Employment Law Updates

AN EMPLOYEE POLICY HANDBOOK – WHO NEEDS IT?

You run a small operation – fewer than 50 employees. The business has been run the same way for years. You have low turnover, and your employees appear to work well together. Why would you need a policy manual? Wouldn’t written policies only serve to make the workplace more rigid and complicated?

Granted, an employee handbook may give the appearance of an employment contract even when it contains a disclaimer explaining that employment is at-will (meaning that employment can be terminated by either party at any time for any nondiscriminatory reason.)  And having policies stated in writing does give your business something to live up to. However, consider the following:

An employment contract may already exist. That’s right, juries in some wrongful termination lawsuits have decided in favor of employees who contend that their employers made oral promises to the employees that constituted an employment contract. If your policies are in writing, you have some leverage against claims that your company made oral promises that are contrary to your written policies. Furthermore, communicating policies orally inevitably leads to inconsistent application, which can translate to charges of discrimination.

Your employees deserve to know what to expect. From a practical point of view, a written policy manual provides your employees with a clear and reliable source for workplace rules. For example, a policy manual answers questions such as “What time does the boss expect me at work?” “When do I get paid?” “What should I wear?” “What holidays are recognized?” “What conduct is likely to get me fired?” “Do I have any recourse when a decision seems unfair?” A manual also clarifies the employer’s expectations, so that when the employee’s conduct falls short of those expectations, the consequences should come as no surprise to the employee. In other words, understanding those expectations gives the employee a better opportunity to succeed in the workplace. Clear policies that are applied consistently also contribute to employee morale and, in turn, increase productivity.

A policy manual benefits the employer as well. For example, a handbook establishes and defines the kind of work environment the employer wishes to build, the prevailing management style, and the spirit of the enterprise. When creating a policy manual, the employer is required to think about what the manual conveys about the employer’s business.

A policy manual also provides an employer with a setting in which to make important statements concerning at-will employment, the authority of the company to change the terms of employment at any time, and the nonbinding nature of published policies. Disclaimers located prominently in the policy manual can also prevent misunderstandings about the nature of the employment relationship that may have been communicated in less formal ways.

A manual can showcase policies of nondiscrimination and anti-harassment. Not only does publication of such policies help prevent discrimination by putting employees on notice, it can also constitute a defense to some discrimination claims and help reduce damages in instances where discrimination occurred.

Finally, a manual helps protect the enterprise by clearly articulating the company’s expectations regarding confidential information about clients, operations, finances and trade secrets; the use of drugs and alcohol; and electronic communications.

Why consult an attorney about your policy manual? You may be convinced that your business would benefit from a policy manual, but you believe you can develop one on your own. After all, you know your business better than anyone else does. However, there are several dangers in writing your own policy manual or adopting someone else’s.

First, whatever is written may be construed as a contract made with the employee. While you want to define your enterprise and the work environment you wish to create, your interests would not be served by unwittingly creating a contract you cannot uphold. An employment law specialist can identify statements that bind your business in ways you do not intend by helping you choose language carefully and inserting the appropriate disclaimers. Additionally, your legal specialist has the experience necessary to analyze the contents of the manual for policies that could lead to sticky real-life situations. A comprehensive legal review will include a search for pesky buzz words that have one meaning in everyday usage and another after an employee has filed a lawsuit. Finally, your attorney can make sure your manual complies with the state and federal laws applicable to your business.

An expensive proposition? The cost may be less than you think, and will undoubtedly pay off in employee relations.

IMPLEMENTING USERRA: AN OVERVIEW

The Uniformed Services Reemployment Act (USERRA) was enacted in 1994 to provide employees who serve in the uniformed services with protected leaves of absence from their civilian jobs, and certain guaranteed health and pension benefits.  All employers are subject tot the Act.  For the first time ever, the U.S. Department of Labor has issued regulations implementing USERRA, and this article provides a summary of those regulations. 

Anti-discrimination

USERRA makes it unlawful for an employer to deny initial employment, reemployment, retention in employment, promotion, or any other benefit of employment to an individual on the basis of his or her membership, application for membership, performance of service, application for service or obligation for service in the uniformed services.  The employee need only show that his or her connection with the uniformed service was a motivating factor – rather than the sole factor – in the employment decision. 

• “Employer” is defined broadly to include not only the entity employing the service member, but the managers of the service member, a co-employer or an employee pension benefit plan.
• “Uniformed service” includes active or inactive duty on a voluntary or involuntary basis in any branch of the Armed Forces, the Army National Guard and the Air National Guard, the commissioned corps of the Public Health Service, and certain positions with the National Disaster Medical System.

Reinstatement

USERRA requires that employers promptly reinstate employees to the position they would have had if they had not served in the military.

