice, or state law. If employee fails to, or is not fit to, return to work, consider terminating the employee and documenting it as a resignation, only if you have confirmed that doing so would not run afoul of laws such as the ADA or state workers compensation retaliation laws. Provide employee with COBRA notice at end of FMLA leave period. Consider the possibility of recovering the costs of insurance premiums paid during the leave. Numerous regulations, interpretations, and other authorities must be evaluated in applying these principles. This document is intended for general information purposes only. It is not a complete or all-inclusive explanation, and it should not be construed as legal advice on any specific facts or circumstances. You are urged to consult your Fisher & Phillips LLP attorney concerning your situation and any specific legal questions you might have. 4

87 EXHIBIT 3

88 FAMILY AND MEDICAL LEAVE POLICY Eligible employees may take up to 26 workweeks of unpaid, job-protected leave under the Family and Medical Leave Act ( FMLA ) in a 12-month period for specified family and medical reasons. Employee Eligibility To be eligible for FMLA leave, an employee must: 1. have worked at least 12 months for the Company; 2. have worked at least 1,250 hours for the Company over the preceding 12 months; and 3. work at a location where there are at least 50 employees within 75 miles. Conditions Triggering Leave FMLA leave may be taken for the following reasons: 1. birth of a child, or to care for a newly-born child; 2. placement of a child with the employee for adoption or foster care. 3. to care for an immediate family member (employee s spouse, child, or parent) with a serious health condition; or 4. because of the employee s serious health condition which makes the employee unable to perform the functions of the employee s job; or 5. to care for an injured or ill military servicemember; 6. to handle a qualified exigency involving a call to active duty for a close family member. Duration of Leave Eligible employees may receive up to 12 workweeks (26 workweeks for servicemember family leave) of unpaid leave during any rolling 12-month period, measured backward from the date of any FMLA leave. FMLA leave for the birth or placement of a child for adoption or foster care must be concluded within 12 months of the birth or placement. Eligible employees may take FMLA leave intermittently (in blocks of time), or by reducing your normal weekly or daily work schedule, when medically necessary for your own or immediate family member s serous health condition. Intermittent leave is not permitted for birth of a child, 1

89 to care for a newly-born child, or for placement of a child for adoption or foster care. Employees who require intermittent leave or reduced-schedule leave must try to schedule their leave so that it will not disrupt the Company s operations. Use of Accrued Paid Leave Depending on the purpose of your leave request, the Company may require you to use accrued paid leave, (such as sick leave or vacation) if available, concurrently with some or all of the FMLA leave. Maintenance of Health Benefits If you and/or your family participate in our group health plan, the Company will maintain coverage under the Plan during your FMLA leave on the same terms as if you had continued to work. If applicable, you must make arrangements to pay your share of health plan premiums while on leave. In some instances, the Company may recover premiums it paid top maintain health coverage or other benefits for an employee and family. Job Restoration Upon returning from FMLA leave, eligible employees normally will be restored to your original job or to an equivalent job with equivalent pay, benefits, and other employment terms and conditions. Additionally, use of FMLA leave will not result in the loss of any employment benefit that the eligible employee earned or was entitled to before using the leave. Notice and Medical Certification When seeking FMLA leave, employees may be required to provide: 1. thirty (30) days advance notice of the need to take FMLA leave, if the need is foreseeable, or notice as soon as practicable in the case of unforeseeable leave. 2. medical certification supporting the need for leave due to a serious health condition affecting you or an immediate family member must be returned before your leave begins, or if not possible, within 15 days of the Company s request to provide the certification. If you fail to do so, we may delay the commencement of your leave or withdraw any designation of FMLA leave, in which case your leave of absence would be unauthorized, subjecting you to discipline up to and including termination. Second or third medical opinions and periodic recertifications may also be required. 3. periodic reports as deemed appropriate during the leave regarding your status and intent to return to work; and 4. medical certification of fitness for duty before returning to work, if the leave was due to your serious health condition. Failure to comply with the foregoing requirements may result in delay or denial of leave. 2

90 Other Employment Outside employment during your leave period is prohibited and may result in disciplinary action, up to and including immediate termination of employment. Failure to Return After FMLA Leave Any employee who fails to return to work as scheduled after FMLA leave or exceeds the FMLA entitlement may be subject to termination of employment. Employees will be subject to immediate termination for: 1. failure to return to work within twelve (12)/twenty-six (26) weeks of beginning of medical leave; 2. failure to return to work within twelve (12)/twenty-six (26) weeks of the beginning of the family leave. 3. failure to return to work as scheduled following the end of a medical or family leave; 4. providing false or misleading information or omitting certain information in connection with a family or medical leave; or 5. violation of any of the Company s rules and regulations relating to a family or medical leave (or any other policy or performance standard). Limited Nature of This Policy This policy is intended to provide only those leave benefits and protection required by FMLA. Extended Medical Leave Eligible employees who have exhausted their family and medical leave and all other employees may be allowed to take extended medical leave of absence, not to exceed twelve (12) months following the last day worked. Employees who take such extended medical leave are not guaranteed to be returned to work or reinstatement to a particular job, rate of pay, or shift at the end of their extended medical leave. However, the Company will attempt to return employees to their regular position if it is available. It if is not available at the time reinstatement is sought, we will attempt to place you in a similar job for which you are qualified, if such job is available. Employees on extended medical leave may maintain their insurance benefits, subject to policy terms and conditions, by paying the applicable COBRA premiums in a timely manner. 3

91 EXHIBIT 4

92 REQUEST FOR LEAVE FORM Employee s Name: Employee s Social Security No.: I. Reason for Leave (check all that apply): Birth of a child and to care for the newly-born child, or placement of a child with the employee for adoption or foster care To care for an immediate family member (spouse, child, or employee s parent) with a serious health condition Because of the employee s serious health condition To care for an injured or ill military servicemember To handle a qualified exigency involving a call to active duty for a close family member Personal: Other reason: II. Type of Leave Requested for Purpose Identified Above (check all that apply, if available): Paid vacation Unpaid family and medical leave Paid sick leave (if applicable) Other type: Each type of leave is subject to the standard policies regarding the particular type of leave, including whether such leave is paid leave. Is intermittent leave or reduced work schedule requested? Yes No If yes, explain why it is needed and the leave schedule proposed: III. Intention to Return to Work When Leave Ends (select one): Employee will not be returning to work. Employee intends to return to work. IV. Authorization, Certification, and Signature: Name of person who provided information to complete form (if other than employee): Name of person who completed form: Date:

93 I certify that the above information is true and correct to the best of my knowledge. I understand that any misrepresentation concerning the above facts can result in termination of employment. Employee s Signature Date

94 EXHIBIT 5

95 FMLA NOTICE AND DESIGNATION FORM (Completed by Employer) EMPLOYEE NAME: FROM: DATE: DATES OF LEAVE: to Eligibility Is Employee eligible for Family and Medical Leave Act (FMLA) Leave? 1 Yes No 2 Does Employee have FMLA leave available? Yes No 2 Check appropriate blank. Designation of Leave Leave of absence is: (a) not designated as FMLA leave 3 (b) designated as FMLA leave. 3, 4 (c) preliminarily designated as FMLA leave. 3, 4 cc: Employee s File 1 An eligible employee is one who at the time leave begins (1) has been employed for at least 12 months; (2) has worked at least 1,250 hours of service in the past 12 consecutive months; and (3) is employed at a worksite where 50 more employees are employed within 75 miles of that worksite. 2 If the response to this question is No, the remainder of this form need not be completed. 3 FMLA leave is available (1) for the birth of the employee s child, and to care for the newborn child; (2) for placement with the employee of a child for adoption or foster care; (3) to care for the employee s spouse, child or parent with a serious health condition; (4) for the employee s own serious health condition; (5) to care for an injured or ill military servicemember; (6) to handle a qualified exigency involving a call to active duty for a close family member. 4 FMLA leave shall not exceed 12/26 workweeks in a rolling 12-month period measured backward from the date of leave. Only that portion of the leave that does not exceed the 12/26-week period may be designated or preliminarily designated as FMLA leave. 1

