AUDIT YOURSELF BEFORE SOMEONE DOES IT FOR YOU
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1 AUDIT YOURSELF BEFORE SOMEONE DOES IT FOR YOU Sandra Hoglund Hanson Kyle J. Groteluschen Davenport, Evans, Hurwitz & Smith, L.L.P. Sioux Falls, SD (605) Davenport, Evans, Hurwitz & Smith, LLP The contents of this presentation are not intended as legal advice. Please consult an attorney for advice regarding your individual circumstances.
2 Why Self-Audit?! An ounce of Prevention is Worth a Pound of Cure
3 Why Self-Audit?! Compliance with federal and state employment laws Proactive identification of issue before they become lawsuits
4 Don t be the Lone Ranger The law helps those who ask for help.
5 Outside counsel can provide more than just a fresh perspective. Helps prevent disclosure of potentially damaging information
6 Privilege Not just for the 1%. Attorney-Client Privilege Protects confidential communications between Attorney and Client pursuant to providing legal advice This could extend to communications made pursuant to reviewing policies to ensure compliance with state and federal laws, and to assessments on the likelihood of potential litigation.
7 Litigation Attorney Work-Product Doctrine Protects information created pursuant to litigation or anticipated litigation Protects information pertaining to an attorney s opinion Protects information relating to certain facts
8 In-house Counsel Ordinary Business Purposes vs. Legal Advice Employers sometimes have difficulty characterizing information created by a legal department or in-house counsel as legal advice, rather, this information is often seen as being created for a business purpose. Such information may not be considered privileged.
9 Step By Step: Employment Audits
10 Employment Audits STEP 1: Determine the Purpose and Scope of your Audit
11 Employment Audits Topics for audits: Hiring Practices Workplace Practices Discrimination & Diversity Documentation Compensation and Payment Benefits (ie. Health, Retirement, Pensions) Social Media Policies and Practices Termination Practices etc.
12 Employment Audits STEP 2: Perform the audit, and maintain control over information discovered
13 Employment Audits -- Performance Identify and limit audit to necessary audit participants
14 Employment Audits -- Performance Which information will be available to defined participants
15 Employment Audits -- Performance Implement effective controls over audit results, to avoid unauthorized disclosures
16 Employment Audits -- Closure STEP 3: Follow through!
17 Employment Audits -- Closure Once you ve found a problem, work to fix it! If you re going to look for issues, be ready to solve them. Failure to take action to solve a known issue could make things worse.
18 Employment Audit Example #1 Employee Handbook Audit DOES YOUR HANDBOOK?
19 Employment Audit Example #1 Clearly state employees are at-will Does the language comply with the NLRA? Is the language non-discriminatory and in line with public policy? Avoid use of contractual language Language prominently disclaims: employment contract, promise of continued employment, obligations to only discharge for cause or notify employees of changes, etc. Are disclaimers consistent with the handbook as a whole?
20 Employment Audit Example #1 Contain an FMLA policy Contains definition of eligible employee Description of leave entitlements Measuring period for FMLA leave Notice and certification requirements Benefits Job Restoration An Updated understanding of the term Disability under FMLA
21 Employment Audit Example #1 Clearly establish a policy on harassment Policy prohibits all forms of harassment (not just sexual!) Policy describes the investigative procedure for harassment complaints Policy prohibits all forms of retaliation
22 Employment Audit Example #1 Establish a policy on employer information Defines Ownership of messages/records Demarcates prohibited activities Establishes consequences for violations Does not conflict with employees rights under Section 7 of the NLRA
23 Employment Audit Example #1 Contain a social media policy? Defines use of social media at the workplace Defines use of social media by the company Appropriately limits use while adhering to Section 7 of the NLRA and the ADA
24 Employment Audit Example #2 EEO Audit The EEOC s FY Strategic Enforcement Plan focuses on 6 hot issues: 1. Eliminate recruitment and hiring barriers 2. Matters affecting immigrant, migrant, and other vulnerable workers 3. ADA, pregnancy and gender related discrimination 4. Gender bias in compensation 5. Preservation of access to Legal System 6. Systemic Harassment
25 Employment Audit Example #2 Management has been trained on EEO Policies ADA s reasonable accommodation requirement Title VII matters Recruitment and hiring procedures comply with EEOC requirements Medical tests are administered appropriately and results are used for only their intended purposes Proper disclosures have been made about the use of credit reports in the hiring process
26 Employment Audit Example #2 Discipline and Termination proceedings are EEO compliant Administered in a nondiscriminatory/nonretaliatory manner Appropriate documentation is kept regarding discipline/termination
27 Employment Audit Example #3 Wage and Hour Audit Back wages continue to accrue until corrected Foundation of good faith defense Cheap insurance: cost is small compared to potential liability
28 Employment Audit Example #3 Employee hours are properly counted Breaks Noncommuting travel time Work related meetings, seminars or training On call Preparing for Work
29 Employment Audit Example #3 Employee hours are properly counted (cont.) Work from home Smartphone use Travel
30 Employment Audit Example #3 Nonexempt employees receive at least minimum wage Payment is current with applicable laws Method of calculating payment is acceptable and produces a result in line with minimum wage requirements Hours in excess of 40 hours are being paid overtime
31 Employment Audit Example #3 All employees are properly characterized Are they employees or independent contractors? Did any employee responsibilities, job titles, or positions change? Has the DOL or judicial definition of the employee changed? Are your employees classified based on the rest of the industry? (herd mentality)
32 Employment Audit Example #3 Deductions from employee wages Properly account for employee required equipment Uniforms Cash shortages or other losses
33 Questions? (605) Davenport, Evans, Hurwitz & Smith, LLP
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