1. law, govt and politics

HR
SPECIALIST
NORTH CAROLINA
Employment Law
Trusted compliance advice for NC employers
In The News ...
Discrimination claims
are up 15% in North Carolina
North Carolinians filed 15% more discrimination complaints in 2007 than they
did in 2006, according to the director of
the EEOC’s Charlotte office.
Reuben Daniels Jr., a North Carolina
native who heads up EEOC enforcement
in the state, said the office received nearly
1,900 complaints in 2007, up from just
1,650 the year before and 1,625 in 2005.
Daniels said while race discrimination
charges predominated, the fastest-growing kind of complaint involved national
origin discrimination. He attributed that
to the EEOC’s expanded outreach in the
Hispanic community. He also pointed out
that some complaints charged discrimination that favored Hispanics. Daniels
blamed the overall growth in complaints
on a poor job market and several mass
layoffs.
Beware legal risk of jotting
nasty notes in customers’ files
In a classic Seinfeld episode, Elaine’s
actions at her doctor’s office cause the
doctor to make a note on her chart that
says she is “difficult.” Do your employees
make similar editorial comments about
customers’ quirks in your internal files?
If so, be careful. A recent lawsuit
shows the potential legal dangers.
Continued on bottom of page 5
North Carolina Employment Law is published by HR Specialist and is edited
by William H. Sturges, a partner in the
employment and labor law practice of
Shumaker, Loop & Kendrick, LLP in
Charlotte. You can contact him at
wsturges@slk-law.com or at (704)
375-0057.
(800) 543-2055
•
October 2008
Special Issue
Editors: William H. Sturges, Esq. and Frederick M. Thurman Jr., Esq., Shumaker, Loop & Kendrick, LLP, Charlotte
Altering time sheets can mean personal liability
responsible for approving
Itoftimeyou’re
sheets or signing off on alterations
the hours reported by employees,
take note: It’s not just your organization
that risks a big fine and costly litigation.
Your personal assets are also at risk, as
a new court ruling shows.
That’s because the Fair Labor Standards Act allows employees to sue their
bosses, execs and HR professionals for
personal liability for altering pay records.
For that reason, make sure supervisors
don’t tolerate—or, worse, encourage—
off-the-clock work or altering of records.
Recent case: A group of “living
assistants” (hourly workers) at a home
for the disabled worked 48-hour
weekend shifts. They had to check on
each resident every two hours, around
the clock.
When they turned in their time
sheets, managers routinely deducted
eight hours because each living assistant supposedly got two four-hour
breaks. The CEO then signed off.
The problem: The employees couldn’t
leave the building during “breaks.”
Because the time wasn’t their own, the
court said it must be compensated.
The kicker: The court held the CEO
personally liable, ordering him and the
company to pay more than $500,000 to
the employees. (Chao v. Self-Pride,
No. 06-1203, 4th Cir.)
N.C. employees can win bigger lawsuit windfall
n North Carolina, it’s not just sexual
harassment lawsuits brought under
Ifederal
law that you have to worry about.
Your organization could face state tort
law claims, such as “intentional infliction of emotional distress” or “negligent
supervision,” if an employee’s behavior
is extreme enough and management
doesn’t take steps to stop it.
That can be a bigger problem than
the federal claim. Why? Monetary damages are capped under federal law (Title
VII). But state tort claims such as intentional infliction of emotional distress and
negligent supervision don’t have caps.
That’s all the more reason to establish
a strong anti-harassment policy, train
your employees regularly and thoroughly
investigate all complaints.
Recent case: EDS employee Caryn
Testa progressed up the corporate ladder
until, she said, a new male supervisor
propositioned her, left her suggestive
Continued on bottom of page 2
Free report How to solve
‘he said/she said’ disputes
For help in sorting out the truth in employees’ conflicting stories of harassment or name-calling, access our free
white paper, Investigating Harassment:
How to Determine Credibility, at www.
theHRSpecialist.com/whitepaper.
IN THIS ISSUE
Recent N.C. employment law cases and advice . . 1-3 Know when to pay hourly employees for travel time . . 7
Top 10 things to know about the N.C. Wage and Hour Act . . 6 The Mailbag: Your questions answered . . . . . . . . . . 8
www.theHRSpecialist.com/NC
National Institute of Business Management
Can you hand out stricter discipline
to bosses than rank-and-file staff?
LEGAL BRIEF
Pay correct, timely wages in N.C.
or risk double damages
North Carolina’s Wage and Hour Act
(NCWHA) says that if you fail to pay
workers what they’re due, they can sue
for those unpaid (or late) wages, plus a
penalty of double what was due. Your
only defense to double damages: proof
that you acted in good faith and reasonably—a tough task.
That’s why it’s vital for employers not
to fall behind on wage payments and to
be absolutely sure of the legality of any
deductions or withholdings from an employee’s wages.
Recent case: Richard Mason worked
in North Carolina under a written contract
that called for a $300,000 base salary and
a one-year-salary severance-pay package.
After being fired, Mason sued for the severance.
He also said the NCWHA applied and
demanded his payment be doubled.
The court agreed Mason was owed the
severance. It sent the double-damages
issue to trial, where the employer will
have to prove it acted in good faith when
it withheld the severance. (Mason v. ILS
Technology, No. 3:04-CV-139, WD NC)
ll employees are not equal in the eyes
of the courts.
You can (and should) hold supervisors to higher behavioral standards than
rank-and-file workers. You don’t have
to treat them the same if they break the
same rules.
As the following case shows, you can
fire supervisors who get into fights with
subordinates, even if you use softer
discipline on employees who get into
similar confrontations.