96 INFORMATION REGARDING FAMILY AND MEDICAL LEAVE 1. You have a right under FMLA for up to 12/26 workweeks of unpaid leave in a 12-month period. Your leave of absence will be counted against your FMLA entitlement. 2. Is medical certification of the serious health condition required? Yes No If required, you must furnish certification before the leave begins, or if that is not possible, within 15 days of our request for the certification. If you fail to do so, we may: (a) delay the commencement of your leave; or (b) withdraw any designation of FMLA leave, in which case your leave of absence would be unauthorized, subjecting you to discipline up to and including termination. 3. In accordance with the Company s paid leave policies, you may choose or the Company will require you to use paid leave for which you are eligible during some or all of the leave as follows: 4. Since FMLA requires the maintenance of your health benefits during leave, you need to continue paying your normal premium during the leave to avoid a lapse in coverage. Your payments are due at the same time they normally would be made by payroll deduction. If your payment is more than 30 days late, your group health insurance may be canceled, provided you receive 15 days written notice that coverage will lapse. 5. If the Company pays your portion of a premium payment for group health coverage or other benefits (e.g. life insurance, disability payments) during the leave, the Company reserves the right to recoup these expenses. 6. You may be required to reimburse the Company for the Company s share of group health insurance premiums if you do not return to work following FMLA leave for a reason other than (a) serious health condition which would entitle you to FMLA leave; or (b) other circumstances beyond your control. 7. You will be required to present a fitness-for-duty certificate before we restore you to employment if you took leave for your own serious health condition (this does not apply to intermittent leave). 8. Upon returning from FMLA leave, you will normally be restored to your original job, or to an equivalent job with equivalent pay, benefits, and other employment terms and conditions. 9. You are a key employee under the FMLA definition. Yes No If you are a key employee, restoration to employment may be denied following FMLA leave on the grounds that such restoration will cause substantial and grievous economic injury to the Company. 2

97 EXHIBIT 6

98 CERTIFICATION OF HEALTH CARE PROVIDER FORM (To be Completed by Healthcare Provider) Note: It is the employee s responsibility to ensure that the healthcare provider fully completes this form. 1. Employee s Name: 2. Patient s Name (if different from employee): 3. Pages 4 and 5 describe what is meant by a serious health condition under the Family and Medical Leave Act of Does the patient s condition 1 qualify under any of the categories described? If so, please check the applicable category. (I) (II) (III) (IV) (V) (VI) None of the above 4. Describe the medical facts which support your certification, including a brief statement as to how the medical facts meet the criteria of one of these categories: 5.(a) State the approximate date the condition commenced, and the probable duration of the condition, and the probable duration of the patient s present incapacity 2 : (b) Will it be necessary for the employee to intermittently work or to work a reduced schedule as a result of the condition (including for treatment described in 6 below)? If yes, give the probable duration: (c) If the condition is a chronic condition (condition #IV) or pregnancy, state whether the patient is presently incapacitated 2 and the likely duration and frequency of episodes of incapacity 2 : 6.(a) If additional treatments will be required for the condition, provide an estimate of the probable number of such treatments. 1 Here and elsewhere on this form, the information sought relates only to the condition for which the employee is taking FMLA leave. 2 Incapacity for purposes of FMLA, is defined to mean inability to work, attend school, or perform other regular daily activities due to the serious health condition, treatment therefore, or recovery therefrom. 1

99 (b) If the patient will be absent from work or other daily activities because of treatment on an intermittent or part-time basis, also provide an estimate of the probable number and interval between such treatments, actual or estimated dates of treatment if known, and period required for recovery, if any. (c) If any of these treatments will be provided by another provider of health services (e.g., physical therapist), please state the nature of the treatments. (d) If a regimen of continuing treatment by the patient is required under your supervision, provide a general description of such regimen (e.g., prescription drugs, physical therapy requiring special equipment): 7.(a) If Medical leave is required for the employee s absence from work because of the employee s own condition (including absences due to pregnancy or a chronic condition), is the employee unable to perform work of any kind? (b) If able to perform some work, is the employee unable to perform any one or more of the essential functions of the employee s job (the employee or the employer should supply you with information about the essential job functions)? If yes, please list the essential functions the employee is unable to perform: (c) If neither (a) nor (b) applies, is it necessary for the employee to be absent from work for treatment? 8.(a) If leave is required to care for a family member of the employee with a serious health condition, does the patient require assistance for basic medical or personal needs or safety, or for transportation? (b) If no, would the employee s presence to provide psychological comfort be beneficial to the patient or assist in the patient s recovery? 2

100 (c) If the patient will need care only intermittently or on a part-time basis, please indicate the probable duration. (Signature of Health Care Provider) (Type of Practice) (Address) (Telephone Number) (Date To be completed by the employee needing family leave to care for a family member: State the care you will provide and an estimate of the period during which care will be provided, including a schedule if leave is to be taken intermittently or if it will be necessary for you to work less than a full schedule. (Employee Signature) (Date) 3

101 DEFINITION OF SERIOUS HEALTH CONDITION A Serious Health Condition means an illness, injury, impairment, or physical or mental condition that involves one of the following: I. Hospital Care Inpatient care (i.e. an overnight stay) in a hospital, hospice, or residential medical care facility, including any period of incapacity 2 or subsequent treatment in connection with or consequent to such inpatient care. II. Absence Plus Treatment A period of incapacity 2 of more than three consecutive calendar days, including any subsequent treatment or period of incapacity 2 relating to the same condition, that also involves: (a) Treatment 3 two or more times by a health care provider, by a nurse or physician s assistant under direct supervision of a healthcare provider, or by a provider of health care services (e.g., physical therapist) under orders of, or on referral by, a health care provider; or (b) Treatment by a health care provider on at least one occasion which results in a regimen of continuing treatment 4 under the supervision of the health care provider. III. Pregnancy Any period of incapacity due to pregnancy or prenatal care. IV. Chronic Conditions Requirement Treatments A chronic condition which: (a) (b) Requires periodic visits for treatment by a health care provider, or by a nurse or physician s assistant under direct supervision of a health care provider; Continues over an extended period of time, including recurring episodes of a single underlying condition; and 2 Incapacity for purposes of FMLA, is defined to mean inability to work, attend school, or perform other regular daily activities due to the serious health condition, treatment therefore, or recovery therefrom. 3 Treatment includes examinations to determine if a serious health condition exists and evaluations of the condition. Treatment does not include routine physical examinations, eye examinations, or dental examinations. 4 A regimen of continuing treatment includes, for example, a course of prescription medication (e.g., an antibiotic) or therapy requiring special equipment to resolve or alleviate the health condition. A regimen of treatment does not include the taking of over-the-counter medications such as aspirin, antihistamines, or salves; or bed-rest, drinking fluids, exercise, or other similar activities that can be initiated without a visit to a health care provider. 4

102 (c) May cause episodic rather than a continuing period of incapacity 2 (e.g., asthma, diabetes, epilepsy, etc.). V. Permanent/Long-term Conditions Requiring Supervision A period of incapacity 2 which is permanent or long-term due to a condition for which treatment may not be effective. The employee or family member must be under the continuing supervision of, but need not be receiving active treatment by a health care provider. Examples include Alzheimer s, a severe stroke, or the terminal stages of a disease. VI. Multiple Treatments (Non-Chronic Conditions) Any period of absence to receive multiple treatments (including any period of recovery therefrom) by a health care provider or by a provider of health care services under orders of, or on referral by, a health care provider, either for restorative surgery after an accident or other injury, or for a condition that would likely result in a period of incapacity 2 of more than three consecutive calendar days in the absence of medical intervention or treatment, such as cancer (chemotherapy), radiation, etc.), severe arthritis (physical therapy), or kidney disease (dialysis). 5

103 EXHIBIT 7

104 FAMILY AND MEDICAL LEAVE STATUS REPORT FORM Employee s Name: Employee s Social Security Number: I. Employee Leave Status: Has there been any change in the circumstances relating to your family and medical leave? Yes No If yes, explain: II. Intention to Return to Work When Leave Ends (select one): Employee will not be returning to work. Employee intends to return to work. Anticipated Date of Return: III. Other Employment: Are you currently employed by another employer as an active full-time or part-time employee: Yes No IV. Certification and Signature: I certify that the above information is true and correct to the best of my knowledge. I understand that any intentional misrepresentation concerning the above facts can result in termination of employment. Employee s Signature: Date:

105 Employee Counseling Report

106 EMPLOYEE COUNSELING REPORT Employee Name Position Department Date of Incident Why are you receiving this report: Facts, Rule, Discipline ACTION TAKEN: CONSULTATION WARNING SUSPENSION: Start date End Date How you should correct this problem: Action which will be taken if you do not correct this problem: Date Issued By: Employee Signature and/or Comments:

107 Performance Appraisal Form

108 PERFORMANCE APPRAISAL FORM EMPLOYEE EVALUATION NAME DATE JOB EVALUATION TITLE PERIOD EVALUATOR: 1. Productivity The amount of work an individual does in a work day. What is employee s overall volume of work? Is employee s work level consistent? What is relation between employee s production and the Company s expectations? Above Average: Average: Below Average: Rating: Comments: Suggestions: Excellent producer. Consistently generates high volume of work. Produces more than is required or expected. Satisfactory producer. Generates sufficient volume of work with some degree of consistency. Meets expectations or requirements. Unsatisfactory producer. Generates minimal volume of work and/or is inconsistent in level of production. Produces less than is expected or required. 2. Quality of Work Accuracy, neatness and thoroughness of work effort: Does employee take time and care to check work? How frequent are mistakes or errors? How consistent is the accuracy and thoroughness of work? Above Average: Average: Below Average: Produces outstanding, neat and accurate work. Work must seldom be checked by others. Errors are rare and minor. Average accuracy and neatness for qualified employees. Occasional errors. Reasonably conscientious about checking work and preventing errors. Poor accuracy and neatness. Frequent errors and/or errors of substantial 1

