Question:
When do we need to post our workers comp report?

Answer:
The answer to this question will depend on the kind of report to which you are referring. You should contact your workers' compensation broker/carrier for additional information.

Question:
We have non-exempt employees taking certification classes to enhance themselves within the industry, which we pay for, but don't require. If the class runs Thurs through Saturday, do we have to pay overtime to the employees for the time spent at the Saturday class (excess of 40 hours that week)? Thank you.

Answer:
You would think the answer to your question is "no," because you are not requiring the courses. However, because you are paying for the classes and allow the employee to use work time for part of the week, there is a risk the employee could successfully argue you owe her for the overtime. This can be tricky and it's probably worth seeking legal counsel.

Question:
An employee has stated that she feels discriminated against based on her weight. There has been no claim from the employee that there is a hostile work environment. I've looked to EEOC and DFEH along with ADA to find some direction; however, it appears there is no specific language regarding weight unless it is tied to mental illness or some disparate treatment of the employee and protected class. There have been no employment actions based on weight. I would like to close the loop with the employee and make sure the company is covered in the event a complaint is filed. Do you have any guidance or is there any other place I should look to for additional information?

Answer:
Weight is not protected under FEHA unless it is caused by a physiological, systemic disorder in which case it qualifies as a FEHA "disability." (See Cassita v. Community Foods, Inc. (1993) 5 Cal.4th 1050.) However, seemingly neutral weight requirements have been challenged where they disproportionately affect women or members of certain minority groups. It is important that you investigate how she feels "discrimination." It is important that her concern of discrimination is not manifested through denial or disparate treatment in any benefit or condition of employment.

As I am sure you are aware, it is always a good practice to address any employee's concerns so they do not feel as if they are being treated unfairly and have no avenue of complaint. Your inquiry should document exactly what she perceives as discrimination. This encourages workplace harmony and reduces the chance that a disgruntled employee will take further action through the legal system.

Question:
We have an employee who was laid off and offered a severance package. He will get six weeks of pay and the check will be issued on a separate check after he leaves employment (after receiving his signed severance agreement). What is our tax responsibility? If he specifically requests that we use what was on his W4 for withholding can we do that or must we use the 25% flat tax rate? Which taxes must be withheld?

Answer:
The IRS has recently published requirements that the withholding on severance agreements be the flat 25%.

Question:
Do you know anything about the FMLA Attorney HotLine? Maybe its new in 2011?

Answer:
I am not sure if the question is asking whether there is a FMLA hotline or whether the creating of an employer EAP (Employee Assistance Program) impacts in some way the obligation to designate illnesses as covered FMLA leave. I will address both questions.

The US Department of Labor does have an FMLA hotline. The number is 800-959-3652.

An employer EAP hotline call can be sufficient to put an employer on notice that an employee's leave is such that it is a protected FMLA leave. (See, Johnson v. Thru Point, No. 04-3386, 3rd Cir., 2005)

Question:
There is a growing pattern for employees to return from PDL and request to reserve their baby bonding time for the holiday season in November and December. With so many employees requesting the same period of time, is there a way to recommend alternative dates to keep operations going, or is baby bonding an absolute right regardless of operational needs?

Answer:
Baby bonding scheduling that does not immediately follow the birth should be treated similarly to the employer's vacation policy. While vacation is usually freely given, the employer reserves the right to approve vacation scheduling so that it does not adversely affect operations. This means the employer can deny the timing of the baby bonding leave if it would pose an undue hardship, i.e. the employer would have to shut down. The employer should make clear they are not denying the leave, just the timing. In addition, I would not recommend this approach when the birth occurs such that the baby bonding leave would naturally occur during the holidays. This would generally be reserved for the situation where the baby is born during the year, the parent returns to work for a period of time, and then requests a later baby bonding leave to coincide with the holidays. Finally, when determining what employees can take off around the holidays and what employees cannot, I would give priority to the new parent.

Question:
Our job descriptions state that the ability to lift 25 lbs is a requirement, and our new employees perform lift tests during their post-offer physicals. The lifting requirement is insufficient and must be raised to 35 lbs. What sort of notification is required when we change the job requirement? Are new lift-tests required for all?

Answer:
Generally we recommend 60 days advance notice of this type of change. In addition, the employer will have to take a look at individual situations where someone cannot lift 35 lbs due to a medical issue and see if it can be reasonably accommodated, i.e. a dolly, hand-truck, etc. Finally, the employer will want to be careful the new lifting requirement is rationally related to the actual job and does not disproportionately adversely affect one gender. I would highly recommend consulting with counsel following the implementation of the policy to ensure the application of the policy does not run afoul of the disability laws or create a disparate impact gender discrimination lawsuit.

