8th edition The Employer’s Legal Handbook by Fred S. Steingold Edited by Alayna Schroeder EIGHTH EDITION JUNE 2007 Editor ALAYNA SCHROEDER Legal research TRISH KEADY TERRI McGINLEY ALAYNA SCHROEDER Cover design SUSAN PUTNEY Book design TERRI HEARSH Proofreading ROBERT WELLS Index THÉRÈSE SHERE Printing DELTA PRINTING SOLUTIONS, INC. Steingold, Fred. The employer’s legal handbook / by Fred S. Steingold. 8th ed., [rev.] p. cm. Includes index. ISBN-13: 978-1-4133-0456-5 ISBN-10: 1-4133-0456-7 1. Labor laws and legislation United States Popular works. I. Title. KF3455.Z9S74 2008 344.7301 dc22 2007002188 Copyright © 1994, 1997, 1999, 2000, 2002, 2004, 2005, and 2007 Fred Steingold. ALL RIGHTS RESERVED. PRINTED IN THE USA. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the publisher and the author. 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Table of Contents 1 Hiring Legal Guidelines for Hiring Employees 3 Job Descriptions 11 Job Advertisements 13 Job Applications 14 Interviews 19 Testing 21 Investigations 25 Making a Job Offer 30 Rejecting Applicants 33 Tax Compliance 33 Immigration Law Requirements 34 New Hire Reporting Form 35 2 Personnel Practices Employee Files 38 Employee Handbooks 41 Employee Performance Reviews 44 Disciplining Employees 49 3 Wages and Hours Overtime and Minimum Wage Requirements 56 Equal Pay Requirements 70 How to Pay Employees 71 Calculating Work Hours 72 Record-Keeping Requirements 74 Child Labor Rules 75 Payroll Withholding 78 e Consequences of Bending the Rules 80 4 Employee Benefits Health Care Coverage 84 Retirement Plans 91 Other Employee Benefits 95 Benefits for Domestic Partners 98 5 Tax es Employer Identification Numbers 103 Federal Employment Taxes 106 Federal Self-Employment Taxes 109 Federal Tax Deductions for Salaries and Other Expenses 109 Independent Contractors 113 Statutory Employees 114 6 Family and Medical Leave Who Is Covered 116 Reasons for Taking a Leave 117 Scheduling Leave 118 Temporary Transfer to Another Job 119 Substituting Paid Leave 120 Advance Notice of Leave 121 Certification 122 Health Benefits 124 Returning to Work 124 Related Laws 126 Enforcement 128 7 Health and Safety e Occupational Safety and Health Act 130 Getting Help 135 State OSHA Laws 137 Hazardous Chemicals 137 Workers’ Compensation 139 Disease Prevention 144 Tobacco Smoke 145 Drug and Alcohol Abuse 146 Repetitive Stress Disorder 149 8 Illegal Discrimination Title VII of the Civil Rights Act 153 Sexual Harassment 159 Age 165 Pregnancy 167 Citizenship 167 Gay and Lesbian Workers 168 State and Local Laws 169 9 Workers With Disabilities e Americans with Disabilities Act 174 Businesses at Are Covered 175 Who Is Protected 175 Exceptions to Coverage 180 Providing Reasonable Accommodations 182 Workers With Emotional or Mental Impairments 187 Financial Assistance 189 Health and Safety Standards 192 Medical Exams 193 Enforcement 194 10 Termination Wrongful Discharge Cases 197 Guarding Against Legal Claims 200 Guidelines for Firing Employees 202 Investigating Complaints Against Workers 204 Alternatives to Firing 206 e Firing Process 207 Heading Off Trouble 212 Final Paychecks 212 Continuing Health Insurance 213 Unemployment Compensation 213 Protecting Your Business Information 216 Handling Postemployment Inquiries 218 11 Employee Privacy Monitoring Employees at Work 225 Searches 229 Employee Dating 230 Other Off-Duty Activities 231 12 Independent Contractors Comparing Employees and Independent Contractors 236 e IRS Rules 240 Workers Automatically Classified as Employees 247 State Laws 248 e Risks of Misclassification 248 Hiring Independent Contractors 248 13 Unions e National Labor Relations Act 254 Unionizing a Workplace 254 Employer Rights and Limitations 256 Employee Rights and Limitations 257 Making Unions Unnecessary 258 14 Lawyers and Legal Research Getting Help From a Lawyer 260 Paying a Lawyer 263 Resolving Problems With Your Lawyer 265 Legal Research 266 Appendix Labor Departments and Agencies 274 State Drug and Alcohol Testing Laws 275 State Laws on Employee Arrest and Conviction Records 285 State Laws on Employee Access to Personnel Records 293 State Minimum Wage Laws for Tipped and Regular Employees 299 State Meal and Rest Break Laws 306 State Health Insurance Continuation Laws 311 State Family and Medical