109 magnitude. Work must be checked by others. Employee shows little concern with quality of work. Rating: Comments: Suggestions: 3. Knowledge of Job Demonstrates the knowledge of fundamental methods and procedures of job. How often does employee have to be shown job procedures? How does employee handle unexpected problems or breakdowns? Does employee retain knowledge of job or require substantial review? Above Average: Average: Below Average: Rating: Comments: Suggestions: Possesses broad and detailed knowledge of all aspects of the job. Rarely needs to ask for job information. Adequate knowledge of phases of work. Possesses knowledge necessary to perform duties. Does not need substantial guidance or direction. Insufficient knowledge of job duties. Has difficulty performing job tasks without substantial guidance and direction. 4. Teamwork Ability to work well with co-workers and supervisors. What level of friction exists between employee and co-workers and supervisors. How does employee react when others disagree or assert authority? Does employee help others? Above Average: Average: Very good team worker. Gets along well with most people. Cooperative and quick to offer help. Handles disagreement with restraint. Acceptable level of cooperation. Works willingly with others. Offers help to co-workers. 2

110 Below Average: Rating: Comments: Suggestions: Causes friction among workers. Responds negatively to disagreement or authority. Refuses to cooperate with or aid co-workers. 5. Independence Ability to work independently, be resourceful and display initiative. Does employee perform functions not specifically given by superiors? Can employee be trusted to work without supervision? Is employee interested in acquiring new skills and knowledge? Above Average: Average: Below Average: Rating: Comments: Suggestions: Superior initiative and follow through. Does not require supervision and undertakes tasks on own. Actively seeks to acquire new skills and knowledge. Satisfactory initiative and follow through. Usually does not require supervision or have to be told to perform job functions. Reasonably willing to learn new tasks. Requires substantial supervision and direction to perform job tasks. Not interested in learning or performing any tasks but those required. 6. Records and Reports Ability to produce and maintain written job reports and records. Are written records/reports kept accurately and neatly? Does employee complete written records/reports promptly and without direction? Above Average: Average: Outstanding management of written records/reports. Completes records/reports accurately and on time. requires little or no supervision. Completes records/reports with satisfactory accuracy. Written records/reports are usually completed on time. 3

111 Below Average: Rating: Comments: Suggestions Records/reports completed in sloppy fashion. Completes written records/reports in an untimely manner. Requires supervision to complete written tasks. 7. Guest Service Ability to deal with guests/customers in polite and helpful manner. Does employee pay attention to guest concerns and seek positive resolution? Does employee display common courtesy and positive attitude to guests? Above Average: Average: Below Average: Rating: Comments Suggestions: Treats guests with outstanding level of concern and helpfulness. Follows through on solving customer problems. Consistently courteous and helpful to guests/customers. Satisfactory skills in dealing with guests. Follows through on guest problems to a satisfactory degree. Usually courteous and helpful to guests. Unsatisfactory treatment of guests. Displays rude and unhelpful behavior to guests. Unconcerned with solving guest problems. 8. Safety Ability to comply with precautions for safety of self and others. Is employee knowledgeable of safety policies and procedures? Does employee comply with established safety procedures? Above Average: Average: Completely knowledgeable of all existing safety policies and procedures. Highly concerned with safety of self and others. Takes all precautions and strictly complies with all safety procedures. Satisfactory level of safety knowledge. Usually concerned with safety of 4

112 self and others. Takes reasonable precautions and usually complies with all safety procedures. Below Average: Rating: Comment Suggestions: 9. Attendance Unsatisfactory level of knowledge of safety of policies and procedures. Fails to take precautions and causes accidents or mishaps. Fails to follow safety procedures. Regularity of attendance and absence for legitimate reasons. How regular is employee s attendance? When absent, does employee do everything possible to minimize disruption? Does employee provide satisfactory reasons for absences? Above Average: Average: Below Average: Rating: Comments: Suggestions: Rarely absent and follows established absenteeism procedures. Takes extraordinary steps to minimize disruption and allow replacements to perform tasks. Absent only for legitimate reasons and provides notice when possible. Satisfactory attendance level. Usually follows established absenteeism procedures. Takes satisfactory steps to minimize disruption. Rarely absent for non-legitimate reasons and usually provides notice when possible. Frequently absent. Fails to adhere to absenteeism policies and procedures. Causes disruption by failure to take steps to allow replacements to perform tasks. Absent for non-legitimate reasons and fails to provide notice when reasonable. 10. Leadership and Supervision (Management Only) Ability to plan, organize and supervise so that jobs are completed. Does manager delegate authority when reasonable? Does manager maintain effective working relationships with employees? 5

113 Does manager plan and organize sufficiently to avoid crisis? Above Average: Average: Below Average: Overall Rating: Comments: Suggestions: Superior level of planning and organization. Delegates and assigns all delegable tasks. Achieves outstanding results and maintains superior working relationship with employees. Rarely experiences crisis. Satisfactory planning and organization. Usually delegates and assigns tasks. Maintains effective working relationship with employees. Usually avoids crisis. Poor planning and organization. Fails to delegate tasks to subordinates. Fails to maintain satisfactory working relationships with employees. Frequently experiences crisis. Additional Employer Comments: Primary Areas of Future Focus Employee Comments: Employee signature does not necessarily mean the employee agrees with the above ratings and comments. It does signify review of the evaluation contents and the opportunity to discuss questions with the evaluator. Employee Signature Date [Original of this Form must be filed in official personnel file for employee] 6

114 Temporary Services Agreement

115 Service Agreement THIS SERVICE AGREEMENT ( Agreement ) is made and entered into effective as of, 2008 (effective date) by and between HOTEL, with a mailing address of HOTEL and [Temporary Service Provider s name], with a mailing address of ( Contractor ). THAT FOR AND IN CONSIDERATION of the covenants, agreements, terms, provisions and conditions herein stated, the parties do hereby mutually agree, each with the other, as follows: 1. Retention of Contractor and Scope of Work; Nonexclusive Relationship. 2. Term. a. Retention of Contractor and Scope of Work. HOTEL hereby retains Contractor to furnish those services identified on Exhibit A attached hereto, through Contractor s employees to HOTEL facilities in, issued from time to time by HOTEL and accepted by Contractor. b. Non-exclusive Relationship. Nothing contained in this Agreement shall be construed so as to create an exclusive relationship between HOTEL and Contractor. HOTEL shall be free at its option to use any number of contractors (i) to supply all of HOTEL s temporary worker needs and (ii) to supply a temporary worker for any single job. Further, HOTEL may reduce at any time the number of temporary workers supplied by the Contractor to HOTEL (irrespective of the course of dealing between the parties) and may at its option cancel or withdraw any Requisition. a. Term. Subject to Section 10 hereof, the term ( Term ) of this agreement shall commence on the effective date and terminate on. b. Option Periods. This Agreement shall be automatically extended for one (1) additional term of one (1) year upon the terms and conditions contained herein, unless (i) HOTEL notifies Contractor by giving written notice thirty (30) days prior to the expiration of the initial term of HOTEL s intent to cancel this Agreement, or (ii) HOTEL and the Contractor fail to mutually agree in writing at least sixty (60) days prior to the end of the initial term on a revised Rate Schedule to be applicable to any additional term. In either such event, this Agreement shall automatically terminate at the end of the initial term. 3. Payment and Terms a. Rate Schedule. HOTEL agrees to pay Contractor for the services performed by Contractor and provided hereunder in accordance with the rates set forth in the Rate Schedule attached hereto and made a part of this Agreement, for all time devoted directly to HOTEL by Contractor s employees as may be necessary and required for the proper 1

