Employment Resolutions for the New Year

It is the New Year and the time for making resolutions. In addition to swearing off sweets and committing to exercise more often, consider the following employment resolutions to reduce your organization’s risks. 

Conduct a job classification audit to ensure all workers are properly categorized
and paid. 

Misclassifying employees as independent contractors or nonexempt employees as exempt under the Fair Labor Standards Act increases your organization’s litigation risk and exposes your organization to liability for unpaid wages (including overtime), taxes, penalties and even, in rare cases, criminal liability. Do not forget to include in your audit seasonal or temporary workers and workers placed by staffing agencies, who may be determined to be jointly employed by the staffing agency and your organization. Classification distinctions are based on job duties and the degree of control your organization has over the worker—not length of employment. 

In August 2016, the North Carolina Industrial Commission’s Classification Section signed a memorandum of understanding to share information it learns about the potential misclassification of workers with the federal Department of Labor’s Wage and Hour Division. In addition, the DOL and IRS have a similar information-sharing agreement. Employers in North Carolina (and many other states with similar understandings) should anticipate that state and federal agencies will share among themselves any evidence of misclassification. This information sharing can implicate more than taxes and wages. For example, the North Carolina Industrial Commission is also charged with ensuring adequate workers’ compensation coverage, and it can assess civil fines and charge employers with misdemeanors for noncompliance. 

Revisit your job descriptions. 

Job descriptions are rarely static. Roles within an organization evolve over time to meet changing customer needs, new technologies and market pressures. The person in the position may take on new responsibilities and delegate or abandon outgrown or outdated tasks. You should consult with your organization’s management to ensure that each job description accurately describes the work performed in the position, including any physical or other requirements that should be disclosed to assess accommodation requests under the Americans with Disabilities Act. Job descriptions should also specify whether the position is exempt or nonexempt under the FLSA. By forcing your management to think critically about each role, your organization may identify opportunities for expansion or areas of duplication, as well as missing or underutilized skills from your existing employees. Comparing an employee’s current performance to an accurate job description is also an excellent and objective way to evaluate performance. 

Review your employee handbook and employment policies. 

Handbooks and policies should reflect both current laws and your company’s practices. Over time, even the best handbooks become stale and outdated. Handbooks should be reviewed internally at least annually and reviewed by legal counsel every three years or whenever there are significant changes to employment laws. If you need to put off a full handbook review for another time, at least review the following policies to ensure they are accurate and reflect current laws and legal best practices: equal employment opportunity; anti-harassment; leaves of absence (particularly leave under the Family and Medical Leave Act); vacation or PTO; sick leave (particularly if your organization is located in a city or state with minimum sick leave requirements); and all descriptions of employee classifications, timekeeping and benefits. Stephen M. Cox’s article on Workplace Violence Prevention Policies and Gun Rights Laws also provides timely insight to prepare or revise your organization’s safety and security policies. 

Commit to employee training. 

The Equal Employment Opportunity Commission recommends as a best practice periodic training to all employees on equal employment opportunity and anti-harassment policies, and providing such training can prevent workplace discrimination and ensure that your organization addresses any issues promptly and appropriately. Managers should also receive periodic training about the importance of proper recordkeeping during disciplinary actions and internal investigations. This documentation not only serves to communicate with employees, but it is also critical for defending any resulting litigation. 

Review your form documents. 

Douglas M. Jarrell’s article on Updating Your Severance Agreements provides a roadmap to the key provisions to review in your organization’s form severance agreements. You should also review job applications, offer letters, employment agreements, nondisclosure and confidentiality agreements, noncompetition and nonsolicitation agreements, and onboarding materials, such as employee authorizations to conduct a background check in compliance with the Fair Credit Reporting Act. These documents, done correctly, can set expectations for the employment relationship, protect your organization from improper disclosures and competition, and provide your organization with important information about your employees. However, if these documents contain errors or are not compliant with applicable legal standards, they could be unenforceable or expose your organization to unnecessary expenses and litigation.  

Please contact a member of Robinson Bradshaw’s Employment and Labor Practice Group for more information about any of the above recommendations or for assistance with following through on your organization’s employment resolutions.