New I-9 Now in Effect

The transition to the new I-9 Form is now complete.  Employers must now use the new I-9 Form, which contains few changes from the last revision. Here is the quick link and some important information on the changes.

The new form can be found at https://www.uscis.gov/i-9.

The new form contains better interface for on-line use including:

• Validations on certain fields to ensure information is entered correctly. The form validates the correct number of digits for a Social Security number or an expiration date on an identity document.
• Drop-down lists and calendars.
• Embedded instructions for completing each field.
• Buttons that allow users to access instructions electronically, print the form and clear the form to start over.
• Additional spaces to enter multiple preparers and translators. If the employee does not use a preparer or translator to assist in completing section 1, he or she must indicate so on a new check box labeled, "I did not use a preparer or translator."

In addition, the new form has been updated in the following additional ways: 

• Requires workers to provide only other last names used in Section 1, rather than all other names used. This is meant to avoid possible discrimination issues.
• Immigrants authorized to work no longer need to provide both their Form I-94 number and foreign passport information in Section 1.
• A new "Citizenship/Immigration Status" field has been added at the top of section 2.
• A dedicated area to enter additional information that employers are currently required to notate in the margins of the form, such as Temporary Protected Status and Optional Practical Training extensions.
• A quick-response matrix barcode, or QR code, that generates once the form is printed that can be used to streamline enforcement audits.
• Separate instructions from the form. Employers are still required to present the instructions to the employee completing the form, however.

It is important to remember that this new smart I-9 form is not an "electronic I-9" as defined in the regulations.  Employers filling out the new form I-9 using Adobe Reader still need to print the form, obtain handwritten signatures, store in a safe place, monitor reverifications and updates with a calendaring system, and retype information into E-Verify as required.

What Do The New FLSA Overtime Rules Mean For Me?

There has been a lot of hoopla and panic about the new FLSA rules.  In fact, few employers seem to understand how these new rules will affect them and their employees.  Here is a quick tutorial:

What are the new rules?

The new rules raise the minimum salary required to claim an exemption to the FLSA minimum wage and overtime rules under the professional, administrative and executive exemptions.  The new rules requires employees to earn a salary of at least $913 per week ($47,476 a year), up from $455 per week ($23,660 a year), to be exempt. The new salary level is equivalent to the 40th percentile of full-time salaried workers in the lowest wage census region nationally.  In addition, the new rules raise the threshold for the highly compensated employee exemption to $134,004, which is the 90th percentile of full-time salaried workers nationally, up from $100,000.

These new salary thresholds will be adjusted automatically every 3 years to maintain them at the same percentile levels.

When do the new rules go into effect?   

The new rules become effective on December 1, 2016. After that time, salaried employees who do not meet the new thresholds must be paid overtime for any hours worked in excess of 40 per week.

How will this affect me?

Simply put, employers must evaluate their workforce and determine which employees are affected by these new rules.  Exempt employees who earn above the new thresholds will not experience any change. It is important however, to make sure that these employees' duties actually qualify under one of the exemption tests.  If not, regardless of salary,  the employees are as non-exempt.  Those employees whose salary fall between the old and new thresholds will be most affected.  Employers may continue to pay these employees by salary, but most also keep track of and pay overtime for any hours worked in excess of 40 per week.  

Although the short-term effects seem to be increasing the take-home wages of some employees and the cost for employers, a lot remains to be seen regarding the longer-term effects of the new rules. While some newly non-exempt employees will have their overall pay increased by overtime, others may lose their jobs or effectively become more restricted in their work environment by their employers' efforts to contain costs and avoid overtime (employees with less flexibility may lose out on some projects).  Others, near the threshold, may receive an immediate small increase in salary so as not to bump them down to non-exempt status.  Much remains to be seen and there is no shortage of reasonable opinions and projections.    

How should I get ready?

• Start early! This is a great time to audit all employee FLSA designations to truly understand which employees work in positions that could be classified as exempt (depending on salary).  You may want to include in this analysis how much overtime may be expected in each position so as to more accurately understand potential labor costs.
• Take a new look at your budgets. If you rely heavily on the group that is being re-classified, figure out your expected increase in labor costs and how you will cover it.  In some cases, that may mean cuts in salaries or personnel, but if it you get out in front of it, your are assured much less heartache. Remember, you cannot lower pay or change your overtime policy retroactively.  
• Figure out your time keeping and overtime policies now, so you can make sure everyone understands what to expect and how to comply before the deadline. There is nothing wrong with policies that have employees clear overtime with a supervisor BEFORE working it or limiting total overtime eligibility.  The key is making sure ALL overtime worked is paid at the premium level.  That does not mean employees need to choose when or how much overtime they work.

