Employment Law Update

August 2007

End-of-summer legal reminders to help employers sail through the remainder of the year

School is starting, vacations are ending, and the leaves will soon begin to change color. That's right, it's the end of summer — the perfect time to update your employee handbooks, review personnel files, refresh your memory regarding recent employment law updates, and get a jump start on fall planning. The following checklist will prepare your company to sail smoothly through the rest of the year:

•  Workplace harassment continues to be one of the most frequently cited bases for complaints lodged with the Department of Fair Employment and Housing. In 2004, the California Legislature passed Assembly Bill 1825, which requires employers who regularly employ fifty or more employees to provide at least two hours of sexual harassment training to supervisory employees once ever two years, and within six months of being hired or promoted into a supervisory position. It has now been two years since the last round of training, and supervisory employees must complete their next round of training by December 31, 2007. Contact Downey Brand's Employment and Benefits Group to sign up for sexual harassment training programs — offered in both in-person and on-line formats — that comply with the California Fair Employment and Housing Commission's most recent regulations.

•  Class action lawsuits based on an employer's failure to provide meal or rest periods to non-exempt employees are on the rise. The potential for liability increased when the California Supreme Court recently ruled, in Murphy v. Kenneth Cole Productions, Inc., that employers may be exposed to three years of liability for failure to provide meal or rest periods. (For more information regarding the Kenneth Cole case, see below.) California's Unfair Competition Law, Business and Professions Code section 17200 et seq., may further extend the statute of limitations to four years. To limit potential liability for meal period claims, employers should ensure that all non-exempt employees clock out during their meal periods. Likewise, to reduce potential liability for rest period claims, employers should consider including an acknowledgment statement with each timecard or time sheet indicating that the employee was permitted to take all authorized rest periods on each work day for the requisite period of time. We recommend using the following language: “I, [EMPLOYEE NAME], acknowledge that I was authorized and permitted to take all rest periods during this pay period, or informed my supervisor of any missed rest periods.” Employers should review these statements following each pay period to ensure compliance with state law.

•  Accurate, timely performance evaluations are necessary to maintain a productive workforce. Good employees will generally stay with an employer longer if they feel appreciated and recognized for their performance. Similarly, honest and timely evaluations are the most effective way to enforce discipline against poor performing employees. This is a good time of year to confirm that performance evaluations have been completed for all introductory and/or probationary employees and to prepare for annual performance evaluations.

•  Do you currently have any employees who are on family and medical leave, pregnancy disability leave, or another medical leave of absence? Now is the time to update the employees' files and follow up regarding their leave status. In order to accurately track employee leaves of absence, we recommend including a form in the employee's personnel file documenting the employee's name, type of leave, the date leave was requested, the date leave began, the anticipated return date, and the date(s) of medical certification(s). The form should also indicate dates for correspondence to be sent prior to an employee's anticipated return-to-work date. For those employees who are scheduled to return to work in the next few weeks, or who have been on an extended open-ended leave of absence, this is the time to send correspondence inquiring as to the status of the leave and reminding the employees that they will need to submit a medical certification before returning to work.

•  When was the last time you updated your employee handbook and related personnel policies? California employment law is constantly evolving. Often times, an outdated policy will result in improper or illegal employment practices. Now is a great time to meet with counsel to make sure your company's policies are up to date and that your employment practices comply with state and federal laws.

•  Are you currently paying health insurance premiums for former employees? Many times, employers will decide, as part of a severance agreement, to keep a departing employee on the company's health plan for a certain period of time. However, as highlighted by a recent case out of South Carolina, employers may encounter significant liability when they agree to insure former employees after they leave the company. In that case, the employer continued to pay HMO premiums for a departing employee without informing the HMO that the employee was no longer working for the company. Because the HMO plan required eligible employees to work at least 30 hours per week, it argued that the employer — as opposed to the HMO — was responsible for the former employee's medical costs, which totaled almost $650,000. While the case dealt primarily with jurisdiction and ERISA preemption issues, it underscores the need for employers to carefully examine promises made to departing employees. To avoid liability, employers who wish to provide medical insurance as part of a severance agreement should instead facilitate proper COBRA notification and agree to reimburse the employee for his or her COBRA premiums for the agreed period of time.

For more information regarding these and other employment law matters, please contact an attorney in our Employment and Benefits Group.

 

Please note that the information contained in this newsletter is not intended to provide specific legal advice. You should consult with an attorney and not rely on any information contained herein regarding your specific situation.