Recent case: Gerald Forrest, a
supervisor for Transit Management of
Charlotte, got into a physical altercation with one of his subordinates. The
employer then gave Forrest a choice:
resign or be fired.
Forrest, who is black, shot off a race
discrimination lawsuit. He argued that
two white employees weren’t fired after
they got into a similar argument and
physical confrontation.
The court dismissed his case, reasoning that it was quite a different matter
A
to have a supervisor pushing a subordinate around than two co-workers doing
the same thing.
Forrest also tried to argue that a white
supervisor wasn’t fired for a similar
pushing incident. But the white supervisor and Forrest did not work for the
same boss. And company rules gave disciplinary discretion to managers. The
court said those who work for different
supervisors aren’t a fair comparison.
(Forrest v. Transit Management of Charlotte, et al., No. 06-2245, 4th Cir.)
Free white paper What your
discipline policy should say
The best way to protect against wrongfuldismissal lawsuits is to establish a clear
progressive discipline policy. Access a
five-step policy model in our free white
paper, Designing a Progressive Discipline
Policy, at www.theHRSpecialist.com/
whitepaper.
You can require employees
to undergo medical evaluations
N.C. employees
(Cont. from page 1)
voice mails and got angry when she
refused his advances. She reported this
to HR but got no response.
After being transferred, Testa eventually quit following two years of being
ostracized by managers. She sued under
North Carolina tort law, alleging infliction of emotional distress and negligent
supervision. The court said she had
enough evidence to warrant a trial.
Under North Carolina law, persistent
sexual advances and remarks that cause
an emotional or mental condition diagnosed by a medical professional can be
extreme enough to be the infliction of
emotional distress. An employer’s failure to stop the harassment can make the
company liable. Plus, failing to rein in
the harasser can be deemed negligent
supervision. (Testa v. EDS, No. 3:07CV-165, WD NC)
2
North Carolina Employment Law • October 2008
ave you ever suspected that one of
your employees was not quite as
injured or ill as he says? Employers certainly can insist on a medical examination to determine the exact nature and
extent of workers’ medical problems—
and any appropriate work restrictions.
Just make certain you treat all injured
employees the same—don’t select some
for more extensive testing and let others
slide.
Recent case: Tommy Allen, who is
black, worked for BMW on the assembly
line and complained that he had carpal
tunnel syndrome. Allen’s doctor agreed
and placed him on medical restrictions
that prevented him from returning to
work at the plant.
BMW then sent Allen to another doctor, who could find no physical evidence
of carpal tunnel syndrome. The company
then scheduled a follow-up appointment
H
to see whether he could return to work,
and whether he needed any restrictions
at all. Allen missed the appointment.
BMW then warned Allen if he didn’t
keep a new appointment, he would
be fired. Allen showed, but refused
to be examined. Instead, he asked the
doctor to excuse him from work. When
BMW found out Allen had refused the
exam, it fired him.
Allen sued for race discrimination,
alleging a white employee with a similar
condition had not been fired for refusing to cooperate with medical evaluation procedures.
But the 4th Circuit Court of Appeals
rejected his claims. It said the white
co-worker had cooperated and did receive
a carpal tunnel diagnosis after his doctor
and the company’s selected doctor both
examined him. (Allen v. BMW Manufacturing, No. 07-1626, 4th Cir., 2007)
(800) 543-2055
FMLA
Start FMLA certification ASAP to avoid ‘leave stacking’
mployees eligible for FMLA leave
cannot stack their 12 weeks of unpaid
EFMLA
leave on top other paid leaves
if your organization chooses to run
FMLA leave concurrently with paid
leave (as it should).
But here’s the key point: You must
tell employees that you intend to run
FMLA leave concurrently with paid
leave. If you don’t, they can take the
FMLA leave later and extend their time
off and other FMLA job protections.
It’s your obligation to designate
leave as FMLA-qualifying whenever
you become aware of an FMLAqualifying condition. It’s not up to
your employees to pick when they
want FMLA time, even if they have
sick leave in the bank.
That’s why it’s important to start the
FMLA certification process as soon as
possible after you know the employee is
absent for a covered reason. Let them
USERRA
know the leave will run concurrently
with their paid sick leave (make sure
your FMLA policy allows for this).
Recent case: Willie Gladden has
diabetes, high blood pressure and other
“serious” conditions that would qualify
him for FMLA leave. He started taking paid leave on Jan. 4. His employer
didn’t request FMLA certification until
Feb. 11. The company then made his
FMLA leave retroactive to Jan. 4. It
fired Gladden about a month after his
12 weeks of FMLA leave would have
expired, counting back to Jan. 4.
Gladden sued, claiming his FMLA
leave truly didn’t start until he received
notice that his employer was applying
his FMLA eligibility. Using that later
receipt date, Gladden still would have
been on his job-protected FMLA leave
when he was fired.
The court sided with Gladden and
allowed the case to go trial. He has a
good chance to win if he can prove
that he wasn’t notified of his FMLA
leave until Feb. 11. (Gladden v. Winston
Salem State University, No. 1:05-CV01032, MD NC)
Final tip: Make sure to track your
requests for FMLA certification and let
the employee know when his or her
FMLA leave starts and ends. Also, track
receipt of FMLA correspondence, either
by requiring a signature or using a delivery service that can verify delivery time
and day. Then, count forward from that
day.
Free report How to Wipe Out
Fraud and Abuse Under FMLA
For an 11-step process to prevent fraud
by FMLA users, access our threepage primer, How to Wipe Out Fraud
and Abuse Under FMLA, at www.
theHRSpecialist.com/whitepaper.
Returning soldiers aren’t at-will employees … temporarily
f you plan to terminate an employee
who recently returned from military
Iduty,
you need a clear, business-based
reason for your action. You can’t fall
back on “at-will status” as a reason for
firing in such cases.