• Do not punish employees for becoming "more expensive."  Unless absolutely necessary, do not roll back flexible work arrangements that may be working.  Instead, figure out how to make them work under the new system. For example, a person working one day from home and making it work, or with a schedule that is shifted, should be able to continue to do so.

• Do not make employees feel less valuable or accomplished because they are now "non-exempt."  Despite it being a worker protection, many employees view their FLSA  exemption as a social status.  Make sure they understand that this is a change to a technical legal distinction, which in no way correlates to their value as employees.  Do not make employees feel like they are "punching-the-clock" if it can be avoided.
• Be careful.  Bad reporting procedures, or even employee non-compliance with reporting procedures, do not exempt an employer from paying overtime.  Make it your business to know (and employees' responsibility to let you know).  
• If you need help with any of the above, make sure to reach out to employment counsel.  One phone call or email could save a lot of heartache (and money!)

Best Practices For Employment Terminations

I have heard way too many stories lately about easy-to-avoid wrongful termination lawsuits. Whether an employee is let go because she did not meet expectations after being given many opportunities to improve or just because painful cuts were necessary, it needs to be done right. Bringing termination processes in line with best practices will avoid confusion and painful (and expensive) disagreements. Here are some clear guidelines that offer employers the best chance of staying out of trouble and out of court. Not surprisingly, they can be helpful for employees as well.

 I will focus in more depth on each of these areas in my next several posts.

• In almost all states in the United States, there is a presumption of “at-will” employment. That means that unless there is a contract stating otherwise, either the employer or the employee can terminate an employment relationship at any time, with or without notice, for any lawful reason. Make sure employment at-will status is clear and known. This means it is clearly stated in every offer letter and mentioned and defined in any policies or handbooks.
• Make sure policies do not undermine the at-will employment relationship, such as those guaranteeing progressive discipline prior to termination.  If there is a progressive discipline policy, make sure it is clear and followed universally. Also make sure exceptions to progressive discipline are clearly stated and are used only in those circumstances.
• Make sure disciplinary documents and processes do not undermine the at will status -- a 6-month probationary period or a 3-month performance improvement plan should be accompanied by language specifically re-affirming the at will status, even during designated periods.
• Once the decision has been made to terminate someone’s employment, regardless of the reasons, have a clear understanding of what the reasons are and what should be articulated. Make sure no one is off message. If it is performance related, DO NOT pretend it is a layoff. If it is a layoff, be honest about that. Regardless of the reason, stay professional and DO NOT disparage the employee or engage in re-hashing the past or assigning blame.
• Be particularly careful when terminating the employment of employees who may have or think they have a claim for wrongful termination. Have they recently reported behavior they believed was illegal? Have they recently cooperated in a government investigation of the workplace? Have they recently exercised their right for family leave? Have they recently complained about harassment, discrimination or wage payment irregularities? If you answer yes to any of the above, seek advice from employment counsel BEFORE moving forward. Regardless of your relationship with the employee, if the employee is in any protected categories (age, religion, race, sexual orientation etc.) take extra time to review the decision carefully and contact employment counsel if you are unsure.   
• Make sure you provide all of the appropriate post-termination documents. This includes information about COBRA, where applicable, and other benefits, unemployment compensation, etc.  Be mindful of final pay requirements, including whether unused vacation is considered wages in your jurisdiction. If you do not know the requirement in your jurisdiction, you can check on findlaw or contact your employment counsel. Make sure to time the effective date of the termination so that you are able to pull together everything you need in time.
• Remember, notice before a termination is not a legal requirement. Providing some notice is considered a courtesy, but does not enhance your legal position in any way. Consider using severance as a way to both soften the blow for an employee and manage legal risk. The idea is simple – an employee provides a release of claims in exchange for a lump sum or continuation payment(s).  If you are offerring severance, be prepared with severance documents when you provide the termination notice. Make sure you include the appropriate federal and local statutes and language – especially for employees over 40.  Contact employment counsel if you are unsure. Do not provide severance payments without a release.  Nothing stings more than being generous post-employment and then getting sued!  
• Respect the dignity of terminated employees.  Treat them professionally and, regardless of their reactions, always act to maximize the possibility of having positive future relationships with departed employees.  Never share information on the circumstances of a termination with anyone without a business need to know.  The sooner a terminated employee moves on professionally and personally, the better for your organization, so help them to get there if you can.  Never provide negative references, instead confirm position and dates of employment.  

