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What Are The Top 5 Commonly Missed Records In Employee Files?
For human resources professionals, there are many things you simply have to get right in order to protect your organization, and recordkeeping is one of them. Employee files, also known as personnel files, are a key component of the recordkeeping process for any organization. They provide a written history of each employee’s tenure with an organization including important information such as pay increases, promotions, disciplinary action, etc. Additionally, there are several documents that are required to maintain HR compliance at the federal level in the United States. For example, check out the U.S. Department of Labor’s reference for federally required new employee documentation.
These documents and comprehensive files can be maintained physically on paper or digitally ideally using a defined data storage strategy supported by an organization’s IT department. Many employers utilize the U.S. Department of Labor’s digital data storage guidelines when developing a digital data storage strategy.
5 Most Commonly Missed Records in Employee Files
Out of all the documents required to be maintained in employee files, below are the five most commonly missed. Do you have these records in your employee files?
1. Pre-Hire Documents
Pre-hire documents include the employee’s resume and application, the signed offer letter or employment contract, a signed handbook acknowledgment, tax withholding forms, a signed code of conduct, and emergency contact information.
2. Wage and Salary Information
Wage and salary information include any increases given (e.g., merit, cost-of-living adjustment (COLA), or promotion-related increases), bonus information, and significant changes to an employee’s position relative to the Fair Labor Standards Act (FLSA) exemption status.
3. Performance Reviews
The performance review documentation that should be stored within an employee file may be a 30 or 90-day review or a signed copy of the employee’s quarterly/semi-annual/annual review. Follow your organization’s timeline and policies for performance reviews and ensure these are added to all employee files.
4. Disciplinary Action
Disciplinary action forms and performance improvement plans (PIPs) are key to maintaining a comprehensive and documented narrative for the employee’s performance. If for any reason an employee is terminated, it can provide information with the potential to protect an organization from litigation. Learn more about at-will employment termination risks and how to reduce your liability.
5. Training and Development
Training and Development documentation can include training plans or checklists, verification of federal or state-required training, as well as the employee’s attained certifications, degrees, and licenses.
How to Properly Store Employee Records
It’s important to understand and follow proper employee record storage procedures. For example, did you know it is recommended that the I-9 Form be stored separately from the employee files? According to the U.S. Citizenship and Immigration Services, I-9 Forms should be stored in a way that best fits your organization, yet is easily available for USCIS inspection. As a result, best practice leads to storing I-9s separately from other files.
Although there is some leeway with employee record storage, best practice is to maintain the following five separate sets of files:
- Employee/Personnel
- Medical
- Confidential – Non-Medical
- Form I-9
- Candidates Not Hired
For more on what should be included in each of these files, read our article explaining how to organize employee records and remain compliant.
Regardless of the storage process you choose, be sure to audit your employee files to ensure compliance. We recommend creating an employee file document list for new hires and ongoing employment by reviewing federal and state requirements, record retention guidelines (which can vary for federal contractors), benefit documentation, and organization-specific documents. This will provide a starting point to validate that your organization’s current files aren’t missing any key forms.
Thank you to Mary Mitchell, MBA, SPHR, SHRM-SCP, CHRS, Senior HR Business Advisor for contributing to this Emerging Issues in HR.
Keep the guesswork out of how to store and maintain your employee files. Strategic HR has a handy Recordkeeping Desktop Reference that outlines the employee documents you should have on file and how long to keep them. Learn more about our HR Compliance & Recordkeeping Services or Contact Us for help!
Marijuana in the Workplace
HR Question:
Now that Issue 2, legalizing recreational marijuana in Ohio, has passed, what does it mean for my employment policies? Does this mean my drug-free workplace policies are no longer valid? How should I navigate marijuana in the workplace?
HR Answer:
Medical marijuana was legalized in Ohio in September 2016, and retail sales began in January 2019, when the first four licensed dispensaries opened for business. On December 7, 2023, Issue 2, decriminalizing non-medical marijuana use, will go into effect – opening the door for adults 21 and over to legally possess, purchase, and share up to 2.5 ounces of cannabis. As reported by WCPO, the law isn’t without its limits, however, as it prohibits:
- Using marijuana in public
- Operating a vehicle while under the influence of marijuana
- Being a passenger in a vehicle and using marijuana at the same time
Additionally, landlords and employers can still prohibit marijuana use based on their policies. So, what do employers need to consider as they navigate this new law?
Considerations for Recreational Marijuana in the Workplace
First and foremost, it’s up to the organization to decide if the use of the drug will be tolerated or affect current drug testing policies. The employer would potentially need to reevaluate, for example, whether or not there is an acceptable amount of marijuana that could be found in someone’s drug test, and how that amount may impact the decision of whether or not to terminate an employee (or not to hire). Additionally, it’s necessary to consider how to ensure current employees aren’t using marijuana at work or before they come in.
Depending on how your organization wants to proceed, there are a few paths to take:
- You could choose to eliminate confusion and maintain (or start) a zero-tolerance drug-free workplace. The drawback here is that you could have a harder time finding applicants for job openings. If that’s the case, you could remove or modify any existing testing policies to eliminate cannabis, much like many employers don’t test for alcohol.
- If you open up your organization’s policies to permit legal marijuana use, one option is to shift the focus from testing what’s in someone’s system, which may linger for weeks after the fact, and instead come up with a new standard aimed at determining whether an employee is actually impaired. Some employers have begun to implement alertness assessments such as AlertMeter, which allows employers to test someone’s cognitive function that day. Of course, this would require training your leaders and managers and communicating expectations across the board to all employees.
Considerations for Medical Marijuana in the Workplace
What about medical marijuana? In outlining employers’ rights, Ohio’s Revised Code 3796.28 states that an employee has no specific protections, which could be interpreted that you do not have to accommodate an employee’s need to use the substance. An employer has the right to not hire an employee based on medical marijuana use, possession, or distribution. At this time, the law does not allow a cause of action against an employer if an employee believes he or she was discriminated against due to medical marijuana use. An employer is allowed to have a zero-tolerance drug-free policy in place, with or without special accommodations for those who use medical marijuana.
The Bottom Line
No, this does not mean your drug-free workplace policies are no longer valid. But what this does mean is that this is a key opportunity to review any drug-related policies to make sure they are up-to-date, accurate, and reflect the needs of your organization. And, as always, consult your legal counsel to ensure that you’re avoiding discriminatory actions and complying with federal, state, and local laws. If you make any changes, be sure to distribute and explain the policy and have employees sign off on the acknowledgment.
Thank you to Alisa Fedders, MA, SPHR, and Samantha Kelly for contributing to this edition of our HR Question of the Week.
Do you struggle with doing what is right for your company and right for your employees when it comes to creating a Drug-Free Workplace? Sometimes the “right” solution isn’t always easily identified. Strategic HR understands your dilemma of being between a rock and a hard place. We can provide you with best practices, policies, and training when it comes to creating a Drug-Free Workplace or any needs concerning the health and well-being of your workforce. Please visit our Health, Safety, & Security page for more information on any of these services.
What Are the Latest ACA Reporting Changes and Deadlines?
HR Question:
I know it’s almost time for the next ACA reporting period. What changes do I need to be aware of for the 2023 tax year?
HR Answer:
You’re right – the ACA (or Affordable Care Act) reporting season is right around the corner! While there are no major changes to the ACA forms and codes for the 2023 tax year, there are some items or updates to be aware of as we head into 2023. If you’re unsure whether you need to report, check out our article on ACA reporting requirements.
Paper Filing Deadlines
The employee distribution deadline for the 1095-C forms is March 4, 2024. In previous years, employers could file their 1095-C and 1094-C forms in paper format to the IRS by mail as long as they did not exceed 250 forms in total. Moving forward to this coming reporting year, the IRS is requiring all employers with more than 10 forms to report through electronic methods. This could be either directly through the IRS’s system or through a third-party provider set up to send to the IRS’s system (such as many HRIS providers). Any corrected forms would also be required to be submitted electronically. If there are less than 10 forms, the paper filing deadline will be on February 28, 2024.
If the employer’s coverage is not affordable under one of the safe harbors and a full-time employee is approved for a premium tax credit for marketplace coverage, the employer may be subject to an employer shared responsibility payment under Section 4980H(a) or Section 4980H(b).
E-Filing Deadlines
The deadline for e-Filing 1095-C and 1094-C forms to the IRS is April 1, 2024 (since March 31st falls on a Sunday). Keep in mind that there could be additional ACA state reporting requirements for your organization with differing deadlines. The states to pay special attention to are California, New Jersey, Massachusetts, Rhode Island, and the District of Columbia.
Be aware of the full list of form types that are required to be sent to the IRS electronically based on the total number of forms submitted.
• Forms 1042–S
• 1094-series
• 1095–B and 1095–C
• 1097-BTC
• 1098, 1098-C, 1098–E, 1098-Q, and 1098–T
• All 1099 series
• Forms 3921 and 3922
• 5498-series
• 8027
• W–2G
• Forms W–2 (Wage and Tax Statement)
• U.S. Territory Forms 499R–2/W–2PR (Withholding Statement (Puerto Rico)
• U.S. Territory Form W–2VI (Virgin Islands Wage and Tax Statement)
There have always been fines attached to late filing with all of these forms. However, the amount has increased to $290 per W-2 from $250 (even if they are mailed in paper format and should have been sent electronically).
Updated Affordability Percentage and Penalties
For the 2023 tax year, the affordability percentage – the maximum amount of an employee’s pay that can be spent on “Employee Only” coverage in order to be considered “affordable” by ACA – decreased from 9.61% to 9.12%. Although there are no major changes to the ACA forms and codes for the 2023 tax year, the IRS has updated the ACA affordability percentage to 9.12%.
Additionally, the IRS has declared that the penalty under Section 4980H(a) will increase to $2,880 or $240 per month, and the penalty under Section 4980H(b) will increase to $4,320 or $360 per month. With these increasing costs associated with noncompliance, it’s important for employers to carefully assess their group health plan offerings to make sure they’re aligning with ACA best practices. It is also essential to ensure that these plans provide comprehensive coverage to full-time employees, including at least one affordable self-only option that meets minimum value benefit requirements.
Thank you to Mary Mitchell, MBA, SPHR, SHRM-SCP, Certified Healthcare Reform Specialist, for contributing to this week’s HR Question of the Week.
Whether you’re new or experienced when it comes to ACA reporting, it can be a confusing process. Clark Schaefer Strategic HR are here to help! If you are unsure if your company should be reporting for ACA, we can help assess your employee calculations to determine if it is needed. We also have the ability to check your employee data for compliance and electronically file your company’s ACA forms with the IRS on your behalf. Contact us for your ACA reporting needs.
How To Handle Drug and Alcohol Abuse in the Workplace
HR Question:
I am part of our HR team, and a supervisor approached me because they suspect one of their employees may be drunk or on some type of drug that is inhibiting their performance. We have a policy prohibiting workplace drug and alcohol abuse that allows us to test if we have reasonable suspicion. Is that enough? What should I do?
HR Answer:
First, we recommend that you talk with the supervisor to understand and specifically document the employee’s behavior that’s causing concern. Is it behavior that is not typical (i.e., appearance, odor, etc.)? It is ideal to have two parties observe and document the behaviors to independently confirm reasonable suspicion of drug and alcohol abuse. However, it is not required if you do not have the ability to do this. If you’re able to have two observers, one party is often the supervisor and the other party is typically someone in management or HR.
If the employee has a safety-sensitive job or appears to present a safety concern for others, the manager and/or HR professional may need to remove the employee immediately from their work area. In this case, escort the employee to wait in a safe and private location (i.e., a conference room, an office, etc.) to discuss the concerns and observations.
How to Communicate the Concern
After documenting the employee’s behaviors, it is important to promptly discuss this information with the employee. It’s helpful to approach this type of conversation from a position of care and concern for the employee versus an accusatory approach. The observations should be shared in a fact-based manner. It is not necessary to specify the drug or alcohol you suspect they may have used. Instead, focus on the concern that they appear to be impaired in some way.
The company’s workplace drug and alcohol abuse policy should be reviewed with the employee, and it should be explained that they are being required to be tested as outlined in the policy. It is also important to explain the consequences if they refuse to comply. (And this should be addressed in your policy as well.) If you have any doubt about your policy’s ability to protect your organization or your employees, we recommend having your attorney review it.
Drug and Alcohol Testing
Given the nature of the situation, the employee should not be allowed to drive themselves to the testing facility. Rather, the employee will need to be transported to the drug/alcohol screening facility. It is best practice to have someone in management or HR alert your testing facility of the situation and to transport the employee. Keep in mind, if you use a facility that does not provide instant results, you will also need to transport the employee to their home or ask them to identify someone who can pick them up and take them home.
It is best practice to not have the employee return to work until the test results are available. If you’re wondering how to handle the employee’s pay during this time, you are not obligated to pay an hourly (non-exempt) employee for time missed from work while waiting on the test results. This may not be the case for salary (exempt) employees according to the FLSA.
Negative Test Results
If the test results are negative, the manager or HR professional should contact the employee and advise them they can return to work on their next scheduled day. It’s also best practice to pay employees for time missed from work while waiting on the results.
Positive Test Results
If the test results are positive, you should follow your company’s policy and procedure. This may involve a last-chance agreement, treatment and/or Employee Assistance Program (EAP), or immediate termination if the company has a no-tolerance policy.
Whether the result is positive or negative, the situation must be handled respectfully and professionally. Keep in mind this is an uncomfortable situation for everyone and should be treated with the utmost discretion for all parties involved.
Special thanks to Marie Frey, SHRM-CP, HR Business Advisor for contributing to this HR Question of the Week.
Handling drug and alcohol use in the workplace can be stressful…especially if you don’t have the right policies, procedures, or training. Strategic HR can provide you with best practices, policies, and training when it comes to creating a Drug-Free Workplace or providing an overall safe and healthy work environment. Visit our Health, Safety & Security or Training & Development pages to learn more.
Can I Fire Someone During Their Introductory Period?
HR Question:
Can I fire someone during their introductory period? Are there ways to reduce our risk?
HR Answer:
The short answer can be yes. As long as an employer has a properly written (and implemented) introductory period, there should be little concern over terminating someone during their new hire period. In fact, sometimes it is actually easier to terminate someone during this period of employment. A key component is to ensure that your introductory period policy and practices apply the employment-at-will status, as allowed by your state or locality. In that case, you should be able to rest easy with your decision, although we recommend consulting your attorney if you have any doubts.
On the other hand, if you don’t have a well-designed introductory period, your organization is at higher risk. If you’re unsure about your policy or implementation, read on to learn why introductory periods are important, what to consider in their design, and ways to reduce termination risks.
Why is a new hire introductory period important?
Introductory periods are an important phase of employment as they allow the new hire and employer to evaluate their fit with each other. These programs typically range from the first thirty days of employment up to six months and can be extended, if necessary.
Keep in mind that appropriate design and implementation are critical. According to the Society for Human Resources Management, some labor experts warn of the legal implications of introductory periods (including discouraging the use of the term “probationary period”). However, if implemented properly, employers can use the time to sufficiently train and evaluate the hire.
Setting appropriate expectations
During the introductory period, the employee has the opportunity to learn their role, acquire and demonstrate the skills necessary to perform the duties of the job, and understand how their role fits into the overall organization. Employers typically use this time to evaluate the employee to determine if they are a good fit for the position by reviewing their skills, knowledge, abilities, overall job performance (quantity and quality of work), work habits and behaviors, and attendance.
Although employees in this defined new hire period are essentially the same as all other employees, there are often special requirements placed on the individuals during this evaluation period. For example, some employers put in place stricter attendance requirements during the introductory period, (i.e., requiring new hires to work on-site for a defined period of time before allowing remote work situations). Other employers reduce the productivity requirements for new hires during this period as they are learning their roles.
