Employment Law Updates

FTC POSTPONES ENFORCEMENT DATE FOR RED FLAG PROGRAMS

As an update to a previous article regarding the “Red Flags” Rule, the Federal Trade Commission has postponed the enforcement date to November 1, 2009.  The reason for the postponement is the large number of businesses who are still unaware that they are covered by the “Red Flags” Rule. 

 

Under the “Red Flags” Rule, any “creditor” with any “covered accounts” must have a “Red Flags” program.  Because this rule is intended to help stop identity theft, it is intentionally broad.  The definition of “creditor” includes any person or company that regularly extends, renews, or continues credit or arranges for credit or accounts.  A “covered account” is an account for goods or services used primarily for personal, family or household use; or any account for which there is a reasonably foreseeable risk to customers of identity theft.   Essentially, any company that sends out bills, invoices or statements may be considered a “creditor” under this rule and should determine whether it needs to have a “Red Flags” program.

 

If you have any questions about the “Red Flags” Rule, including whether you or your business would be considered a “creditor” or what a “Red Flags” Program should include, be sure to contact an attorney knowledgeable in this area of the law.

NEW YEAR, NEW POSTERS....

Make sure your 2009 To-Do list includes updating the mandatory employment posters.  New posters are required for Oregon employers because of the increase in minimum wage and the new Oregon Smokefree Workplace law.  In addition, employers subject to the Family and Medical Leave Act (FMLA) must update the FMLA poster to comply with the new Department of Labor regulations.  This is also a good time to confirm that all required posters are displayed in a conspicuous place, where employees may regularly view them.  For more information about the various posters that are currently required, you can check with an experienced employment attorney or log on to the Bureau of Labor and Industries website at http://www.oregon.gov/BOLI/CRD/C_Postings.shtml.

DOES YOUR COMPANY NEED A RECORDS RETENTION POLICY?

As a result of a recent federal law change, more and more businesses are considering adopting a Records Retention Policy.  Most businesses create a huge number of emails and electronic records and yet lack any sort of policy or process regarding the retention, storage and destruction of those records.  Without any direction, a typical employee will store emails and other documents on the employee’s local hard drive (or personal directory), out of reach of the company’s organized filing or tracking system.  After a few years, a business can find itself drowning in hundreds of thousands of unorganized electronic records, with no easy way to determine what is important and what can be deleted.  It is also possible that many important records will be inadvertently (or deliberately) lost, creating a different set of problems.

 

A Records Retention Policy is intended to create an orderly process for maintaining, storing and destroying electronic and paper records.  Not only does a properly drafted and implemented policy allow a business be better organized for day-to-day business, it also helps with disaster preparedness and could reduce the amount of storage space needed on an ongoing basis.  If your business is interested in more information about a Records Retention Policy, be sure to contact your experienced business attorney.

DON’T FORGET TO UPDATE YOUR POSTERS

Because of recent changes to several different state laws, employers need to update certain required posters.  For example, the state minimum wage has increased to $7.95 per hour.  In addition, the Oregon Family Leave Act (OFLA) has been modified to include grandparents and grandchildren in the definition of “family member”, and also to mandate that employees be allowed to use accrued sick leave for family leave.  Finally, the required Oregon OSHA poster has been modified to provide that employees have 90 days to file a safety and health complaint with the Bureau of Labor and Industries (BOLI), and 30 days to file a complaint with Oregon OSHA.

To remain compliant, make sure your posters are current.  For more information about where to obtain the required posters, contact the Oregon Bureau of Labor and Industries, or click here to access the BOLI website: http://www.oregon.gov/BOLI/CRD/C_Postings.shtml

EMPLOYERS MUST USE NEW I-9 FORM

The federal government has released a new Employment Eligibility Verification Form (I-9), the mandatory form employers must complete for every new hire.  This form is used to verify an applicant’s identity and eligibility for employment in the United States under the Immigration Reform and Control Act of 1986 (IRCA).  For individuals hired after November 7, 2007, and for any re-verifications after that date, employers must use the new Form I-9. 

The new Form I-9 eliminates five of the ten “List A” documents that employers previously could rely on to establish both the applicant’s identity and his or her employment eligibility, but does not make any changes to the “List B” (identity) and “List C” (eligibility) documents.  The new form, which bears a revision date of June 5, 2007 (located in the lower right hand corner of the form) can be downloaded in English and in Spanish, and information on completing the form can be found on the U.S. Citizenship and Immigration Services website.

BEWARE THE USE OF SOCIAL SECURITY NUMBERS IN EMPLOYMENT SETTINGS

Effective October 1, 2007, the Oregon Consumer Identity Theft Protection Act requires businesses to safeguard the personal information of any “resident of this state” or “consumer,” which in most cases will mean a business’s employees and customers.  In general, the Act protects information sufficient to permit identity theft against the employee or customer whose information was compromised, e.g., financial information and social security, driver’s license, and passport numbers.  A $1,000 fine is assessed for each violation.  To avoid such penalties, employers must abide by the three requirements imposed by the Act.

First, the Act requires employers to notify an employee or customer if personal information is disclosed for other than legitimate business reasons. 

Second, the Act prohibits employers from publicly posting or displaying an employee’s or customer’s social security number, and from printing that person’s social security number on any materials that are mailed to the person unless (i) requested by the employee or (ii) the information is part of the documentation of a transaction or service requested by the person.  Further the employer cannot print the employee’s social security number on any card required for the employee to access products or services provided by the employer. 