Question:
A full-time employee is on maternity leave, receiving SDI, FMLA and using PTO. At the end of maternity leave the employee does not want to return to work. Is the employee obligated to return to work for a certain amount of time or can she submit her notice at the end of maternity leave and NOT return to work?

Answer:
Assuming there is no contract between the employer and the employee and the employee is employed on an at-will basis, the employee can simply not return to work at the end of the maternity leave and give notice at that time. While this is legally permissible, it is not the most ethical thing to do if the employee had already made up her mind about not returning prior to the termination of the leave period. Some employees realize while on leave that returning would be too difficult or undesirable, and this of course is understandable. What is somewhat improper is to use up all the leave benefits and then announce at the end of the leave that you are not returning, when you knew of this fact well in advance. However, it is legally permissible.

Question:
An employee driving to work fell asleep at the wheel and was involved in a minor auto acc (hit barrier). Can we request a "fitness for duty" from his doctor?

Answer:
Maybe. Under the FMLA (and CFRA), an employer may require an employee to submit a fitness for duty certification that addresses the employee's ability to perform the essential functions of the job, but only if the employer informs the employee of this requirement and provides a list of essential job functions with the designation notice. In addition, the employer (1) must have a uniformly applied practice or policy requiring such certification from all similarly situated employees returning to work after an illness, injury or disability and (2) may only seek a fitness-for-duty certification with regard to the particular health condition that caused the employee's need for leave.

Under the Americans with Disabilities Act (ADA), an employer can require an employee to undergo a fitness for duty examination when health problems have had a substantial or injurious impact on an employee's job performance. Such examination must be job-related and consistent with business necessity. If an employee's serious health condition may also qualify as a disability under the ADA, the FMLA does not prevent the employer from following the procedures for requesting medical information under the ADA.

Question:
Is an employer required to reimburse prospective applicants and current employees for the cost of fingerprinting that is required as a condition of employment?

Answer:
An employer is required to reimburse prospective applicants and current employees for the cost of fingerprinting that is required as a condition of employment, since the cost is an expenditure incurred by the employee in direct consequence of the discharge of his/her duties, and by the applicant in obeying the directions of the employer. This is not a waivable right.

Interestingly, in situations where fingerprinting is statutory-mandated (i.e., required by law), the California DLSE has interpreted the Labor Code to impose a mandatory duty on employers to reimburse an employee for any costs incurred as a result of the fingerprinting test, but not necessarily a job applicant. But, an employer would be wise to pay for all employee or applicant fingerprinting tests to avoid violating state law. Employers also should carefully consider the need of requiring fingerprint tests as a condition of employment - if not statutorily mandated - as fingerprint tests may result in information, or improper disclosure of information, that may implicate privacy issues.

Question:
I have an employee that started work on 2/15/2010. She will be having a baby in August and is only entitled to PDL at that time. She has now asked to take baby bonding time after she has a year with the organization since the baby will not be a year old yet. Would she be entitled to baby bonding time after she reaches one year of employment and 1250 hours?

Answer:
Generally, leave taken for bonding with a child, whether after birth, adoption, or foster care placement of a child with the employee, needs to be concluded within one year of the birth or placement of the child.

Question:
I have recently been doing freelance HR/recruiting functions for companies on my own without the benefit of a staffing service as my employer.  Should I be carrying insurance for myself in case a situation should arise on a contract job?

Answer:
With a few exceptions for certain specific industries, there is no legal requirement that self-employed, sole proprietors carry insurance in California, including workers’ compensation insurance.  However, it may be advisable to do so.  Your insurance broker can best advise you on what types of insurance may be right for your business.  Depending on your work arrangements with the companies you perform work for, it is possible you may be covered by some of their insurance policies as well, especially if they would be considered your employer under California law. 

Question:
Is there a “minimum” cap amount when placing a cap on vacation or PTO banks?

Answer:
Unfortunately, California law is not clear on exactly what the minimum allowable cap on vacation or PTO is.  Earned vacation and paid time off (“PTO”) cannot be forfeited once earned by an employee.  Consequently, “use-it or lose-it” policies are illegal in California.  However, an employer may cap the amount of vacation and/or PTO an employee can accrue, provided the cap is “reasonable.”  The California Division of Labor Standards Enforcement (“DLSE”) years ago opined that a worker must have at least nine months after the vacation accrues before a cap will be deemed effective.  Following this line of reasoning, a cap of at least 1.75 times the annual accrual rate would be consistent with the DLSE’s old opinion letter.