Leave Laws 322 Right-to-Know Laws (Hazardous Chemicals) 328 Right-to-Know Laws (Hazardous Chemicals) (continued) 329 State Laws Prohibiting Discrimination in Employment 330 Agencies at Enforce Laws Prohibiting Discrimination in Employment 344 State Laws at Control Final Paychecks 349 Index CHAPTER 1 Hiring Legal Guidelines for Hiring Employees 3 Avoiding Illegal Discrimination 3 Respecting Applicants’ Privacy Rights 4 Avoiding False Job Security Promises 5 Preventing Negligent Hiring Claims 6 Protecting Against Unfair Competition 7 Hiring Young Workers 11 Hiring Immigrants 11 Job Descriptions 11 Necessary Elements 12 Permitted Discrimination 13 Job Advertisements 13 Job Applications 14 Avoiding Unlawful Questions 14 e Legal Effect of Job Applications 16 Interviews 19 Interviewing Protocol 19 Legal Restrictions on Questions 20 Testing 21 Skills Tests 21 Aptitude and Psychological Tests 21 Honesty Tests 22 Medical Tests 23 Drug Tests 24 Investigations 25 e Fair Credit Reporting Act 26 Information From Former Employers 28 2 | The employer’s legal handbook School Transcripts 28 Credit History 29 Criminal History 29 Driving Records 30 Making a Job Offer 30 Rejecting Applicants 33 Tax Compliance 33 Immigration Law Requirements 34 New Hire Reporting Form 35 CHAPTER 1 | hiring | 3 M any state and federal laws—as well as countless court decisions—set out legal protocol for every phase of the employment relationship, including the hiring process. If you’ve correctly sensed that many workers today are well informed about their legal rights and are willing to fight to enforce them, you may be concerned about making costly mistakes during hiring. Fortunately, you can steer clear of most of the legal perils of hiring employees by understanding and following these sensible guidelines: •Avoidillegaldiscrimination. •Respecteachapplicant’sprivacyrights. •Don’timplyjobsecurity—unlessyou mean it. •Protectagainstunfaircompetition. •Observethelegalrulesforhiringyoung workers and immigrants. The first part of this chapter discusses these key principles—some of which apply throughout the employment relationship and are discussed elsewhere in this book as well. The rest of the chapter will explain how to keeplegalriskstoaminimumasyouwritejob descriptions,advertiseforworkers,designjob applications, interview applicants, check into theirbackgrounds,andofferthemjobs. FAST TRACK ose hiring independent contractors should consult Chapter 12, where you’ll find a detailed discussion of the legal and practical issues you’ll have to consider. Legal Guidelines for Hiring Employees Most large companies maintain human resource departments and in-house lawyers to lead them through the intricacies of employment law—but it’s a costly endeavor. And if you run a small or midsized company, this is an unaffordable luxury. In either case, the guidelines discussed here should reduce your need for outside legal help when hiring employees. Avoiding Illegal Discrimination Federal and state laws prohibit all but the smallest employers from discriminating against an employee or applicant because of race, color, gender, religious beliefs, national origin, disability, or age. Also, many states and cities have laws prohibiting employment discrimination based on other criteria, such as marital status or sexual orientation. These antidiscrimination laws—covered in depth in Chapters 8 and 9—apply to all stages oftheemploymentprocess:preparingjob descriptions, writing ads, conducting interviews, deciding whom to hire, setting salaries and jobbenets,promotingemployees,and disciplining and firing them. These laws apply only to employers who have more than a certain number of employees, which differs for each antidiscrimination law. And, many state laws apply to smaller employers who are not covered by the federal laws. To find out whether your business must comply with these laws, see Chapters 8 and 9. [...]... compensation insurance? 