116 performance of the services. Except to the extent provided in Section 3(b) hereof, these payments shall constitute full and adequate consideration to Contractor for all labor, services and material furnished to or on behalf of HOTEL, and HOTEL shall not be obligated to pay any additional fees, costs or other sums to Contractor. HOTEL will pay Contractor for all time worked on an assignment for HOTEL by a given employee assigned to HOTEL at the appropriate straight or overtime rates as is required by State and Federal Wage and Hour Laws. HOTEL shall not be responsible for overtime for any temporary worker where such overtime has been generated by a temporary worker providing services for Contractor, any other client of Contractor or any person other than HOTEL at different times during the same work week. All overtime must be approved in advance by HOTEL and reported for the week in which it was worked. Overtime shall not be carried forward or backward to a different week. HOTEL shall not be obligated to pay Contractor an increased fee as a result of any overtime rate being paid to any employee of Contractor. Contractor shall calculate its fee based upon the straight rate, not the overtime rate that Contractor pays to a given employee of Contractor assigned to HOTEL. Contractor shall use a standardized time card in a form previously approved by HOTEL for all of Contractor s employees assigned to HOTEL. b. Additional Expenses. In addition to payments to be made under Section 3(a), HOTEL agrees to reimburse Contractor for the costs incurred by Contractor for the items listed on Exhibit attached hereto and incorporated herein by reference; provided, that, (i) Contractor has obtained HOTEL s prior approval and (ii) all such items are being purchased solely to supply Contractor s employees with certain materials needed to perform the jobs to which such employees are assigned. All such out-of-pocket expenses shall be itemized on each invoice covering the services in conjunction with which such expenses were incurred. Contractor shall provide HOTEL with true and accurate copies of receipts or other documentation substantiating all out-of-pocket expenses invoiced to HOTEL with each invoice. HOTEL s approval of such out-of-pocket expenses shall not be unreasonably withheld. c. Terms of Payment. HOTEL will pay Contractor on a weekly basis at forty-five (45) days following the acceptance of a correct invoice in a form previously approved by HOTEL. HOTEL shall not be obligated by pay Contractor for any services under this Agreement unless HOTEL has issued to Contractor a Requisition executed by an authorized agent of HOTEL. Contractor agrees to invoice on or before the tenth (10 th ) of the month for all services provided in the prior month, in accordance with the payment terms specified above, in the Requisition and per the rates specified in the Rate Schedule. Failure of Contractor to invoice in accordance with such terms and rates and otherwise as specified herein and in each Requisition will be considered an event of default and HOTEL shall have the right to terminate this Agreement and each Requisition previously issued hereunder. Additionally, HOTEL reserves the right to contest any inaccurate, incomplete or otherwise nonconforming invoice. HOTEL s failure to pay any disputed fee or other sum shall not be an event of default under this Agreement; provided that HOTEL has given notice to Contractor of its objection to any such fee or other sums. 2

117 4. Standard of Performance. a. Provision of Services. All services to be provided by Contractor under this Agreement shall be provided and performed in accordance with high professional standards and prudent business judgment and standards. b. Initial Evaluation Period. Contractor agrees that with respect to each temporary worker that Contractor assigns to HOTEL, HOTEL shall be given a period of two (2) business days (commencing from the date the temporary worker begins his or her work assignment at HOTEL) in which to evaluate each such temporary worker s job skills and performance, suitability for and compatibility with HOTEL s work environment. In the event HOTEL determines, in its sole discretion, that any such temporary worker is not suitable for the assigned position, Contractor shall terminate the assignment of such temporary worker under the Requisition. Upon the termination of any such Requisition, HOTEL shall not be obligated to pay Contractor any fees, expenses or compensation for the services of such temporary worker whose assignment with HOTEL has been terminated. c. Applicable Law/Compliance. Contractor agrees to comply (i) with all applicable Federal, State and local laws, statutes, executive orders, rules, regulations and ordinances in its performance of this Agreement and any act by Contractor in connection herewith and (ii) with all Federal and States Laws, statutes, executive orders, rules and regulations pertaining to Contractor s operation and its authority to offer the services and engage in the activities contemplated in this Agreement or conduct its business, including but not limited to the Federal Social Security Act, the State and Federal Unemployment Insurance Acts, the State Worker s Compensation Laws, State and Federal Wage and Hour laws, the Occupational Health and Safety Act, all State and Federal and local Employment Laws, and all other laws and regulations. Contractor shall establish appropriate procedures and controls as that services under this Agreement will not be performed by using any alien who is not legally eligible for such employment under United States immigration laws. Contractor acknowledges and agrees that it shall be responsible for complying with the Immigration Reform and Control Act with respect to its employees. 5. Contractor s Employees Not Deemed Employees of HOTEL. a. Contractor Responsibilities for Its Employees. With respect to each temporary worker assigned to HOTEL, Contractor shall comply with all of HOTEL s policies (and all applicable State and Federal laws) pertaining to background and reference checks and drug screens prior to each temporary worker commencing his or her assignment at HOTEL. Notwithstanding the foregoing, it is expressly understood and agreed that the personnel used or supplied by the Contractor pursuant to this Agreement shall be and remain employees and/or agents of the Contractor, and under no circumstances are such persons to be considered or held to be employees and/or agents of HOTEL. As to all such persons, Contractor shall have the sole responsibility for all employment matters, including, without limitation, (i) employee recruitment, selection, training, supervision 3

118 and control, counseling and corrective action; (ii) the withholding of all State, Federal and local income taxes and social security; (iii) the provision of any disability benefits and employee benefits; and (iv) the handling of all workers compensation claims and unemployment compensation claims. b. Compliance with HOTEL Policies. Contractor s employees and agents shall comply with all HOTEL policies while on HOTEL s premises. Contractor shall provide its employees and agents with adequate orientation (subject to HOTEL s review and approval) to introduce its employees and agents to the role and function of Contractors and its employees and agents assigned to HOTEL and to explain HOTEL s policies, rules and regulations. (1) Harassment Policies. Contractor acknowledges that it is the policy of HOTEL to prevent all forms of harassment in the workplace, including without limitation sexual harassment. Contractor agrees to cooperate with HOTEL in effecting such policy. (2) Removal of Contractor s Employees. HOTEL may request that Contractor remove, or cause to be removed, any employee(s) from HOTEL s premises, owned or leased, for any reason and Contractor shall immediately comply. 6. Former Employees of HOTEL. a. Notice to HOTEL. Before assigning a former employee of HOTEL, or any HOTEL affiliate to HOTEL, Contractor shall contact HOTEL-HR to obtain a reference and other information relevant to the assignment of such person to HOTEL. HOTEL reserves the right to approve or disapprove any such assignment. 7. Accounting Records and Audit; Reports. a. Accounting Records and Audit. Contractor agrees to maintain complete and accurate accounting records in a form acceptable to HOTEL, to substantiate Contractor s charges hereunder (including payroll records, time cards, attendance cards and disciplinary action, etc.) and to retain such records for three (3) years (or for such longer period as may be required by applicable laws) after completion of all Requisitions issued under this Agreement. During the term of this Agreement and during the respective periods in which Contractor is required to maintain records hereunder, HOTEL shall have access during normal business hours to all of Contractor s records pertaining to its activities in connection with the performance of this Agreement for the purpose of conducting audits. HOTEL shall have the right to retain an independent third party to conduct any such audit. The provisions of this Section 7 shall survive the expiration or termination of this Agreement. b. Reports. As requested by HOTEL, Contractor shall provide to HOTEL by no later than the fifth (5 th ) calendar day of each month a complete and accurate written 4

119 report of its activities for the immediately preceding month (including, but not limited to, for each temporary worker assigned to HOTEL) a report of all hours (broken down into straight and overtime) worked at HOTEL, the rate of pay, expenses for which Contractor requested reimbursement and such other matters as HOTEL may request from time to time, in a form previously approved by and satisfactory to HOTEL in its sole discretion. Additional reports to be requested may include (but not limited to) information on staffing levels/response, attrition, disciplinary action, diversity, performance analysis, and safety. 8. Confidentiality a. Confidential Information and Trade Secrets. In connection with the performance of the services hereunder, HOTEL may disclose to Contractor and its employees information considered to be confidential information and/or a trade secret (All such material and information is hereinafter referred to collectively as the Information ). Information shall mean any information concerning HOTEL s business, operations or technology and all material and information made available to Contractor under this Agreement or in connection herewith or obtained by Contractor, directly or indirection, from any source whatsoever (including orally or in writing) in conjunction with the performance of this Agreement or otherwise in connection herewith. b. Contractor s Obligations. All Information shall be kept strictly confidential by Contractor. Except to the extent Contractor is expressly authorized in writing by HOTEL, Contractor agrees that it shall not disclose any part of the Information to any third person, or to any of its employees except on a need-to-know basis to the extent necessary to perform his or her job assignment at HOTEL. Contractor shall also otherwise limit the use and circulation of the Information within its organization to the extent necessary to perform the services covered in this Agreement. Contractor further agrees to hold all such Information in trust and confidence for HOTEL and to maintain at all times adequate procedures to prevent loss. Without limiting the foregoing, Contractor shall not make any copies of such Information without the prior written approval of HOTEL and shall return to HOTEL upon demand any such Information. Contractor shall (i) use the Information solely for the purpose of performing its obligations under this Agreement, (ii) take reasonable steps and procedures (and where appropriate under the circumstances, provide security protection) to keep the Information confidential, (iii) expressly require each of its employees and agents exposed to any of the Information to keep all Information confidential. Upon the termination of this Agreement or immediately at HOTEL s request, Contractor shall return all Information to HOTEL. In the event of a breach or threatened breach by Contractor or any of its directors, officers, employees, independent contractors or agents of the provisions of this Agreement, in addition to all other available remedies for such breach or threatened breach including damages, HOTEL shall be entitled to injunctive relief restraining Contractor and any of its directors, officers, employees, independent contractors and agents from disclosing, in whole or in part, any Information. 5