Reason: You may know that federal
law—the Uniformed Services Employment and Reemployment Rights Act,
or USERRA—provides job protection
to soldiers and reservists returning
from active duty or training. But you
may not realize that USERRA temporarily cancels the returning employee’s
at-will status.
That means if you want to terminate
a returning reservist or soldier, you
can do so only “for cause” and must
be able to point to a solid job-based
reason.
How long till at-will status returns?
USERRA says returning soldiers who
are gone more than 180 days receive
that extra protection for one year. Those
gone for 30 to 180 days get six months’
worth of extra protection.
www.theHRSpecialist.com/NC
Recent case: A computer tech at
Booz Allen Hamilton faced frequent
discipline for tardiness and violating
the company’s professionalism code.
She also served in the U.S. Naval
Reserve. The company fired her for
continued tardiness soon after she
returned from a military deployment.
She fired off a USERRA lawsuit
alleging the company didn’t have just
cause for its actions. But the appeals
court disagreed, saying she’d been
warned and that the firing reasons rose to
the level of “just cause.” (Francis v. Booz
Allen Hamilton, No. 05-1523, 4th Cir.)
Final tip: In USERRA cases, employers have the burden of proof and
must show their actions were “reasonable.” That means employees who file
USERRA lawsuits will likely have
their cases heard by a jury and not dismissed earlier in the process. That makes
each case potentially very expensive,
even if you ultimately win.
Establish ‘just cause’ for firings after military leave
USERRA prohibits you from terminating employees who are returning from active duty
or reservist leave unless:
• You can point to “just cause,” even if the employee previously was an at-will employee who could be fired for any reason. (That just-cause status continues for one
year if the person served on military duty for more than 180 days. The status extends six months for people on military leave between 30 and 180 days.)
• You can prove the soldier/employee knew (or was notified that) his or her actions
could constitute just cause for discharge. That means you have a duty to give warnings first.
• You can prove the termination was “reasonable.” That means the rules you accused
the employee of violating were reasonable workplace rules.
October 2008 • North Carolina Employment Law
3
National Roundup
Ethnic name isn’t a ‘head-start’ to bias claim
MISSOURI Mohammed Hussein, who was born in Fiji,
worked as a pilot during the Sept. 11 attacks. When flights
were grounded that day, Hussein went to his hotel’s bar and
allegedly hoisted a toast when the TV showed the collapsing
Twin Towers. The airline fired him for breaking the “no
drinking while in uniform” rule. He sued, arguing that his
name triggered the firing.
The court disagreed, saying it takes more than an ethnic
name to infer that an employer would fire someone based
on prejudice. Employees must show some level of discriminatory intent, action or motive by the employer. (EEOC v.
Trans States Airlines, 8th Cir.)
Advice: Employees whose names people associate with a
particular religion, origin or ethnicity can’t automatically
claim that their names led to discrimination. If that were the
case, anyone with such a name would have a leg up on other
employees in every discrimination case.
‘Excellent’ evaluation can still be retaliation
MARYLAND A government employee filed several race-bias
complaints that were settled. When he transferred to a new
position, he earned an “excellent” rating, plus a pay hike.
But he still filed another race-bias suit. Why? His rating
wasn’t high enough to also earn a bonus that year. The rating, he said, was retaliation for earlier lawsuits.
A federal court let his case go to trial, saying he should
have a chance to prove the rating was still retaliation.
(Webster v. Rumsfeld)
Advice: Always document evaluations and bonus decisions
with tangible job performance data. Avoid vague generalities such as “excellent employee” or “bad attitude.” Instead,
use measurements such as sales numbers, work quality, productivity and other valid business reasons for all decisions.
As this case shows, high praise can be deemed retaliation if
Compliance lessons from other states
the review is worse than a previous one and hurts the employee’s ability to earn a bonus or a promotion.
Pay for car-pooling time? Only if you require it
NEW MEXICO A group of gas rig employees always drove to
work together because the wells were in a remote location
with limited parking. During the drive, they often discussed
work issues. They filed a Fair Labor Standards Act lawsuit
demanding pay for that commute. But the court said no,
noting that all workers were free to drive their own cars and
spend their car-pooling time as they chose. So they weren’t
performing “work.” (Smith, et al., v. Aztec Well Services
Company, 10th Cir.)
Advice: Unless you mandate that employees travel
together, it’s unlikely that their travel time will be compensable work time. But if you insist that employees carpool or
make certain work-related stops along the way, you’ll pay.
Listen for clues that count as FMLA ‘notice’
ILLINOIS A janitor told his boss that he had visited the doctor due to a weak bladder. He then revealed that a prostate
test showed the need for a biopsy. He also told the boss he’d
commit suicide if he had prostate cancer. The company fired
the janitor for performance problems. He sued, citing interference with his right to take FMLA leave.
The company said he never pointed to a serious condition,
so it wasn’t obligated to let him know how to take FMLA
leave. The court disagreed, saying that although the janitor
didn’t look sick, he clearly let his boss know he was having
medical problems. (Burnett v. LFW, 7th Cir.)
Advice: Employees don’t have to say something as explicit
as “I need FMLA leave due to ‘X’ illness” to provide legitimate
notice of a need for FMLA leave. It’s the employer’s duty to
judge whether a person’s condition rises to the “serious” level.
