Category: Hiring

October 3, 2017

New York Law Protects Employees and Applicants with Criminal Records

New York employers cannot have blanket policies against hiring employees with criminal records. Instead, they must carefully consider several factors before using an applicant’s criminal record to deny employment.

(Some cities in New York have passed “ban-the-box laws” that prohibit employers from asking about criminal convictions on job applications. Read more about that topic here.)

New York Corrections Law

The New York Corrections Law codifies the state’s public policy supporting employment of people with criminal records.

It provides that employers may not make negative employment decisions by reason of the individual’s having been previously convicted of one or more criminal offenses, or by reason of a finding of lack of ‘good moral character’ when such finding is based upon the fact that the individual has previously been convicted of one or more criminal offenses, unless:

(1) there is a direct relationship between one or more of the previous criminal offenses and the specific employment sought or held by the individual; or

(2) the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.

Note that this law only applies to prior convictions. It does not apply to convictions occurring during employment with the employer in question.

The law identifies 8 factors that employers must consider in deciding whether a criminal conviction disqualifies an individual from employment in a particular position.

The factors are:

New York’s public policy encouraging the employment of persons previously convicted of one or more criminal offenses.
The specific duties and responsibilities necessarily related to the employment sought or held by the person.
The bearing, if any, the criminal offense or offenses for which the person was previously convicted will have on his fitness or ability to perform one or more of the job’s duties or responsibilities.
The time elapsed since the criminal offense or offenses.
The age of the person at the time of the criminal offense or offenses.
The seriousness of the offense or offenses.
Any information produced by the person, or produced on his behalf, regarding his rehabilitation and good conduct.
The legitimate interest of the employer in protecting property and the safety and welfare of specific individuals or the general public.

Notice to Applicant

If a job candidate with a criminal record asks an employer for a statement of the reasons they were denied employment, then the employer must provide one in writing within 30 days.

Employers who learn of criminal records through background checks must satisfy additional notice requirements.

New York Human Rights Law

An employee with a criminal record can claim discrimination on this basis under the New York State Human Rights Law. This law prohibits many forms of employment discrimination, including race, sex, age, and disability discrimination. But it also specifically references violation of the Corrections Law provisions above as violating the Human Rights Law.

As a result, applicants and employees can file claims of criminal record discrimination like other employment discrimination claims in New York. This means they can file a complaint with the New York State Division of Human Rights or directly with a court.

Criminal Records and Federal Employment Law

Federal employment law does not expressly protect employees with criminal records. However, in 2012, the U.S. Equal Employment Opportunity Commission (EEOC) issued guidance cautioning employers.

The EEOC explained how employment decisions based on criminal records could result in discrimination based on another protected category. Specifically, because certain races and ethnic groups represent a disproportionate percentage of individuals with criminal records, denying employment based on convictions is arguably the same as denying it based on race, national origin, etc.

The EEOC expects employers to consider various factors before making employment decisions based on criminal records. These are similar to the New York Corrections Law factors listed above.

How To Stay Out of Trouble

These laws do not say that employers can’t use criminal records as part of their employment decisions. Rather, they mean that employers must evaluate each situation individually.

Employers should document their consideration of all of factors listed above any time they deny employment based on a prior criminal conviction. This documentation alone will improve your defense of a criminal record discrimination claim. Employers who can’t show they weighed the statutory factors may not be able to overcome that failure.

Remember that the overriding question is how closely related the convictions are to the jobs in question. Banks probably need not hire former bank robbers. But clothing stores probably can’t turn down applicants because of their misdemeanor public intoxication charges from college.

The facts of each case matter. If there is any doubt, then you should speak with an employment lawyer familiar with these situations before proceeding. If you didn’t, and now face a discrimination complaint, read this.

September 6, 2017

Workforce Design Meets Employment Law

Let’s say you are an entrepreneur. You have a product or service worth buying, and maybe you’re already selling it. But now you need to build a team to help your business really take off. What legal issues do you need to keep in mind when you consider your workforce design?