Whether you are making the expectations more or less strict as compared to other employees, it is important to ensure that new hires are made aware of the expectations and how they will change after the completion of the introductory period.
Reduce termination risk during the new hire introductory period
Termination of employment at any time can be inherently risky. Here are some suggestions to consider that may bolster your new hire period policies and implementation:
- Clearly define the introductory period, including the length of time, and state that it can be extended, if necessary.
- Clearly express employment-at-will, if allowed in your jurisdiction and it applies to your situation. This statement indicates that the employment relationship is terminable at any time, including during the new hire period, and completion of the introductory period does not change that status.
- Provide a clear explanation to the new hire of how they will be evaluated, including specific expectations during the period and if/how these expectations are going to change once the new hire period is successfully completed.
- Evaluate your new hire regularly. Provide frequent and immediate feedback including written evaluations.
- If the new hire is failing to meet expectations, discuss what must be done to achieve acceptable performance as well as the next steps if there is no improvement.
Following these guidelines will help to ensure the new hire is treated fairly during the process. We also recommend that you consult your attorney to be sure that your introductory policies and procedures are optimally designed to mitigate your organization’s risk.
Special thanks to Patti Dunham, MBA, MA, SPHR, SHRM-SCP, for contributing to this edition of our HR Question of the Week.
Terminations are one of the most difficult aspects of Human Resources. Strategic HR can walk you through a termination, assist with the investigation, and provide a third-party objective look at each case. Visit our Employee Relations page to see how we can help you navigate through challenging situations while also building a positive relationship with your employees.
Why Do I Need An Employee Handbook?
HR Question:
Why do I need an Employee Handbook? Are they required?
HR Answer:
While it is not a requirement to have an employee handbook, having one can be an effective tool for you to communicate expectations throughout your organization. The employee handbook can be a quick reference for commonly asked questions such as “When am I eligible for vacation?” or “How do I call in sick?” Beyond communication with employees, a well-crafted employee handbook can provide many benefits to your organization.
Benefits For Employees
Orientation and Onboarding
For new employees, the handbook serves as an important introduction to your company. In addition to explaining work rules and expectations, it introduces new employees to the vision, values, and mission of your organization. An employee handbook can be a roadmap during orientation to help new employees get onboarded more quickly and reduce misunderstandings.
Organizational Culture
Your employee handbook is also an introduction to your company culture. The way that policies are phrased – such as expected working hours and location(s), ways to submit PTO requests or time off, how to communicate family/personal crises should they come up, etc. – can speak to your organization’s flexibility, inclusiveness, open-mindedness, or work-life balance expectations. Drafting policies that promote and reward desired behaviors (and perhaps, even explain the reasons behind them) can help nurture a healthy workplace culture.
Benefits For Employers
Protection for Employers
The employee handbook serves as a legal statement of policy on behalf of the employer. When signed by both the employee and employer, it can stand as evidence that not only were expectations communicated, but they were also agreed to as a requirement of working within the organization. For example, including anti-discrimination and anti-harassment policies, as well as bystander reporting requirements and complaint filing procedures, can provide guidance and protection for both employees and the employer should difficult situations arise.
An employee handbook can also clearly communicate the organization’s right to end employment based on performance, reorganization, financial downturn, or any other reason (commonly known as an “employment-at-will” statement). Without this, an employee may claim that an employment contract was made through other means of communication. Having a clear at-will-employment statement in the handbook may provide some protection from these types of claims.
It is critical for your handbook to be constructed properly for it to provide protection versus risk. Therefore, we highly recommend having your legal counsel review your handbook to ensure that it provides optimal protection for your organization.
HR Compliance
Your employee handbook can be used to meet the requirements of federal, state, and local laws. For example, federal law requires employers who are covered by the Family Medical Leave Act (FMLA) to inform employees of their FMLA rights. If FMLA applies to your organization, an employee handbook provides an opportunity to inform employees of their rights, your internal processes, and answer any frequently asked questions that come up when addressing FMLA needs.
In addition, businesses that have employees across states, cities, and towns may have to comply with the laws in those work locations. Creating state handbook policy addendums for different states or jurisdictions can help the organization in communicating these requirements.
Consistency in Work Rules
An employee handbook formalizes the company’s policies on workplace matters, ideally encouraging a fair and consistent workplace. Managers can refer back to the handbook as a guide when it comes to discipline, internal processes, expectations, or review policies to ensure consistent treatment for each employee.
Including policies such as a progressive disciplinary policy can inform managers and employees of the company’s expectations on how disciplinary issues will be handled, providing a sense of trust and reducing confusion in challenging situations.
Additional Considerations
Evaluating Policies and Communicating Changes
Maintaining company policies in an employee handbook provides an opportunity to examine your policies for contradictory, illegal, or outdated rules. Annual revisions to your handbook will encourage you to identify policy changes that should be made based on company goals, new laws, court rulings, and industry standards.
As with any HR policy revision, it is important to communicate the changes to employees. As a best practice, many organizations require employee signatures verifying that they have received the revised handbook.
Yes – Your Handbook Can Be Used Against You
An employee handbook is significant for what it includes, as well as what it does not include. It should provide policy direction, flexibility when necessary, and a clear outline of practices that your organization can follow consistently.
It is also essential not to include things in the handbook that you are NOT doing. For example, if your handbook indicates that you plan to review employee performance every year, but you haven’t reviewed anyone in over five years, then it would be important to review and revise that statement to reflect the practices you actually follow.
Ensure Your Handbook Is Customized For YOU
Be cautious of handbook templates or copying another organization’s handbook. Avoid including policies that do not apply to your company such as policies for companies with over 50 employees because you think you might be over 50 employees within the next 3 years. Also, make sure you have your attorney review your handbook to ensure they are comfortable defending you, should something ever go to court, based on what is written in the handbook.
Wondering if you’re up to date on policy trends? Learn more about the Top Employee Handbook Policies to Include this Year.
Thank you to Colleen Mahoney, PHR, HR Business Advisor, for contributing to this week’s HR Question of the Week.
Don’t have a handbook and not sure where to begin? Concerned that your current handbook is outdated? Don’t worry. Clark Schaefer Strategic HR can help you to create or revise your handbook to ensure that it serves as a meaningful communication tool helping to protect your employees and your business. To learn more, request a free handbook consultation today.
Why Is Harassment Training Important?
HR Question:
Do I really need to provide harassment training? Isn’t having an anti-harassment policy sufficient?
HR Answer:
While it’s definitely a great place to start, having an anti-harassment policy isn’t enough. It’s crucial to ensure that your entire team is on the same page when it comes to definitions, expectations, and consequences surrounding harassment in the workplace. Because harassment can look and feel differently depending on the situation and the context, you want to leave no room for misunderstandings or confusion – especially when trying to create a psychologically safe work environment.
Three Reasons Why You Need Harassment Training
1. It promotes and fosters a positive, inclusive, and diverse work environment. Harassment training helps to create a workplace culture that values respect, dignity, and inclusivity. It raises awareness about inappropriate behavior and ensures that employees have an understanding of the importance of treating their colleagues with respect. It eliminates confusion, helps educate and share perspectives that employees may not have experienced or had access to, and helps raise the value of all experiences in the workplace.
2. It can mitigate legal issues. Providing harassment training allows organizations to educate their employees about their rights and responsibilities in relation to harassment laws. This also provides an opportunity for everyone in the organization to have clear outlines of what is not acceptable. It’s part of the employer’s responsibility to create a safe workplace for their employees, and this is just one of many steps in doing so.
3. It can protect employees and promote a psychologically safe work environment. Harassment can have severe emotional, psychological, and even physical effects on individuals. By providing regular harassment training, organizations can aim to protect their employees from experiencing or witnessing such behavior by clearly outlining actions that are unacceptable in the workplace. Training provides employees with the knowledge and tools needed to identify, report, and address harassment more effectively and in a timely manner.
Keep the Training Going!
Between the 2018 and 2021 fiscal years, the Equal Employment Opportunity Commission (EEOC) received a total of 98,411 charges alleging harassment under any basis and 27,291 charges alleging sexual harassment. Since an employer can be held legally responsible for the actions of their employees, it stands to reason that every effort should be made to regularly remind employees of the expectations of their behavior, rather than assuming the training can be a “one and done” scenario.
So how can organizations continue the thread of anti-harassment throughout their organization?
- Start at the beginning of the employee life cycle. Include training on the types of harassment, the consequences of engaging in harassment, and the steps to prevent harassment to get new employees started off on the right foot, ensuring that they are familiar with what personal conduct will and will not be accepted in the workplace.
- Make sure you regularly repeat the training. Many organizations conduct annual education/training sessions that include harassment as part of the training. This is a great opportunity to refresh your employees’ knowledge of the subject matter and to further emphasize the company’s no-tolerance policy with regard to harassment.
- Be sure to review your anti-harassment policy regularly. Remember, the policy is still a great tool in your anti-harassment toolbelt. If you’re not sure where to start, the Society for Human Resource Management provides five ways to update and upgrade your current policy to make sure it’s in line with best practices.
Keep in mind, while federal law advises periodic harassment training, some states may require such training. For example, in California, employers with 50+ employees must provide two hours of sexual harassment training for supervisors every two years. Be aware of the specific requirements of your state or locale when it comes to harassment education for your employees.
Special thanks to Julie Schroer, SHRM-CP, for contributing to this edition of our HR Question of the Week!
Are you overdue on harassment or other annual training? Does your current training curriculum need to be refreshed to reflect changes in company policy or legal requirements? Strategic HR has the expertise and resources to help. Visit our Training & Development page to learn more.
At-Will Employment Termination Risks
HR Question:
We’ve got a team member who just isn’t working out. The problem is we haven’t taken all of the right steps in documenting the issues, but we’re an at-will employer – can’t we just terminate anyway? What are the risks of at-will employment termination?
HR Answer:
The term “Employment At-Will” is a familiar one for most employees and companies. So, what exactly does this term mean? Conceptually, it means either the employer or the employee is free to end the employment relationship at any time, with or without notice or cause. A majority of employers throughout the United States establish at-will relationships with their employees, either as the result of the law, existing policy, or a combination of both. However, does this mean it gives an employer the freedom from risk should they decide to terminate an employee on the basis of the at-will employment relationship? Not exactly.
At-Will Termination Risks
As a best practice, an employer should not completely rely on an employee’s at-will status to defend a termination decision. Even though good cause is not needed to end an at-will employment relationship, most employers typically have a valid reason for termination, such as continual poor performance.
Prior to terminating an employee under at-will circumstances, keep in mind that it’s not uncommon to receive a retaliation claim, a discrimination claim, or a similar action.
Additional justification is expected when putting an individual out of their job, whether it has to do with the person’s performance, violation of company policy, or another workplace issue entirely. Providing justification can reduce the time and resources related to managing a termination.
Protect Yourself with the Basics
It’s important to establish best practices on the front end, and consistently follow them to reduce your at-will termination risks. Ideally, no one should be surprised by a termination notice. Considering all of the dynamics that are usually in play when it comes to terminations, the best way to approach an at-will termination is to follow solidified HR practices from the beginning. As the age-old HR saying goes “document, document, document!”
Having clearly defined procedures, training, practices, and consistent follow-through allows an employer to navigate the waters of risk when it comes to at-will terminations.
If issues have not been documented, there are a few things to consider:
- If progressive disciplinary action is listed in the employee handbook, it’s important to follow it consistently.
- Before taking steps toward termination, consider the approach. Are these actions in line with the company’s culture? Are they representative of the company’s values?
- It is okay (encouraged, even) for HR to press the “pause” button on the situation and require the necessary documentation before authorizing a termination.
Steps to Reduce Employer Liability and Risks
There are easily established processes and policies that can be implemented to reduce liability and risk throughout the employee’s life cycle. We recommend that employers:
- Use disclaimers in the new-hire process (offer letters and new-hire orientation) and require signed acknowledgments.
- Clearly outline employment expectations.
- Implement a progressive discipline policy.
- Adopt a grievance procedure.
- Train supervisors on how to properly document disciplinary actions.
- Include human resources in the disciplinary process.
- Review situations carefully and seek legal guidance prior to making adverse employment decisions.
Culture and Morale Matter
It’s important to consider all of the issues that go along with terminating someone who is employed on an at-will basis. Parting ways with an employee, justified or not, can have an impact on your culture and morale. Handling terminations in a manner that is consistent, ethical, and shows dignity and respect for the individual involved plays a critical role in how your remaining employees view the company’s leadership.
There is always a risk in termination. It is always good practice to involve your attorney before pulling the final trigger to ensure support if a legal issue may arise.
Thank you to Julie Schroer, SHRM-CP, for contributing to this edition of our HR Question of the Week!
Let the HR experts at Clark Schaefer Strategic HR help you navigate the employment law minefield. Check out our HR Compliance and Recordkeeping page to learn more, or contact us directly!
Do I Need a Heat Safety Plan? How Do I Build One?
HR Question:
As an employer, I understand it’s my responsibility to take precautions when employees work outside in the heat. Additionally, I learned that OSHA is now conducting Heat Safety Inspections. Do I need a heat safety plan? If so, how do I build one?
HR Answer:
As summer heats up and the temperatures rise above 80°F, so too will heat-related illnesses. Employers should be aware that OSHA places a duty on employers to protect employees from occupational heat-related illnesses both indoors and outdoors. SHRM reports that employers should prepare for an increase in heat-related workplace inspections by OSHA especially as the heat index rises!
Despite being commonly underreported, the Bureau of Labor Statistics found that since 2011 there have been 436 work-related deaths caused by environmental heat exposure. The death of postal worker Peggy Frank from heat stroke in her mail truck led to legislation that require all postal vehicles to be modified to include air conditioning within three years. In 2021, OSHA announced an enforcement initiative on heat-related hazards, developing a National Emphasis Program on heat inspections, and launching a rulemaking process to develop a workplace heat standard.
Starting a Heat Safety Plan
A job safety analysis will provide a better understanding of the heat risks that your employees experience. Positions commonly at risk for heat-related occupational illness are workers in agriculture, construction, landscaping, and mail and package delivery. Indoor environments such as manufacturing plants and distribution centers can create high-heat environments, which through ambient heat and protective clothing can be just as dangerous as the outdoors. When building your heat safety plan, be particularly mindful of the dangers involved with physically demanding positions and positions requiring bulky equipment or gear in high heat.
Monitor The Heat
When the heat index reaches 80°F or higher, serious occupational heat-related illnesses and injuries increase. This is especially true when employees are not yet acclimatized to the heat, performing strenuous work in direct sunlight, or in radiant heat without frequent access to cool water and shade. Monitor ambient temperatures and prepare for high heat events to ensure adequate measures are taken to protect employee health. Businesses with high-heat environments should establish a heat alert program so adjustments can be made to the physical demands of employees working in high heat. Businesses may consider scheduling hot jobs for cooler parts of the day or planning scheduled maintenance or repair work for cooler seasons.
Evaluate Your Tools
Once there is a thorough understanding of the organization’s heat safety risks, evaluate environmental controls such as air conditioning, fans, heat shields, ventilation, or other ways of reducing radiant heat sources. Investments made in improving employee working conditions will improve productivity and provide a boost to morale. Employers can continue to reduce the risk of occupational heat illnesses by providing frequent breaks, and shaded cooling stations with ample cool water that is easily accessible to workers. Establishing a regular schedule of rest and hydration breaks will promote a culture of well-being where employee health and safety are the top priority.
Pay close attention to new hires in high-heat environments as they have not had an opportunity to acclimate to the environment. Provide even more frequent breaks to new employees and ease them into the physical demands. Providing body cooling and protective clothing such as cooling vests can help reduce the impact of the heat on the employee’s health.