USERRA rights are not diminished because an employee holds a temporary, part-time, probationary, or seasonal employment position.  However, an employer is not required to reinstate an employee who was hired for a brief, nonrecurrent period with no reasonable expectation that the employment would have continued indefinitely or for a significant period.  Seasonal employment does not necessarily fall under the latter classification, however.  While it is temporary, it may be seen as recurrent and the employee may have a reasonable expectation that the employment will be available when the season again rolls around again.

If the employee’s position goes into lay-off status during the service period, the employee is reinstated to lay-off status.  If the position was in recall status during the service period, the employee would be recalled.

In order to be reinstated, the employee must satisfy the following requirements:

     1. The employee must give the employer advance notice of the employee’s service. 

• The regulations recommend that 30 days notice be given, but there is no absolute requirement covering the length of the advance notice.  If the employee is unable to give notice or is prevented by military necessity from doing do, reinstatement rights are not forfeited.  Notice does not have to be written.  If the employee is unavailable, the notice can be provided by an “appropriate officer” on the employee’s behalf. 

      2. The employee may not have more than five years of cumulative service for a single employer. 

• The five year total does not include time taken before the leave to prepare for service and time taken afterward for rest and recuperation.

      3. Upon completing service, the employee must notify the pre-service employer of his or her intent to return to the employment position by either reporting to work or submitting a timely application for reinstatement. 

• If the period of service is less than 31 days, the employee must report back to the employer not later than the beginning of the first full regularly-scheduled work period on the first full calendar day following the completion of the period of service, and the expiration of eight hours after a period allowing for safe transportation from the place of that service to the employee’s residence. 
• If the period of service is more than 30 but less than 181 days, the employee must submit an application for reinstatement (written or verbal) with the employer not later than 14 days after completing service. 
• If the period of service is more than 180 days, the employee has 90 days to apply for reinstatement. 
• If it is impossible or unreasonable for the employee to report within the appropriate time period through no fault of his or her own, he or she must report to the employer as soon as possible after the expiration of the eight-hour period.
• If the employee fails to timely report for or apply for reinstatement, he or she does not automatically forfeit entitlement to USERRA’s reemployment and other rights and benefits.  Rather, the employee becomes subject to the conduct rules, established policy, and general practices of the employer pertaining to an absence from scheduled work.
• If the employee is recovering from a service-related illness or injury, he or she has two years from the date of completion of service to reapply for employment.

      4. The employee may not have been separated from service with a disqualifying discharge or under other than honorable conditions.

      5. If the period of service exceeded 30 days and if requested by the employer, the employee must submit documentation to the employer showing that:

• the reinstatement application is timely,
• the employee has not exceeded the five-year limit on the duration of the service; and
• the employee’s separation or dismissal from service was not disqualifying. 

The employer is not permitted to delay or deny reinstatement by demanding documentation that does not exist or is not readily available.  If the documentation is received after reinstatement and it shows that the employee is not entitled to reinstatement, the employer may terminate employment and any rights or benefits that the employee may have been granted.

The employee is not required to tell the employer before leaving for service that he or she intends to seek reinstatement.  In fact, if the employee informs the employer upon leaving for service that he or she does not intend to return to the employment, the employee does not waive reinstatement rights, though non-seniority benefits may be forfeited.

The employer is required to promptly reinstate the employee returning from service.  “Prompt reinstatement” means as soon as practicable under the circumstances of each case.  Absent unusual circumstances, reinstatement must occur within two weeks of the employee’s application for reinstatement.  For example, prompt reinstatement after a weekend National Guard duty generally means the next regularly scheduled working day.  On the other hand, prompt reinstatement following several years of active duty may require more time, because the employer may have to reassign or give notice to another employee who occupied the returning employee’s position.

Employees are Subject To The Escalator Principle

The escalator principle requires that the employee be reinstated to a position that reflects with reasonable certainty the pay, benefits, seniority, and other job perquisites that he or she would have attained if not for the period of service.  The position the employee would have attained if not for the period of service is known as the “escalator position.”

If the service was less than 91 days, the employee must be reinstated in the escalator position.  If the employee is not qualified to perform the duties of the escalator position after reasonable efforts by the employer, the employee must be reinstated in the position in which he or she was employed on the date that the period of service began.  If the employee is not qualified to perform the duties of either the escalator position or the pre-service position, after reasonable efforts by the employer, he or she must be reemployed in any other position that is the nearest approximation first to the escalator position and then to the pre-service position.  The employee must be qualified to perform the duties of the position and the employer must make reasonable efforts to help the employee become qualified to perform the duties of that position.  An employee is “qualified” if he or she has the ability to perform the essential tasks of the position.

Non-Seniority Rights and Benefits

The non-seniority rights and benefits to which an employee is entitled during a period of service are those that the employer provides to similarly situated employees through an agreement, policy, practice, or plan in effect at the employee’s workplace.