In March 2006, the Labor Commissioner issued a revised Manual and withdrew prior opinion letters on the issue.  Although there is no clear guidance on the issue, a cap close to 1 times the annual accrual is likely to be challenged and found unlawful, whereas a cap closer to 1.75 or 2 times the annual accrual is less likely to be challenged and found unlawful. 

It should be noted, however, that no statute or regulation specifies a limit on the accrual rate cap, and no court decision has specifically ruled on what constitutes an acceptable minimum cap.  Even following the Labor Commissioner’s withdrawn opinion letter is not a guarantee because, while California courts give a degree of deference to the Labor Commissioner’s opinion, they are free to disregard it when they conclude it does not correctly interpret California law.

Question:
Can you just do background checks on full-time employees and not on seasonal employees?

Answer:
Although there is no requirement for employers to conduct background checks, many employers choose to do so for a variety of reasons, including avoiding claims for negligent hiring.  Employers who conduct background and/or credit checks must comply with a variety of laws including, but not limited to, the federal Fair Credit Reporting Act, the California Consumer Credit Reporting Agencies Act, and the California Investigative Consumer Reporting Agencies Act.  If an employer chooses to perform background checks on full-time employees, nothing in the law similarly requires the employer to conduct background checks on seasonal or part-time employees.  However, any time an employer chooses to implement a practice or policy for one group of employees and not another, the practice or policy should be carefully scrutinized to ensure it does not have an unintended disparate impact on employees in any class protected by anti-discrimination or other laws. 

Question:
If a nonexempt employee is asked to make a trip to the bank to make deposits (which is not part of his normal job), do we have to pay him mileage reimbursement for driving to and from the bank?  Does it matter if it's part of his normal job?

Answer:
Mileage reimbursements are the same for both nonexempt and exempt employees.  Labor Code section 2802 requires employers to reimburse employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”  Thus, if an employee is required to incur costs -- either as part of the employee's regular job duties or simply while performing a task he/she was directed to perform -- the employer must reimburse the employee for those costs, including mileage.

Question:
Regarding the mileage question.  We have an hourly employee do the same thing, but rather than pay him mileage, we pay him his regular rate of pay based on the time it takes him to drive to and from the bank.  Is that ok?

Answer:
Under California law, employer-required travel time generally must be compensated as “hours worked” and counted in determining eligibility for overtime premium pay and meal and rest periods. This obligation is independent of any obligation an employer may have to pay an employee’s travel expenses.  Consequently, an employee’s time spent traveling in the performance of his or her job duties must be compensated for time spent traveling in addition to being reimbursed for travel expenses.

These answers are provided for informational purposes only.  They are not intended as legal advice nor do they create an attorney-client relationship between Jackson Lewis LLP and any readers or recipients.  Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances.  Furthermore, prior results do not guarantee a similar outcome.

Question:
Our company is considering switching to PTO. I understand the financial downside to the employer and the upside for more control to the employee, but I would like to know if there are other advantages/disadvantages we should review before deciding to switch.

Answer:
The specific advantages/disadvantages that can flow from switching to PTO depend on your situation, and it probably makes sense to speak to an employment and labor lawyer with regard to your specific circumstances before deciding to switch.

That being said, in general switching to PTO provides a number of specific advantages in terms of being able to manage employee vacations and leaves. With PTO, it really does not matter what the purpose of the missed time is (vacation time versus sick days, etc.), they are all treated the same. On that front, it reduces some management headaches.

It also makes it easier to track how much time employees have accrued, how much they have used in a given period, and how much accrued time they are carrying over from year to year. This simplifies the calculations necessary for paying out individual employee's accrued time either at the end of employment, or at the end of the year if you do not allow employees to carry over time from one year to the next.

In terms of disadvantages associated with PTO, there are only a few, the most important is the fact that employees have greater flexibility to decide specific hours they will take off in a particular day or week. For instance, employees can take two hours in the middle of the day. This can make tracking the hours employees actually work in a given week difficult depending on the system you are using. Inaccurate tracking of employee hours can lead to wage and hour claims.

Many companies are making the switch to PTO, and it will likely become the norm among companies that offer paid time off as an employee benefit in the near future, if that is not already the case.

Question:
We have an employee seeking treatment under our workers compensation insurance. They have been declared permanent and stationary. The employees work restrictions, which we cannot accommodate, are permanent (life long). We have explored a reasonable accommodation transfer to a vacant position which they could perform with restrictions, which does not exist. In other words, they are no longer able to perform the essential functions of the position. Are we legally entitled to terminate this employees employment based upon the fact that we will never be able to accommodate their permanent work restrictions and a reasonable accommodation does not exist?