Teach supervisors to pay attention to employees’ clues.
r 2008
Octobe
l Issue
Specia
STAFF
NA
TH CAROLI
OR
HR NEmployment Law
SPECIALIST
rs
employe
Publisher: Phillip Ash
Copy Editors: Nancy Baldino,
Cal Butera
Contributing Editor: Anniken Davenport, Esq., Production Editor: Dan Royer
HRNCeditor@NIBM.net
Production Assistant: Nancy Asman
Associate Publisher: Adam Goldstein
Editorial Director: Patrick DiDomenico
Senior Editor: John Wilcox, (703) 905-4506,
jwilcox@NIBM.net
Customer Service: (800) 543-2055,
customer@NIBM.net
HR Specialist: North Carolina Employment Law (ISSN 1937-8432) is published monthly by the
National Institute of Business Management Inc., 7600A Leesburg Pike, West Building, Suite 300,
Falls Church, VA 22043-2004, (800) 543-2055, www.NIBM.net. Annual subscription price: $299.
© 2008, National Institute of Business Management. All rights reserved. Duplication in any
form, including photocopying or electronic reproduction, without permission is strictly prohibited
and is subject to legal action.
For permission to photocopy or use material electronically from HR Specialist: North Carolina
Employment Law, please visit www.copyright.com or contact the Copyright Clearance Center Inc.,
222 Rosewood Dr., Danvers, MA. 01923, (978) 750-8400. Fax: (978) 646-8600.
This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is sold with the understanding that the publisher is not engaged in
rendering legal service. If you require legal advice, please seek the services of an attorney.
4
North Carolina Employment Law • October 2008
Frederick
M. Thurman
Shumake
r, Loop &
Kendrick
, LLP, Charlotte
H. Sturges,
on
to check
They hadhours, around
nd shifts.
two
weeke
t every
ing
time
each residen
approv
in their
ed
sible for on alterations
the clock. they turned
ly deduct
respon
off
When
f you’re
ers routine living assisor signingby employees,ation
manag
e each
time sheets reported
sheets,
na
becaus two four-hour
ion
your organiz on.
hours
off.
eight hours edly got
not just costly litigati
to the
Discriminat in North Caroli
signed couldn’t
and
15% filed 15% more dis- they take note: It’s
risk, as
tant suppos CEO then
ees
than
are up
a big fine are also at
. The : The employ s.”
ans
of
in 2007
breaks
that risks al assets
“break
North Carolinicomplaints to the director
The problem g during their own, the
tion
ng
Your person ruling shows. Labor Standcrimina
buildin
accordi office.
.
court
e the Fair to sue their
leave the the time wasn’t
nsated
a new
did in 2006, Charlotte
Carolina
becaus
yees
for
se
be compe
the CEO
That’s
emplo
ment
Becau
sionals
Jr., a North
must
the EEOC’s
held
it
.
enforce
allows HR profes
court
Daniels
and the
: The
court said
ards Act
and
pay records
Reuben heads up EEOC received nearly
g him
, execs
altering supervisors
just
who
office
orderin $500,000 to
The kicker
bosses liability for
native
up from 2005.
said the
sure
ally liable,more than
al
age—
in
ide,
, make
in the state, ints in 2007,
person
. person ny to pay
reason worse, encour
v. Self-Pr
and 1,625 ination
compla
that
records
before
For
1,900
compa
year
e—or, altering of
yees. (Chao
race discrim grow1,650 the
the emplo 3, 4th Cir.)
don’t tolerat work or
of “living
said while the fastest- l
-clock
group at a home
Daniels
nationa
inated,
No. 06-120
off-the t case: A
s)
predom
involved ed that
charges of complaint
Recen (hourly worker48-hour
the
He attribut
d
nts”
ing kind
ination. ed outreach in out
d worke
assista
pointed idisable
origin discrim expand
He also
EEOC’s
for the
hly
to the community. charged discrim
thoroug
c
ly and
Hispani complaints
cs. Danielsints
regular
ees
Hispani
ints.
that some favored
in compla
that
your employall compla employee Caryn
nation the overall growthseveral mass
gate
EDS
sexual
ate ladder
and
investi
corpor
t case:
blamed job market
not just
isor
Recen ssed up the
na, it’s
t under
to a poor
male superv tive
Caroli
brough
progre
about.
ts
new
Testa
n North
layoffs.
said, a left her sugges page 2
to worry
ment lawsui
buying
of
her,
you have face state tort
until, she
harass
money posters
itioned Continued on bottom
law that
federal
ation could ional inflic-ent propos
Don’t wasteforms and are alertas “intent or “neglig
s
Your organiz
, such
s”
or
workplace ent agenciedon’t need to
solve
behavi
nal distres
law claims
governm
they
How to
emotio an employee’s ement
required
Several
es
s owners
Free report
tion of
if
posters
manag
ision,”
said’ disput in emces.
ing busines forms and
superv e enough and
workpla
most
it.
said/she out the truth
e free
stop
‘he
harasspay for
than
to
of
ed in their often availabl
m
is extrem
in sorting
steps
our free
t take a bigger proble ary damto be display nts are
For help ’ conflicting stories
access
doesn’
docume
be
ment:
sites.
Monet
ployees name-calling,
Those
in “.gov”
ent web
That can claim. Why?
law (Title
ating Harass
at www.
federal
ment or
Investig
on governm Web sites endingent sites.
as intenpaper, ine Credibility, aper.
the federalcapped under
such
note:
governm
white
s and
Take
to sell
/whitep
Determ
ages are state tort claims nal distres
ies try
only official
How to pecialist.com
5
are the
compan
of page
VII). But
have caps. sh
private
on of emotio
theHRS
d on bottom
Some
inflicti
ision don’t to establi
Continue
tional
nt superv more reason
pubis
train
time . . 4
neglige all the
ment Law
E
nt policy,
s for travel . . . 8
That’s
ISSU
rassme
a Employ and is edited
employee
....