Train Your Managers / Supervisors and Employees
Train employees and managers on heat safety to ensure that everyone knows the signs and symptoms of heat stress and is trained on heat-related illness first aid. OSHA fined a Florida-based employer heavily for exposing workers to hazards related to high ambient heat without adequately training someone to perform first aid and ensure they were available to render assistance in heat-related emergencies. Training is key to ensuring employees are educated on heat-related hazards to manage their exposure, take breaks, stay hydrated, and monitor signs of heat stress. Managers need to be trained on heat-related hazards, safety protocols to reduce heat-related illnesses, and how to obtain first aid for any employee suffering from heat-related illness.
Employers can consult the Criteria for a Recommended Standard: Occupational Exposure to Heat and Hot Environments for more recommendations on how to build a heat safety program and keep employees safe from heat-related illnesses.
Special thanks to Colleen Mahoney, PHR, for contributing to this edition of our HR Question of the Week!
Have you had a safety audit recently? Do you know which OSHA forms you are required to complete? A safe environment plays a key role in keeping a company Healthy, Safe, and Secure. Strategic HR has the expertise you need to ensure your policies and practices are keeping your workers, and customers, safe. Visit our Health, Safety, and Security page to learn more about how we can assist you.
What Do I Do Now That I-9 Flexibilities Are Ending?
HR Question:
In July 2023, the Department of US Citizenship and Immigration Services eliminated the Form I-9 flexibilities put into place due to COVID-19. Recently, I understand they are again allowing the remote review of I-9 documents. Is this accurate?
HR Answer:
Yes, you’re correct – the US Citizenship and Immigration Services (USCIS) confirmed that the temporary flexibilities for verifying documents for I-9 forms expired on July 31, 2023. Any remote team members hired during the COVID-19 pandemic (on or after March 20, 2020) whose I-9 documents were verified remotely, had to have their documents physically inspected. That verification was required to be completed by August 30, 2023.
While we all scrambled to update these documents, USCIS came out with additional guidance on July 25, 2023, that provided an alternative procedure for Form I-9. The Notice indicated that employers who meet the following four (4) requirements may choose an alternative procedure in lieu of physically examining Form I-9 documentation that had been examined remotely under the COVID-19 flexibilities.
To qualify for the alternative procedure, an employer must have:
- Performed remote examination of an employee’s documents between March 20, 2020, and July 31, 2023;
- Been enrolled in E-Verify at the time they completed the Form I-9 for that employee;
- Created a case in E-Verify for that employee (except for re-verification); and
- Be currently enrolled in and continue to participate in E-Verify.
Employers who do not meet all four requirements must perform an in-person physical examination of documents by August 30, 2023.
The USCIS provides details on the alternative procedure and examples of properly completed forms.
New Form and Additional Flexibilities
Although many HR professionals celebrated the alternative procedure that was provided, we had more to celebrate when the flexibility was extended. In August 2023, the USCIS allowed permanent remote examination of employees’ Form I-9 documents IF they are enrolled in the E-Verify program. For more guidance, refer to the detailed alternative procedure.
Finally, the department did issue a new I-9 form in August 2023. The form dated “10/19/2019” can continue to be used through October 31, 2023, but beginning November 1, 2023, only the new Form I-9 dated “08/01/2023” can be used.
What if an Employee Refuses?
If an employee is unwilling or unable to provide documentation for physical confirmation or remotely if you qualify, that employee is subject to termination. Employers cannot retain an employee who has not provided documentation for the I-9 form, including presenting their documents for physical inspection. Organizations that retain an employee who is not authorized to work in the United States, or who have not reviewed documentation in person, are subject to hefty fines by the USCIS.
Remember, I-9 forms should be kept in a separate file from the employee’s personnel file, and make sure you retain the updated I-9 forms. For additional information, be sure to check out USCIS’s FAQ for Employers.
Special thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP, Director of HR Solutions and Sheryl Fleming, MA, SHRM-SCP, HR Business Advisor for contributing to this edition of our HR Question of the Week!
I-9 forms and other employment verification processes are important to get right – otherwise, you might be subject to costly fines and legal fees. Let our HR experts lend a hand! Learn more about how we can support your compliance efforts by visiting our HR Compliance and Recordkeeping page or by contacting us today.
What Do I Have to Know Before Filing My EEO-1 Report?
HR Question:
What is an EEO-1 Report and how do I know if I am required to file one?
HR Answer:
As defined by the Equal Employment Opportunity Commission (EEOC), the EEO-1 Report is an annual mandatory data collection of demographic workforce data, such as race/ethnicity, gender, and job categories. The window for the 2022 data collection will open in mid-July 2023.
Am I Supposed to File an EEO-1 Report?
Great question to start with! Not every employer is required to file an EEO-1 report. That being said, there are a few questions to ask yourself to understand if you need to file:
- Do you have 100 or more employees?
- Are you a federal contractor?
- Are you a first-tier subcontractor with 50 or more employees and at least $50,000 in contracts?
If you answered “yes” to any of the above questions, then you need to file an EEO-1 report annually. Employers also must file if the organization is any of the following:
- Owned by or affiliated with another company and the entire enterprise has 100 or more employees.
- Serving as a depository of government funds for any amount.
- A financial institution that is an issuing and paying agent for US Savings Bonds and Notes.
There are some organizations that are exempt, such as State and local governments, public primary and secondary school systems, institutions of higher education, American Indian or Alaska Native tribes, and tax-exempt private membership clubs other than labor organizations.
What Should I Know Before I File?
It always pays to be prepared! Before you start gathering the data yourself, here are a few tips to help you be better prepared to file your EEO-1 Report.
First, research and understand the requirements for filing. While these requirements don’t change frequently, it’s best practice to double-check the most up-to-date requirements, which can be found on the EEOC‘s website. If you have additional questions, the Message Center provides an outlet to reach out to the EEOC for guidance. This page will open in mid-July as the window for 2022 data collection opens.
Gathering the data yourself can be difficult. While this may not be an immediate solution, investing in an HRIS or a payroll system can be a great resource. Some software includes an HR solution that provides an efficient and accurate way to access the employee data needed to complete the report accurately.
If you do not have an HRIS or payroll software solution, you can have each employee complete an EEO Self-Identification Form. This form is voluntary, however; if an employee declines to identify, the federal government requires you to determine this information by visual survey and/or other available information. Although there is not a specific form that you are required to use for self-identification, here is a sample EEO Self-Identification Form from our Virtual HR Support Center.
How Do I File?
If your company has never filed an EEO-1 Report before, let’s start with the basics – creating an online account. Visit the EEOC Data page, select “Create an Account,” then log in to the EEO-1 Component 1. At that point, new users can link their individual user account to a company record by selecting “Add Company to List” on the Your Company List page and entering your company’s EIN. After you register, you will receive your Company ID and PIN.
You will need the following information to complete the report:
- Company ID and PIN
- Company EIN and NAICS code
- Company DUNS Number (if the company is a federal contractor)
- Establishment address(es) – for a single-establishment, submit only one EEO-1 data report; for a multi-establishment company, submit a separate report for each location.
- A count of all full-time and part-time employees during the specified pay period you have selected (for 2022 reporting in 2023, you can select October, November, or December of 2022)
- Gender and race/ethnicity of all employees
- Job categories for all employees
- Employment data from one pay period in October, November, or December of 2022
Once the report is finished, it needs to be certified and submitted. Don’t forget to click the “certify report” button; otherwise, the EEOC will not receive your report.
Thank you to Sherri Hume, SHRM-CP, HR Business Advisor, for contributing to this edition of our HR Question of the Week.
Recordkeeping is one of the more mundane tasks associated with Human Resources, but it is extremely important and can get you into hot water (i.e., incurring fines) if not done properly. Keeping the right files easily accessible and up-to-date is vital. Need some help? Visit our HR Compliance & Recordkeeping page to learn more.
What is Equal Pay Day?
HR Question:
I keep seeing information about “Equal Pay Day” during Women’s History Month. What is Equal Pay Day, and how can I recognize it in my organization?
HR Answer:
Equal Pay Day is a symbolic day that puts into perspective the 23% pay gap between a woman and a man in the same role. Based on the current gap, a woman has to work one full year plus several additional weeks into the following year to make the same amount that her male counterpart made in one year alone.
In 2023, Equal Pay Day is March 14, representing the 2022 US Census Data showing women make 84 cents (all full-time workers) and 77 cents (all full-time, part-time, and seasonal earners) for every dollar paid to non-Hispanic, white men. This translates to an annual wage gap of $9,954. That gap is unfortunately even larger for most women of color, resulting in a gap of $.64 on the dollar for Black women, $.62 for mothers, $.61 for Native Hawaiian and Pacific Islanders, $.54 for Latina women, and $.51 for Native and Indigenous women.
Equal Pay Day was established in 1996 by the National Committee on Pay Equality (NCPE). The day is recognized annually, but not always on the same date due to the pay gap calculation. Even though Equal Pay Day has been around for 27 years, it is more widely recognized today, in part due to the stronger focus on eliminating the gap. Current initiatives, such as pay transparency and salary history ban laws, were introduced by individual cities and state-wide to address the pay gap.
Where are Equal Pay Laws in Place?
On January 1, 2023, three new states were added to the list of city and state governments that passed laws to protect applicants by banning employers from asking about prior salary history and/or requiring that companies list salary ranges in their job advertisements. Currently, the following governments have such laws:
States:
- California
- Colorado
- Connecticut
- Maryland
- Nevada
- Rhode Island
- Washington
Cities:
- Cincinnati, OH
- Ithaca, NY
- Jersey City, NJ
- New York City, NY
- Toledo, OH
- Westchester County, NY
According to the Society for Human Resource Management (SHRM), pay transparency is one of the top issues people managers will face in 2023. According to Monster’s 2022 poll, 98% of workers believe salaries should be disclosed, with another 53% of applicants refusing to apply for a position if the salary is not disclosed.
How Can I Support the Movement?
So how can employers address the gender gap and honor Equal Pay Day in their organizations? Some recommended ways include:
- Performing an Equal Pay Audit to review job classifications, salaries, and genders and take corrective actions if inequity is found.
- Reviewing compensation policies to remove gender bias.
- Removing managerial discretion on pay and sticking to a salary band of positions for new hires and for annual increases.
- Removing prior salary history from applications and interviews.
- Establishing fair scheduling practices to allow for caregiving.
For even more ways to contribute to awareness and celebrate Equal Pay Day you can visit equalpaytoday.org.
Thank you to Paula Alexander, MA, PHR, SHRM-CP, for contributing to this HR Question of the Week!
Performing an equal pay audit can be a complex, but necessary, step toward equal pay for all. Clark Schaefer Strategic HR is ready to assist you with any of your needs around Benefits and Compensation. We offer assistance with everything from job descriptions to policy development to help address your complex issues that impact employee compensation or benefits. Please visit our Benefits and Compensation page for more information on how we can assist you.
How To Limit Liability At Your Company Party
HR Question:
We’re looking forward to hosting our company holiday party to celebrate our accomplishments this year. While we want this to be a fun celebration, we also want it to be responsible. How can we limit liability at the company party, especially if we’re considering serving alcohol?
HR Answer:
The holidays are here, and to many, that means it is time for holiday parties. While holiday events are a great time to bring your team together and increase engagement, there are potential risks to keep in mind as an employer. As you plan your event, below is a list of best practices to consider that may help to limit potential liability:
- If it is truly a social event for your team, do not require attendance. Remind staff that attendance is not required but voluntary. This may help to limit liability with a potential harassment claim because the event is voluntary and not in the course and scope of employment.
- To further support the non-work nature of the event, hold the event off-site and outside of regular business hours. Many organizations also allow employees to bring a guest thereby underscoring the non-work component.
- Set expectations around respectful behavior and encourage employees to drink responsibly. Remind employees that company policies, including harassment and other conduct policies, apply at the event.
- Determine if alcohol will be offered. Company leaders will need to determine if the company holiday party is the right environment for alcohol. There are multiple factors to consider, including the age range of your workforce, how the timing of the party fits with employees’ work schedules, past history, and the location of the party. If you have employees under the age of 21, your company will need to assess how you will handle this potential liability. If you have employees attending the party before their shift, that is another issue you will need to address.
How to handle alcoholic beverages at the party
If you decide to provide alcoholic beverages, there are a number of considerations you can make that may help limit potential liability at your company party. Here are some good practices to consider:
- Provide food and non-alcoholic beverages at the event, both for safety reasons and so those who choose not to drink alcohol know you’ve considered them and feel included.
- Offer a cash bar where employees purchase alcohol. This can reduce the likelihood of a claim that the employer provided alcohol directly to employees. It is also likely to reduce consumption.
- Provide employees with a set number of drink tickets so that each attendee is limited in the number of alcoholic drinks they will be served.
- Plan for how employees who have been drinking will get home. This may involve providing taxis or public transit options at no cost to the employees, arranging for group transportation, or encouraging employees to designate a driver at the beginning of the event.
- Even if you don’t plan to provide a taxi service, don’t think twice about calling and paying for one if an intoxicated employee has no way home other than driving themselves. To facilitate this, someone from management can be designated to stay until the end and maintain their own sobriety to ensure that everyone gets home safely.
- Have a plan to ensure that no minors or visibly intoxicated attendees are served alcohol. If possible, hire professional servers (or hold the event at a staffed facility) who will, as part of their job, politely refuse to serve anyone whom they perceive has had enough to drink.
How to handle cannabis at the event
Consider the potential use of cannabis at the party. With the legalization of cannabis in many states, employers also need to be prepared to deal with this new potential concern at holiday events. Employees may believe it is appropriate to bring this state-legal drug (in some instances) to the party, but, marijuana remains illegal under federal law.
It may be appropriate to remind staff of your drug-free workplace policy (if applicable) which prohibits consumption in the workplace and at company-sponsored events. If you wish to avoid consumption at your party, clearly communicate the policy to employees before the event. The Society for Human Resource Management (SHRM) offers these additional suggestions regarding cannabis at holiday parties.
While these steps will not eliminate all the risks, they may help to reduce liability and help your employees celebrate the year and their achievements safely and responsibly. For more suggestions on how to limit liability at your company party, SHRM provides these tips to reduce liability while celebrating the season.
Thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP, Director of HR Solutions, and our HR Support Center for contributing to this HR Question of the Week.
It’s important to celebrate company success, but don’t throw caution to the wind in the process. Our Strategic HR Business Advisors are prepared to help you celebrate and protect your business and your employees. We can help you to reduce your potential liability by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our HR Compliance and Recordkeeping page to learn more about how we can help or contact us for immediate support.
Why Is It Important To Get An Employee’s Signature?
Have you ever had an employee question an employment agreement or say they didn’t mean to agree to a term of their employment? Why is it so important to get an employee’s signature?
This is a critical question for all employers, and the answer applies to more than just employment agreements! At its root, a signature is used to show the intent of an individual to bind oneself to a contract or make a written representation.
Why is an Employee’s Signature Important?
In the case of a new hire’s employment agreement, the signature here binds both the employee-to-be and the company to the agreed-upon terms such as salary, benefits, schedule, etc. – all items you don’t want to have to argue over after the employee has already started.
There are other instances where having an employee’s signature can help to protect your organization beyond the employment agreement. For example, when memorializing a performance conversation, it may be important to have an employee make a written representation of the fact that they were there, they understand the conversation, and they’ve agreed to any future action discussed during the meeting.
Obtaining an employee’s signature on documents such as these not only helps to clarify expectations, but it can also be an important part of your organization’s risk mitigation.
Employee Signature Best Practices
These signed documents are used should the agreement, the conversation, or actions be called into question, whether that’s internally or in a court of law. To eliminate additional confusion, there are best practices when gathering employee signatures.
A signature in ink is recognized as the standard for executing documents. However, should in-person not be an option (as many organizations have experienced a significant increase in remote workers), other legally recognized methods of signing are effective. These may include a scanned PDF of a signed document with an original signature or obtaining an electronic signature using software that is legally recognized, such as DocuSign, Adobe, certain payroll services, etc.