Yes, I’m an employment lawyer. No, I’m not suggesting that employment laws should be the primary factor in how you organize the people in your company. But once you have employees, complying with employment laws enters the equation.

Why Should You Design Your Workforce?

What are we talking about anyway? Maybe one day you could actually design the people in your workforce, if you wanted to. They could all be robots. You could order exactly the models and styles you want.

I don’t know if employment laws will eventually apply to robots. I kind of doubt it, and hope not, I think. (Then again, that would help keep people like me relevant despite a robot revolution . . . but I digress.)

If you want you business to work and grow, you want the right people involved. And even if you have the right people, they need some direction and scope of responsibilities. We’re not going to get into titles and job descriptions here. Those really aren’t all that critical to the employment law issues I have in mind. Still, if your employees don’t have some direction, then you’ll have chaos.

Okay, perhaps chaos works for you. But it doesn’t work for most businesses. And it doesn’t avoid the obligation to comply with employment laws. (If you’re interested in the type of chaos that includes disregard of employment laws, then what can I say? Good luck. But here’s a list of government websites you ought to at least know about.)

So, I assume those who are still reading want some structure. Each person reports to someone else. People will have some physical space to work in (though it may not be on company premises). There have to be some rules about what employees can and can’t do. (You’re not going to give everyone access to the bank accounts, right?) You’ll need to address compensation, including guarantees, expectations, and logistics.

That’s probably just the tip of the iceberg in most cases. But it’s enough to get us started here.

How Do You Design Your Workforce?

WARNING: This isn’t intended to be a blueprint. Any good workforce design needs to focus specifically on your business. We can’t tackle that in the abstract. But I think some examples will be helpful.

How much can you spend?

Suppose you’ve spent six months working by yourself to launch your business. Good news: It’s working! You decide that you can afford to spend $150,000 on a staff over the next year. You’ll re-evaluate after that (or, more likely, earlier, but let’s keep this relatively simple!).

Well, now you have to decide how to spend that $150,000.

First, remember that not all of the $150,000 will end up the hands of your employees. Most likely you will at least have to get a workers’ compensation insurance policy. In New York, and a few others states, you’ll also have to have disability benefits insurance. And there’s unemployment insurance. Plus, of course, taxes: FICA, FUTA, income tax withholdings. Oh, and did you want to offer your employees health insurance, life insurance, etc.?

You could try to avoid some of those items by hiring independent contractors, but then you’re taking a risk of misclassification. Many workers treated as independent contractors are really employees under relevant laws. That means you may expose yourself to additional penalties for not providing/deducting all the items in the previous paragraph. That’s not to say you should never use independent contractors–I don’t assume you’ll have a full-time plumber/electrician on staff–but for now we’ll stick with direct employees.

How many employees do you want?

Just to keep the numbers round, we’ll say you’ll end up with $100,000 in real after tax cash (which you’ll pay by check or direct deposit, but you get the point) to offer workers over the next year. How do you want to spread that around? Give it all to one person? Rotate through 10 low-paid part-timers?

Believe it or not, employment laws may have a significant role in this key workforce design decision. Minimum wage and overtime are obvious factors. There’s also the fact that some legal obligations depend on the number of employees you have.

To move things along, let’s go with an initial workforce of 3 employees. We’ll have one full-time employee and two part-timers.

There are still many workforce design questions to answer, such as:

What do full- and part-time mean? How will they be paid? When will they work? Where will they work? What will they do? What will they use?

Workforce Design Meets Employment Law

Let’s take each of the specific questions above and look at how employment law may influence your workforce design decisions.

1. What do full- and part-time mean?

The law doesn’t directly dictate this. Typically, full-time is 40+ hours. But sometimes it’s 35 or 37.5 hours, depending on the length of an unpaid lunch period. And those are only some possibilities.

However, there are laws that apply differently depending on whether an employee is full- or part-time, as defined by the law in question.

The federal workforce reduction law (the WARN Act), for example, uses 20 hours per week as the cutoff for part-time workers. So does the New York Paid Family Leave Benefits Law.