If the non-seniority benefits to which employees on furlough or leave of absence are entitled vary according to the type of leave, the employee must be given the most favorable treatment accorded to any comparable form of leave when he or she performs service in the uniformed services.  For example, military leave for a short training period may be comparable to jury duty (generally, jury duty does not require a lengthy service period).  Accordingly, the employee is entitled to the same benefits as employees on jury duty.  While military leave is not paid leave (even though an employer may choose to supplement an employee’s military salary), it may better compare with paid leave programs than with other unpaid leave programs. 

As a general matter, accrual of vacation leave is considered to be a non-seniority benefit that must be provided during military leave, but only if the employer provides that benefit to similarly situated employees on comparable leaves of absence.

The employee must be permitted upon request to use any accrued vacation, sick leave or similar leave with pay during the period of service in order to continue his or her civilian pay.  However, an employer cannot require the employee to use paid leave during the period of service.

Health Care Benefits

If the employee has health care coverage under an employer’s group health plan, the plan must permit the employee to elect to continue coverage during the service leave for the employee and dependents (if the plan includes dependent coverage) for a period of time that is the lesser of (a) the 24-month period beginning on the date on which the employee’s absence for the purpose of performing service begins; or, (b) the period beginning on the date on which the employee’s absence for the purpose of performing service begins and ending on the date on which he or she fails to return from service or apply for a position of employment.  (The regulations do not deal with the question whether COBRA applies when coverage under USERRA expires.)

If the employee performs service for fewer than 31 days, he or she cannot be required to pay more than the regular employee share for health plan coverage.  If the employee performs service for 31 or more days, he or she may be required to pay no more than 102% of the full premium under the plan.

If an employee gives notice of service and leaves for a service period in excess of 30 days without making an election regarding continuation coverage, the plan administrator may cancel the employee’s health plan coverage upon the employee’s departure for military leave.  If the employee elects continuing coverage and pays all unpaid amounts due within the periods established by the plan, the coverage must be reinstated without the imposition of administrative reinstatement costs.  Health plan administrators may adopt reasonable rules allowing cancellation of coverage if timely payment is not made. 

If health plan coverage for the employee or a dependent was terminated for military leave, the coverage must be reinstated upon reemployment.  An exclusion or waiting period may not be imposed in connection with the reinstatement of coverage upon reemployment, if an exclusion or waiting period would not have been imposed had coverage not been terminated for military leave, unless the exclusion or waiting period is for illness or injuries determined by the Secretary of Veterans Affairs to have been incurred in, or aggravated during, performance of service in the uniformed services.

Pension Benefits

USERRA requires that an effort be made to rehabilitate the returning employee’s pension benefits.  The employer is responsible for making all of the employer contributions to the plan that the employee would have received if his or her employment had been continuous.  If the plan does not permit or require an employee contribution, the employer must make the contribution attributable to the employee’s period of service no later than 90 days after the date of reinstatement, or when plan contributions are normally due for the year in which the service in the uniformed services was performed, whichever is later. 

If the employee is enrolled in a contributory plan he or she is allowed (but not required) to make up his or her missed contributions or elective deferrals.  These makeup contributions or elective deferrals must be made during a time period starting with the date of reinstatement and continuing for up to three times the length of the employee’ immediate past period of uniformed service, with the repayment period not to exceed five years.  Makeup contributions or elective deferrals may only be made during this period and while the employee remains employed with the post-service employer. 

The employee is not required or permitted to make up a missed contribution in an amount that exceeds the amount he or she would have been permitted or required to contribute had he or she remained continuously employed during the period of service.

Any employer contributions that are contingent on or attributable to the employee’s make-up contributions or elective deferrals must be made according to the plan’s requirements for employer matching contributions. 

If the employee received a distribution of all or part of the accrued benefit from a defined benefit plan in connection with his or her service in the uniformed services before being reinstated, he or she must be allowed to repay the withdrawn amounts when he or she is reinstated.  The amount the employee must repay includes any interest that would have accrued had the monies not been withdrawn. 

Discharge Protection

USERRA protects the employment of employees returning from service for a period of time.  If the employee’s most recent period of service was more than 30 days, but less than 181 days, the employee cannot be discharged except for cause for 180 days after the date of reinstatement.  If the employee’s most recent period of service was more than 180 days, the employee cannot be discharged except for cause for one year.

Required Postings

As of January 18, 2006 all employers are required to post the 2006 version of the USERRA requirements where other required postings are located.  (Download most recent poster.) 

Conclusion

USERRA is a complex law that can be difficult for employers to administer.  Consult with an Employment Law attorney if you have questions.