All in all, it goes back to showing intent to sign should anyone ever question that an agreement was created.
What Doesn’t Count as a Signature?
What you want to avoid is a question of fraud or whether an individual intended to enter into the agreement. Just typing a name using script font instead of using an original signature is typically not sufficient because it is easier to claim that it was created by someone other than the named party.
Additionally, simply cutting and pasting a picture of a person’s original signature into a document, as is sometimes done on letters, isn’t recommended because it can be more easily used to create counterfeited documents (or alleged to be counterfeit by a party not wanting to be bound by the agreement). Having said that, it is slightly better than typing in script font.
In the end, it is important to protect both parties – the employee and the company – with original or well-documented signatures in the case of disagreements or audits. By taking a little bit of additional time upfront to ensure that you’ve gathered an employee’s signature correctly, you can prevent a significant amount of wasted time and money later down the path.
Special thank you to Emily Smith, JD, General Counsel for Clark Schaefer Hackett, and Sammie Kelly for contributing to this Emerging Issues in HR.
Although maintaining proper recordkeeping practices may not be everyone’s forte, it is a critical piece to help protect both your organization and your employees. But don’t worry, Clark Schaefer Strategic HR are here to help! We can conduct an HR Audit to review your HR policies, procedures, documentation, and systems to identify any areas for improvement or enhancement in your HR function. To learn more, visit our HR Audit page or Request an HR Audit Quote.
How To Determine If A Home Office Injury Is Covered By Workers’ Compensation
HR Question:
Our company has agreed to allow employees to work a hybrid schedule, allowing them to work from home on multiple days during the week. Although this has been very well received by employees, we have seen an increase in the number of injuries from employees working from home. How do I know if a home office injury is covered by workers’ compensation, and how do I handle these claims?
HR Answer:
The Bureau of Labor Statistics announced that in 2020, private industry employers reported 2.7 million nonfatal workplace injuries and illnesses. Although down from 2.8 million in 2019, workplace injuries are still an expensive and difficult issue for employers, and with the increase in the number of employees telecommuting and working from home or alternate locations, this task has some additional unique challenges.
What is a compensable injury under workers’ compensation?
In many instances, it is easy to determine if an injury is covered by workers’ compensation. The key words in determining coverage under workers’ compensation are: “arising out of (what they were doing) and in the course of (where were they – time, place, etc.) employment.” Cutting your finger opening a box at work is an easy example of a covered injury. Injuries from a home office are not always as easy to determine coverage. Overall, injuries and illnesses that occur while an employee is working at home are considered work-related (and thus compensable) if the illness or injury occurs while the employee is performing work for pay in the home or alternate workspace and the injury or illness is directly related to the performance of work. If the employee is completing a work task and they can prove they were working in the interest of their employer when they got hurt or injured, it is typically a covered event.
One important note is that employers must also consider the “personal comfort doctrine.” This legal term states that certain personal activities for the employee’s comfort (bathroom breaks, eating/drinking) are deemed necessary and are considered part of an employee’s work activity. According to the personal comfort doctrine, tripping over the dog and breaking your leg while walking to the bathroom at home during work hours could be covered under workers’ compensation. This doctrine, along with the overall lack of witnesses and the inability to control the work environment, can lead to frustration regarding workers’ compensation claims outside of the traditional workplace.
For additional support, OSHA provides instruction on compliance and guidance on interpreting the work-relatedness of injuries resulting from telecommuting.
What can employers do to protect your organization and your employees?
We recommend taking the following steps to establish expectations for safe remote work environments, as well as what to do if you receive an injury claim from a remote worker:
- Create a work-from-home policy that includes the requirement to maintain a professional, well-kept, and safe work environment. Include home safety audits.
- Require employees to report any work-related injuries or illness immediately to their manager or safety official.
- If an injury occurs, obtain a report of the accident and be sure to include a written statement from the employee. The report should include exactly what the person was doing at the time of the injury. How, when, and where the injury occurred should be detailed in the report. Cumulative injuries and slips, trips, and falls are the most commonly reported home injuries, therefore, getting these details is important.
- Ask the employee to take pictures of the work area where the injury occurred as well as of their injury, if possible.
- Provide all of the pertinent information to your workers’ compensation carrier or administrator, and let them make the assessment as to work-relatedness. Include legal counsel if necessary.
Overall, treat all workplace injuries the same, regardless of where they occurred. Claims must be actively managed from the time they are reported. Employee safety and health should be a priority for all employers, regardless of an employee’s work location. Actively managing these claims is one step in assuring their well-being and the well-being of the company.
Thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP, Director of HR Solutions for contributing to this HR Question of the Week.
Strategic HR understands your concerns with the well-being of your employees as well as your organization. We offer expertise in health, safety, and security to cover any need you may have ranging from creating workplace safety policies to developing a business resumption plan for handling unexpected emergencies. Please visit our Health, Safety & Security page for more information.
Do Our Remote, Out-of-State Employees Qualify for FMLA?
HR Question:
Our company has employees located in Ohio who all qualify for the protections covered under the Family Medical Leave Act (FMLA), but we also have employees working remotely in other states. Do our remote, out-of-state employees qualify for our FMLA policy?
HR Answer:
Great question. Even if the employees don’t fall within the 75-mile radius that the FMLA takes into account when counting employees towards the requirements, employers are still required to provide FMLA benefits to their employees who work remotely and out-of-state.
Why Does FMLA Compliance Matter?
What happens if those same benefits aren’t extended properly? Well, a lack of FMLA compliance can result in impressive fines. For example, not completing the notice can cost several hundred dollars alone, not to mention the millions in fines that can result from a mishandled claim or wrongful termination, such as the situation this Massachusetts company found itself in.
Even before the COVID-19 pandemic struck, some companies were beginning to branch out of their home states and hire individuals with the necessary talent, but not necessarily the ideal location. Many of these organizations were pioneering the process, working through the requirements and laws as they could. Now that remote work has become such a staple in the business community, it’s easier for any organization to run into this issue, as it’s often the case that many remote employees may be the first or only employee in a particular state.
How to Determine if Remote Employees Qualify for FMLA
There have been no changes to what is defined as “covered employers” as defined by the Department of Labor (DOL), as a “covered employer may be a private-sector employer (with 50+ employees within a 75-mile radius in 20 or more workweeks in the current or previous calendar year), a public agency, or a school.” Employers that fall under this category are required to provide FMLA benefits and protections to eligible employees while also complying with additional responsibilities required under the FMLA.
An eligible employee is one who:
- Works for a covered employer,
- Has worked for the employer for at least 12 months as of the date the FMLA leave is to start,
- Has at least 1,250 hours of service for the employer during the 12-month period immediately before the date the FMLA leave is to start (a different hours of service requirement applies to airline flight crew employees), and
- Works at a location where the employer employs at least 50 employees within 75 miles of that worksite as of the date when the employee gives notice of the need for leave.
So why does this rule extend to those employees who fall outside of the 75-mile radius and the 50+ employee count? It’s because the DOL determines their FMLA status based on the office or location that delivers their assignments or that they report to. The purpose of this is to protect the employees’ jobs should they have the need to focus on their own or their family’s health.
If you assume that you don’t have to meet FMLA guidelines for a remote employee, be sure to double-check the Department of Labor’s regulations, as well as your own internal reporting system, before skipping this important requirement.
Special thanks to Alisa Fedders, MA, SPHR, and Samantha Kelly for contributing to this edition of our HR Question of the Week!
FMLA, ADA, and other labor laws can be difficult to understand – let alone enforce. That’s where Strategic HR has you covered. We bring years of experience and know-how to the table. We can assist you with your tough compliance issues and help you sleep more soundly at night. Visit our HR Compliance & Recordkeeping page to learn more.
Can We Verify Form I-9 Documents Virtually for Remote Employees?
HR Question:
As we continue to hire more employees to work remotely, can we use virtual methods to verify Form I-9 documents for our remote employees? If so, is the option for virtual I-9 verification going to end?
HR Answer:
The U.S. Immigration and Customs Enforcement (ICE) has extended its temporary policy allowing employers to inspect Form I-9 documents virtually through April 30, 2022.
How to Verify Form I-9 Documents for Remote Employees
The policy to allow virtual verification was first issued in March 2020 due to the COVID-19 pandemic, and it has been extended 12 times – it is unknown at this time if this date will be extended again. Employees hired on or after April 1, 2021, working exclusively in a remote setting, are temporarily exempt from the physical inspection requirements associated with the Form I-9. Employers may examine documents remotely via e-mail, fax, video link, secure upload, etc., and complete the Form I-9 with appropriate annotations. Originally this only applied to companies that were completely operating remotely due to the pandemic. However, since April 2021, ICE stated that employers can use remote Form I-9 verification procedures for new hires working remotely, even if other employees are working onsite.
Starting May 1, Employers Cannot Accept Expired List B Documents
It is important to note that the Department of Homeland Security (DHS) is ending the COVID-19 Temporary Policy for List B Identity Documents. Beginning May 1, employers will no longer be able to accept expired List B documents.
The temporary policy that is coming to an end was previously enacted by DHS in response to the difficulties many individuals experienced with renewing documents during the COVID-19 pandemic. According to DHS, “Now that document-issuing authorities have reopened and/or provided alternatives to in-person renewals, DHS will end this flexibility. Starting May 1, 2022, employers must only accept unexpired List B documents.”
If an employer is presented with an expired List B document between May 1, 2020, and April 30, 2022, they are required to update their Forms I-9 by July 31, 2022. See this table to ensure compliance with the updated requirements.
Have I-9 Completion Timelines Changed?
The normal timelines for I-9 completion remain in effect. Section 1 of the form must be completed by the employee’s start date, and Section 2 must be completed within three business days of the start date. Employers taking advantage of the relaxed procedures must provide written documentation of their remote onboarding and telework policy to each employee.
I-9 completion can be done with a paper form or by completing an online fillable Form I-9. You will still have to print the completed form for signatures and can then scan it for storage.
Since we don’t know yet when the temporary extension of virtual document inspection will end, another option is to consider sending information, along with the Form I-9, to new hires requiring them to present their original supporting documentation to a Designated Agent who will verify their identity and complete section 2. After this is completed, they can mail the original Form I-9 to HR.
Can Form I-9s be Stored Electronically?
You can complete and store your employees’ Form I-9s electronically. According to U.S. Citizenship and Immigration Services, you may maintain the forms either electronically or on paper as long as you follow the established requirements. To ensure that you are storing your Form I-9s properly and for the required duration of time, see our article about electronic storage of I-9s.
Thank you to Alisa Fedders, MA, SPHR, Senior HR Advisor for contributing to this edition of the HR Question of the week.
strategic HR inc. knows that keeping abreast of HR Compliance issues can be daunting, especially when regulations continue to change. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our HR Compliance and Recordkeeping page to learn more about how we can help or contact us for immediate support.
What to do if the IRS notifies you of Affordable Care Act (ACA) penalty fees
HR Question:
How do I know if my company needs to submit Affordable Care Act (ACA) reporting to the IRS? What are the potential ACA penalty fees if we do it wrong?
HR Answer:
Any employer with self-insured medical benefits or with 50 total Full-Time and Full-Time Equivalent employees is required to report to the IRS. (Not sure if you have 50 Full-Time Equivalent employees? Here’s a guide to do the math.) Failure to report to the IRS could result in two different types of penalty notices, Section 4980H(a) and Section 4980H(b) penalties.
Employers have reported receiving two types of penalty notices
The first type of penalty notice assesses penalty fees for employers who filed in an audited year, but based on the information provided, the IRS does not believe that the employer offered the minimum essential coverage with minimum value to all full-time employees. This could mean that the smallest benefit plan offered to employees was too expensive when compared to their pay. If employers fail to meet this threshold of minimum essential coverage, they could be assessed penalty fees.
The second type of penalty notice that employers have received is a notification that they should have filed as an Applicable Large Employer (ALE), based on their W2s of that year. This means that the company reached the threshold of 50 (or the equivalent of) full-time employees, which triggers a new level of required filings and regulations. This most likely means they should have filed specific forms (the 1094-C and 1095-C), and if they failed to do so, they are being assessed large penalties.
So, what can employers do to potentially reduce the assessed penalties and stop further ACA penalty fees from piling up?
Respond Immediately to ACA Penalty Fees Notifications
The first step – respond without delay! As soon as any notices are received, immediately reach out to the operations manager listed on the notice to let them know that you are actively researching the issue. It is imperative that you do not set this concern to the side. There is nothing more important to take care of in that given moment in terms of cost to your company.
The reason for the urgency in your response time is because the fees will increase exponentially the longer you wait, and they can increase day by day, incurring an astronomical fee. Some employers have seen fees up to $20,000 for missing one form for three years. These fees are typically estimated in the penalty letters, which can be alarming for small employers.
Gather Your Team & Take Action
The second step is to connect with your tax department, tax attorney, and your HR team to begin to gather the information necessary to file any 1094-C and 1095-C forms. If you do believe you should have filed and did not, ask for an extension as soon as possible. This will reduce the ongoing daily penalties. If you don’t respond and ask for an extension, it’s possible that a levy may be filed against your organization after thirty days.
If you did not have an HRIS provider filing for you at the time, it can be convoluted to pull the information necessary. These forms often require enrollment data, benefit waivers, and historical work hours, which is why it’s best to include your HR department while tackling this process.
It’s worth noting that if your organization crossed over the fifty-employee threshold mid-year and filed appropriately in the years following, we would encourage you to work with your tax department or attorney to determine if you qualify for transition relief. It is possible to reduce fees if you qualify and file for the missed year.
As organizations continue to implement and interpret the Affordable Care Act, there may be bumps in the road. Be sure to partner with your HR department and attorney to ensure your organization is following guidelines, filing appropriately, and quickly addressing any notices from the IRS.
Special thanks to Mary Mitchell, Sr. HR Business Advisor and Certified Healthcare Reform Specialist, for sharing her ACA expertise and contributing to this HR Question of the Week.
Keeping up with ever-changing ACA regulations can feel like an insurmountable task when you have so many other things on your HR plate. If you are unsure if your company should be reporting for ACA, Strategic HR can help to assess your employee calculations to determine if it is needed. We can also help you to stay on top of regulations relevant to your company, assist with your recordkeeping, and advise you on when to seek legal counsel. Learn more about our HR Compliance & Recordkeeping Services or contact us today!
This article does not, and is not intended to, constitute legal advice. Information and content presented herein is for general informational purposes only and readers are strongly encouraged to contact their attorney to obtain advice with respect to any legal matter. Only your individual attorney can provide assurances that the information contained herein is applicable or appropriate to your particular situation or legal jurisdiction.
Can I Ask if My Employees Are Vaccinated?
Can we ask if our employees are vaccinated? Isn’t this a HIPAA violation or an illegal inquiry under the ADA or somehow confidential information?
Employers can ask for proof of vaccination unless there is a state or local law or order to the contrary.*
When an employer is requesting or reviewing medical information in its capacity as an employer, as it would be when asking about an employee’s vaccination status, it is considered to be an employment record. In such cases, HIPAA would not apply to the employer. The Americans with Disabilities Act (ADA) will govern the collection and storage of this information.
The Equal Employment Opportunity Commission (EEOC), which enforces the ADA, has stated that asking about vaccination is not a disability-related inquiry, though it could turn into one if you ask follow-up questions about why the employee is not vaccinated. Asking a yes or no question, or requesting to see the employee’s vaccination card, does not violate any federal laws or require proof that the inquiry is job-related.