120 9. Indemnification and Insurance. a. Indemnification. Contractor agrees to protect, indemnify, hold harmless and defend HOTEL, its subsidiaries, affiliates and related companies, and their respective officers, directors, employees and agents from and against all claims, suits, actions, damages, losses, and expenses (including, without limitation, reasonable attorney s fees and costs of litigation) in any manner resulting from or arising directly or indirectly from or out of the activities of Contractor, its employees, agents and/or Subcontractors in connection with the performance of its services and obligations under this Agreement, including, without limitation, any and all claims, suits, actions (whether such claims, suits or actions are deemed to be with or without merit), liabilities or damages of any nature whatsoever, arising directly or indirectly from or in connection with (i) Contractor s violation of or failure to comply with all applicable Federal, State and local laws, statutes, executive orders, rules, regulations and ordinances (including, without limitation all employment laws) in conjunction with the conduct of its business activities and the provision of the services hereunder; (ii) the improper administration and management of payroll functions (including, without limitation any claims, suits, actions, liabilities or damages of every nature whatsoever based upon claims of improper or inadequate handling of Federal, State and local tax withholdings and social security withholding, and compliance with State and Federal Wage and Hour Laws); (iii) Contractor s negligence in connection with employee recruitment, selection, training, supervision and control, counseling and disciplinary action of Contractor s employees; or (iv) personal injury, death and property damage (including loss of use thereof and down time) resulting from the negligent acts of Contractor or its employees, agents or contractors. Contractor s agreement to protect, indemnify, hold harmless and defend as set forth in this Section 9 shall not be negated or reduced by virtue of Contractor s insurance carrier s denial of insurance coverage for the occurrence or event which is the subject matter of the claim and/or refusal to defend Contractor or HOTEL. b. Notice of Claim. Each party shall provide the other written notice of the assertion of any claim which may be subject to indemnification, as soon as practicable after such claim is received. Failure to provide notice of the assertion of such a claim shall not be deemed a waiver of any right of indemnification or of any other rights which accrue under this Agreement. c. Cooperation. HOTEL and Contractor each agree to cooperate with one another in connection with any pending or threatened claim of any type in connection with personnel assigned to HOTEL pursuant to this Agreement, including without limitation, by providing full and complete information on any such claim. d. Insurance. (1) During the term of this Agreement and so long thereafter as Contractor may have any obligation to HOTEL under this Agreement, Contractor shall at its own cost and expense procure and maintain in full force and effect (or cause to be procured and maintained at no cost to HOTEL) insurance with sound and 6

121 reputable insurance companies of the type and in such amounts as adequate for all risks in accordance with sound and prudent business practices for the type of business operation, activities and services to be provided and performed by Contractor under this Agreement and as approved by HOTEL from time to time, including, without limitation, (i) worker s compensation and employer s liability, (ii) general liability, (iii) automobile liability and (iv) protective liability. In no event shall the insurance coverage required hereunder fall below the amounts set forth on Exhibit attached hereto and incorporated herein by reference. Upon the executive of this Agreement, Contractor shall immediately provide to HOTEL true and accurate Certificates of Insurance (properly endorsed by an authorized representative of the insurance company) evidencing that the insurance required hereunder is in force and effect and that such insurance will not be canceled or materially changed without giving HOTEL at least thirty (30) days prior written notice. Except to the extent prohibited by applicable Federal or State law, HOTEL shall be named as an additional insured and loss payee on all such insurance policies. The requirement that Contractor procure and maintain such insurance coverage shall not negate or reduce Contractor s obligations under Section 9(a). HOTEL shall have the right to require Contractor to increase the amounts and otherwise upgrade the insurance required to be provided by Contractor hereunder as HOTEL deems appropriate in its reasonable discretion. This section 9 shall survive the expiration or termination of this Agreement. 10. Termination Rights; Cooperation a. Upon Default. Subject to the notice provisions contained in Section 12, if either party shall fail to perform its obligations under this Agreement or under and Requisition issued hereunder, the other party shall have the right to terminate this Agreement and all Requisitions issued hereunder upon thirty (30) days written notice, which termination shall be effective on the effective date set forth in such termination notice. b. Without Cause. HOTEL shall have the right to terminate this Agreement without cause upon thirty (30) day written notice to Contractor. Contractor shall have the right to terminate this Agreement without cause upon ninety (90) days written notice to HOTEL. Such termination by either party shall be effective on the effective date set forth in such termination notice; provided, however, it is expressly agreed by Contractor and HOTEL that HOTEL, in its sole discretion, may immediately cancel or withdraw individual Requisitions at any time with or without cause. In such event, HOTEL may, but is not required to, request the reassignment of Contractor s employee(s) affected by such cancellation or withdrawal to HOTEL under a different Requisition. c. Payment Upon Termination. In the event of termination, all Information and all HOTEL property and work in Contractor s possession shall be forwarded to HOTEL. Upon HOTEL s receipt of all such Information property and work, HOTEL shall pay Contractor for satisfactory services performed up to the 7

122 effective date of the termination at the specified rates or rates in accordance with the Rate Schedule. Such payment shall be HOTEL s sole obligation and Contractor s sole remedy in the event of termination by HOTEL. In no event shall HOTEL be liable for incidental or consequential damages or lost profits. 11. Representations and Warranties of Contractor. Contractor represents and warrants to HOTEL as follows: a. Organization. Contractor is duly organized, validly existing and in good standing under the law of the State of its formation and is qualified to do business in all jurisdictions in which it conducts its business, with full corporate powers to own its properties and to conduct its business as presently conducted and as required to perform its obligations under this Agreement. b. Skill and Knowledge. Contractor represents that each of its management staff members, employees and agents has the requisite skill, knowledge and expertise and Contractor has the requisite financial strength, procedures, equipment, processes, (including computer information system) and facilities to provide and perform all of the services to be provided and performed under this Agreement in strict conformity with the terms and conditions hereof. c. Standard Procedures. Contractor currently has and shall maintain and consistently implement standard procedures (i) for recruiting workers that possess skills and characteristics specified by HOTEL and (ii) for conducting background checks, reference checks, and drug screens all in accordance with all applicable Federal, State and local laws. d. Corporate Approvals. All corporate proceedings legally required to be taken by Contractor in connection with the authorization and execution of this Agreement and the performance of its obligations hereunder and related hereto, and all such approvals, authorizations, consents, licenses, and other order of State, Federal or local regulatory agencies, public boards or bodies (collective, Governmental Approvals ), if any, as may be legally required to be obtained by Contractor with respect to all or any such matters, have been taken or obtained and Contractor shall take all necessary action to maintain all such Governmental Approvals in full force and effect throughout the term of this Agreement. e. Authorizations. This Agreement has been duly authorized, executed and delivered by Contractor and when executed and delivered by Contractor, will constitute the legal, valid and binding obligation of Contractor enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization or other laws or equitable principles affecting creditors rights generally. f. Authority. Contractor has full legal authority to engage in the activities covered by this Agreement and the execution and delivery of this Agreement and 8

123 12. Default and Remedies. compliance with its terms, conditions, and provisions will not conflict with or result in a breach of any of the terms, conditions or provisions of the formation document or bylaws of Contractor or any agreement or instrument to which it is a party or by which it is bound, or any law, regulation or administrative decree or order to which it is subject, or constitute a default thereunder. g. No Restrictions. Contractor is not a party to or bound by any agreement or instrument or subject to any charter or any other corporate restriction or any judgment, order, writ, injunction, decree, law or regulation which may materially and adversely affect the ability of Contractor to perform its obligations under this Agreement or which requires the consent of any third person to the execution of this Agreement or the transactions contemplated hereby. h. Litigation. No litigation is pending or threatened against Contractor with respect to this Agreement or the consummation of the transactions contemplated hereby. i. True and Accurate Information. All documents and other information previously delivered and provided to HOTEL in conjunction with the services to be provided and performed hereunder remain true and accurate, including without limitation, all representations, warranties, and certifications contained in any such document and other information. 1. Contractor. In the event Contractor shall fail to perform any obligation or provide any service on the part of Contractor to be provided or performed hereunder as and when required hereunder or otherwise to comply with the terms of this Agreement, such failure shall constitute an event of default under this Agreement, and HOTEL shall have the right to terminate this Agreement upon thirty (30) days written notice to Contractors, which termination shall be effective on the effective date set forth in such termination notice. Without limiting the foregoing, HOTEL shall have the right to cancel this Agreement and all Requisitions issued hereunder upon HOTEL s notice of cancellation to Contractor, such cancellation to be effective as of the date HOTEL provides such written notice to Contractor or as of a later date specified by HOTEL, if HOTEL determines in its sole discretion that there is a material adverse change in the business or financial condition of Contractor. Additionally, in the event of such default by Contractor, HOTEL shall have the right to immediately offer employment to any or all Contractor employees assigned to HOTEL without payment of any penalties or fees. Upon any such termination, HOTEL shall have the right to seek all rights and remedies it may have at law or in equity. Contractor shall not be relieved from its obligations under Section 10 of this Agreement upon any such termination by HOTEL. 2. HOTEL. Subject to Section 3(c), in the event HOTEL shall fail to pay or perform in a timely manner any of its obligations under this Agreement after thirty (30) days from the date of HOTEL s receipt of written notice from Contractor, such failure shall constitute an event 9

