Employment Rights, Benefits & Labor: Frequently Asked Questions

Frequently Asked Employment Law Questions

Are employee arbitration and class action waivers good for my business?

A class action is a lawsuit brought by a group of people who allege they suffered similar injuries caused by the same defendant.  Not only are class actions expensive for a company to defend, but they can have a significant adverse effect on morale, particularly when brought by current or former employees alleging their employer didn’t pay them all their wages.  A 2018 US Supreme Court decision held that employers can require employees to resolve claims with “single plaintiff” arbitration rather than joining with other employees in a class action lawsuit.  While the use of an Arbitration Agreement and Class Action Waiver signed by your employees lowers your risk of having to defend a class action, there are certain requirements for the agreement and waiver to be effective.  Employers should be aware there are both pluses and minuses associated with employee arbitration and class action waivers which must be considered before deciding to utilize these types of agreements.

What are the minimum wage increases for employers in Washington State in 2019 and beyond?

Before their first 2019 payroll, employers should make sure they comply with the statewide and city-specific minimum wage increases effective January 1, 2019. Minimum wage throughout Washington State will increase to $12.00/hour. As mandated by I-1433, the minimum wage in Washington State will increase gradually every year until 2020, when it will be $13.50/hour. Beginning in 2021, the Washington State Department of Labor & Industries will adjust the minimum wage based on a cost-of-living formula. Employers in cities with their own minimum wage ordinances, such as Seattle, SeaTac and Tacoma, must pay the highest minimum wage required by law. For more information on the new minimum wage requirements, please contact any member of Ryan Swanson’s Employment Rights, Benefits & Labor Group.

What are the minimum wage increases for employers in Seattle in 2019?

The Seattle Office of Labor Standards announced the 2019 minimum wage increases for large and small employers in Seattle. Effective January 1, 2019, the minimum wage for large employers, which are employers with more than 500 workers worldwide, will be $16.00 per hour. Large employers are required to pay this minimum wage regardless of contribution to medical benefits. For small employers, which employ 500 or fewer employees worldwide, the new minimum wage will be $15.00 per hour. An exception is that small employers can instead pay no less than $12.00 per hour in wages if they contribute at least $3.00 per hour toward employee medical benefits and/or the employee earns at least $3.00 per hour in reported tips. Employers will also be required to display an updated Labor Standards poster reflecting the new minimum wage increases.

What should employers do now to prepare for Washington’s Paid Family and Medical Leave Act?

Washington’s new Paid Family and Medical Leave Act creates a statewide insurance program to provide partial wage replacement for workers during family and medical leaves. Nearly all Washington employers must begin collecting and paying premiums totaling .4% of gross wages beginning January 1, 2019, and workers can apply for benefits beginning January 1, 2020. To be ready for the law’s first deadline, employers should:

1. Prepare to deduct the employees’ portion of the premium (.253% of gross wages) from each paycheck beginning January 1, 2019.
2. For employers with 50 or more employees in Washington, budget to pay the employer’s portion of the premium (.147% of gross wages).
3. Notify employees about the new paycheck deductions, and make sure employees understand that the paid family and medical leave benefits will not be available until 2020.

More information can be found at www.paidleave.wa.gov.

When do I need to pay my employee’s overtime pay in Washington State?

In Washington State, non-exempt employees are entitled to overtime pay if they work more than 40 hours per week. Overtime pay is calculated at time and a half the non-exempt employee’s regular rate of pay. There are exceptions for exempt employees. These exceptions are for executive, administrative, and professional employees as well as outside salesmen and computer specialists. An employer should look to the State of Washington guidelines as to whether employees fall within those categories and therefore are exempt from overtime pay. Employers failing to pay employees’ overtime pay can be subject to the amount of unpaid overtime pay going back two or three years plus interest. Employers may also be subject to double damages if employees prove they are entitled to wages, including overtime pay, as well as attorney fees. Employers should review employee job duties and titles to confirm whether their employees are in the exempt or non-exempt category.

What is a class action waiver and can I require my employees to sign one?

A class action waiver is typically an agreement providing that the employee agrees to resolve employment disputes on an individual basis and will not pursue or join a class action with his or her fellow employees. By having employees waive class actions, employers may avoid lengthy and expensive class action lawsuits in the future.
A class action waiver requires consideration (giving something in exchange) to make it valid. When a new employee signs a class action waiver at the outset of their employment, then hiring them for the job is consideration. However, in Washington an existing employee keeping their job doesn’t count as consideration. To have an enforceable class action waiver with existing employees, employers need to offer existing employees something new of value, such as money, paid time off, a promotion, etc.

What does my company need to know about the recently enacted Washington Equal Pay Opportunity Act?