Finally, just because employees think that something is or should be private or confidential doesn’t mean they can’t be required to share it with their employer. Social Security numbers, birth dates, and home addresses are all pieces of information an employee may not want to advertise, but sharing is necessary and required for work. Vaccination status is similar. However, all of this information, once gathered, should not be shared by the employer with third parties, except on a need-to-know basis.
*It appears that some governors may attempt to prevent certain entities from requiring “immunity passports” (e.g., proof of vaccination) through an executive order (EO), though as of July 31, none of the EOs already issued appear to apply to private businesses and their employees. Also note that if there is a law in place that prevents treating vaccinated and unvaccinated employees differently (like in Montana), you may be able to ask, but not take any action based on the response.
Should we keep a record of who is vaccinated or make copies of vaccination cards? If we do, how long should we keep that information?
If you’re asking about vaccination status, you’ll want to keep some kind of record (so you don’t have to ask multiple times), but how you do this is up to you, unless state or local law has imposed specific recordkeeping requirements. You may want to keep something simple like a spreadsheet with the employee’s name and a simple “yes” or “no” in the vaccination column. If you’d prefer to make a copy of their vaccination card, that should be kept with other employee medical information, separate from their personnel file. Per OSHA, these records should be kept for 30 years.
If we keep a record of who is vaccinated, can we share it with managers who will be required to enforce policies based on that information, such as masking and social distancing?
Yes. We recommend not sharing this information any more widely than necessary. While anonymized information is okay to share (e.g., “80% of our employees are vaccinated”), each employee’s vaccination status should be treated as confidential, even if the fact that they are wearing a mask to work seems to reveal their status publicly. Obviously, managers will need this information if they are expected to enforce vaccination-dependent policies, and employers should train them on how they should be enforcing the policies and how and when to escalate issues to HR or a higher level of management.
Special thanks to the HR Support Center for providing this edition of our HR Question of the Week.
For further COVID-19-related resources, check out our COVID-19 Employer Resources page or contact us for direct assistance.
This article does not, and is not intended to, constitute legal advice. Information and content presented herein is for general informational purposes only and readers are strongly encouraged to contact their attorney to obtain advice with respect to any legal matter. Only your individual attorney can provide assurances that the information contained herein is applicable or appropriate to your particular situation or legal jurisdiction.
What is the Employee Retention Tax Credit (ERTC)?
HR Question:
What is the Employee Retention Tax Credit (ERTC) and how can I take advantage of this program?
HR Answer:
As an incentive to employers of all sizes to keep employees on payroll, the Employee Retention Tax Credit (ERTC) was created to help employers navigate the unprecedented impact of COVID-19. The ERTC is a refundable tax credit formed within the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and further extended/expanded under the Consolidated Appropriations Act (CAA) and American Rescue Plan Act (ARPA).
Originally, to be eligible for the credit as of March 2020, an employer must actively carry on a trade or business during the calendar year 2020 and meet either of the following:
- Full/Partial Suspension Test: If an eligible employer experiences a calendar quarter in which trade or business is fully or partially suspended due to an order of government authority restricting commerce, travel or group meetings (this includes but is not limited to commercial, social and religious purposes) due to the COVID-19 pandemic.
- Gross Receipts Test: If an eligible employer experiences a significant decrease in gross receipts (AKA revenue) resulting in more than a 50% drop when compared to the same quarter in the previous year. (Until gross receipts exceed 80% of gross receipts in the prior quarter).
Originally, the credit was worth 50% of “qualified wages” – including health care benefits – up to $10,000 per eligible employee from March 13, 2020 – December 31, 2020. In other words, the maximum benefit for 2020 resulted in credit of up to $5,000 per employee. Companies can STILL do this today.
CAA Changes
In December 2020, Congress revised the provision resulting in the Consolidated Appropriations Act (CAA), extending the credit for eligible employers that continue to pay wages during COVID-19 closures or recorded reduced revenue through June 30, 2021. The CCA also:
- Increased the amount of the credit to 70% of qualified wages, beginning January 1, 2021, and raised the limit on per-employee qualified wages from $10,000 per year to $10,000 per quarter. In other words, you can obtain a credit as high as $7,000 per quarter per employee.
- Expanded eligibility by reducing the requisite year-over-year gross receipt reduction from 50% to only 20%. And it raised the threshold for determining whether a business is a “large employer” — and therefore subject to a stricter standard when computing the qualified wage base — from 100 to 500 employees.
- Provided that employers who receive PPP loans still qualify for the ERTC for qualified wages not paid with forgiven PPP funds. (This provides an incentive for PPP borrowers to maximize the nonpayroll costs for which they claim loan forgiveness.)
ARPA Changes
The American Rescue Plan Act (ARPA) was created to increase the speed of recovery to the economic and health struggles faced by COVID-19. The new law extended the ERTC through the end of 2021 and expands the pool of employers who can take advantage of the credit by including so-called “recovery startup businesses.” A recovery startup business generally is an employer that:
- Began operating after February 15, 2020, and
- Has average annual gross receipts of less than or equal to $1 million.
While these employers can claim the credit without suspended operations or reduced receipts, it’s limited to $50,000 total per quarter.
The ARPA also targets extra relief at “severely financially distressed employers,” meaning those with less than 10% of gross receipts for 2021 when compared to the same period in 2019. Such employers can count as qualified wages any wages paid to an employee during any calendar quarter — regardless of employer size. Otherwise, the ARPA continues to distinguish between large employers and small employers for purposes of determining qualified wages.
Note that the ARPA extends the statute of limitations for the IRS to evaluate ERC claims. The IRS will have five years, as opposed to the typical three years, from the date the original return for the calendar quarter for which the credit is computed is deemed filed.
Additional IRS Guidance
Prior to the passage of the ARPA, the IRS issued additional guidance on the ERTC that helps determine whether operations were partially suspended because of a COVID-19 related government order.
The IRS has previously stated that “more than a nominal portion” of operations had to be suspended, meaning:
- Gross receipts from the suspended operations are 10% or more of total gross receipts,
- Hours of service performed by employees in the suspended operations are 10% or more of total hours of service, or
- Modifications to operations result in a reduction of 10% or more of the employer’s ability to provide goods or services.
How can my company claim the ERTC?
The ERTC is a payroll tax credit to be reported on Form 941 and may be up to a total of $33,000 per employee for 2020/2021 depending on facts. Any eligible employer can claim ERTC in either/both 2020 and 2021. Special care should be taken when calculating and claiming the credit, especially if the business also received a PPP loan, or other government funding since COVID-19, as IRS rules required an analysis to avoid any “double-dipping.”
Every business is unique and the amount of your ERTC will vary depending on the time period, number of employees, and other factors. To effectively position your business with the benefits of the ERTC, it is encouraged to partner with a tax consultant who knows your industry and the tax laws. To have a discussion about the potential of ERTC during calendar years 2020 and 2021, reach out to Clark Schaefer Hackett consultant Phil Hurak (pshurak@cshco.com) today.
Special thanks to Phil Hurak for writing this edition of our HR Question of the Week!
For additional information regarding the ERTC, please visit the CSH COVID Resource Center containing articles on ERTC, PPP, FFCRA, and other benefits potentially available to your business.
Strategic HR knows that keeping abreast of HR Compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our HR Compliance page to learn about our auditing services which can help you identify trouble spots in your HR function.
Do I Have to Pay Taxes On My Unemployment Benefits?
HR Question:
It’s tax season, and I’m a little confused about how to handle the unemployment benefits I received in 2020 – do I have to pay Federal and State taxes on this income?
HR Answer:
Millions of people impacted by the COVID-19 pandemic were able to receive some relief through unemployment benefits. As the nation navigates our annual tax season (a little later than normal, as the tax deadline was delayed until May 17), many are surprised to learn that income is actually taxable!
When it comes to federal income taxes, unemployment benefits are taxed as if they were wages. The American Rescue Plan, signed into law on March 11, 2021, includes a provision that makes the first $10,200 of unemployment nontaxable for each taxpayer who made less than $150,000 in 2020. If you are married, and your spouse also received unemployment, both of you can exclude $10,200.
However, when it comes to state income taxes, it depends on where you live. Some don’t tax them at all, while others are making exceptions for 2020 and 2021 as a result of the pandemic. To help taxpayers understand how unemployment benefits are taxed on a state-by-state basis, Kiplinger created a comprehensive guide. Let’s take a look at the guidance for Ohio, Kentucky, and Indiana:
Ohio
Ohio remains aligned with the federal government exemption guidelines for unemployment income in 2020, meaning the individuals are not required to pay taxes on unemployment benefits up to $10,200. The IRS is expected to issue a refund for anyone who filed prior to the American Rescue Plan being enacted. More details to come.
Kentucky
Kentucky will not provide an exemption for up to $10,200 of unemployment compensation received in 2020. Kiplinger provided further guidance by highlighting that “[any] unemployment compensation excluded on a Kentucky resident’s federal income tax return must be added back on his or her Kentucky individual income tax return on Schedule M, Line 5, as an ‘Other Addition.’”
Indiana
Indiana is not currently allowing for an exemption for unemployment compensation, which means that “an amount excluded for federal income tax purposes has to be added back when filing your Indiana income tax return.” As Kiplinger pointed out, this could change depending on what the Indiana General Assembly decides in the coming months.
But a key point to note here is that there may be a part of unemployment benefits that are deductible (as Indiana considers unemployment benefits taxable). “The deductible amount depends on your federal adjusted gross income, how much unemployment compensation you receive, and your filing status,” Kiplinger reports. In order to calculate the exact amount of your deductions, Kiplinger also recommends completing the “Unemployment Compensation Worksheet” in the Form IT-40 instruction booklet.
For additional guidance on how unemployment benefits are taxed in your state, contact your tax advisor or get in touch with your state’s Tax and Information Assistance contact.
Thank you to Strategic HR’s Terry Salo, Senior HR Consultant, for contributing to this HR Question of the Week.
Strategic HR knows that keeping abreast of HR Compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our HR Compliance and Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.
Are Employee Gift Cards Considered Taxable Benefits?
HR Question:
To thank my employees for their extra efforts, I have provided them with a $50 gift card. Accounting is telling me I have to report the value of the gift cards as taxable benefits. Is that true?
HR Answer:
Yes, it’s true! According to the IRS, cash, gift certificates, and gift cards are considered taxable fringe benefits and must be reported as wages. But you may be relieved to know that this rule doesn’t apply to all gifts or perks that you may give to employees.
The IRS tells us that we can exclude the value of a “de minimis” benefit from an employee’s wages. For those unfamiliar with a “de minimis” benefit, the IRS defines it as “any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable.” Most employers tend to categorize de minimis gifts in the under $50 range, but for some, it can go upward of $100.
In comparison to cash or cash equivalents which are always considered taxable benefits, small gifts have much more flexibility when it comes to tax responsibilities according to the IRS. But how organizations denote “small” is still up for negotiation. When deciding on a gift or fringe benefit for an employee, consider the value and the frequency of the gift or benefit. For example, purchasing a book for an employee for their birthday would be excluded. Purchasing a book every month for an employee would not be excluded due to the frequency of the gift, regardless of the value of the book.
Additional Examples of Tax-Exempt Benefits
Other examples of de minimis benefits include such things as some meals, occasional parties, occasional tickets for events (not season tickets), holiday or birthday gifts (other than cash or cash equivalents). Essentially, occasional gifts that can’t be redeemed for cash value can be considered as these exempted benefits.
There is also an exemption for achievement awards, which come with additional rules of their own. Examples of these gifts include gifts for achievements such as safety milestones or length of service or anniversary milestones. Certain achievement awards can be excluded from the employee’s wages if the awards are tangible personal property and meet certain requirements. Notable exceptions from The Tax Cuts and Jobs Act prohibit certain property as an employee achievement award, including vacations, lodging, stocks, bonds, and securities. Limitations are further detailed in the Act, including $400 maximum for non-plan awards and up to $1600 if you have a documented, non-discriminatory program surrounding the awards.
Additional requirements exist for these achievement awards. For example, length-of-service awards can’t be received during the employee’s first five years of employment or more often than every five years. Also, safety awards can’t be given to more than 10 percent of eligible employees during the same year.
Employee awards are an important part of employee engagement. It is important, however, to make sure you don’t turn that $100 thank you gift card into a much more expensive “gift” by assuring you are properly handling the taxes accompanying such a gift.
Strategic HR knows that keeping abreast of HR Compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our HR Compliance Services to learn more.
How to Handle Unemployment Fraud?
HR Question:
Our company is getting unemployment notices for people that have never worked here, or in some cases, people who are still employed. How should I handle this unemployment fraud?
HR Answer:
The increasing level of unemployment fraud has been a source of frustration for states, employers, and individual employees. Various US congressional packages providing supplement unemployment relief have provided not only relief for the unemployed, but also an opportunity for criminals to seek ways to attempt to benefit. The US Department of Labor has reported “a surge in fraudulent unemployment claims filed by organized crime rings using stolen identities that were accessed or purchased from past data breaches.”
States that were already overwhelmed by the unexpectedly high levels of unemployment insurance (UI) claims are now having to pursue fraudulent claims to recover benefits that should not have been paid. Employers’ unemployment rates may increase as a result, and employees find themselves dealing with identity theft concerns.
In this article, we’ll share information and resources that employers and employees can use to understand who are the most likely victims and what to do should they suspect or fall victim to unemployment fraud.
What Can Employers Do?
There are some measures that employers can take to address unemployment fraud. HR professionals should be on alert to scrutinize any notices that they receive from state unemployment administrators to ensure their accuracy. If fraud is suspected, be sure to follow your state’s reporting instructions. Note that some states require both the employee and employer to file reports.
In addition, it’s important to inform your employees about the prevalence of identity theft and unemployment fraud scams that are occurring across the United States. As a proactive measure, consider sharing the information below regarding what employees can do to understand if they might be at risk for unemployment fraud and what to do if they become a victim.
What Can Employees Do?
Employees who have had a fraudulent unemployment claim filed in their name are recommended to refer to the Unemployment Insurance Fraud Consumer Protection Guide from the U.S. Department of Justice’s National Unemployment Insurance Fraud Task Force. This guide explains:
- Who might be more at risk of becoming a victim
- Signs that you might have been a victim of a crime
- Steps to take if you believe you’re an unemployment fraud victim
- How to protect yourself from becoming a victim
- Unemployment insurance fraud resources and links for each state
According to the UI Fraud Consumer Protection Guide, if a UI claim has been filed in your name that you did not file, you should:
- Report it to your state workforce agency immediately.
- If you’re currently working, notify your employer of the fraudulent claim as they may also need to file documentation.
- File a complaint using the National Center for Disaster Fraud form or by calling the Disaster Fraud Hotline at (866) 720-5721.
Additionally, employees are encouraged to go to annualcreditreport.com to ensure they have not been a victim of identity theft. Employees may also want to place a free one-year freeze on their credit by contacting any one of the three nationwide credit reporting bureaus listed below. When one bureau is notified, they must notify the other two.
- Equifax: 800-525-6285
- Experian: 888-397-3742
- TransUnion: 800-680-7289
Review Cybersecurity Practices
With the rise of unemployment fraud cases using information that was obtained from previous data breaches, it’s important that employers and employees implement good cybersecurity practices. This presents an opportune moment to review how your organization protects personally identifiable information (PII), such as name, address, birth date, social security number, etc. Do you encourage employees to create unique and strong passwords? Do you require two-factor authentication or alternate solutions to increase your cybersecurity? Whatever safety measures you have in place, we recommend that you continue to review them to ensure that you are covering all of the necessary areas and that your employees are following cybersecurity practices consistently.
Special thanks to Cathleen Snyder, SPHR, SHRM-SCP, and Melinda Canino for contributing to this edition of our HR Question of the Week.
Still have questions? Contact our HR experts! Give us a call at 513.697.9855 or email us at Info@strategicHRinc.com.
Do We Have to Provide Employees Time Off to Vote?