HIS
anti-ha
Carolin
list
the
to pay hourly s answered . . .
IN T
North
Specia a partner in
a strong
Know when
,
by HR
ent
e of
lished
Your question
. . 1-3
Managem
H. Sturges law practic
and advice . . 3 The Mailbag:
in
of Business
by William and labor
k, LLP
Institute
ent law cases
ourAct
ment
National
& Kendrichim at
employm
employ
rthCarolina WageandH
ker, Loop
Recent N.C.
Shuma You can contactor at (704)
stoknowabouttheNo
te.
m
Top10thing
Charlot
-law.co
es@slk
wsturg
C
57.
.com/N
375-00
ecialist
heHRSp
55 • www.t
(800) 543-20
Trusted
Editor: William H. Sturges, Esq.,
Frederick M. Thurman Jr., Esq., (704) 375-0057,
Shumaker, Loop & Kendrick, LLP, Charlotte
Jr., Esq.,
onal liability
mean pers
sheets can
Esq. and
complian
ce advice
for NC
s ...
In The Newclaims
Editors:
William
Altering time
I
NC employe
I
bigger
es can win
lawsuit win
dfall
✓ Yes, I want to begin my subscription to
❒
North Carolina Employment Law for only $179
per year (nearly 40% off the normal price).
Name_______________________________________
Company____________________________________
Address_____________________________________
City, State, ZIP_______________________________________________
Phone___________________E-mail_________________________
Payment Method:
Fax this coupon
❒ Credit card ❒ Visa/MC ❒ AMEX ❒ Discover to (703) 905-8040
Card #_____________________________________Exp. date______________
Signature_________________________________________________________
❒ Check/money order
Mail to: North Carolina Employment Law,
P.O. Box 9070, McLean, VA 22102-0070
❒ Bill me
Contact our Customer Service Center at (800) 543-2055
or customer@NIBM.net.
NC2007
(800) 543-2055
In The News …
Don’t waste money buying
workplace forms and posters
Several government agencies are alerting business owners they don’t need
to pay for most forms and posters required to be displayed in their workplaces. Those documents are often
available free on government web sites.
Take note: Web sites ending in “.gov”
are the only official government sites.
Some private companies try to sell
posters and government documents
using official-looking sites.
Advice: You can download most
required federal posters free at the U.S.
Department of Labor’s main poster page,
www.dol.gov/osbp/sbrefa/poster.
You can download mandatory North
Carolina posters, including the new
minimum wage poster, at www.
nclabor.com/posters/posters.htm.
Settlement in race case despite
employee’s ‘scandalous’ record
Boda Plumbing of Monroe has agreed
to pay $18,500 to Anthrone Cunningham
to settle an EEOC racial discrimination
lawsuit.
Before settling, Boda Plumbing asked
the court to consider that Cunningham
has “an extensive criminal record
including multiple convictions related
to fraud in employment matters.”
U.S. District Judge Frank Whitney
Notes in customers’ files
Continued from page 1
The case: A drugstore customer
asked the pharmacist not to mention the
types of drugs she was picking up at
the counter. The pharmacist made note
of her request in the internal computer
system, but added in his notes:
“CrAzY!!” and “She’s really a psycho!!”
When a friend picked up the woman’s
prescription, the printout receipt accidentally included these comments. The
woman sued for libel, noting the comments were available to every pharmacist in the drugstore’s chain.
Advice: Use this example to remind
employees to avoid writing down their
personal comments about customers.
www.theHRSpecialist.com/NC
ruled that Cunningham’s criminal record
was “certainly scandalous, but … also
irrelevant to the question of whether
he suffered racially discriminatory
behavior.”
As part of the settlement, Boda
agreed to provide a positive reference
letter to Cunningham and to adopt a
formal anti-discrimination policy.
4 supervisors arrested
after ICE raids S.C. poultry plant
Federal Immigration and Customs Enforcement (ICE) agents arrested four
supervisors at the House of Raeford
Farms poultry plant in Greenville, S.C.
Assistant U.S. Attorney Kevin
McDonald said agents found apparently false information on employment
records at the plant. Former supervisors
at the Raeford, N.C.-based company
said managers knew they were employing illegal immigrants.
To avoid safety violations,
know N.C.’s top targets
The North Carolina Department of Labor’s
Occupational Safety and Health Division
found serious violations in about 5,000
workplaces last year. Here are the 10
most frequently cited serious violations
in private-sector general industry, followed by the specific OSHA standard:
1. Machine guarding, 1910.212(a)(1)
2. General duty clause (Employers
shall provide a workplace free from recognized hazards), NC General Statute
95-129(1)
3. Abrasive wheel machine guarding
exposure adjustments, 1910.215(b)(9)
4. Continuous grounding path,
1910.304(f)(4)
5. Eye and body drenching or flushing facilities, 1910.151(c)
6. Abrasive wheel machinery work
rests, 1910.215(a)(4)
New online tool helps employers
(and employees) calculate OT pay
7. Eye and face protection,
1910.133(a)(1)
The U.S. Department of Labor recently
debuted a useful new tool that employees—and you—can use to calculate an employee’s overtime pay. The
web-based Fair Labor Standards Act
Overtime Calculator Advisor (www.dol.
gov/elaws/otcalculator.htm) asks a set
of questions about pay periods, hours
worked, hourly pay scales and additional compensation.
Advice: Employees will be using this
tool to check whether you pay them
correctly, so you should get to it first.