Under the Affordable Care Act (ACA), a worker is full-time if they work 30+ hours per week.

Just looking at those examples, the WARN Act and ACA generally don’t apply to businesses with only 3 employees (referencing our scenario above). But the New York Paid Family Leave Benefits Law does, even if only 1 of the 3 employees works in New York! If you’re trying to structure your New York workforce such that employees won’t be eligible to take paid family leave, then you would need to considerably limit their days and hours worked.

2. How will they be paid?

What if you don’t want to have to pay overtime? Then you basically have two options. One is not to let anyone work over 40 hours per week. The other is to qualify your employees for an exemption to overtime requirements.

Not everyone can be properly classified as exempt. It depends, in part, on what someone actually does in their job. But for most exemptions, the employee also has to be paid on a salary basis. The federal salary threshold is in flux. So, let’s look at state law.

In 2018, an employer with less than 10 or fewer employees, will have to pay a New York City-based employee at least $900/week to satisfy the most typical exemptions. If you’re going to pay that much so you don’t have to pay overtime when they work 50 hours in a week, are you willing to let them have weeks where they only work 30 hours? Or do you need 50 hours of work each week to justify the salary.

And look. If you have around $100,000 to pay 3 people. You can’t afford to have all 3 of them be exempt if they work in New York City. But if they work somewhere with a lower exemption salary requirement, then maybe you could, if their job duties qualify.

3. When will they work?

This ties back into the last problem. You can’t just say work whenever. Sure, you might have employees that don’t work enough. But the bigger problem, especially if you hired hard workers, is that they’ll work too much. Then you’ll be stuck paying overtime you can’t afford.

Some states have laws about working on Sundays, ranging from prohibiting it in certain industries to requiring premium pay. States also have laws that require meal periods. They may prohibit you from having an employee work when you otherwise would like them to. (See, for example, my Primer on the New York Meal Period Requirements.)

In some industries, such as truck driving, there are also specific requirements for how long an employee can work.

4. Where will they work?

Do you have space for them in your office or facility? Can they work at home? Will they need to travel? Who will pay for that?

Remember, especially for non-exempt employees, you have to track time worked. The traditional time clock may be a helpful tool.

Time can be harder to track for employees who are offsite. But there are plenty of technology-based solutions to monitor time. This could range from an email where the employee self-reports time worked on a periodic basis to software that records when the employee logs into and out of their computer. Which methods will you use?

There are also overtime rules that apply in determining whether you have to pay employees for time spent travelling related to work.

And don’t forget access issues. If employees will be working in your facility when you aren’t there, how will they get in? Do they need to lock up when they leave?

5. What will they do?

Sure, job descriptions are nice. You can write those up front, before you hire. Or you can bring on the right people and figure out how they fit best. Whether written down or not, the scope of an employee’s job matters for employment law purposes.

First, there are the overtime exemptions mentioned above. They almost always depend, in part, on what the employee does. It’s not enough to call someone the Vice President of Sales and assume they’re exempt. If this employee really only enters customer data into a spreadsheet, they’re probably not going to qualify for an exemption.

Next, if you have enough employees to be subject to disability discrimination laws (15 or more under the ADA, often less under state laws), you may end up having to determine the “essential functions” of a person’s job. The ADA protects employees who can perform the essential functions of their job with or without reasonable accommodations.

What if an employee’s disability prevents him from driving? Suppose you want your employees to be able to drive to visit customers, run errands, etc. If that’s only incidental to their primary responsibilities, however, you couldn’t just get rid of the employee who can’t drive due to disability.

There can even be union-related considerations in workforce design. Maybe you don’t want a union (read here). But what if your new employees do. Even at just 3 employees, they could try to unionize. However, if you’re a private employee subject to the National Labor Relations Act, a bona fide “supervisor” isn’t eligible to be in a union. NLRA’s other protections don’t apply to supervisors either. But, again, just calling someone a supervisor doesn’t make it so in the eyes of the law. It will depend on what they actually do in the course of their job.

