A New Year’s Policy Review

The start of a new year is a traditional time for employers to review their workplace policies to ensure the policies comply with federal, state, and local requirements, both old and new.

The start of a new year is a traditional time for employers to review their workplace policies to ensure the policies comply with federal, state, and local requirements, both old and new. It is also a time to reflect upon any workplace incidents, charges, or lawsuits that may have occurred during the past year and whether policy changes might prevent or reduce the likelihood of such matters from arising in the future.

As 2021 begins, most employers remain primarily focused on the continuing effects of the Coronavirus pandemic inside and outside of their businesses.

Given the multitude of difficult issues it has created for employers, the usual annual review may not be treated as the priority it might have been in a normal year. While it is understandable that management might not be able to give the annual policy review the attention it warrants, a failure to make needed policy revisions could have serious consequences down the road.

The workplace today remains among the most regulated places in our society, and it is increasingly so as new rules and regulations affecting the workplace are issued on a regular basis by state and federal governmental bodies.

Even cities and counties are enacting protective workplace legislation. And, for at least the next four years, employers will be dealing with a Biden administration that will be much more favorable to employees than the last one.

By all reports, the Biden administration intends to significantly increase the enforcement of workplace laws and regulations. They have also indicated that they will implement regulatory changes to help unions in their organizing efforts. Measures taken now to ensure legally compliant policies and procedures are in effect, could help to prevent problems down the road.

Policy Review – FSLA

One topic that always merits careful attention is compliance with the Fair Labor Standards Act (FLSA), and where applicable, similar state statutes. These are the laws that require a specified minimum wage, as well as overtime pay for all hours over forty worked in a workweek (and over eight hours in a day in some states). The misclassification of employees as exempt from overtime pay is the most common FLSA violation and the basis for the largest number of lawsuits.

Misclassification can result in substantial liability. The liability period can extend back three years and generally includes liquidated (double) damages and attorney’s fees. Ensuring that your exempt employees are truly exempt is one of the most effective actions that an employer can take to avoid potential liability. It should be an essential aspect of any workplace review.

Policy Review – Overtime Pay

To be exempt from overtime pay, employees must satisfy the FLSA’s minimum salary test and the “duties” test under the so-called “white collar” exemptions. Currently the minimum salary for exempt status under the FLSA is $684 per week, ($35,568 annually). Several duties exemption tests exist under the FLSA, three of which being the executive, administrative, and outside sales tests. Exempt “executive” employees include managers and supervisors with the primary duty of directing at least two full-time employee and managing the operation or a subdivision thereof.

Exempt “administrative” employees primarily perform non-manual, office work and exercise discretion and independent judgement on significant business matters. There is no minimum salary test for exempt “outside sales” personnel but they must spend the majority of their time away from the office making sales calls.

Policy Review – Off the Clock

One additional wage and hour issue that has arisen quite frequently lately and should likewise be addressed is liability for off-the-clock work. Such work generally involves an employee performing some work-related function either before punching in or after punching out for the day. Examples could be pre-shift preparations for production, post-shift report preparation, as well as sending or responding to business-related e-mails or texts after work hours.

In most cases employers are totally unaware that such activities have taken place. A good practice to prevent such conduct is to post notices prohibiting any overtime or off-the-clock work without specific authorization. To avoid liability, you must also document consistent enforcement of the policy.

Policy Review – I-9 Forms

Another federal employer mandate that sometimes draws less than sufficient scrutiny is properly completing I-9 forms required for all employees at the time of hire. A thorough self-audit should ensure that all the forms are complete with all blanks containing some entry, even if it is only “N/A.” Incomplete forms are a frequent source of recordkeeping violations, which can result in significant fines.

Similarly, failure to discard I-9 forms that you are no longer required to retain can also result in recordkeeping violations since they would be reviewed with all others if an audit ever occurs. The required retention period is 3-years from the date of hire, or one year from the employee’s departure, whichever is later. Unneeded forms should be promptly discarded.

Policy Review – OSHA

An additional focus for employers in conducting their review should be compliance with all Occupational Safety and Health Administration (“OSHA”) obligations. The Biden administration has already announced that it will focus on employee safety and health through aggressive enforcement of all OSHA standards. They intend to double the number of compliance investigators, as well as increase the number of workplace audits.

Therefore, in addition to ensuring that all COVID-19, normal safety protocols, and necessary training have been implemented, employers should also confirm that their OSHA 300 log, Form 301 and 300A are all current and posted if required.

Policy Review – Employee Handbooks

Finally, no review of policies and procedures would be complete without a thorough review, and if needed, revision of the employee handbook. If you do not have one, now would be a good time to implement one. No workplace is too small to be without an employee handbook. Handbooks remain the most effective way to publicize your policies and your expectations for the employees. They also help to ensure that you are consistent in the treatment of employees. In addition, a well-written handbook demonstrates a good faith effort to comply with the numerous regulations that apply to the workplace.

By taking the time to conduct an employment policy review early in the year, employers are much more likely to successfully demonstrate compliance if a government audit arises or an employee files suit.

Richard D. Alaniz is a partner at Alaniz Law & Associates, a labor and employment firm based in Houston. He has been at the forefront of labor and employment law for over forty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Rick is a prolific writer on labor and employment law and conducts frequent seminars to client companies and trade associations across the country. Questions about this article, or requests to subscribe to receive Rick’s monthly articles, can be addressed to Rick at (281) 833-2200 or ralaniz@alaniz-law.com.

The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.

The information provided is my own and does not reflect the opinion of my firm or anyone else.