Tamara L. Harper Labor and Employment Law Blog on Lawyers.com

Employment Handbook Policies. 

            We are well into the 2007 business year and tax time is behind us (or at least most of us who did not file extensions).  There are many changes within the employment law arena as it relates to employment manuals.  Several clients took me up upon my offer to conduct a business site visit for a free audit compliance overview and a new employee handbook was created or updated.  One such client did not.  It’s corporate litigation costs for failure to satisfy the basic component of an at-will defense e.g. production of an employee handbook, is running at $45,000 and I estimate litigation will continue as employees are now savvy and not amiable to settlement.  Litigation may run up to $100,000. 

            I have been working hard these past two years to educate my corporate clients and business entrepreneurs that a handbook is not only vital to a defense in employment litigation, but crucial in the management of your business, and is a good business practice.  As your corporate records should be updated by counsel annually, so should your employment manual or handbook.  There are three different types of employment policies:

                  1.      Optional policies you may choose to include, if appropriate to your company.

                  2.      Recommended policies are based on a law or benefit, and I recommend that you include such, as they are applicable to your business operations.

3.      Mandatory or required policies, are required by law or to maintain at-will employment status.

There are several changes in employment laws for the year 2007. 

                  1.      The unlawful harassment policy, which is a required policy, has been expanded to include new language adding independent contractors to the list of those that are covered under an employer’s anti-harassment policy.  To minimize liability your company unlawful harassment policy must include five key components.  A labor law attorney should be consulted in this area.  This policy applies even if you only have one employee.  California law requires that employers post a state DFEH poster, which includes information about the illegality of sexual harassment and available remedies, in a prominent and accessible location in the workplace.

                2.      Paid Family Leave (PFL) is not a type of paid leave, nor does it grant employees any right to a legally protected leave of absence.  It is a benefit intended to provide a partial wage replacement for individuals who take time off work to care for a family member or bond with a new child.  PFL is funded by an increase in the SDI tax paid by employees.

                3.      A new policy for 2007 is a telecommuting policy.  Depending upon the nature of their jobs and other considerations, some employees may be able to perform their job duties at home or at a central telecommuting location.  You will need to establish additional policies defining:

                     a)      Equipment responsibility;

                     b)      Security of data and other proprietary information;

                     c)      Safety procedures or other requirements that will be implemented to cover employees working at home - for example, workers' compensation;

                     d)      How performance will be measured;

                     e)      Policies that will change as a result of telecommuting; and

                     f)       Any effect on union agreements.

            Different rules apply to this policy depending upon whether or not you are providing telecommuting for the employee's convenience or whether your company requires telecommuting e.g. to avoid the costs of additional office space.  In this case you are responsible for providing all needed equipment.  Please consult counsel if you are implementing such practices, as there are other legal issues involved.

           4.      Your company is not required under state or federal law to provide any vacation benefits at all; however, laws regulate vacation policies if you choose to have them.  New for 2007 is that California employers may make deductions from an exempt employee’s accrued vacation only if the exempt employee takes off four or more hours in one day. The amount of time taken for four or more hours may be deducted from their vacation or Paid Time Off (“PTO”).  Deductions in any increment may be made from a non-exempt employee’s accrued vacation or PTO.

            The largest problem employers face in administering vacation policies is inadvertent or intentional violations of the California law, which requires employers to compensate terminated employees for any unused, accrued vacation pay owed at the time of employment termination.  The entitlement to vacation must be proportionate to the time actually worked.  In calculating the pro rata vacation pay that is due a terminated employee, employers often mistakenly compute vacation pay based on the employee's rate of pay at the time the vacation accrued.  However, California law requires employers to base vacation pay for a terminated employee on the final rate of pay (e.g., the rate in effect at the time of termination).  Before you terminate an employee, you should always consult your employment counsel.

            5.      A heat illness policy is new for 2007.  Workers’ outside must be provided adequate water, shade, and rest periods. Your company’s Injury Illness and Prevention Program should provide detailed information regarding the implementation of these requirements.

            It is not too late to schedule a business site visit for a free audit compliance overview and prepare and create a new or updated employee handbook.  Please contact me at your earliest convenience.  Please feel free to pass this email onto other business entrepreneurs whom you know could use this relevant information.  As always, I appreciate your referrals and your business.

Harper & Associates, P.C. gives piece of mind to business entrepreneurs who desire to protect their assets, ideas, and wealth by showing them how to limit their liability exposure, register and protect their intellectual property, and hold property in trust.  Tamara L. Harper, Esq. assists small to mid-size companies in the real estate, bio-tech, restaurant, and service industries with initial formation, corporate regulations and employment/labor compliance, business sale or acquisition, and investor capitalization in addition to registering and defending intellectual property rights. As an Attorney and Registered Investment Advisor, Ms. Harper reviews your existing estate planning and brings it up to date in order to limit exposure and maximize wealth using her unique knowledge.                                                                     ©2007 Harper & Associates, P.C.