6. What will they use?

Maybe you have a residential lawn care company. If so, you may only entrust employees to use a push mower and hedge clippers. No big deal.

But, if you’re in a technology field, medicine, or consulting, the stakes may be higher. Are you providing a computer? Access to proprietary databases?

In these situations, you’ll want to consider how to protect your assets, and those of your clients, even from your own employees. Confidentiality agreements and even non-competes may be appropriate.

And you have to keep employees safe too. If you run a factory, for example, you’ll need to implement safety measures consistent with OSHA requirements.

No Shortcuts to Workforce Design

Most entrepreneurs won’t sit down and think through every possible legal issue related to bringing on a workforce. There are plenty of limitations on time and resources when confronting workforce design. But, employment law compliance shouldn’t be an afterthought either.

Larger, more established companies may have more resources and experience with having employees. But that’s not a complete advantage. That means they also have inertia going against them. In many ways its easier to design your workforce from scratch rather than reorganizing an existing staff.

Nevertheless, it’s unlikely that any business will get workforce design exactly right the first time, or any time. You will learn from what works and what doesn’t and adjust accordingly. For better or worse, you will also gain more and more experience with how the various employment laws may affect you. Learn from that too.

To learn more from me, you can sign up for my email newsletter here.

August 10, 2017

5 Bad Business Ideas for Good Employers

You’re in charge of managing a workforce. Maybe you own the company. Or you could be in human resources. Or another aspect of management. I assume you want to be considered one of the good employers, right?

In that case, here are 5 things you should never do!

1. Date Subordinates

Okay, you know what I’m talking about. But let’s start with what I’m not talking about. Especially if you own or help operate a small business, it’s reasonable that your spouse or longtime partner may also become involved. I’m not strictly advocating “no nepotism” policies. But don’t cross dangerous lines needlessly!

No matter how well you and your direct reports get along, it needs to stay professional, or at most friendly. Dating, where it could become romantic, isn’t worth the risk. Sure, it might work out great. But there are many ways it could go south.

First, advances may be rebuffed. If that happens, then the relationship between the two of you may be permanently tainted.

Second, even if a relationship develops, what are the motives? Is your employee only dating you to keep the job, to get ahead, to set you up? This just isn’t the right way to look for love!

Third, even if the relationship is real and works out, other employees may not like it. They might see it as creating a bias in favor of the employee you’re dating. And, let’s face it, you probably would, even should, be biased in that situation. What happens if the employee’s performance drops below an acceptable level and you have to fire your significant other?

Fourth, sexual harassment claims. By your desired paramour. From other employees. And these could come months or years down the road in some cases. These claims are a big hit for otherwise good employers!

If you nonetheless do find yourself dating an employee that reports to you, figure out a way to minimize the risk. Yes, there are even so-called “love contracts” where both parties make representations in writing to help the employer avoid liability. Hopefully, you don’t have to go that far in most cases. Reassigning the employee may solve, or at least help, the problem. But don’t just assume you can date an employee and have everything go smoothly. It probably won’t.

You don’t have to just take my word for. Get The Scoop on Love Contracts.

2. Keep Problem Employees

Any business with multiple employees over time will eventually end up with a bad one. This doesn’t necessarily mean someone with bad motives, but it can. More often, it’s just an employee who isn’t the right fit for the job for whatever reasons.

Some good employers think they can right the ship no matter what. “I hired this guy . . . I can fix him.” But that philosophy doesn’t always work. Okay, it usually doesn’t work.

Even if you could retrain a chronically underperforming employee, it probably isn’t worth the effort. You could find someone else better out there right now.

And if someone lies to you once or twice, can you afford to give them another chance?

This doesn’t mean you should have a zero tolerance policy in all respects. It just means you need to be realistic. If someone isn’t the right fit now, they probably won’t be in six months either.

Here’s another secret. The longer you employ someone, the more it costs to get rid of them. There are many inputs in this calculation. They may include training costs, severance pay, risk of litigation, etc. Do the analysis earlier rather than later, compare the cost of trying someone else, and make the difficult decision. You’ll be glad you did.