Finally, the Act requires employers to “develop, implement and maintain reasonable safeguards” to protect the security, confidentiality and integrity of employee and customer personal information, including its disposal.

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.

NEW HOMELAND SECURITY I-9 REGULATION FACES COURT CHALLENGE

All employers are required to document the citizenship or immigration status of new employees by requiring those employees to complete a Form I-9 and provide certain documents (such as a U.S. passport or driver's license and social security card) within three days of the employee's commencement of employment.  Knowingly employing workers who are unauthorized to work because of their citizenship or immigration status can result in substantial fines, and even criminal penalties.  A new Department of Homeland Security regulation that was scheduled to go into effect on September 14, 2007 would have placed even more responsibility on employers, but implementation of that regulation has been stayed by the court, at least temporarily. 

The new regulation provides that if an employer receives written notice from the Social Security Administration that the combination of name and social security number submitted for the employee do not match agency records (called an Employer Correction Request, or "no-match letter"), that employer shall be deemed to be "knowingly employing workers who are unauthorized to work."  The regulation will also apply when an employer receives written notice from the Department of Homeland Security that the documents submitted by the employee in completing the Form I-9 do not match agency records (called a Notice of Suspect Documents).

Fortunately, the new regulation provides a safe harbor provision for employers who take "reasonable" steps to resolve the discrepancy after receiving a no-match letter or Notice of Suspect Documents.  Reasonable steps include:

1. Promptly checking the employer's records to determine whether the discrepancy was caused by a typographical or similar clerical error in the employer's records.  If an employer finds an error, the employer should correct its records and notify the relevant agency within 30 days of receiving the no-match letter;
2. Promptly asking the employee to confirm that the employer's records are correct. If they are not correct,the employer should correct the records and verify the corrected records with the relevant agency within 30 days of receiving the no-match letter.  Employers may verify a social security number by calling the Social Security Agency at 1-800-772-6270, weekdays from 7 a.m. to 7 p.m. EST; and
3. If the employer's records are correct, the employer should then ask the employee to follow up with the relevant agency.

If the employer cannot resolve the discrepancy, it must either terminate the employee or face the risk that the Department of Homeland Security will find that it violated federal law.  The employer generally has 90 days after receiving the no-match letter to either make sure that the discrepancy is resolved or terminate the employee.  If the employer and employee tried to resolve the discrepancy for the full 90-day period, they have an additional three days to complete a new Form I-9.

At the eleventh hour, labor and civil rights groups challenged the regulation as unfairly targeting legal workers, and also argued that the Department of Homeland Security has no authority to utilize the tax code to implement its immigration initiatives.  The court issued an order temporarily suspending implementation of the rule until that legal challenge is resolved, which could occur as soon as October, 2007.

PERFORMANCE EVALUATIONS – DON'T SWEAT IT!!

No one enjoys employee performance appraisals.  Whether you’re the appraiser or the appraised, you’re likely to suffer from excessive perspiration just thinking about the process.  Yet it is that very process that can keep an employer out of court, or at least provide documentary evidence to support a performance-based termination and defeat a claim that performance was just an excuse for an otherwise wrongful termination.  In addition, evaluations play an important role in reinforcing positive employee behavior, eliminating negative characteristics, and clearly communicating expectations.  When conducted on a routine basis, evaluations can help establish trends and identify measurable benchmarks for future performance.  Documentation of repeated problems that have not been adequately addressed serves as a reasonable warning to the employee that his or her position is in jeopardy.  Appraisals that include a discussion of the employee’s limitations may bring out the need for alterations to the job or work environment that are necessary to comply with any reasonable accommodation requirements.  And managers who review their employees’ performance at least once a year can better evaluate eligibility for promotions and other personnel changes. Finally, discussing the evaluation with the employee and obtaining the employee’s signature help ensure that the employee has read and understands the employer’s expectations and is willing to meet them. 

DON'T FORGET: NEW EEO-1 FORM FOR 2007

Those employers with (a) 100 or more employees or (b) 50 or more employees and federal government contracts of $50,000 or more, are now required to use a revised EEO-1 annual reporting form.  The new form should be submitted, as usual, by September 30 of each year.  However, it contains some important changes that may immediately affect your data collection efforts.  For example, the EEOC has added a new category to “Racial Identity” entitled "Two or more races,” and has divided the single category of "Asian or Pacific Islander" into two separate categories: "Asian" and "Native Hawaiian or other Pacific Islander."  The category "Black" has been renamed "Black or African American" and "Hispanic" has been renamed "Hispanic or Latino."  In another important change, the new form strongly endorses the practice of having the employee self-identify his or her race and ethnicity, as opposed to the old method of relying on the employer to visually determine those characteristics.   

The EEOC has also revised the form’s job categories.  The old category, "Officials and Managers," is now divided into two levels:  “Executive/Senior Level Officials and Managers” (defined as those who plan, direct and formulate policy, set strategy and provide overall direction; and in larger organizations, those within two reporting levels of the CEO); and “First/Mid-Level Officials and Managers” (defined as those who direct implementation or operations within specific parameters set by Executive/Senior Level Officials and Managers, and who oversee day-to-day operations).  In addition, the business and financial occupations have been moved from the “Officials and Managers” category to the “Professionals” category.   You may download the new form.