HR Question:
We received a request from an employee for time off to vote. My state doesn’t require voting leave, but this employee works in a different state, and we have employees located across the country. What do I need to do here?
HR Answer:
If an employee of yours works in a state with a voting leave law, you will need to comply with that law. Most states require that employers provide at least a few hours of employee time off to vote, and many of those states require some or all of that time to be paid. In New York, for example, all registered voters are allowed to take off as much time as is necessary to enable them to vote and are entitled to be paid for up to three of those hours. You’ll also want to check any applicable voting leave laws for notice requirements and for specifications on when during an employee’s shift the time off should be given. You can find all this information on the HR Support Center by entering “voting leave” in the search bar. Workplace Fairness also has an online interactive tool to allow you to look up voting laws by state.
To keep things simple and fair, you might consider implementing a single company policy that meets or exceeds all applicable state requirements. That way there’s no confusion about what your policy is, employees in states without leave requirements won’t feel like they’re being excluded, and everyone in your company will have the opportunity to vote. Some employers even go the extra mile by cancelling all meetings on election day or making that day a paid holiday.
Thank you to our HR Support Center for providing the response to this edition of our HR Question of the Week.
Do you wish your HR Handbook and Job Descriptions would write themselves? Would you like to have 24/7 access to HR forms, checklists, and templates so you don’t have to “recreate the wheel”? Check out our Virtual HR Solutions to see how we can make “going it alone” not so ALONE! In addition to comprehensive online HR resources & tools, you can also have unlimited access to HR professionals via phone/email/chat.
Can I Store My I-9 Forms Electronically?
HR Question:
I have heard of other employers storing all of their I-9’s electronically, rather than in paper form. Is that acceptable? Is there anything I need to know before moving to store my I-9 Forms electronically?
HR Answer:
Yes, many employers are moving to the electronic completion and storage of their employees’ I-9 Forms. According to U.S. Citizenship and Immigration Services, you may maintain the forms either electronically or on paper, with a few requirements to keep in mind.
Storing Form I-9s Electronically
If you are storing them offsite, you must be able to produce the documents within 3 days of the request from an auditor. If you decide to maintain your records electronically, you have the option of using an online payroll provider which should allow the employees to complete the form online and store it. Alternatively, you can have employees complete the hard copy paper form and then scan and upload the original signed form. Either option is an acceptable alternative for electronic storage. The paper form can then be destroyed once it has been properly stored electronically.
How to Manage I-9 Verification Documents
Regarding the documents that are provided as “proof” for the I-9, employers are not required to create or attach photocopies of documentation submitted to satisfy the Form I-9 requirements during the employment eligibility verification process, but the practice is permissible. If you choose to make photocopies of the documents, make sure that you do it for ALL employees to avoid any potential claims of discrimination.
Requirements of Electronic Storage Systems
If you are using an electronic system, U.S. Citizenship and Immigration Services (USCIS) require you to make sure the system you are using can meet the following requirements:
- It has controls that ensure the system’s integrity, accuracy, and reliability;
- It has controls that can prevent and detect the unauthorized or accidental creation of, addition to, alteration of, deletion of, or deterioration of an electronically completed or stored Form I-9, including the electronic signature if used;
- You have an inspection and quality assurance program in place that regularly evaluates the system and includes periodic checks of electronically stored Form I-9’s, including the electronic signature if used;
- You have an indexing system that allows users to identify and retrieve records maintained in the system; and
- The system has the ability to reproduce legible and readable paper copies.
In addition, you are required to document the process and procedures used for collecting and maintaining the documents. You can find additional details on the requirements for storing I-9’s electronically on the U.S. Citizenship and Immigration Services website.
Finally, keep in mind that you must have a secure IT system in place. The system should be able to audit who accessed the files and/or edited them, as well as ensure that only authorized individuals have access to the records. You must also have a system in place that ensures the information is securely backed up in the event of a system crash.
How Long You Are Required to Store I-9s
An employer must keep the original Form I-9 for all current employees for as long as they are employed. After an employee terminates employment, the original Form I-9 must be on file for EITHER: three (3) years after the date of hire or one (1) year after employment is terminated – whichever is later. For example:
Scenario A: If an employee is terminated after only 6 weeks on the job, their Form I-9 must be kept for three years after the hire date.
Scenario B: If an employee terminates after 5 years of employment, their Form I-9 must be kept for one year after the date of termination.
Here’s an easy way to calculate the date of Form I-9 retention:
- If an employee worked fewer than three years (Like scenario A above): Add 3 years to the date of hire
- If an employee worked more than three years (Like scenario B above): Add 1 year to the date of termination
- Following the above calculations, use the later of the two dates as the retention date.
Ensuring Storage Safeguards
Storing your I-9’s electronically can be a wonderful solution for these documents – just be sure you have a process in place with the appropriate safeguards and systems. The USCIS warns us that if the records cannot be retrieved during an audit, even if there is proof of a system crash, you will be in violation.
Thanks to Patti Dunham, MBA, MA, SPHR, SHRM-SCP for contributing this edition of our HR Question of the Week!
Strategic HR knows that keeping abreast of HR Compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our HR Compliance and Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.
What Should I Consider Before Doing a Reduction in Force?
HR Question:
I may need to restructure my workforce as a result of the downturn in business activity. What should I consider from a fairness and legal standpoint?
HR Answer:
Determining the need for a Reduction in Force (RIF) is a challenging decision to make, but it is sometimes necessary to keep the business running in a positive way. According to the Society for Human Resource Management (SHRM), the definition of a RIF “occurs when changing priorities, budgetary constraints, or other business conditions require a company to abolish positions.”
Before moving forward with a RIF, we recommend that you thoroughly consider all of your options. Some states offer assistance to employers that may help them avert layoffs or receive early intervention to help the workforce impacted by a RIF. For example, Ohio Job and Family Services’ Office of Workforce Development offers a Rapid Response (RR) program that is funded by the U.S. Department of Labor. Services may include customized workshops, training, up-skilling, retooling, certifications or skill matching.
If you determine that your organization needs to move forward with a reduction in force, you should use a carefully planned approach. You will need to be aware of and adhere to state and federal regulations to ensure compliance throughout your process. This will help to protect your organization against employment litigation. It is also important to train your management staff on what they can and cannot do in the RIF process. This is a time to go back to the basics when it comes to managing your human resources and protecting your business.
8 Recommended Steps to Follow When Considering a Reduction in Force
1. Select the Employees for the Layoff
It’s important to determine an objective criteria process for your selection process. Consider factors such as criticality of the position to the business, seniority, performance review scores and any corrective action documents that may have been issued. This is the time that accurate and timely employee documentation throughout the year is important as it will play a big part in your selection process.
You will need to remind managers of the importance of using objective criteria in the selection process and not to make decisions based on who they like or dislike. You may also consider having a “no backfill for one year” rule to ensure the RIF is truly necessary and not a way for managers to “clean house.”
Once you have an initial list of employees to be laid off, you should apply steps 2 – 5 below to ensure that you are in compliance with state and federal regulations.
2. Avoid Adverse / Disparate Impact
According to SHRM, adverse or disparate impact refers to “employment practices that appear neutral but have a discriminatory effect on a protected group. Adverse impact may occur in hiring, promotion, training and development, transfer, layoff, and even performance appraisals.” For help in understanding and navigating this, check out SHRM’s toolkit to avoid adverse impact in employment practices.
3. Review Federal and State WARN Regulations
If an organization is contemplating a RIF or a layoff, there are several factors to take into consideration such as reviewing state and federal statutes, including the Worker Adjustment and Retraining Notification Act (WARN). WARN offers protection to workers and even communities by requiring employers to provide a 60-day notice in advance of a plant closing or what they deem as a mass layoff. This Act is only applicable to employers with 100 or more employees.
4. Review ADEA and OWBPA Regulations
You will need to comply with two federal regulations that offer protections based on age: ADEA and OWBPA.
The Age Discrimination in Employment Act (ADEA), protects employees 40 years of age and older from discrimination on the basis of age in hiring, promotion, discharge, compensation, or terms, conditions or privileges of employment.
The Older Workers Benefit Protection Act (OWBPA) is an Act that amends the ADEA to clarify the protections given to older individuals in regard to employee benefit plans, and for other purposes.
5. Determine Severance Packages, Benefits Coverage, and Additional Services (if any)
As you develop severance packages, benefits coverage, and any other services that you will offer, you should review the Employee Retirement Income Security Act (ERISA) to ensure compliance. ERISA is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.
6. Train Supervisors and Managers
These individuals are your first-line of defense (and many times your biggest legal threat) when it comes to employees’ perception of company policies, procedures, and decisions. Although human resources would always like to be the ones to address employee concerns, your front-line managers and supervisors are doing it on a daily basis whether they want to be or not. They should be properly trained on how to handle employee concerns.
Some suggestions for supervisor/manager training include:
- Basic Discrimination Laws: Be sure supervisors and managers are aware of basic discrimination laws. Assist them with increased communication and employee relation skills so they are able to respectfully support company decisions and communicate with employees regarding their concerns or issues.
- Staying Compliant and Consistent: Ensure managers and supervisors are clearly aware of what they can and cannot do from a legal perspective. Those involved in the employment process should know and document the process used when restructuring or selecting employees for layoff, and then use it – consistently. A clear legally defendable (non-discriminatory) reason when selecting those who will be let go is the most important aspect of restructuring. In addition, managers and supervisors should be guided by human resources to ensure an appropriate message is being delivered when HR isn’t delivering it.
- How to Maintain Good Documentation:We all know that documentation is essential for a good legal defense, but also remember it can hurt as well. Train your staff on what good documentation looks like and what to avoid. Remind them that everything is subject to review in a lawsuit – employee warnings, performance evaluations, and even those simple notes we write down on a sticky note and throw in their file. Be aware of what you are putting down into writing and make sure it is objective and defendable.
7. Prepare for Reduction in Force Meetings
As you prepare for your layoff meetings, have a clear plan of what is going to be communicated, who is responsible for communicating the message, and how the message will be delivered both to those who are being directly impacted and those who will remain. It can be helpful to think through your anticipated frequently asked questions and prepare answers prior to your meetings.
8. Inform Your Workforce of the Layoffs
As you deliver the news of your reduction in force, remember that the golden rule still stands in employment – treat your employees the way you would like to be treated. Think about how you would prefer to be treated during these tough times when decisions are so difficult. Treat your employees with dignity and respect at all times. Provide notice of the layoff if it is reasonable, and provide some type of outplacement if you are able.
Be sure to listen to your employees as well. Employees are more likely to file a claim against employers when they feel like they are ignored or that their concerns are not addressed. Although your message may not always be what they want to hear – allow them to be heard and feel a part of the process.
Remember also, the RIF not only effects the person being released from his/her job, but also the remaining employees. There can be an emotional toll on those who remain, in addition to the impact it may have on their job duties as well. Be prepared to provide the resources and tools necessary to help your staff to stay engaged and do well through this difficult time of transition.
How to Handle Changes to Job Responsibilities
Moving forward, your next consideration is to have a plan about who will absorb each exited person’s job tasks. You should determine if this situation requires a long term solution or if you foresee returning to the prior structure again when the budget allows. Job descriptions for those positions affected by the lay-off will need to be reviewed to reflect changes to the responsibilities and functions of the position. Sometimes you may find the change has actually improved the position making it more efficient.
You may also want to consider a salary review for the positions affected. Since some individuals are now performing the functions of multiple positions, is a pay increase warranted and feasible?
Remember, the job description is based upon the position itself, not the individual performing the job. Make sure to get input from all relevant parties – supervisor and employee – when determining the final role of an impacted position.
In addition, we recommend that you consider cross-training employees on job tasks to be ready for these unforeseen times and to have coverage in the absence of employees when they are out of the office for personal reasons.
To ensure your compliance with all federal and state laws and regulations in the process of a reduction in force, we encourage you to consult with your attorney to review your plans before implementation. Be prepared with a plan and look at the strengths and weaknesses of your team so you are not caught off guard!
If your business is considering a reduction in force, the team at Strategic HR is available to help coach you through the process and decisions that will need to be made. We are here to help you through the tough times – just contact us.
What Should Ohio Employers Know About Marijuana in the Workplace?
Question:
As an Ohio employer, can you help me understand how marijuana legalization fits into our employment policies?
Answer:
You are not alone in trying to navigate the everchanging state of marijuana legalization. A growing number of states have either passed laws, or are considering legislation, to ease restrictions on employees’ use of marijuana for medicinal or recreational reasons. So, employers that need or want to continue testing or disciplining for marijuana use must know the applicable state and federal laws, including the court decisions that interpret those rules.
Medical marijuana was legalized in Ohio in September 2016, and retail sales began on January 16, 2019, when the first four licensed dispensaries opened for business. As of February 1, 2020, OHDispensaries.com reports 48 of the 57 licensed dispensaries are operating. So, it is important that you know your rights as an Ohio employer regarding medical marijuana.
Below, we will walk you through some commonly held perceptions and workplace scenarios to help your Ohio-based company evaluate how marijuana legalization impacts your employment policies.
True or False: Medical marijuana users have job protections in Ohio due to state disability discrimination laws.
Answer: False. Presently, there is nothing in Ohio’s medical marijuana law that prohibits or limits an employer’s right to drug test employees for marijuana, require a drug free workplace, or impose discipline or discharge an employee violating an employer’s policies The law protects the employer’s right to fire or discipline any employee found to be using medical marijuana. The statute also states that it will not interfere “with any federal restrictions on employment” related to the use of medical marijuana in the workplace. All marijuana use, whether for medical or recreational use, is still illegal under federal law. It is listed as a Schedule I drug under the Controlled Substances Act, which means that it is deemed to have no medical value and a high potential for abuse.
True or False: If an employee has a medical condition that requires the use of medical marijuana, I must accommodate the employee.
Answer: False. In outlining employers’ rights, Ohio’s Revised Code 3796.28 states that an employee has no specific protections. Under the law, you do not have to accommodate an employee’s need to use the substance. An employer has the right to not hire an employee based on medical marijuana use, possession, or distribution. The law does not allow a cause of action against an employer if an employee believes he or she was discriminated against due to medical marijuana use. An employer is allowed to have a zero-tolerance drug free policy in place, with or without special accommodations for those who use medical marijuana.
True or False: My company has its headquarters in Ohio but has locations in other states. Even if the laws in those states provide workplace protections for medical marijuana users, our employees in those states who use medical marijuana may be disciplined, fired, or not hired.
Answer: False. Thirty-three states and Washington, D.C., have legalized medical marijuana use, and 10 states have approved both medical and recreational use. Registered medicinal users—or “cardholders”—in some states other than Ohio may have job protections. For example, beginning in 2020, employers in Nevada and New York City cannot consider positive pre-employment marijuana screens. However, some exceptions apply, particularly for safety-sensitive positions. Consider research published last year by the National Institute on Drug Abuse where they found that employees who tested positive for cannabis had: 55 percent more industrial incidents, 85 percent more injuries and 75 percent greater absenteeism compared to those who tested negative.
State statutes with nondiscrimination provisions for medicinal use typically exclude jobs that require drug testing under federal law. For example, certain commercial motor vehicle operators would be excluded from job protections because the Department of Transportation requires them to pass drug and alcohol screens.
While Ohio law provides employers with employment rights on the topic of medical marijuana use, HR professionals must remain vigilant to ensure that your company does not act irresponsibly or apply policies in a discriminatory manner. Make sure that your drug-testing practices and drug-free workplace policy fall within the parameters of the laws in the states in which your company operates. You may find it helpful to consult your legal counsel to ensure that you understand and comply with the federal, state and local laws that may apply to your organization.