While nothing can guarantee a smooth employment termination process, following best practices can help insulate employers from making needless mistakes.  It is worth the time and effort now to avoid the headache later.  

Leave Policies Target Employee Retention - But Not All the News Is Good

The 2014 National Study of Employers -- a new study of mid- and large-sized employers, confirms what employers already know, namely, that the still-recovering economy has not led employers to short-change their employees with regard to leave, but has forced employers to focus on the bottom line and tighten some flexible working policies.  The study, conducted by the Families and Work Institute (FWI) and the Society for Human Resource Management (SHRM), which compared employer data from 2009 and 2014, found that more employers in 2014 are offering the 12 weeks of protected leave required under the Family Medical Leave Act (FMLA), regardless of their employees' eligibility, although fewer than before are offering more than 12 weeks leave.  In addition, employers are recognizing the aging work force (and their aging parents) and providing more informational and other support for those employees, although holding firm on the amount of job-protected leave to care for ill parents. 

In addition, despite reports to the contrary, the Study data reflects that employers are more willing to allow flexible work arrangement for their fulltime employees, such as occasional telecommuting and more personal control over overtime and breaks for personal needs.  On the other hand, employees are seeing fewer job-sharing possibilities, permanent telecommuting allowances and fewer employers offering sabbatical options or the ability to return after career breaks.  Essentially, employers are allowing individual employees flexibility, but are more reluctant to allow fixed alternate schedules to meet their employees' personal needs.  This reflects the growing concern about the costs of some of these flexible arrangements, but may not tell the whole picture.

Surprisingly, the study also shows a slight decline in employers encouraging managers to asses outcomes and accomplishments as opposed to "face time" and hours spent.  While this result is contrary to current best practices, it may reflect an inability of some employers to properly compare and assess worker output due to other shortages.  The improving economy and growing new-hire rates should fix some of that as long as employers continue to manage their employees with an eye towards accountability and retention.  Employers that are able to manage leave and schedule accommodation properly, thereby satisfying employee-needs while not compromising their own needs and values, are able to stay our of legal trouble and benefit from more productive, happier employees.  Employers should not hesitate to contact employment counsel to help navigate the right solution to tricky leave or accommodation issues.     

Gov. Ends 'Don't Ask' Policy For Disabled Workers

Federal contractors, who employ more than 15 million workers nationwide, will soon be asking disabled individuals to 'out' themselves as part of new regulations.  Contrary to the strict policies in effect at most employers prohibiting asking employees or potential employees about possible disabilities, a new rule forces employers to ask and track such individuals, in an effort to reach a target of employing 7% disabled workers.  

Years of training to comply with the Americans With Disabilities Act (ADA), which forbids employers from gathering information on disability status, is now being turned on its head.  Previously, such inquiries were considered discriminatory as well as dangerous for employers, since knowledge of a disability could trigger a requirement to accommodate under the ADA.  In fact, the EEOC was required to make an exception to allow employers to comply with the new rule so that they can show they are meeting the targets or are attempting to recruit to meet the targets.

The new rule, promulgated by the the Office of Federal Contract Compliance Programs (OFCCP) becomes effective on March 24, 2014 and changes the regulations to Section 503 of the Rehabilitation Act of 1973.  Its new requirements are summarized on the Department of Labor website.

Key changes include: 

• Data collection: Contractors will be required to document and update annually several quantitative comparisons for the number of Individuals with disabilities who apply for jobs and the number they hire. The data must be maintained for three years.
• Invitation to Self-Identify: Contractors will be required to invite applicants to self-identify at both the pre-offer and post-offer phases of the application process, using language prescribed by OFCCP. The Rule also requires that contractors invite employees to self-identify every five years, using the prescribed language. 

The new self-identification form asks employees and potential employees to self-identify and provides a non-exhaustive list of possible disabilities.  It allows individuals to self-identify or to choose not to answer.  It also includes information on the duty to accommodate and provides an opportunity to request an accommodation.

While government contractor employers may see an immediate shift in culture as employing individuals with disabilities becomes a more universally celebrated, rather than hidden aspect of the employment culture, private employers are likely to feel the effects eventually as well.  However, non-government contractors should not change any policies or practices with regards to individuals with disabilities and should continue to focus exclusively on each person's ability to perform the essential functions of his or her job.  For help on compliance with the ADA and/or the new regulations for government contractors, contact employment counsel.