8. Points of operation guarding,
1910.212(a)(3)(ii)
N.C. employers named to
Fortune’s ‘best to work for’ list
Fortune magazine recently published
its 2008 list of the “100 Best Companies
to Work For,” and five North Carolina
employers made the list. Cary-based
SAS Institute was ranked 29th, in part
for its outstanding on-site child care
program. Kimley-Horn & Associates,
also headquartered in Cary, was ranked
38th and was noted for the freedom it
gives to new employees in carving out
their careers. Cisco Systems and Network
Appliance, both in Research Triangle
9. Protection from open-sided floors,
platforms and runways, 1910.23(c)(1)
10. Unused openings in electrical
boxes or fittings, 1910.305(b)(1)
Park, also made the top 100 list, along
with Alston & Bird of Charlotte.
Bash away!
The North Carolina Office of State Personnel has removed from its web site
an online copy of its personnel handbook, which included a ban on anti-gay
discrimination.
North Carolina Representative and
Republican House Minority Leader Paul
Stam questioned what the ban was doing
there when North Carolina law does not
prohibit discrimination based on sexual
orientation or gender identity.
The State Personnel Commission
sought to add the prohibition to the
handbook in January, but the state regulatory panel refused, saying lawmakers
needed to approve the ban before the
state changed its policies.
October 2008 • North Carolina Employment Law
5
In the Spotlight
by Frederick M. Thurman Jr., Esq., Shumaker, Loop & Kendrick, LLP, Charlotte
Top 10 things to know about the North Carolina Wage and Hour Act
of wages and
M
7 Advances
employee loans.
5 Withholdings.
any employers are familiar with
the basic requirements of federal
wage-and-hour law—the minimum
wage, how to calculate overtime and
who must receive it. But the North
Carolina Wage and Hour Act is often a
mystery to employers and employees
alike.
Here are the top 10 things you should
know about the act.
1
Where to find the act. The act is
codified in the General Statutes, beginning with section 95-25.1 and continuing through section 95-25.25. The
act and the North Carolina Department
of Labor’s interpretive regulations are
both available online at www.nclabor.
com/wh/Wage_Hour_Act_Packet.pdf.
2 What is the minimum wage?
North Carolina’s minimum wage
isn’t simply a regurgitation of the federal minimum. Instead, the act requires
paying whichever is higher: $6.15 per
hour or the federal minimum wage,
which rose to $6.55 per hour on July
24, 2008.
3
Notifications regarding wages.
At the time of hire, employers must
notify newly hired employees—either
orally or in writing—of promised wages
and scheduled paydays. Employment
practices or policies regarding promised wages must be provided in writing
or in a posted notice. Employees must
receive at least 24 hours’ advance notice, in writing or in a posted notice, of
any reduction in promised wages. For
each pay period, employees must receive a written statement that itemizes
all deductions made from that period’s
paycheck.
4 Method of payment.
An employer
may select any legal form of payment, as long as payment is made on
the designated payday. Acceptable forms
of payment include cash, money order,
negotiable checks, direct deposit to an
institution whose deposits are insured
by the federal government or direct
deposit to an institution the employee
6
North Carolina Employment Law • October 2008
selects. An employee may be required
to accept payment by direct deposit.
Handling withholdings, particularly those not required
by law, can get complicated. Pay careful attention to both the statutory language (N.C. Gen. Stat. § 95-25.8) and
to the interpretive regulations (13 N.C.
Admin. Code § 12.0305).
Basically, an employer may withhold a portion of an employee’s wages
(1) when required or empowered to do
so by state or federal law or (2) when
the employee has provided a written
authorization, signed on or before the
payday for the pay period from which
the deduction is to be made, indicating
the reason for the deduction.
An authorization may be specific
(when the amount of the deduction is
known in advance) or blanket (when
the amount of the deduction is not
known in advance).
“Terminated employees
must be paid all wages
due on or before
the next regular payday
following termination.”
of withholding
6 Withdrawal
authorization.
Employees must be
allowed at least three calendar days
prior to withholding to withdraw specific authorizations, if such deductions are
for their convenience. Those deductions include withholding for savings
plans, credit union installments, savings bonds, club dues, uniform rental
and cleaning, parking and charitable
contributions. Before an employer may
withhold pursuant to a blanket authorization, the employee must be given
notice of the amount of the proposed
withholding and allowed at least three
calendar days from the date of notice
to withdraw the blanket authorization.
Advances of
wages to an employee or a third party
at the employee’s request are considered prepayment. A dated receipt for
the advanced wages (signed by the
employee) is sufficient to show that the
advance was requested and made, and
no withholding authorizations are
required when the advance is later
withheld from a paycheck. In the
absence of an executed loan document,
the principal of an employee loan is
considered an advance of wages. However, withholdings related to interest
and other related loan charges require
written authorization.
8 Disputed wages.
When the
amount of wages is in dispute, the
employer must nevertheless pay the
amount the employer acknowledges is
due. An employee’s acceptance of a
partial wage payment does not release
any claim for the balance of the wages,
and the employer may not demand
such a release.
9 Last paycheck.
A terminated employee must be paid all wages due
on or before the next regular payday
following termination. However, commissions and bonuses due must be paid
on the first regular payday after they
become calculable. A final paycheck
may be delivered either through regular
pay channels or by mail if the employee
requests it. If an employee requests
sending the paycheck by mail, the employer may require notarized or witnessed consent. Regular pay channels
or mail are the only two allowable delivery options. A friend picking up the
check is not acceptable.
can help if an employer
10 Who
is confused?
Of course, your
attorney is always a good resource when
addressing these issues. Also, the state
Department of Labor offers some useful basic resources on its web site.
Wage and Hour Bureau information
can be found at www.nclabor.com/
wh/wh.htm.
(800) 543-2055
Nuts & Bolts
Rules of the road: Know when to pay hourly employees for travel time
don’t need to pay nonexempt emYandouployees
for their commuting time to
from the workplace. That’s simple.