Strategic HR knows that keeping abreast of workplace compliance issues and deadlines can be daunting, especially when the laws keep changing. We can help you by offering resources to help you identify and mitigate compliance issues and by making sure you are informed of changes and reacting in a timely manner. Our HR Audit will help your organization identify trouble spots in your HR function. Visit our HR Audit page to learn more about this helpful service.
Compensating Employees for Travel Time
Question:
We have employees who occasionally have to travel from one of our offices to another during their work day. Are we required to pay them for their travel time?
Answer:
This is a very common situation, and the quick answer is it depends. Exempt employees generally are not entitled to additional compensation for travel time, so when evaluating whether or not to compensate for travel time you should focus only on your non-exempt staff. Work-related travel time NOT connected to the employee’s regular commute to and from work should generally be compensated and count toward an employee’s hours worked for the purposes of calculating overtime.
You should also have your travel time pay practices and policies reviewed by your legal counsel for the states and localities in which your employees are working to ensure compliance with applicable laws, and to ensure that your policies and practices are appropriate to your particular situation.
If an employee is commuting from home to their usual work site, it is not counted as compensable work hours; however, non-exempt employees who travel as part of their principal working duties should be compensated. Examples might include an office administrator traveling between multiple offices for meetings or a repairman going from one assignment to the next.
Another example of compensable travel time is if the employee is traveling from home to a non-typical work location and back home in the same day. The amount of time that the employee spends traveling to and from the non-typical work location that exceeds the employee’s normal commute is considered compensable travel time.
Generally, employees should be compensated for all time spent traveling during regular business hours.
Please bear in mind that laws exist in numerous states that provide expanded definitions of travel time or impose additional requirements for travel time pay. The Fair Labor Standards Act (FLSA) addresses this issue specifically in Section 29 CFR § 785.38 (Portal-to-Portal Act).
Strategic HR knows that keeping abreast of HR Compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our HR Compliance and Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.
What is a Certificate of Qualification for Employment?
HR Question:
This week a hiring manager was excited about a candidate but learned during an interview that the candidate has had a Felony for theft. The candidate mentioned having an Ohio Certificate of Qualification for Employment that they could provide. Although we are not a bank and the role does not handle money, we need to make sure our organization will not be put at risk by making a careless hire. Alternatively, we do not want to be discriminatory or lose an otherwise qualified individual that could make a great fit for the role. So what is a Certificate of Qualification of Employment and how can it help our company?
HR Answer:
Ohio law provides for a certificate to be available that removes criminal-record-based barriers to employment, without erasing or hiding the criminal record itself. The “Certificate of Qualification for Employment” (CQE) will allow persons who have a previous felony or misdemeanor conviction to apply to the court to lift the collateral sanction that bars them from being considered for employment in a particular field. A CQE is only given if an individual has been through an extensive application and investigation process and deemed, by both the Department of Rehabilitation and Corrections (DRC) and the Court, to be rehabilitated. A Certificate of Qualification for Employment may be revoked if the offender is convicted of or pleads guilty to a felony offense committed subsequent to the issuance of the certificate.
Employer Benefits of a Certificate of Qualification for Employment
A CQE can benefit an employer by removing mandatory rules that prohibit licensure or employment of individuals with certain criminal records. The Certificate may be used for general employment opportunities as well. If an employer knowingly hires a CQE holder, the Certificate offers the employer legal protection from a potential negligent-hiring lawsuit. (However, if the employer fails to take action if dangerous or criminal behavior is exhibited after hiring and retains the employee after such behavior, the employer can then be held liable.)
The Ohio Department of Rehabilitation and Correction provides information to learn more about the certificate and a link where you can assure the authenticity of a CQE. You can also contact The Ohio Justice and Policy Center or directly review Ohio Revised Code 2953.25.
Banning the Box
There are many states and cities with laws making it illegal to exclude an otherwise qualified applicant who has had a misdemeanor or felony. At least 16 states have already passed legislation, “banning the box”, which prevents employers from inquiring about a criminal background at initial application. Federal EEO laws, including Title VII of the Civil Rights Act of 1964, prohibit employers from discrimination by using criminal history information in their employment decisions because they can significantly disadvantage protected individuals such as African Americans and Hispanics.
The EEOC also has written the following guidance you may refer to:
- What You Should Know About the EEOC and Arrest and Conviction Records
- Enforcement Guidance on Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964
This candidate’s Certificate of Qualification for Employment could prove to be a win-win. An applicant who has the qualifications you need and is looking for that long-deserved break may prove to be one of your most grateful and loyal employees if given the opportunity. Remember whether hiring or declining, before making a potentially costly decision, it is important to educate yourself on related federal, state, and local laws and/or seek legal counsel.
Struggling with hiring the right person and figuring out how and where to find candidates? Wondering how to do drug screens, background checks, physicals, references, and assessments? We can help you make sense of it all. Whether you need a complete recruitment solution or just help with pieces of the process, Strategic HR can assist you. Visit our Recruitment page to learn how we can provide you with top-notch outsourced recruitment solutions.
Can you be an Employee and Independent Contractor for the Same Company?
HR Question:
Can an individual that is working for us be both an employee AND an independent contractor?
HR Answer:
According to IRS guidelines, it is possible to have a W-2 employee who also performs work as a 1099 independent contractor. For example, it is possible that an individual could work part of the year as an employee and part of the year as an independent contractor due to a layoff or even a resignation. Another way this could occur would be if the individual is performing completely different services or duties for a company that would qualify them as an independent contractor.
Examples of Employee and Independent Contractor Dual Classification
- A production worker is laid off due to a slow down in the warehouse. The individual begins doing janitorial work for a few local companies and provides services to the same company from which they had been laid off. In this situation, the individual would receive a W-2 for the time they worked as an employee and a 1099 for the janitorial work.
- An Executive Assistant who also owns a cleaning service business can have dual classification if their employer contracts with their cleaning company to clean the offices in the evenings.
- An IT Help Desk Associate who performs graphic design work as a side gig can have dual classification if their employer contracts with the individual to create a new logo for the company.
- An Electrician who also does handy work after hours in the community can have dual classification if the individual contracts with their employer to replace the company’s roof.
- A custodian who works for a county public school and also owns and operates his own snow plowing service on nights and weekends can be classified as an employee and issued a Form W-2 for his custodian position. At the same time, when the county contracts with the individual for snow plowing services, he is an independent contractor as well.
How to Determine if Someone is an Employee or Independent Contractor
To determine if this dual classification applies to your situation, you must first verify if your current (or previous) employee’s secondary work qualifies as an independent contractor. The IRS provides specific guidance surrounding the Independent Contractor Definition.
As an alternative to making the determination yourself, you can choose to have the IRS review your situation and make the determination for you, but it will take some time. You would need to submit your position information to the IRS directly by completing IRS Form SS-8. In doing this, the IRS will determine the proper job classification and even guide you on dual classification. Although you will be confident in using the correct classification by following this route, know that the average response time is estimated to be six months.
If you (or the IRS) determine that the extra work being completed meets the Independent Contractor guidelines, you can pay them as both an employee and an independent contractor. If you elect to do this, be sure to keep accurate records. Companies should maintain a W-4 for employees and a W-9 for those working as a contractor. In addition, be sure to clearly and accurately document the hours worked in each category and the duties that were performed. It is widely believed that having a worker receive both a W-2 and a 1099 increases the likelihood of an audit by both the IRS and the DOL. Therefore, maintaining detailed records will be essential for your defense.
What Happens if you Misclassify Employees
Criminal penalties and liability for backpay may be imposed against organizations and leaders if Fair Labor Standards Act (FLSA) laws are violated. The DOL has recently increased its focus and scrutiny on employer misclassification of independent contractors. It is important to be aware that additional auditors have been engaged to direct their attention toward this area of compliance. Therefore, be sure that you have followed all relevant guidelines and maintain proper recordkeeping to protect your organization and remain compliant.
Thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP for updating this HR Question of the Week.
Strategic HR knows that keeping abreast of HR Compliance issues can be daunting, especially when the laws keep changing. We can help you stay compliant by fielding your questions regarding properly classifying your employees and other HR matters. We offer resources to help you identify and mitigate compliance issues. Visit our HR Compliance & Recordkeeping page to learn about our auditing services which can help you identify trouble spots in your HR function.
Do I Have To Pay Employees for the Company Holiday Party?
HR Question:
Our organization is hosting our annual holiday party, and we’re trying to answer a question – do we have to pay our employees to attend?
HR Answer:
It’s that time of year again – the holiday season is here! And with this season come parties and events designed to celebrate this festive time of year, show appreciation for employees and their contributions, and build team camaraderie by gathering together. Plus, in a labor market where employee retention is a primary concern, holiday parties can be a way to provide levity to a stressful time, show an organization’s thanks and commitment, and engage employees (and potentially, their families). But just because it’s a work-sponsored event, does that mean employers have to compensate their employees for time spent at the party?
Do I Have to Pay Employees for the Holiday Party?
In general, employers are not required to pay employees if the company holiday party is considered voluntary and takes place outside of regular working hours. Holiday parties scheduled during the regular workday should be compensated. If the employer requires all employees to attend an event outside of regular working hours, then it may be considered work time and employees should be compensated for attendance. Be sure to follow applicable FLSA requirements as well as any internal policies that you have established.
How Should I Pay Employees for the Company Holiday Party?
If an employee is exempt, their salary covers all work obligations. Non-exempt employees, however, need to be paid for attending in the following situations:
- If attendance is mandatory, non-exempt employees should be paid for the extra time and travel to and from the party (if it’s not held at the regular work location).
- If the holiday party includes work-related activities, such as a meeting and/or team-building exercises, non-exempt employees should be compensated.
- If a non-exempt employee is working at the event including set-up, clean-up, serving, and/or representing the company (i.e., wearing a mascot costume), they should be paid, even if they are working voluntarily. Want to keep internal costs down and avoid placing additional stress on your team? Don’t ask or permit non-exempt employees to work the holiday party.
It’s important to note some employment contracts or collective bargaining agreements may have provisions that require employers to pay employees for attending certain events, including holiday parties. Be sure to keep those agreements in mind when scheduling or factoring in potential costs for a holiday party.
What Else Should I Consider?
As always, whenever there’s alcohol involved, it’s important to keep some of the legal considerations in mind. For example, do you have a plan for handling alcohol? Will there be drink tickets or a cash bar? Do you plan to enforce a drink limit to help avoid DUIs and other potential risks? These and several others are good questions to ask to determine ways to limit the organization’s liability for this event.
In the end, it’s important for employers to communicate clearly about whether attendance is voluntary, and whether employees will be compensated for their time. The goal of a holiday party is to celebrate, relieve some stress, and enjoy spending time with your team – not to force people to gather if it’s not how they want to spend their time.
Thank you to Becky Foster, Senior HR Business Strategist, and Samantha Kelly, Senior Sales and Marketing Strategist, for contributing to this HR Question of the Week.
Do you find yourself without answers to tough Benefits and Compensation questions? Whether you need an analysis of your current benefit offerings, a review of your salary structure, or outsourced payroll/benefits administration, Strategic HR Business Advisors can do the job. Please visit our Benefits & Compensation page for more information or Contact Us.
Federal Employment Poster Requirements for On-Site and Remote Workers
HR Question:
I keep receiving notices that I need to order new posters to meet federal employment poster requirements. Many of my employees aren’t in the office regularly and those that are don’t look at the posters or any of the compliance documents we are required to distribute. What’s the risk if we don’t post these posters or distribute the annual notifications to employees? Eliminating this task would save me and the company a lot of time and money.
HR Answer:
Even if you feel employees are not reviewing the posters, there’s still a compelling reason to provide them. The Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), and the Employee Retirement Income Security Act (ERISA) require these employment postings and notices. And organizations that don’t comply with the requirements can be fined.
To save time, you can purchase a package of posters from a reputable vendor. This can be an easy, but potentially costly, way to fulfill the necessary poster requirements. However, if you would like a more cost-conscious solution, the DOL has a great option. Their Workplace Posters Overview provides a list of the necessary posters, along with links to downloadable posters in multiple languages.
Did you know that poster requirements can vary by company size and industry? If you’re not sure what federal posters your organization is required to provide, the DOL created the FirstStep Poster Advisor as an interactive, step-by-step guide to help you with poster compliance.
How to Meet Remote Employee Poster Requirements
As many employers have shifted their workforce to a remote or hybrid work model, these employers have to shift their typical in-office practices to meet the Department of Labor’s requirements for their remote employees. To remain in compliance, the DOL requires employers to post labor posters electronically in a file that is accessible by everyone. Also, the file should not be password protected.
Employees must be able to find employment posters for their organization regardless of their work location. So if employers have a hybrid work model, a best practice is to have posters physically posted at the worksite while also including the electronic version of the posters on an accessible intranet.
Penalties For Not Following Federal Employment Poster Requirements
If you are still asking yourself if it’s worth the hassle and expense, consider the potential penalties for non-compliance. In January 2022, the penalties for failure to post and/or provide notifications increased. Although some of the fines may not seem significant, they can add up quickly. According to the Federal Register, here is a sampling of the new maximum penalties for violating the following posting requirements:
- $189 — Family and Medical Leave Act (FMLA)
- $14,502 — Job Safety and Health: It’s the Law (OSHA)
- $23,011 — Employee Polygraph Protection Act (EPPA)
For notifications, the Employee Retirement Income Security Act (ERISA) has significant fines for:
- Failure to provide the Summary of Benefits and Coverage (SBC) Plan Description ($1,362 per failure)
- Failure to provide an automatic enrollment notice for your 401(k) plan ($2,046 per day per person)
The Federal Register Poster Fine Reference provides details for all the fines you can incur for failure to comply.
Don’t Forget About State-Mandated Posters
In addition to federal posters, you may also be required to provide state posters. Here are links to posters required by Ohio, Kentucky, Indiana, and all other states. We recommend consulting with your legal counsel to ensure that you provide all of the posters that are appropriate for your organization.
As you can see, there could be several employment posters that your organization is required to post. So, if you think you are going to save time and money by not posting these materials, you may want to reconsider the potential fines and penalties that could result from non-compliance. Is it worth the risk?
Thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP, Director of HR Solutions for contributing to this HR Question of the Week.
Recordkeeping is one of the more mundane tasks associated with Human Resources, but it is extremely important and can get you into hot water if not done properly. Learn how Clark Schaefer Strategic HR can help with your HR Compliance and Recordkeeping needs. Feel free to Contact Us with any specific questions you may have.
Are Evacuation Drills Mandatory to Meet OSHA Training Requirements?
HR Question:
According to the OSHA Training Requirements, is it mandatory that I conduct practice evacuation drills as part of my company’s annual training?
HR Answer:
The Occupational Safety and Health Administration (OSHA) does not require employers to conduct drills at a certain frequency. However, it is recommended as part of a comprehensive Emergency Action Plan, which is required. OSHA standard 29 CFR 1910.38(a) outlines the requirement for written documentation, planning, and training for workplace emergencies, and as an employer, preparing for the ‘worst case’ is something you should want to do. In today’s world where we’ve seen an increase in active shooter incidents, unpredictable weather patterns, and wildfires, emergency preparedness will allow you and your employees to have a plan in place should you be impacted by some type of potentially hazardous situation.
How to Prepare Employees for Workplace Emergencies
Employers should consider evacuation plans as one small part of the required Emergency Action Plan and use them as the opportunity to practice. The drills could include evacuation due to a fire, chemical leak, or even a shelter in place in the event of an external chemical emergency.
OSHA’s Evacuation and Procedures e-tool provides step-by-step guidance to help you prepare your workplace for potential emergencies. In addition, this OSHA Workplace Emergencies Factsheet provides an outline of what is required. Once you have a plan in place, OSHA recommends that you review the plan with employees and hold practice drills “as often as necessary.” It is also advised to include outside resources such as fire and police departments when possible. OSHA recommends that after each drill you assess the effectiveness of the drill (and the plan) and make adjustments as needed.
