Employers: Don’t Drop The Ball Before The Ball Drops

Time is running out for employers to make those life-changing New Year’s resolutions–and we mean the kind you keep, not the annual, I’ll go to the gym more (which by the way, requires you to join the gym).

Here are our recommendations for a successful 2019:

  • If you don’t have Employment Practices Liability Insurance, resolve to get it. When shopping for or renewing an EPLI policy, have your broker insist on allowing you to select your own counsel in advance. It’s called an “endorsement” to the policy and it simply provides that you identify in advance the law firm that will represent you for an employment claim covered by the policy. It should not cost more. If the carrier balks, have the broker shop you to another. While this may sound like it’s in our self-interest, you know us better than that. Too many of our long-term clients have horror stories of being ignored or misunderstood by carrier-appointed counsel. We know you, we understand you and we never forget our anniversary; or if you’re not sentimental, just remember, it’s better to stay with the devil you know. Either way, let’s resolve to stay together in 2019 and beyond.
  • On the topic of minimizing risk, if you currently have arbitration agreements or no alternative dispute resolution process in place, consider jury waivers. We continue to have a bad feeling about arbitration. An early exit by motion is nearly impossible, there is no right to appeal, the discovery process is just as time consuming as in court, and the administrative and arbitrator’s fees alone make arbitration less cost efficient. A jury waiver must be a knowing, voluntary, clearly written agreement in which employees agree to waive their right to a jury trial if they sue for specifically identified employment claims. The benefits to remaining in court without the possibility of a runaway jury make it well worth resolving to implement jury waivers in 2019.
  • State and federal departments of labor and taxing authorities are voraciously hunting for employers to penalize for employee misclassifications: employees misclassified as independent contractors (see next week’s post) or non-exempt employees misclassified as exempt. The employer portion of back taxes, contributions to Unemployment, Disability, Social Security and Medicare, combined with the fines and penalties for misclassification of employees as ICs (and even potential personal liability), can be huge and absolutely not worth the risk. For exempt/non-exempt misclassifications, the cost in overtime going back 2 to 3 years, the fines and penalties, the audit of all other employees, and again the potential for personal liability, also makes the crime not worth the time. This is the perfect time to examine all of those classifications. Resolve to get it straight before getting caught.
  • ICE has announced that it will continue to aggressively pursue I-9 audits in 2019. Errors on I-9s are easy to make, can be costly and might lead to further federal government scrutiny. Even the most diligent employers make mistakes on I-9s. For example, there are multiple places that require a date which must be in the proper format. So 1/1/19 is wrong; the proper form is 01/01/2019. Any deviation is a violation and will result in a fine. Resolve to have your I-9s reviewed before ICE comes knocking.

A few year- end reminders:

  • Check your state 2019 minimum wage increases and adjust accordingly
  • New Jersey employers: remember your mandatory annual distribution of the CEPA Notice and the Gender Equity Pay Notice
  • New York employers: remember that if you change pay rates, you must provide a new Wage Theft Prevention Act Notice

Finally, we want to leave you with our favorite holiday gift story of 2018. As a holiday gift to its employees, a Wisconsin drinking glass manufacturer surprised each of them with a gift card to a local gun shop. That’s right, this employer thinks it’s a good idea to arm all of its employees. Wisconsin allows open and concealed carry so the boss just better pray that business stays strong. A RIF among employees, each with one in the chamber, is not likely to go well, but neither are bullets around heated glass. At least this gift gives a whole new meaning to getting loaded at the holiday party.

Happy New Year!

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