But what if such employees occasionally travel off-site (or even overnight)
for work reasons?
When to pay nonexempt workers
for travel locally or on overnight trips
baffles many employers. Mistakes can
spark anything from mild complaints
to class-action lawsuits—a black eye
for you either way.
The Fair Labor Standards Act sets
rules on compensating hourly employees for travel time. The best way
to decipher them is by using a case
study.
Home-to-work travel
Let’s say Robert Smith is a nonexempt
employee who sometimes travels for
work. It’s clear that you don’t need to
pay for his commute to work; the Portalto-Portal Act of 1947 covers that.
But suppose you ask Robert to pick
up some company documents on his
way in to work. In that case, you’d
pay him from the time he picks up the
documents. The law says that if the
travel is for the company’s benefit, it’s
compensable. If it’s purely commuting,
it’s not.
Working at different locations
The U.S. Department of Labor says
travel time spent by employees as part
of their principal activity, such as travel
among job sites during the workday,
is considered “work time” and must
be paid.
For example, say Robert reports to
headquarters before making his rounds
to visit other company locations. In
that case, the commute to headquarters
is commuting time, but all travel from
headquarters until his last stop is paid
time.
Time from the last stop to home is
unpaid commuting time. Any travel
that is a regular part of the employee’s
job is paid time.
Out-of-town day trips
Generally, time spent traveling to and
returning from the other city is work
time. You can exclude the employee’s
regular commuting time and meal
breaks.
For example, say Robert drives to
the airport and takes a 6 a.m. flight
to a seminar in Chicago. He arrives at
8:30 a.m. and takes a cab to the seminar.
The seminar runs from 9 to 5, with
an hour lunch break. After the seminar,
he chats with friends for an hour
before taking a cab back to the airport. He flies back to his base city and
drives home.
Which hours count as “compensable” time?
You don’t have to pay Robert for
his trip to the airport; that’s commuting time. But you do have to pay him
from the time he arrives at the airport
through his flight, cab ride and during
the Chicago seminar. (You don’t have
to pay for his lunch period.)
Do you pay for Robert’s chatting
time with friends? If there are no other
flights home until later, yes. But if
Robert simply opts for a later flight
to swap stories with his buddies, the
answer is no.
The cab back to the Chicago airport
and the flight home are paid time. The
drive home from the airport is considered unpaid commuting time.
Final tip: Make sure nonexempt
employees understand when they will
be paid before they travel. Spell out
the rules clearly in your employee
policies.
Next Nuts & Bolts: Interview questions
Coming soon:
The FMLA
Know the FLSA rules for rest periods, on-call time, training and more
In addition to travel time, employers face
many other questions about what counts
as “compensable time” under the federal
Fair Labor Standards Act (FLSA). Here are
answers to some of the stickier issues:
ON-CALL TIME. Employees required to
remain on call on the employer’s premises
are considered working while on call.
Employees required to remain on call at
home (or who can leave a message where
they can be reached) are considered not
working (in most cases) while on call.
WAITING TIME. Employees are paid
for waiting time when they are “engaged to
wait.” Employees fall under that definition
if they’re required to be at a work site while
waiting to perform work.
REST AND MEAL PERIODS. You typically must pay employees for short rest
periods, usually 20 minutes or less. You
generally don’t need to pay employees for
bona fide meal periods (typically 30 minutes or more).
Employees must be completely relieved
from duty during unpaid breaks and meal
periods. Example: If you require your assistant to eat lunch at her desk in case a call
comes in, she must be paid because she
hasn’t been fully relieved of her duties.
SLEEPING TIME. Employees required to
be on duty for less than 24 hours are considered “working,” even if they’re permitted
to sleep. Employees required to be on duty
for 24 hours or more may agree with their
employer to exclude from hours worked
any scheduled sleeping periods of eight
hours or less.
TRAINING PROGRAMS AND MEETINGS. You don’t have to pay employees for
time spent at training programs, lectures
or similar activities as long as they meet
the following four criteria: (1) The event
is outside normal hours. (2) It’s voluntary.
(3) It’s not job-related. (4) No work is performed during that time.
Source: Adapted from U.S. Department of Labor fact sheet No. 22, www.dol.gov/esa/regs/compliance/whd/whdfs22.htm.
www.theHRSpecialist.com/NC
October 2008 • North Carolina Employment Law
7
by Frederick M. Thurman Jr., Esq., Shumaker, Loop & Kendrick, LLP, Charlotte
Is there any requirement to offer vacation benefits?
Q
• Provides continuation coverage under a group health insurance plan for up to 18 months
• Requires that employees be allowed no fewer than 60 days
to elect continuation coverage
• Allows for the charging of up to 102% of premiums to
electing participants
The North Carolina act, however, does not include dental,
vision care, prescription drug benefits “or any other benefits
provided under the group policy in addition to its hospital,
surgical, or major medical benefits.”
Must I offer vacation time to my employees? If I do,
must I pay terminated employees for their unused
vacation time?
No and yes (but maybe not). The North Carolina Wage and
Hour Act expressly provides, “No employer is required
to provide vacation pay plans for employees.” When a vacation benefit is provided, terminated employees are generally
entitled to be paid any accrued but unused vacation time. In
order for the vacation time to be forfeited upon termination,
employees must be notified in advance of the forfeiture policy, either in writing or through posted notices.
What does ‘right to work’ mean in North Carolina?
Injured while playing on company team
Q
A
Q
If an employee is injured at a company-sponsored
softball game, where participation is purely voluntary,
is the injury compensable under workers’ compensation?
Probably not. The North Carolina Supreme Court recently
weighed in on this subject and found an injury resulting
from a go-kart accident during an employer-sponsored “Fun
Day” was noncompensable.