124 of default under this Agreement, and Contractor shall have the right to terminate this Agreement on thirty (30) days written notice, and to seek payment at the specified rate or rates in accordance with the Rate Schedule for satisfactory services performed up to the effective date of termination. Such payment shall be HOTEL s sole obligation and Contractor s sole remedy in the event of termination by HOTEL. In no event shall HOTEL be liable for incidental or consequential damages or lost profits. 13. Force Majeure. Any delay or failure of either party to perform its obligations hereunder shall be excused, if, and to the extent that such failure or delay is caused by an event or occurrence beyond the control of the party and without its fault or negligence and if such failure or delay could not have been prevented or overcome by the exercise of due diligence by the party concerned, including but not limited to, acts of God, actions by any governmental authority (whether valid or invalid), fires, explosions, riots, wars or sabotage; provided that written notice of such delay (including the anticipated duration of the delay) shall be given by the affected party to the other party within five (5) days. Upon Contractor s failure for any reason to perform under this Agreement, HOTEL shall have the right, in its sole discretion, to perform all services itself with its own employees or other persons or to purchase the services being provided by Contractor under this Agreement from alternative sources and reduce the Contractors services to be performed or provided by Contractor hereunder. In the event HOTEL exercises its rights as set forth in the immediately preceding sentence, HOTEL shall have no liability to Contractor in connection with such action and HOTEL shall receive a credit in the amount of the costs incurred by HOTEL against any fees, expenses or other sums owed to Contractor. HOTEL shall not be liable to Contractor for any amount for any period of time Contractor is unable to provide services under this Agreement. 14. Trademarks. All trade names, trademarks, service marks, and the like owned by HOTEL or their affiliates shall remain the property of HOTEL or the affiliate notwithstanding their consent to Contractor s use of any such trade names, trademarks, service marks and the like solely in connection with the services to be provided under this Agreement. All such uses shall be subject to HOTEL s prior written approval. 15. Advertising. Without HOTEL s prior written consent, Contractor shall not use or permit use of the words HOTEL or any similar word or trademark of HOTEL or its related companies in the description or marketing of service or goods by Contractor, its affiliates or their respective directors, officers, shareholders, employees or agents, nor shall Contractor advertise or publish that Contractor has contracted to furnish service, goods or materials pursuant to this Agreement. 16. Entire Agreement. This Agreement and the attached Exhibits constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all previous verbal or written agreements. Any modification of this Agreement must be in writing and signed by a duly authorized representative of each party. There are no other understandings, obligations, representations or warranties relating to the subject matter of this Agreement, except as herein expressed. This Agreement shall supersede, and shall not be modified or amended in any way by the printed terms of any invoice, order or other document which may be issued by either party covering work or services rendered. 10

125 17. Assignment. Contractor shall not assign its rights or obligations hereunder or any interest herein or subcontract any of the work to be performed and services to be provided hereunder without the prior written consent of HOTEL. 18. Binding Effect. This Agreement and all the terms and provisions hereof shall be binding upon and shall inure to the benefit of the parties, their respective successors and assigns. 19. Competitive Pricing. If HOTEL receives a nationally or regionally based offer from another Contractor to supply HOTEL with like Services at prices that are lower than the prices covered by this Agreement, HOTEL will notify Contractor and give Contractor an opportunity to meet this competitive offer within two (2) weeks of HOTEL s notice. If Contractor declines to meet the competitive offer, HOTEL reserves the right to terminate the Agreement upon thirty (30) day written notice and without penalty or recourse to Contractor. 20. Notices. All notices required under this Agreement shall be in writing and if to HOTEL shall be sufficient in all respect if delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail to: Attn: and if to Contractor shall be sufficient in all respects if delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail to: Temporary Service Provider Attn: 21. Waiver. The failure of any party to insist upon strict performance of any of the terms, conditions and provisions of this Agreement shall not be deemed a waiver of future compliance therewith by the party by which the same is required to be performed hereunder and shall in no way prejudice the remaining provisions of this Agreement. All remedies reserved to HOTEL shall be cumulative and in addition to any other or future remedies provided by law or equity. 22. Severability. If any provision of this Agreement, or the application of any such provision to any person or in any circumstance is held invalid, the application of such provision to any other person or in any other circumstance, and the remainder of this Agreement, shall not be affected thereby and shall remain in full effect. 11

126 IN WITNESS WHEREOF, this agreement has been executed as of the date first above written. HOTEL By: Its: ( HOTEL ) Temporary Service Provider By: Its: ( Contractor ) 12

127 Contractor I-9 Agreement

128 CONTRACTOR I-9 COMPLIANCE AGREEMENT [HOTEL Name] (hereafter HOTEL) operates a facility in [location]. HOTEL has contracted with [Contractor s name] (hereafter CONTRACTOR) to provide services, and in doing so, CONTRACTOR and HOTEL agree as follows: COMPLIANCE WITH FEDERAL, STATE, AND MUNICIPAL LAWS: CONTRACTOR will comply with all federal, state and municipal laws and regulations relating to the performance of its duties hereunder including, but not limited to, those laws and regulations concerning wage and hours, payment of taxes, laws prohibiting discrimination and harassment, and compliance with the requirements of the Immigration Reform and Control Act of ACKNOWLEDGEMENT OF COMPLIANCE: CONTRACTOR represents and warrants that it is in compliance with and agrees that it will remain in compliance with the provisions of the Immigration Reform and Control Act of 1986, including but not limited to the provisions of the Act: (1) prohibiting hiring and continued employment of unauthorized aliens, (2) requiring verification and recordkeeping with respect to identity and eligibility for employment, and (3) prohibiting discrimination on the basis of national origin, United States citizenship, or intending citizen status. CONTRACTOR specifically agrees that it will certify to HOTEL on an annual basis, or as requested by HOTEL, in writing that CONTRACTOR is in compliance with all I-9 requirements with respect to each and every of CONTRACTOR S employees. By entering into this Agreement, CONTRACTOR certifies that all personnel that are being used, or will be used to perform services pursuant to this Agreement are authorized to work legally within the United States. MAINTENANCE OF RECORDS: CONTRACTOR shall be responsible for the creation and retention of all employment records or documents required by law, including but not limited to: - Time and payroll records for all employees of CONTRACTOR performing labor for HOTEL. - Employment Eligibility Verification Form (I-9) for all CONTRACTOR employees working on HOTEL s premises. The I-9 Form shall be used by CONTRACTOR to verify that persons employed by CONTRACTOR are eligible to work in the United States. SELF AUDITS: CONTRACTOR agrees that it will perform self-audits of its I-9 compliance on no less than an annual basis as measured from the date of execution of this agreement, and CONTRACTOR agrees that it shall certify in writing to HOTEL that it has completed its I-9 self-audit and resolved any problems or deficiencies identified in the course of said audit. WORK PERFORMED BY AUTHORIZED INDIVIDUALS: CONTRACTOR will not allow any of its agents or employees to perform services on behalf of HOTEL or enter upon HOTEL s premises unless said persons are legitimately entitled to work according to the laws of the United States. 1

129 INDEMNITY: CONTRACTOR agrees to indemnify HOTEL and hold HOTEL harmless from all liability, including liability for interest and penalties, which may be assessed against HOTEL as a result of Contractor s failing to comply with U.S. immigration laws. HOTEL CONTRACTOR DATE DATE 2

130 Guidelines for Investigating

131 Guidelines for Investigation of Harassment, Discrimination and Workplace Misconduct Complaints A. Initial Response Your (and the Company s) initial response to an employee s complaint of harassment or discrimination often is key to protecting the employee and the Hotel. For this reason, what you say and do in response to a complaint is critical. Below are some do s and don ts for responding to a complaint. While neither list is exhaustive, these guidelines should help steer you in the right direction. Do Not : Tell the employee to go work it out with the employee with whom he or she is having a problem. Tell the employee that he or she is overreacting or is too thin-skinned. Tell the employee to ignore the conduct because the offending person is harmless or doesn t mean anything by it or is just joking or that s just the way he or she is. Require the complaining employee and the offending employee to meet with you together to work it out or work through their differences. Agree to keep the complaint just between you and the complaining employee and take it no further. Agree to do anything other than investigate the concern and take appropriate action. You Should: Tell the employee you appreciate him or her bringing this matter to your attention. Listen attentively to the complaint and take careful notes if possible. Repeat your understanding of the complaint to the complaining employee to ensure that your understanding is correct and that the employee has told you everything. Assure the complaining employee that the Hotel takes these matters seriously and will investigate and take appropriate action. Tell the employee to bring any additional concerns to your attention immediately. Contact [name or job position] immediately. 1

