"Me Too" Prevention - A Checklist for Small Businesses

In light of recent events in the news, now would be a great time for small businesses to run through a quick checklist.

1. Do you have a sexual harassment policy?

2. When was the last time your company reviewed and updated your sexual harassment policy and enforcement procedures?

3. Do you offer sexual harassment training to educate employees on what behavior is and is not tolerated in the workplace?

4. Do you provide an effective way for employees to make complaints when potential violations occur?

5. Do you take appropriate action to enforce your sexual harassment policy by investigating all complaints and addressing violations soon after they occur?

No small business wants to appear in the news after an outpouring of "Me Too" reports from employees.  There are simple steps companies can take to ensure they provide a healthy and respectful work environment for all.  Now get to it.

One Employee Triggers Many Laws

For small business owners, hiring a first employee is a very important step. The employer must comply with a range of laws as soon as that first employee comes on board. 

Be Aware of Reporting Requirements

An employer's first obligation is to comply with Texas and federal reporting laws. The new hire will need to fill out an I-9 form. Businesses must report new employees to state and federal agencies within twenty (20) days of the start of employment.

Federal Laws Protect Employees

Several important federal laws protect employees where a business has one or more employees. The Federal Labor Standards Act (FLSA) sets out the minimum wage and overtime laws we are all accustomed to in the U.S. The Occupational Safety and Health Act (OSHA) protects the health and safety of workers. Businesses must comply with these laws as soon as they hire their first employee. Other important federal statutes, including Title VII and the Family Medical Leave Act, only restrict businesses with more people on the payroll.

Some Texas Employment Laws Also Apply

Several state-level protections are triggered by the first hiring. The Texas Payday Act governs how and when employees get paid. It spells out state requirements for minimum wage, overtime pay, timely wages, and illegal deductions. Employers must also comply with the Unemployment Compensation Act. Even employees who work for an employer for as little as a single day may be eligible for unemployment benefits through that employer.

There Are Workplace Posting Requirements

Employers must provide workers with information regarding their rights by posting various types of information in a visible location within the workplace. They must provide or post informational materials about Workers' Compensation, the FLSA, OSHA, the Texas Payday Act, and other laws. Many of these posters are available for free through agency websites.

Ongoing Compliance Is Key

For employers with one or more employees, it is important to check and update their informational posters periodically. The Texas Workforce Commission website is a great resource for this purpose. They should also review whether they are in full compliance with all relevant employment laws. An experienced employment law attorney is in the best position to evaluate and advise on compliance issues.  

The Texas Whistleblower Act Protects Government Employees

When a public employee discovers illegal activity in their job, they have an ethical (if not a legal) duty to report it to somebody who can do something about it.  The Texas legislature enacted the Texas Whistleblower Act in 1983 to protect these employees from retaliation for making such a report.  

In order to recover under the Act, a plaintiff must show: (1) she is a public employee; (2) she acted in good faith in making a report; (3) the report involved a violation of law by an agency or employees; (4) the report was made to an appropriate law enofrcement authority; and (5) she suffered retaliation.  Tex. Gov't Code § 554.002.  Section 554.022(b) further clarifies that an “appropriate law enforcement authority” is a government official or entity that "an employee in good faith believes is authorized to regulate under or enforce the law alleged to be violated in the report or to investigate or prosecute a violation of the criminal law."  

Yesterday I was interviewed about a Whistleblower lawsuit with claims arising under the Texas Whistleblower Act, Texas common law, and the First and Fourteenth Amendments.

Common Pitfalls of the Fair Labor Standards Act

As soon as a business or non-profit hires its first employee, it must comply with the Fair Labor Standards Act (FLSA). This federal statute is widely known because it includes the minimum wage and overtime requirements we are all accustomed to. Still, there are many common misconceptions about this law. Businesses and organizations should take the time to ensure that they are complying with FLSA guidelines and keep careful records showing as much.

Exempt vs. Non-exempt

An employee who is classified as "nonexempt" must be paid minimum wage and must receive overtime pay for all hours worked beyond forty (40) hours per week. Individuals who are properly classified as “exempt” are not guaranteed minimum wage or overtime pay. Employers must have a solid understanding of what makes an employee exempt to avoid denying the right to minimum wage and overtime pay. Mistakes can lead to huge financial consequences for their business because FLSA penalties can add up fast.

How to Classify Employees

Despite popular belief, it is not the case that all salaried employees are exempt. In fact, employers must look at several different factors to determine the appropriate classification.

Employers should start by looking at the primary job duties for a particular position.  Exempt employees fall into one of three categories.  An employee in management who supervises two or more people and is responsible for hiring and firing is considered an executive. An employee who is primarily responsible for the support of the business works in an administrative role. These positions involve much more than simple clerical work and include human resource, public relations, and accounting roles. Professionals perform jobs that require advanced education and training, such as lawyers, physicians, teachers, and architects.

Executive, administrative, and professional employees must meet several additional requirements in order to be exempt. They generally must receive a salary rather than hourly pay. Employers must pay exempt employees a minimum of $455 per week. An executive, administrative, or professional who receives less than this amount is considered nonexempt and is entitled to receive overtime pay.

The Consequences of Mis-Classification

Sometimes employers will mistakenly mis-classify employees. By treating a nonexempt employee as an exempt employee, they may not properly record and compensate minimum wage and overtime hours. These employees may file FLSA overtime claims with the U.S. Department of Labor. After the claims are investigated, the employer may be subject to severe penalties and backpay. 

Employers should take great care to avoid this situation. They should develop clear job descriptions that identify the job duties for all positions. They should work with an experienced employment attorney to ensure that they properly classify their employees as exempt or nonexempt. Finally, they should track and record all work hours to ensure that employees receive the full minimum wage and overtime pay they are entitled to receive.