The Washington Equal Pay Opportunity Act that took effect on June 7, 2018 updated Washington’s Equal Pay Act for the first time since 1943. It prohibits discrimination in pay among “similarly employed” employees and gender-based pay differentials. Employers must now prove that any pay differential is based in good faith on job-related factors consistent with business necessity. Employers must look at actual job duties, not just job title, and cannot base pay differential on an employee’s previous compensation. Career advancement opportunities cannot be limited based on gender, and employer policies can no longer preclude employees from discussing their pay or others’ pay. Employees can file civil lawsuits for alleged violations of the Act, and if they prevail, are entitled to actual damages or $5,000, whichever is greater, plus their attorney fees and costs. Employers should consider a review of their compensation policies and training for human resources managers to ensure compliance, and should coordinate with legal counsel to ensure that review is undertaken in a way that protects the company from legal risk.

What is the “ban the box” law Washington recently adopted? Can I still ask job applicants about their criminal background?

Washington Fair Chance Act, which extends “ban the box” protections to the state’s public and private employers (with some limited exceptions). The law prohibits employers from inquiring orally, having any question on an application, or otherwise obtaining any information about applicant’s criminal record until after the employer initially determines the applicant is otherwise qualified for the job. In other words, employers may not obtain any information about an applicant’s criminal background until after the applicant has had an opportunity to show herself to be qualified. Employers also may not advertise employment in a way to exclude people with criminal records such as by saying “no felons” or “no criminal record.” Washington is the 11th state to adopt background check reform.

What are the key legal considerations for hiring interns?

Internships are work-related learning, and often comes when you are hiring a student and you’d love to call them an intern. However, you must go through an analysis about whether the person you’re hiring does fit into the category of being called an intern. Most businesses hire interns to avoid meeting the minimum wage, overtime requirements, etc. If they are an employee and not an intern, employers must meet those requirements. For non-profits and public sector work, unpaid interns are usually okay.

Where we come into more confusing territory is when you have for-profit employers. There used to be a six-factor test that governed whether or not people were considered to be interns, but in 2018, the United States Department of Labor adopted a new primary beneficiary test. Who is getting the most value out of the work that this particular worker is doing? What you’re really looking at here is the economic reality. Are you having someone come in and do the work that has a significant economic advantage for the worker or for the employee? There are different factors when you look at this. Is this part of the education process? Does it complement or replace your other workers? What you don’t want is a job opening, but then you can’t quite find your right candidate and say you’ll just hire an intern and slot someone in. This is really a complement to your existing workforce with the recognition that you’re doing it more for training purposes for the worker, as opposed to a significant economic benefit for the company. Again, if the worker is determined not to be an intern, then you are subject to those minimum wage and overtime requirements.

What are the key legal considerations for apprenticeships?

Apprenticeships are registered either with our State Department of Labor & Industries or with the Federal Department of Labor. First of all, apprenticeships are not “at will” employees, they are truly a different kind of legal animal. There’s going to be an apprenticeship agreement which is approved by the government entity. Next, there’s an initial probationary period during which the apprenticeship can be discharged without cause. After that, they can only be discharged for cause. If the apprenticeship believes they were improperly terminated, they do have appeal rights to the government agencies. Second is the issue of wages. There is a percentage of the jury level worker’s wage that the apprenticeship earns and that percentage increases as the apprenticeship program goes on. As a company that has full discretion over the amount that apprenticeships are paid, you have to follow this preset schedule. Third, the legal requirement that you may or not be aware of is the equal opportunity requirement. If you’re registering an apprenticeship program with the government or if you have more than five apprenticeships in that program, then you have to file an Affirmative Action Plan that includes both ways you’re going to reach out to minorities and women to get them involved in that apprenticeship program, and then also benchmarks in terms of percentages that you need to meet. If your company is thinking about starting an apprenticeship program, then reach out to the Department of Labor & Industries. They also have a really detailed website that gives a lot of information.

What are the legal requirements for hiring independent contractors?

This one is super tricky and here’s why. Our Federal Courts have their own test for who can be an independent contractor, but our state has at least three different tests for whether or not someone can be an independent contractor. Not all of those are the same. You can have an independent contractor that meets one test and doesn’t meet the others. It makes it really challenging to figure out if your worker fits into the independent contractor framework. The reason that you want them to do so is so you can avoid things like overtime, annual wage taxes, etc. If you don’t, the consequences are high. A lot of people misclassify independent contractors when they really should be employees. If you are found to have a misclassified worker, there are stiff penalties, not just for the particular worker that was misclassified, but potentially for the entire class of workers that are misclassified for the job. There can be a widespread significant consequences, and those consequences are financial and include back taxes, back wages, insurance premiums, penalties and interest.