132 B. General Rules Notify [name or job position] immediately if you become aware of a potential harassment or discrimination problem. Consider placing the victim or the accused on leave during the investigation. If an investigation is necessary, select an investigator who does not work directly with the alleged victim and accused. Usually it is better to have an investigator who is outside the chain of command of either employee and one who is not personal friends with either. Select an investigator who is personable and can make witnesses comfortable. Select an investigator who is familiar with the Hotel s policy on harassment, discrimination and workplace conduct, and the legal issues presented. It may be preferable to have two investigators working together. Outline the preliminary and closing statements to be made and the information to be covered before any interviews. Witness interviews should be conducted in a private setting. Allot sufficient time for each interview to allow for a thorough interview without the witness feeling rushed. If possible, the interview should be conducted at an offsite location so that the witness will not be questioned by co-workers when returning to work following the interview. Each witness should be cautioned, at the beginning and the end of the interview, about the confidential nature of the interview. They should be told not to discuss the interview with coworkers, friends, family members, or anyone at all. This caution should include a specific statement that the interviewee is not to assume that any other employee is entitled to know about the contents of the interview. Take extensive notes. Try to draft notes in a statement form as you are taking them. If this cannot be done, draft a statement at the end of the interview, review it with the witness, and have the witness sign it. Provide a copy if requested. Do not include your opinions about the facts or the credibility of the witness in your notes. Do not store investigation materials in anyone s personnel file. Rather, maintain those materials in a permanent confidential investigative file marked as such. Witnesses (except the accused) should be specifically informed that they will not be retaliated against by anyone based on any information that they provide during the interview and that the interview will remain confidential to the extent possible. If the witness wants to know if statements made during the interview will get someone into trouble, they should be told that a thorough investigation will take place and the Hotel will evaluate the facts uncovered and take appropriate action. 2

133 Do not interview anyone as a witness if you do not have some reason to believe the person may have information related the incident being investigated. Do not tape record interviews. Tape recorders are intimidating. Do not allow witnesses to tape record the interviews. Do not tell witnesses what other witnesses have said. Should a witness refuse to cooperate or participate, excuse that witness and notify for further instruction. C. Interviewing the Complainant Interview the complainant in a location other than the normal workplace, if possible. Give the complainant as much time as necessary to relate each and every incident of harassment or discrimination. Stress the need for confidentiality. Stress that no retaliation will occur for statements made or information provided in good faith in the interview. Take notes as described above. Pay particular attention to independent sources of corroboration. These sources include witnesses, written correspondence, etc. Specifically and carefully note dates, times, places, and names if the complainant can remember them. Require the complainant to be as specific as possible with his or her allegations, even if it is distasteful or unpleasant for him or her to recount. In other words, do not accept characterizations, such as inappropriate touching or offensive comments. Require the complainant to tell you exactly what happened or what was said and when and where it occurred. Even the smallest detail may have significance. Assure the complainant that the interview will be kept as confidential as possible within the bounds of conducting a thorough investigation. At the end of the interview, reiterate the importance of confidentiality. Do not attempt to predict the outcome of the investigation or the actions the Hotel may or may not take other than completing the investigation. However, you should ask the complainant what he or she believes would be a reasonable solution to the problem. Thank the employee for bringing the matter to your attention. Remind him or her to bring any additional concerns to your attention. 3

134 D. Interviewing Other Potential Victims Inform the witness of the extremely confidential nature of the interview and that they are not to discuss it with anyone. Witness interviews should initially be limited to those witnesses identified by the complainant as persons with knowledge. Advise witnesses that you are asking questions regarding a complaint about a potential violation of Hotel policy and review the policy with the witness. Stress that no retaliation will occur for statements made or information provided in good faith in the interview. Take notes as described above. Ask open ended questions that do not directly accuse anyone of anything. For example, in a sex harassment investigation do not ask questions such as Have you ever seen Joe Jones grab Sue? Rather, questions could be in the nature of: Has any employee or manager of the Hotel ever made comments or statements to you of a sexual or similar nature that you felt were inappropriate in a business setting? Has any manager or employee of the Hotel ever made comments or statements to you about your appearance or your personal life that you felt were inappropriate? Has any employee or manager of the Hotel ever made inappropriate gestures towards you or touched you inappropriately or attempted to touch you inappropriately? Have you ever witnessed any of these things (touching, attempted touching, in appropriate comments, propositions, etc.) happening to any other person? Has any other employee of the Hotel ever complained to you that comments or actions of this type were occurring? Have you ever felt it necessary to avoid working with certain people at the Hotel at certain times and places because you were concerned by activities of this type? Have you ever complained to any supervisory employee about conduct you believed to be inappropriate? If the answer to any of the above questions is yes, the interviewer should follow up at the same degree of detail that is suggested above for the complainant. In other words, ask the witness to describe in specific detail the conduct or comments that the witnesses found inappropriate or made him or her feel uncomfortable or conduct or comments directed at others the witness believed to be inappropriate in the workplace. 4

135 At the conclusion of the interview, remind the witness of the confidential nature of the interview and tell the witness not to assume that any employee has a need to know about the contents of the interview. Specifically, tell the witness that they are not to discuss it with friends, co-workers, and family members. Thank the witness for his or her cooperation. E. Interviewing Fact Witnesses Fact witnesses are witnesses who may have information relevant to the investigation, but who may not have experienced or witnessed the alleged harassing or discriminatory conduct. Stress the confidential nature of the interview. Advise witnesses that you are conducting an investigation for the Hotel. It is not necessary to tell them the specific nature of the complaint or concern or the persons involved. Tell the witnesses that the investigation is confidential and they are not to discuss the contents of the interview with anyone, including co-workers, family, or friends. Take notes as described above. Limit the questioning of a fact witness to the specific facts they are supposed to know. For example, if the sole purpose of interviewing a particular witness is to determine whether someone attended a particular meeting, you should not question the person generally about the specific allegations being investigated. You may ask whether the witness has ever witnessed comments or conduct that he or she believed was inappropriate. If the answer is yes, ask the witness to describe each such incident. Caution the witness at the end of the meeting about the confidential nature of the meeting. Tell them they are not to discuss it with friends, co-workers, or family members. Thank the witness for his or her cooperation. F. Electronic Files and other electronic files that were used or accessible to the complainant and/or the accused should be preserved as of the date the Hotel became aware of the complaint. Maintaining these records is an unaltered states is important. The failure to do so may have a negative effect in any future legal action. The IT Department should be involved to preserve the integrity of the information. Once the files are secured, electronically-stored information such as and internet use records should be reviewed if the allegations or investigation suggest that relevant information may be found there. 5

136 G. Documents To the extent possible, the investigator(s) should personally gather personnel records, payroll records, and any other documents necessary for the investigation. This will minimize the involvement of other clerical employees in the process. The investigator should handle all word processing tasks and make all copies personally. If possible, word processing should be performed on a stand alone word processor with secure document storage. If this cannot be accomplished, documents should be kept on removable storage devices rather than a hard drive or network server. Be sure to make sufficient copies of the storage device to avoid the risk of loss or damage. The investigator(s) should personally shred unneeded drafts, copies, etc. All statements and other documentary evidence should be stored in a separate secure file kept by the investigator(s). There should be no generalized briefings to groups of people, such as management teams, directors, etc. without discussing the meeting in advance with counsel. In drafting statements, remember that all statements and drafts thereof will be available to the opposing side if a charge or lawsuit is later filed. Investigator s statements should be as thorough and truthful as possible. They should not include the investigator s subjective impressions or opinions. H. Interviewing the Accused Before the interview, make a list summarizing each allegation made against the accused. Inform the accused that you are conducting an investigation required by law and Hotel policy. Tell the accused that the interview, as well as the entire investigation, is being kept confidential to the extent possible. Tell the accused that no judgments have been made about the validity of the complaints, but that each will be investigated fully. Review each allegation with the accused and allow him or her to respond to them in detail. Allow the accused to explain his or her general relationship with the complainant. Take notes as described above. Consider allowing the accused to write a rebuttal to each allegation After reviewing any written rebuttal, you should question the accused based on his or her written response. 6

137 Make specific notes of any witnesses that the accused names so that they can be interviewed as well. Tell the accused that retaliation is against both the law and Hotel policy and that he or she is not to retaliate against any complaining party, nor is he or she to discuss the allegations with him or her. Tell the accused that the investigation is ongoing and that no conclusions have been reached. Tell the accused that he or she should not discuss the investigation with anyone. I. Concluding the Investigation Follow up with all witnesses and evidence uncovered in the interview of the accused. Conduct any additional interviews needed. If there is more than one investigator, the investigators should meet to compare notes and organize the results of the investigation into a brief report or synopsis without reaching any conclusions. The investigator(s) should meet with the decisionmaker(s) for a full review and discussion of the investigation. Following the discussion, a conclusion should be reached regarding the validity of the complaints and appropriate action to be taken. Consider consulting legal counsel at this stage, or earlier in the process, to help ensure fairness and the protection of the legal rights of both the accused and the Hotel. Written conclusions ordinarily should state facts and not legal conclusions such as engaged in harassment or violated the law. Instead, you should describe the specific conduct that is alleged and/or confirmed to have occurred. Sometimes, the available information is not clear enough to determine everything that happened. If so, your written conclusion should so state. If you conclude from the investigation that the misconduct occurred, determine the appropriate action necessary to ensure no future misconduct and discipline the employee who engaged in misconduct (e.g., warning, transfer, demotion, suspension, discharge, training, monitoring, probation). If the evidence did not establish misconduct, determine whether further communication of expectations still is appropriate to ensure professional and respectful conduct. Prepare appropriate written documentation, including statement that retaliation is prohibited. Meet with the complainant to explain conclusions and actions taken related to the complaint. Always reaffirm the Company s commitment to the EEO Policy, including the anti-retaliation provision. 7