Answer:
A disabled employee who is "qualified" under the Americans with Disability Act (ADA) or California’s Fair Employment and Housing Act (FEHA) may have a right to reinstatement with the employer if the employee can perform the essential functions of the position, with or without a reasonable accommodation. If the disabled employee is not qualified, or is qualified but accommodation would cause an undue hardship or direct threat to the health and safety of co-workers or the employee, then an employer may deny reinstatement, provided there is also proper supporting documentation from the authorized healthcare provider.

However, if the disability is related to a Workers’ Compensation claim, then the employer is sometimes required to consider permanent modified duty or alternative assignment if the disabled worker is not expected to recover from disability enough to return to the employee’s original job. (City of Moorpark v. The Superior Court, 18 Cal. 4th 1143; Labor Code 132(a))

Note: the party making inquiry should seek the advice of legal counsel before deciding to terminate the employee, as opposed to merely putting the employee on indefinite leave of absence, to carefully review individual circumstances. (This is recommended due to the risk of a discrimination claim, and due to the complexity and technical nature of disability benefits.)

Question:
Is there an agency or a type of "subject matter expert" out there that can help us help a terminally ill employee understand and apply for all of the various types of benefits that he/she might be entitled to receive?  For example: Social Security disability, the company's LTD coverage, SDI, COBRA, Medicare, etc.  All of these various programs seem to overlap each other.  Some questions are:

1. What are the different waiting periods?

2. If the employee qualifies to receive all three, are they allowed to collect money from all three or is that considered double dipping - >really triple dipping?

3. Age and income restrictions?

4. How much does each pay?

5. Eligibility requirements (medical diagnosis) Which do you have to report as income (for tax purposes)?

These are just a few of many questions we will need answered.  We want to help this employee navigate this complex web, as they are not able to do so on their own (due to the illness) and they do not have any family or friends to help them.  I am not necessarily looking for a labor law attorney, rather someone that specializes in this specific area. Please let me know of any consultants or agencies that we can retain on behalf of this employee.

Answer:
The following are answers to the five general questions relating to a "terminally ill" employee:

1. Depending upon the nature of the illness, there are several sources that may provide help in assisting the employee. For example, Social Security (SSDI) has specialists that provide online assistance starting at http://www.ssa.gov/pgm/reach.htm and http://www.ssa.gov/pgm/links_disability.htm; Long Term Disability insurance carriers have representatives that are required to answer questions and provide assistance through the application process, and to fully explain benefits. Rep contacts are shown in the LTD insurance contract; Visit http://www.edd.ca.gov/Disability to obtain guidance on SDI benefits; One of the better sources for information and assistance relating to COBRA/CAL-COBRA is at: http://www.opa.ca.gov/healthcare/health-plan/keeping-coverage.aspx ; Medicare information and assistance may be obtained from: http://www.medicare.gov/

2. The applicable eligibility waiting period and offset provisions, if any, depend upon the disability benefit plan.

3. Age and income restrictions, if any, depend upon the disability plan.

4. The amount of benefits depend upon the nature of the illness and disability plan.

5. Taxability of benefits, if any, depend upon the disability plan.

There may also be discretionary employer-provided sick leave benefits, as well as pension plan disability benefits, that would have to be explained to the employee.

There is an informative comprehensive material, The Leave & Disability Coordination Handbook, published by Thompson Publishing Group. Lastly, you may also request a free copy of a helpful comprehensive "leave management checklist" at profdan@ssctv.net

Note: the party making inquiry may want to seek the advice of legal counsel, due to the complexity and technical nature of disability benefits, to review individual circumstances before providing assistance to the employee.

Question:
We have an employee who has been temporarily working out of another state for a few months but his place of residence is still California. Should the employee be taxed at the California state rate or the new state where they are temporarily residing and working?

Answer:
Income received from sources in California by a nonresident or part-year resident (non-military) is subject to California individual income tax (California Revenue and Taxation Code section 17041, subdivision (b); Also, see Appeal of Dennis L. Boone, 93-SBE-015, October 28, 1993). Conversely, income received from sources outside of California (non-California source income) by a nonresident or part-year resident is not subject to California individual income tax.

The specific method used to determine the tax liability of a nonresident or part-year resident taxpayer is illustrated at www.ftb.ca.gov/law/summaries/NonResTxCA_2002S.pdf , and is reported on Form 540NR California Nonresident or Part-Year Resident Income Tax Return.

The state income tax, if any, of the state in which the employee currently resides depends upon such state’s tax laws. For example, there are some states that do not have an individual income tax, i.e. Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming.

Note: the party making inquiry may want to seek the advice of a qualified tax professional or legal counsel to review individual circumstances before making tax filing decisions.