16 | The employer’s legal handbook RESOURCES For additional information on hiring and the ADA, refer to the EEOC website at www eeoc.gov The Legal Effect of Job Applications A well-written application form can help get the employment relationship off on a solid legal footing Since it’s filled out very early in the process, you can use the form to let the applicant know the basic terms and... would disqualify the applicant from a job that may put members of the public or other employees at risk Your need to investigate a job applicant is legitimate—but if you go overboard, you may violate the job applicant’s legal right to privacy The best way to reduce the risk of an 26  |  The Employer’s Legal Handbook invasion of privacy claim is to do both of the following: • Seek only the background... claiming that the handbook stated that the employer could fire an employee 6 | The employer’s legal handbook only after warnings were given and disciplinary procedures were followed the court ruled that the employer was required to follow the procedures set out in its own employee handbook and couldn’t fire Scott at will (Lukoski v Sandia Indian Management Co., 748 P.2d 507 (1988).) during the hiring... business going is to try to get their business away from her former employer Speedy sues Sue for infringing on its trade secret At trial, Speedy shows that it keeps the list in a secure place and 10  |  The Employer’s Legal Handbook permits access only to selected employees who need the information In light of these precautions, the judge orders Sue not to contact the customers on the list and requires her... people of their rights to earn a living, so the key to a legally enforce­ able covenant not to compete is to make its terms reasonable In evaluating whether a covenant not to compete is reason­ ble, focus a on three questions—each of which relates to the specific job and the specific employee • Is there a legitimate business reason for restricting the future activities of the particular employee? There... False Job Security Promises If there’s no contract for a fixed term of employment, an employee works at the will of the employer and employee The employer can fire the employee at any time—and the employee is free to quit at any time—for any reason or for no reason at all That’s the basic law, although you can’t fire someone for an illegal reason—because of the color of the employee’s skin, for example,... proceed cautiously Make 22  |  The Employer’s Legal Handbook sure that the tests have been screened scientifically for validity and that they are correlated to job performance Review them carefully for any questions that may intrude into the applicant’s privacy Another concern for employers is the ADA, which lets you give a psychological test or exam to a job applicant—as long as the test or exam isn’t medical... it For a poster containing the required notice, contact the local office of the Wage and Hour Division of the U.S Department of Labor (See the appendix for contact details.) Resources For detailed information on the Employment Polygraph Protection Act, including whom the law covers, what the law requires and prohibits, tips for compliance, and exceptions to the law, see The Essential Guide to Federal... like to talk about sex A group of applicants in California sued the store, claiming that the test violated their rights to privacy and was discriminatory The California Court of Appeals agreed, ruling that the questions were not job-related The court held that the job applicants were entitled to a legal order prohibiting the store from using the test (Soroka v Dayton Hudson Corp., 235 Cal App 3d 654 (1991).)... workforce consists entirely of white men, the word-of-mouth recruitment can be illegal discrimination; it’s likely that few people other than white men will hear about the job openings The effect of the procedures is what counts To avoid violating antidiscrimination laws at the hiring stage, do all of the following: • Advertise job openings in diverse places so they come to the attention of diverse people • Determine . by the federal laws. To find out whether your business must comply with these laws, see Chapters 8 and 9. 4 | The employer’s legal handbook A particular form of discrimination becomes illegal. employee handbook. Later, Scott was fired without warning or suspension. He sued, claiming that the handbook stated that the employer could fire an employee 6 | The employer’s legal handbook only. you run the risk that they’ll later start a competing business or go to work for a competitor. If so, they may use information or contacts they gained at 8 | The employer’s legal handbook Statements