138 The follow up communication to the Complainant should include conclusions, thanks for making report, assurance of no retaliation, and expectation to report promptly any further concerns. If appropriate, follow up at a future date with the Complainant and others as necessary to ensure no future problems. Document necessary follow up steps, such as training or other communication steps taken to help prevent any future problems. 8

139 Separation Checklist

140 EMPLOYEE SEPARATION CHECKLIST NAME OF EMPLOYEE: EFFECTIVE DATE OF SEPARATION: In connection with the separation of your employment, you have the following obligations: (Please initial all that apply) Return all Company materials, documents, data, etc., whether in paper or electronic form Return all Company equipment and property, including, but not limited to: Keys to Company property Parking/building access card Uniform(s) Nametag(s) Computer equipment: Computer, Model Laptop, Model Printer, Model Cell phone/pager Company credit cards Other (specify) Repay any outstanding advances owed to the Company. Expense advances, vacation advances and debts owed by the employee to the Company that are subject to repayment through payroll deductions will be deducted from the final check to the extent permitted 1

141 by law. Comply with the Company s confidential information policy, including your continuing obligation to maintain the confidentiality of Company proprietary information. Your access to the Company s computer ends on: Password: Your access to the Company s voice mail ends on: Your access to the Company s property ends on: Your ability to act for the Company ends on: Your health/dental/vision benefits will terminate on: You were informed about your COBRA Insurance rights on: Your final pay in the amount of : Received on: Other checks received Received on: $ $ Please sign below indicating that you agree and accept the information above. Date Employee Signature Print Name Date Employer Signature Print Name 2

142 COBRA Notice

143 COBRA Notice Date / / From: To: Name(s) Re: Notice of Right to Elect to Continue the Company s Group Health Plan Coverage If you are married, both you and your spouse should read this Notice and review the Election Form. If your spouse and/or any dependent child does not live with you, you must advise the Company immediately of his, her or their address(es) so we can provide them this Notice and Election Form. Because of the Qualifying Event specified at the end of this Notice, coverage under the Company health plan for you (and your covered spouse or dependent children, if any) has ended or will end shortly. Federal and state law (collectively referred to as COBRA ) permits you, your covered spouse and dependent children to elect to continue your company s health plan coverage for a limited time. This coverage is called continuation coverage or COBRA coverage. You (and your covered spouse or covered dependent child, if any) are sometimes called a Qualified Beneficiary in this Notice. If you or your covered spouse or dependent child want COBRA coverage, complete the enclosed Election Form and return it to the Company within the election period described below (and specified on the Election Form). Continuation coverage consists of the coverage under the Company s group health plan that you and other Qualified Beneficiaries had immediately before your Qualifying Event. If the Company health plan changes benefits, premiums, etc., continuation coverage changes accordingly. During open enrollment, each Qualified Beneficiary will have the same options under COBRA coverage as active employees covered under the Company health plan. How to Elect to Continue Health Plan Coverage You may elect to continue your coverage by completing the enclosed COBRA Election Form and returning it to the Company. You also may elect to continue your covered spouse s or dependent child(ren) s coverage on the Election Form. Your covered spouse and adult dependent child(ren) also have the right to elect coverage themselves. This means that even if you don t elect to continue coverage for them, they may independently elect to continue their coverage. You must send us the completed COBRA Election Form on or before the date specified on the Election Form. The election period ends 60 days after the date of this Notice or 60 days after the Company health plan coverage expires, whichever period is longer. If we don t receive the Election Form by the date specified on the Election Form, neither you nor any other Qualified Beneficiary will be entitled to COBRA coverage. Premium For COBRA Coverage 1

144 You must pay the entire premium for your COBRA coverage. See the attached COBRA Premium Schedule for rates. The rates include a 2 percent add-on allowed by COBRA to cover administrative expenses. These rates are subject to change once a year as of the beginning of the "determination year" as indicated on the schedule. Payment of Initial Premium for COBRA Coverage Initial payment of premiums for COBRA coverage must be made on or before the 45th day after electing COBRA coverage. For example, Joe completes and mails his Election Form on May 15. Joe must make his initial premium payment on or before June 29. The initial payment must include payment for the premiums for all prior months of continuation coverage. The premium for the current month must be made within 30 days of the first day of the month. For example, Sandy s employment terminated in September and her first day of continuation coverage is October 1. Sandy elects continuation coverage and makes her initial premium payment in December. Sandy s initial premium must include payment for coverage for October and November. No claims under the group health plan incurred after the Qualifying Event will be paid until the applicable premium is paid. If the full initial premium payment is not made within the 45- day period, COBRA coverage for the affected Qualified Beneficiary will be canceled. If, for whatever reason, you received any benefits under the Plan during a month for which the premium was not timely paid, you will be required to reimburse us for the benefits you received. Payment of Premiums After the Initial Premium After the initial premium, your premium payment is due the first of each month for that month s COBRA coverage. There is, however, a grace period for late payment, which expires on the 31st day after the first of the month. If you don t make the premium payment within the 31-day grace period, your COBRA coverage will be canceled retroactive to the last full month for which premiums have been paid. If, for whatever reason, you received any benefits under the Plan during a month for which the premium was not timely paid, you will be required to reimburse us for the benefits you received. If the payment received is less than the full premium by an insignificant amount, there will be a 30-day grace period to make up the difference. If the full premium is not received by the end of the grace period, coverage will end as of the end of the month for which the full premium has been received. Duration of COBRA Coverage 18-month maximum. Generally, when there has been a termination of employment or a reduction in hours that causes coverage to be lost, COBRA coverage for a Qualified Beneficiary begins the day after the Company-provided health plan coverage is lost, and continues for up to 18 months or begins as of the first day of the next month. See information below for this plan's rule. For example, Bob s employment terminates in January and his last day of the company health plan coverage is January 31, If Bob properly elects COBRA coverage, it begins February 1, 1999 and can continue up through July 31, This general rule, however, has important exceptions that either lengthen or shorten the 18-month period. 36-month period. COBRA coverage for your covered spouse or dependent child can increase to up to 36 months from the date the 18-month period began if any of the following events 2

145 occur during the 18-month period: former employee dies; the employee and spouse are divorced or legally separated; or, for the dependent child only, the dependent child loses status as a dependent under the Company health plan. You, your spouse, or any dependent(s) must notify us within 60 days in case of divorce or the dependent child ceasing to be eligible, or else the COBRA maximum period will remain 18 months. 36-month period if you become entitled to Medicare. If the former employee becomes entitled to Medicare before expiration of the 18-month COBRA coverage period (including before your employment with the company terminated), the COBRA coverage period for your covered spouse or dependent child(ren) is a period that ends 36 months after you become entitled to Medicare, or the 18-month coverage period described above, whichever is longer. 29-month period for disabled qualified beneficiaries. If a Qualified Beneficiary (including you) is disabled, COBRA coverage for all Qualified Beneficiaries may continue for up to 29 months from the date the 18-month period would begin. The 29-month period applies only if the following conditions are satisfied: (1) the Social Security Administration determines the Qualified Beneficiary is disabled at the time of the qualifying event or within 60 days of when COBRA coverage begins; and (2) the Qualified Beneficiary provides the company a copy of the determination within the 18-month coverage period and not later than 60 days after the determination is made. The premium for COBRA coverage increases after the 18th month of coverage to 150% of the applicable premium for the disabled Qualified Beneficiary, as well as other Qualified Beneficiaries, if they are in the same rate band. Early Termination of COBRA Coverage COBRA coverage can terminate before the 18-month, 36-month or 29-month period described above expires. COBRA coverage for a Qualified Beneficiary terminates on the earliest of: the month for which the premium for the Qualified Beneficiary s COBRA coverage is not timely paid; the date the company ceases to maintain any group health plan; after electing COBRA coverage, the date the Qualified Beneficiary becomes (a) entitled to Medicare or (b) covered by another group health plan that contains no exclusion or limitation for pre-existing conditions of the Qualified Beneficiary, or which exclusion or limitation does not apply due to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). If a Qualified Beneficiary is entitled to 29 months of COBRA coverage on account of disability, but is later determined not to be disabled, coverage ends with the first month beginning more than 30 days after that determination. For further information, please contact the Company s plan administrator: Name of Contact Due to the following Qualifying Event, occurring on / /, you are eligible for COBRA coverage for months beginning on / /. Your existing coverage ends as of / /, unless you elect COBRA coverage. Qualifying Event 3

146 Termination Notice

147 TERMINATION NOTICE Employee Name: Date: Date of Termination: Type of Separation: Resignation Dismissal Other Eligible for Rehire? Yes No Reason for Dismissal: Employee Signature: Date: Employee Comments: cc: Employee Personnel File