For an injury to be compensable under North Carolina’s
Workers’ Compensation Act, it must be an injury “arising out
of and in the course of the employment.” Citing older authority, the court wrote: “Where, as a matter of good will, an
employer at his own expense provides an occasion for recreation or an outing for his employees and invites them to participate, but does not require them to do so, and an employee
is injured while engaged in the activities incident thereto,
such injury does not arise out of the employment.”
A
Must small businesses provide
COBRA-like continuation health coverage?
Q
My company has fewer than 20 employees. Must my
group health insurance policy still provide COBRAlike continuation coverage to terminated employees?
Yes, although COBRA does not apply. The North Carolina Group Health Insurance Continuation and Conversion
Privileges Act, which has provisions similar to the federal
COBRA Act, does include small employers. Like COBRA, it:
A
FYI
Workers feel underpaid? They may be ‘overtitled’
Nearly 50% of people believe that they are underpaid in
their current jobs, according to a new Salary.com survey.
But an analysis of those employees’ jobs and wages
reveals that less than 22% actually were paid below the
fair market value for their jobs. “Overtitling” is the biggest factor. “We found that 30% of respondents were
likely overtitled,” says Bill Coleman, senior VP of compensation at Salary.com.
8
North Carolina Employment Law • October 2008
I always hear North Carolina is a “right to work”
state. Does that mean there are limitations on how or
why I may be fired? Does that have anything to do with
“employment at will?”
Although they sound similar, “right to work” and “employment at will” are different concepts that do not contradict each other. “Right to work” generally means that
membership in a recognized union may not be a condition
of hire or continued employment. Thus, if your workplace is
unionized in North Carolina, you cannot be required to join
the union.
“Employment at will” is a common law concept that provides—absent a written employment agreement or collectivebargaining agreement—that either you or your employer may
terminate the employment relationship at will, at any time,
with or without notice and for any reason, as long as the reason is not made unlawful by statute (such as the federal Civil
Rights Act) or other laws.
A
Hiring for the nonsmoking workplace
Q
Can I refuse to hire a smoker?
A
Probably not. For private employers with three or more
regular employees, it is unlawful in North Carolina to
discriminate against an employee or prospective employee
because he engages in or has engaged in “the lawful use of
lawful products if the activity occurs off the premises of the
employer during nonworking hours and does not adversely
affect the employee’s job performance or the person’s ability to properly fulfill the responsibilities of the position in
question or the safety of other employees.”
Frederick M. Thurman Jr. practices employment
law at the Charlotte office of Shumaker, Loop &
Kendrick, LLP. He is the current Chair of the
Labor and Employment Law Section of the North
Carolina Bar Association and has more than 12
years’ experience counseling employers on compliance and policies, representing employers in litigation and
speaking on employment law topics. You can contact him at
(704) 375-0057 or at fthurman@slk-law.com.
To submit your question to North Carolina Employment Law,
e-mail it to HRNCeditor@NIBM.net or fax it to (703) 905-8042.
(800) 543-2055
HRNC-SIS-003
The Mailbag
HR
SPECIALIST
CHARTER DISCOUNT CERTIFICATE
NORTH CAROLINA
Employment Law
To receive your Charter Discount Price,
use this customer code:
Cover Price
You Save
Charter Discount Price
$299
$120
$179
DP6397
Name_______________________________________________________
Title/Company________________________________________________
■
Order online at www.theHRSpecialist.com/NC and
receive your Online Bonus instantly!
Address_____________________________________________________
City________________________________________________________
OR:
■ Check enclosed (payable to HR Specialist: North Carolina)
■ Bill me later
■ Please charge my: ■ VISA ■ MasterCard ■ AMEX ■ Discover
State____________________________ ZIP________________________
Phone______________________________________________________
E-mail______________________________________________________
Card No.
(We will never sell your e-mail to other companies)
Exp. Date
All rates and guarantees apply to a 12-issue subscription.
Your subscription may be tax deductible if used for business purposes.
Signature
DETACH UPPER PORTION AND RETURN
BENEFITS
PRICE
12 Issues of North Carolina Employment Law
$179
Each monthly issue is packed with critical survival strategies:
• Business-focused briefings on state and local HR laws
Included
• Practical guidance on lawsuit-proofing your policies, pay and practices
Included
• Early-warning alerts on new pitfalls and legal trends
• Plain-English guidance on complicated federal employment laws
Included
Included
Web Site
Included
Access to free reports and in-depth advice at our new web site:
www.theHRSpecialist.com
Weekly E-Letter
Included
Latest news and best practices from the HR world when you sign up for
our free HR Weekly e-letter
HR Legal Alerts
Included
E-mail alerts when immediate HR action is required
Online Bonus
North Carolina’s 10 Most Critical Employment Laws
It’s a $49.95 value, yours FREE.
Our exclusive Special Report makes North Carolina law work for you—
not against you. It’s FREE with your paid subscription. Download today
when you order online at www.theHRSpecialist.com/NC
Included
100% MONEY-BACK GUARANTEE
NORTH CAROLINA EMPLOYMENT LAW guarantees that you’ll have new control over your business and new power to defuse
National Institute of Business Management
7600A Leesburg Pike • West Building, Suite 300 • Falls Church, VA 22043-2004
(800) 543-2055 • Fax (703) 905-8040 • www.theHRSpecialist.com/NC
HRNC-ODF-SIS
legal land mines before they explode into million-dollar lawsuits. If you are ever dissatisfied with the real-world value of this
service, we’ll refund everything you paid. Your issues and your FREE SPECIAL REPORT are yours to keep, no matter what.
— Phillip A. Ash, Publisher