Check out my 5 Tips for Firing Problem Employees!

3. Hire People Like You

We are all predisposed to like people who resemble us. We’re automatically more comfortable and familiar with them. We know how they think, how they behave, and what motivates them. Or, at least we assume we do.

There are two big problems with hiring based on similarities:

The first is a legal concern. Discrimination. If you only hire/promote people similar to you in race, age, gender, etc., then you may be systematically disadvantaging particular classes of candidates. This can mean litigation, legal fees, and settlements or damages awards. Not good, obviously.

The second is a business concern. Do you really need more people like you? You already do you better than anyone else. What you need is a mix of “not-yous” to complement your strengths and weakness.

This doesn’t mean you can or should only hire people who are nothing like you. To be sure, only hiring employees of a different race or sex may also constitute discrimination. But good employers embrace diversity of experience, personality, characteristics, etc., not only because it’s the right thing to do, but because it works for their business too!

While you’re at it, Don’t Ask These Questions During Job Interviews!

4. Ignore Complaints

No one is perfect. Your business is going to make mistakes, or at least the people working for you will. It’s better to foster a culture where people are open about their mistakes so that they can be corrected. Otherwise, they build on themselves, making matters worse.

So, how do you foster this positive culture? First, don’t overreact. Try not to scream or disparage someone when you find out they did something wrong. If this is simply a performance matter, then try to correct it and move on. Obviously, consistent poor performance is another issue, addressed above.

Now, let’s say you find out about a mistake because another person files a complaint. And let’s say this complaint alleges harassment, discrimination, or other mistreatment. Then you have to investigate, but, again, don’t overreact.

Just because someone complains about a co-worker, it doesn’t always mean they want to sue you. Often, your investigation will reveal a misunderstanding that can be remedied. Other times, you may discover that someone has crossed the line. But even then, it doesn’t necessarily mean they meant to. Where possible, correct the mistake and make sure it doesn’t happen again.

Especially in the harassment context (sexual, racial, age-based, etc.), the potential liability often arises once an employer knows of misconduct and fails to act. But acting doesn’t have to mean firing anyone, or even transferring employees. The investigation may be sufficient.

But if you don’t take a complaint seriously or don’t try to get to the bottom of things, then you create a big target if the unwelcome behavior persists. Yes, this often increases the employer’s legal responsibility for this conduct. More importantly, it increases the likelihood that the complaining employee will go outside your organization to seek redress.

Be prepared for these situations in advance. Read my post on Responding to Employment Discrimination Complaints.

5. Forego Overtime Pay

Overtime is a major compensation issue that many employers, including good employers, get wrong. Yes, it’s nice to have employees who are willing to work as much as you need them to. But if you don’t pay them as required, it can cost you tremendously.

Lawyers representing employees are eager to file lawsuits against employers for failure to pay overtime. Not only can they recover handsomely for their clients. They also receive their fees from the employer if they win. Don’t be a target for these lawyers. Do it right!

The basic rule is that employees who work over 40 hours in a week must be paid overtime at time-and-a-half. Some employees can be exempt, meaning they don’t have to receive overtime pay. And, in some cases, different hour thresholds and payment requirements apply.

Here are some of the common mistakes:

Not accurately recording all hours worked.
Not paying overtime when earned.
Providing “comp time” instead of overtime pay, which isn’t allowed for private employers and has specific limits for public employers.
Improperly classifying an employee as exempt.
Miscalculating the overtime rate.

Remember, in most cases, employees can’t simply agree not to be paid for overtime. The law requires it, so any such agreement probably won’t hold up. If there is a claim in court or with the Department of Labor, then it’s the employer’s burden to show compliance with the law.

Keep in mind that the U.S. Department of Labor is in the process of reviewing its overtime exemption rules.

My Most Important Tip for Good Employers Like You!

There are so many traps in the employment law minefield. And the laws and workplace realities simultaneously change all the time. You need to stay up-to-date on what’s going on if you want to remain one of the good employers out there. My free email newsletter can help you be one of the great ones! Sign up here now!