How to Meet OSHA Training Requirements
Workplace safety training will vary depending on the type of business. Here are some important points to consider when deciding what types of training your employees need to meet OSHA Training Requirements and Standards:
- Educate your employees about the types of emergencies that may occur and train them in the proper course of action.
- The size of your workplace and workforce, processes used, materials handled, and the availability of onsite or outside resources will determine your training requirements.
- Be sure all your employees understand the function and elements of your emergency action plan, including types of potential emergencies, reporting procedures, alarm systems, evacuation plans, and shutdown procedures.
- Discuss any special hazards you may have onsite such as flammable materials, toxic chemicals, radioactive sources, or water-reactive substances.
- Clearly communicate to your employees who will be in charge during an emergency to minimize confusion.
It is a good idea to keep a record of all safety and health training. Documentation can also supply an answer to one of the first questions an incident investigator will ask: “Did the employee receive adequate training to do the job?”
Emergency Action Plan Resources
OSHA has a number of outstanding resources to assist you in your planning process for an Emergency Action Plan, as well as all of the required OSHA standards. Free resources to help you with your safety training plans can be found in OSHA’s Training Resources and this updated booklet which outlines all of OSHA’s training-related requirements in one document.
Keep in mind that although drills are not required, a well-developed emergency plan with proper training (including drills) will result in fewer injuries and less confusion and chaos during an emergency. A well-organized response will help you, your employees, and your business to be in the best position to effectively handle an emergency.
Thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP for updating this HR Question of the Week.
Are you overdue on harassment or other annual training? Does your current training curriculum need to be refreshed to reflect changes in company policy or legal requirements? Strategic HR has the expertise and resources to help. Visit our Training and Development page to learn more or Submit a Training Request.
What is the Value of Job Descriptions?
HR Question:
Do I really need job descriptions for my employees? Are they legally required? We have a small staff and everyone has to be willing to do everything. What is the value of having job descriptions?
HR Answer:
No, job descriptions are not legally required documents, however, they can help your employees (and their supervisors) to understand their responsibilities and how their roles contribute to the mission of your organization. They are also an important part of compliance and, when written well, can help to protect your organization should you face employment law disputes.
To achieve optimal performance, it’s important that your employees understand the scope of their responsibilities. Job descriptions help to define a job by determining and documenting the responsibilities of the position and the physical requirements of the job. This document is not a “how-to” or a procedure outline (which can change frequently), but rather it should capture what individuals are accountable for in their job.
Job descriptions add value because they:
- Provide a clear picture of the job to applicants applying for the position
- Help current employees to understand what they are accountable for
- Serve as a helpful tool for supervisors to coach employees on how to improve performance
- Help to determine appropriate salary levels for a position based on the expectations, education, and experience requirements for the role
- Allow individuals to evaluate the physical requirements necessary for the position and what the work environment is like (i.e., Does it require heavy lifting? Is it a “desk job”? Does it involve frequent travel, evenings, or on-call availability, etc.)
- Allow organizations to determine if an employee can perform the physical functions of a job or if an accommodation could be made for those applying for a job (or coming back from a medical leave or workers’ compensation leave, for example)
Getting Started: What to Include in a Job Description
If you’re beginning the process of creating job descriptions, it can be helpful to conduct a job analysis to understand the necessary tasks and responsibilities for the position and how the job is performed by employees at your organization.
Common components of a job description include:
- Job Title
- Reporting Structure: Role the position reports to and role(s) the position supervises, if applicable
- FLSA Classification
- Date of Job Description Creation / Revision
- Job Summary: It is helpful to provide a brief, general overview of the position.
- Essential Job Duties/Function: Describe the duties that must be performed in the job. Focus on the function of the job rather than the means used to achieve that function. It helps to identify the required outcomes of the job tasks rather than describing the tasks themselves.
- Physical Demands/Requirements
- Work Environment
- Minimum and Preferred Requirements
- Disclaimer: Explains the job description isn’t designed to list every responsibility and is subject to change.
- Acknowledgement/Signatures of Incumbent and Supervisor
For additional components to consider, see this step-by-step guide provided by the Society for Human Resource Management (SHRM). We also recommend that you consult your legal counsel for guidance to ensure your job descriptions are appropriate for your organization and legally compliant.
Out of Date Job Descriptions Pose a Risk
It is important for your job descriptions to be kept up to date, otherwise they can potentially cause more harm than good when it comes to providing HR Compliance support. However, when written well, the positive aspects of a job description outweigh the negatives and can provide you with documentation on the job requirements and support actions that you may have taken. Therefore, whenever your organization goes through significant changes or the nature of your work or specific jobs shift, be sure to revisit and revise your job descriptions accordingly.
An Easy Way to Keep Job Descriptions Updated
If finding the time to revise your team’s job descriptions feels like a daunting task in and of itself, consider addressing them one at a time. An easy way to work updates into your routine is to have supervisors take a few minutes during the performance review process to work with each employee to make any necessary updates their job descriptions. Approaching the updates one at a time during your reviews can help to make the process more manageable.
Job descriptions are too important to fall to the bottom of the “wish list.” When done correctly, they serve a multitude of functions. However, we understand busy workloads often relegate job descriptions to a “when time permits” activity. If you are putting off creating or revising your job descriptions due to a lack of time or staff, contact us. Dare we say it’s “in our job description” to help!
How to Handle Background Checks for Temporary Employees
HR Question:
We had a fabulous individual working for us through a temporary agency. We decided to hire the individual and ran them through our process, including conducting a background check. The results were shocking – we thought the temporary agency had already verified their background. How should I handle background checks for temporary employees going forward to ensure this doesn’t happen again?
HR Answer:
Many companies treat temporary employees differently when it comes to background checks and only realize it when it’s too late – when they try to hire the individual. The staffing company said they ran a “background check” before they placed the individual with you. However, when you compare the results of your own verification versus the staffing company’s, it hits you: If you had run your own background check first, instead of relying on the staffing company’s, you would never have considered the individual in the first place. So, now what do you do?
Unfortunately, this situation is all too common. Many employers allow temporary workers into their organization without knowing anything about the “background check” the staffing company performed before those individuals started working for their organization.
Did they only run a database search? Maybe they just entered the employee’s name in a local county records website or simply Googled the person. Or, even more disturbing, maybe they didn’t research the person’s background at all!
The term “background check” is very broad. When working with temporary employees, it is best practice to confirm that your staffing company is running quality courthouse background research before you let them place temporary personnel with your organization.
Background Check Tips for Temporary Employees:
- Connect with your attorney to discuss whether or not you should include background check requirements in your Master Service Agreement (MSA), as well as how they are to be conducted. Many times that might include the last seven years of residence, county, state, social security number, aliases/previous last names, etc. You may want to consider using a third party rather than an internal database search.
- Ask to see the reports for individuals who have a criminal record. It is a good HR practice to apply your evaluation approach consistently to both temporary and permanent employees.
- Consider including county criminal research. Many organizations have found county research to be a helpful source in finding if a felony or misdemeanor charge exists for an individual, and it can help to support HR Compliance with the Federal Credit Reporting Act (FCRA).
- Don’t be fooled by a “federal” search. This check certainly has its value, however, it can be misleading. While it may sound all-encompassing, it only includes federal crimes. Pre-employment screening companies have found the majority of crimes committed are state crimes. Therefore, most people with a criminal past would come back clean on a federal search.
Managing the hiring process can be tricky. If you currently run pre-employment screenings before you bring someone on board, you already understand the importance of this verification process. To help protect your organization and your employees, follow the best practice of having employees from staffing companies meet the same expectations as direct hires.
A special thank you to Matt Messersmith, President/CEO, Signet Screening, and Amy Turner, Senior HR Business Advisor, for sharing their expertise in this HR Question of the Week.
Does the thought of hiring someone make your head spin? Full-time, temporary, temp-to-perm, intern…pre-employment assessments, references, background checks, drug screens – we can help you manage it all. Whether you need a complete recruitment solution or just help with pieces of the process, Clark Schaefer Strategic HR can assist you. Visit our Recruitment page to learn how we can provide you with top-notch recruitment solutions.
How do I handle missing or incorrect I-9 Forms?
HR Question:
My company recently began to review our I-9s and found that we are missing some I-9 forms, and some are incomplete. Can we ask the affected employees to fill out another I-9 if it is missing? If so, how do we do it correctly? And if it was incomplete, can we update it on the old form? Please help!
HR Answer:
First, it’s important to understand that there are two types of I-9 errors: (1) technical and procedural errors and (2) substantive errors. Technical and procedural errors can be corrected. An example is forgetting to record a document title, which can easily be fixed, and fines are discretionary. A substantive error cannot be corrected. If audited, your company will likely face a fine if the statute of limitations has not been met. Examples of substantive errors include failing to complete I-9 paperwork or not signing or dating Section 2 of the form.
What to do if you have Substantive I-9 Errors (i.e., missing I-9s or incomplete I-9s)
The Immigration and Nationality Act (INA) was intended to relieve employers of liability for certain minor and unintentional violations but wouldn’t act as a shield to avoid its basic requirements. When an I-9 form isn’t properly kept or completed, the violation is considered substantive and therefore uncorrectable.
If an I-9 form is lost, destroyed, or not maintained as required by the INA’s retention requirements, the appropriate action is to come into compliance with the law as quickly as possible. Once identified, a missing I-9 form should be completed by the employer and the affected employee immediately along with the current date. This won’t correct the error, but it does demonstrate a good-faith effort to comply with the law, which may be considered if penalties are assessed. A note should also be included with the I-9 regarding the reason you had to complete a new I-9.
To Correct an Existing I-9 Form Error
- Draw a line through the incorrect information
- Enter the correct information
- Initial and date the correction
To correct multiple errors on the form, you may redo the section on a new I-9 form and attach it to the old form. A new I-9 can also be completed if major errors (such as entire sections being left blank or Section 2 being completed based on unacceptable documents) need to be corrected. A note should be included in the file regarding the reason you made changes to an existing I-9 or completed a new I-9.
Be sure not to conceal any changes made on the form. Doing so may lead to increased liability under federal immigration law. If you have made changes on an I-9 using correction fluid, it is recommended that you attach a signed and dated note to the corrected I-9 explaining why.
Never Backdate an I-9 Form
Employers that make false statements or attestations to satisfy the employment eligibility verification requirements may be fined, imprisoned for up to five years, or both (and this could be higher in certain fraud cases). If an investigation reveals that an individual knowingly committed or participated in acts relating to document fraud, additional (and substantial) fines may be imposed.
Penalties for I-9 Violations
Failure to comply with I-9 verification and document retention requirements could result in a penalty. Most recently, the minimum penalty for a first offense is $252 per I-9; the maximum penalty is $2,507 per I-9 for a first offense. These penalties are adjusted for inflation each year, so you should review the Federal Register’s Civil Monetary Penalty Adjustments for future updates. It’s also important to note that fines can increase significantly for second or subsequent violations.
Penalties are assessed based on several factors, including:
- The size of the employer
- Any good-faith efforts that were undertaken by the employer
- The seriousness of the violation
- Whether the individual involved is an unauthorized alien
- Any history of previous violations by the employer
The statute doesn’t require that equal weight be given to each factor, nor does it rule out consideration of additional factors.
Maintaining Compliance – How to Conduct an I-9 Audit
To reduce your risk, it is recommended to conduct regular internal I-9 audits and correct any mistakes appropriately. If you are unfamiliar with the process, see our article on how to conduct an I-9 audit. Additionally, the U.S. Immigration Customs and Enforcement and the Immigrant and Employee Rights Section (IER) have provided joint guidance to help employers perform internal audits which can be found in this handy downloadable guide.
It is also important that you continue to be aware of any reporting or process changes, such as the ending of the I-9 verification flexibilities, to ensure that you are maintaining your records properly.
Bottom Line…
It’s best to always ensure compliance within the appropriate three-day verification period from the employee’s date of hire to when the I-9 form is completed and signed by both parties. If you discover an error, you should take corrective action immediately. While substantive violations are not correctable, every effort should be made to ensure good-faith compliance when a discrepancy is uncovered. If a discrepancy is discovered, you are at risk of incurring substantial fines in the event of an audit. For additional support, you may want to contact an I-9 expert or legal counsel for guidance. We also recommend correcting any internal practices that led to the discrepancies so they are not repeated.
Thank you to Cassie Whitehouse, M.Ed., Senior HR Business Advisor, for updating this HR Question of the Week.
Recordkeeping is one of the more mundane tasks associated with Human Resources, but is extremely important and can get you into hot water if not done properly. If you’re concerned about your I-9 compliance, you should conduct an internal I-9 audit. If you don’t have the time or the expertise to do this properly, one of our expert HR Advisors at Strategic HR would be glad to help. Contact us for assistance with your I-9 audit or other recordkeeping needs. You may also be interested in learning more about our HR Compliance and Recordkeeping Services.
How Long Should We Keep Resumes and Applications?
HR Question:
We’ve received a lot of resumes recently – some have been for positions we’ve posted, and some are unsolicited. Do we have to keep all of these resumes, and if so, how long do we need to keep the resumes and applications?
HR Answer:
First, let’s address what to do with unsolicited resumes. You are not obligated to store unsolicited resumes; however, it is important to be consistent with your approach. If there are any unsolicited resumes that you have kept for further consideration, your best approach is to keep all unsolicited resumes for the same duration of time that you retain your solicited resumes.
For resumes and applications that you have received in relation to a job opening, there are a few federal laws that require employers to retain employment applications and related documents ranging for a period of one to two years from the date of the hiring decision (the date the position was filled, not posted). Employers are responsible for following the federal laws under which they are covered as well as any contractual requirements that they may have (i.e., union contracts) that may require additional time to maintain records.
Another important item to note regarding applicant recordkeeping is that you are required to maintain not only employment applications for a position, but the entire hiring record. Hiring records could include such things as applications, resumes, screening tools and assessments, background checks, and reference checks. Anything that you use in assisting you with an employment decision is considered part of your hiring records.
Major federal laws that address employment records retention requirements include:
- Title VII of the Civil Rights Act of 1964 – Requires employers to keep various employment records, including job applications, for one year from the date the application was received.
- Age Discrimination in Employment Act – Requires employers to retain employment applications for one year. There is language, however, that indicates if you are aware the applicant is over age 40, you should retain it for as long as two years.
- Americans with Disabilities Act – Requires employers to retain job applications and documents for one year. There is some variation based upon whether or not the applications are solicited or unsolicited, but the maximum retention is two years.
- Executive Order 11246 – If you are a government contractor and have less than 150 employees or a contract of at least $150,000 you must retain these records for one year. If you have at least 150 employees or more and a contract of $150,000, you are required to keep the records for two years. If you have a resume on hand from a previous search and decide to consider it for a new position months down the road, you will need to keep that resume or application for the time required based on the last viewing of the document (i.e., 1-2 years past the fill date of the second position).
A word of caution – if there is a discrimination charge or unlawful employment practice brought against the employer, employment applications must be retained until the matter reaches a resolution. This can get tricky if someone claims discrimination because they did not get a promotion; the employer is then required to keep all the applications received for that promotion until the claim is resolved. With a lengthy lawsuit and litigation, this could be an extended amount of time.
Generally speaking, good practice is to keep resumes and applications of non-hired individuals for two years following the date the hiring process is completed for a position (i.e., from the time the new employee starts working). Remember to consult state laws in addition to federal regulations when determining how long to keep employee records.
Recordkeeping can be a daunting task, especially when you are trying to clean out old records and maintain the pertinent ones to remain compliant. Strategic HR understands your frustration and has many tried-and-trusted tips on recordkeeping – including a handy Recordkeeping Desktop Reference to help you decide what to keep and what to toss. Visit our HR Compliance & Recordkeeping Services to learn more about ways we can help you to get your employment records in order.