NEW DEADLINE EXISTS FOR PRODUCING PERSONNEL RECORDS

For many years Oregon employees have had the right to inspect and receive certified copies of their personnel records.  That right extends for 60 days after they are terminated, or as long as their employer maintains the records.  As of January 1, 2008, employers will have 45 days to comply with an employee’s request to inspect or receive certified copies of his or her records.  This 45-day window applies to any request for records, even after termination.  The employee and employer may choose a different time frame for inspection, but only if the records are not readily available.  Most importantly, failure to comply with a request can now lead to a fine of up to $1000.  Even though this law comes with quite a “stick,” it is a welcome clarification for employers, who now have a clear deadline for compliance.

LEGISLATURE BROADENS SICK LEAVE RIGHTS

Beginning January 1, 2008, there will be a change in the law regarding employees’ ability to use accrued sick leave while on family leave.  As you probably know, the general rule is that time spent on leave protected by OFLA and/or FMLA is unpaid.  Historically, however, if the employer offers sick leave, vacation, or other paid leave time as a benefit for employees, then under FMLA or OFLA, the employer must allow the employee the option of using the paid time so long as that is consistent with the employer’s policy.  As of January 1, 2008, if the employee is taking OFLA leave, then the employer must allow the employee to use any type of accrued paid leave time, regardless of whether such use is consistent with the employer’s policy. 

Example:  Employer’s policy provides for employees to accrue sick leave and, under the policy, the accrued sick leave can be used when the employee or the employee’s spouse or children are sick.  The policy clearly prohibits an employee from using his sick leave to care for the employee’s parent.  Under FMLA, if the employee is taking FMLA leave to care for a critically-ill parent, the employer is not required to allow the employee to tap into his accrued sick leave because doing so would be inconsistent with the employer’s policy.  However, under the new OFLA law, the employer must allow the employee to utilize the employee’s sick leave bank regardless of the policy’s restrictions.

Also, keep in mind that employers can require employees to use accrued time off while the employee is using OFLA and/or FMLA time, but only if the time on leave would otherwise be unpaid.  If the employee is receiving payments from some other source during the OFLA/FMLA leave (e.g. short-term disability or time loss), then the employee cannot require the employee to draw from his or her accrued leave bank.

OREGON FAMILY LEAVE LAW EXPANDED

The Oregon Legislature recently made two major changes to the Oregon Family Leave Act (OFLA), both of which take effect on January 1, 2008. 

First, the definition of “family member” has been expanded.  Traditionally OFLA required employers to give an employee up to 12 weeks of unpaid leave to care for a family member with a serious health condition, and defined “family member” as the employee’s spouse, parent, child, parent-in-law, same-sex domestic partner and the domestic partner’s parent or child.  With the new law, an employee will also be able to take family leave to care for grandparents or grandchildren who have a serious health condition.

The second significant change to OFLA affects leave arising out of a workers’ compensation injury.  As of January 1, 2008, an employer may not reduce an employee’s OFLA leave bank for absences resulting from a worker’s compensation injury.  Previously, an employee with a disabling compensable injury could be required to use OFLA and FMLA time while he or she was on leave for the disabling injury.  Under the new law, an employee’s leave due to an on-the-job disabling injury will not reduce the amount of OFLA time the employee may take in the year, but will still reduce the employee’s FMLA leave bank.  In addition, if the disabled employee refuses a genuine offer for light duty or modified work but is eligible to take OFLA time, family leave for that employee automatically begins upon refusal.  The employee does not need to notify the employer that the OFLA leave has begun.  This means that an employee’s refusal to take light duty no longer automatically terminates the employee’s right to reinstatement or reemployment – if the employee has OFLA time available, the employee must be reinstated or reemployed at the end of the OFLA leave period.   

NEW LAWS RELATING TO BREASTFEEDING AT WORK

As you probably know, in 2005 an Oregon law went into effect encouraging (but not requiring) employers to provide employees with time and a private place to express breast milk while at work.  The legislature recently made that duty mandatory for certain employers.

Specifically, beginning January 1, 2008, any private employer with at least 25 employees is required to provide employees with a 30-minute rest period to express milk during each four-hour work period, unless the employer and employee agree to a different arrangement.  In addition, the employer must make reasonable efforts to provide a private location close to the employee’s work area for the purpose of expressing milk.  The rest periods are unpaid unless the employer is required by law or contract to provide paid rest periods (and most employers are required to provide paid rest periods).  If the time spent by the employee expressing milk exceeds the regular paid break time, then the remaining time spent expressing milk can be unpaid; however, the employer may allow the employee to make up the amount of time used during the unpaid rest periods.  Violations of these requirements could result in a penalty of up to $1,000.

There is an exception to this law if complying with these requirements creates an undue hardship.  An undue hardship is defined as “significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employer’s business.” 

Because this law is new, there are many unanswered questions.  The Bureau of Labor and Industries (BOLI) has been assigned the task of creating regulations that should provide us with more guidance.