What you really want to be doing is looking at the overall nature of the relationship. There are some key things that you can do to try and make sure your worker is an actually an independent contractor. One of those is by setting out an actual independent contractor agreement. We recommend you title it an “independent contractor agreement.” Additionally, there are a number of factors that need to be stated. Contracts should state contractors are:

• free from direction/control
• have their own UBI numbers
• keep their own books and records
• are responsible for and pay for their own taxes
• bear their own costs and expenses
• perform tasks outside the company’s typical operations
• provide their own tools and materials
• are limiting the job to a fixed project instead of an ongoing relationship

Please see “How to Properly Classify Independent Contractors and Employees in Washington,” which outlines the various different tests, how to apply them and what these agreements should include.

What steps do I need to take when hiring teenagers?

First of all, you have to make sure that certain, age, hours and job duties requirements are met. For most of non-agricultural jobs, the minimum age that you can hire is age 14. There is a grid on the L&I website of the number of hours that teenagers can work based on their age. 14 and 15 year olds have different requirements than 16 and 17 year olds and there are limits of number of hours a day, which hours a day they can work, they can only work past a certain time and how many days a week they can work. Refer to those charts if you’re hiring a teenager to make sure that their schedule fits into those parameters.

Next, you have to take a look at the job duties. Many safety-sensitive jobs are off limits for teenagers in Washington. They cannot operate a meat slicer or a forklift, for instance. It might surprise you that they are unable to do any regular driving at all, and they can’t work alone past 8 p.m. without adult supervision. If you meet those requirements, age, job duties and hours, then you still have to take a couple of steps to get formal approval. First, you have to get a business license endorsement to hire a minor. You can obtain a business license endorsement through a form on the government website. Employers must also obtain an authorization form filled out by the parent or guardian of the minor. If it is during the school year, you have to get their school to sign off on that as well. If you’re thinking about hiring a minor, the L&I website has a two-page guide on these requirements that will help you walk through the steps and make sure you check all the legal boxes.

Can we ask the applicant prior to or during the interview, “do you use tobacco” or any other drugs?

Washington does not protect or have as a protected category tobacco use. That means that it is okay for employers to state they do not want to hire someone that uses tobacco, and you can ask about it in advance. However, there is still a potential of when you ask about it in advance, you could be inviting issues. Tobacco use can relate to health views, but it could also relate to disability. You don’t want to get into inviting issues about disability discrimination or any other type of discrimination. That is protected.

What you can do is inform your applicants that the company has a no smoking policy and you can ask them to abide by it. However, you have to do this for all applicants – if you’re going to do it, do it across the board. This also applies to drug testing too. You want to advise your candidates that you test all of your qualified candidates for drugs and alcohol and tobacco in advance.

How do I handle unauthorized or off-the-clock work?

This is a frequent question. With iPads, laptops, cell phones, people can work anytime and sometimes without knowledge of the employer. The bottom line is if your employees are working off-the-clock, outside and beyond their 40 hours, then that time must be paid. Hourly workers are entitled to overtime pay if they work more than 40 hours in a 7-day (rolling) work week. Overtime is one and a half times the person’s regular rate, even if you told them do not work unless we’ve authorized it in advance. But if they’re going to go ahead and work, you’ve got to pay for that time.

While you can discipline them for working extra hours without authorization, one of the ways you can avoid this is by creating a policy. A policy can lay out a number of different requirements, and can protect the company from potential claims.

What can a company do to protect itself from a former employee’s social media posts about the company on twitter, job boards, etc.?

Legally, one remedy here is a severance agreement. In the most basic of terms, with a severance agreement you are going to pay some money to a worker in return for their agreement not to disparage the company, and a release of claims. If you have a standard form severance agreement in your company, you should review it to make sure that includes a non-disparagement provision. A word of caution, though: you do not want to set the wrong precedent here by offering severance and severance agreements only to those people who you feel like have the highest chance of posting negative comments about your company.

How should our company handle employee reviews and feedback?

As a business, you want satisfied and happy employees doing their best work. At the same time, you want to protect yourself against liability if issues come up down the road. Luckily, those two primary goals really tie together and the practical approach about how you should be handling employee reviews and how you should be handling issues with your employees. One of the biggest tips is not to let things wait. Do not wait for a year-end annual review. Be prompt, tell people their issues, and address them right away. You do not want any surprises. Firing an employee with no documentation on performance, or not one shred of evidence to support termination can lead to a claim of retaliation. Employers must have a file to support that there is an actual, very good business reason to terminate an employee. Address the issues right away, in writing as appropriate and make sure you are being truthful about the problem areas.

Make sure are you not only giving constructive feedback for areas of improvement, but positive feedback as well. You will have happier employees that feel like they’re valued and doing something that’s important for your company.

What are some guidelines for proper business email etiquette we can share in our workplace?

Because of the informality of email, people frequently are much looser with the language and tone they use. The easy and instantaneous nature of email makes it easy to forget the permanent nature of these communications. However, when a dispute arises emails are often the first evidence to which both parties turn. Following email etiquette reduces the chance that e-discovery will be embarrassing or harmful to your case. This includes advising employees to use the same care and tone in a work email as they would if they were writing a business letter, choosing language carefully and avoiding the use of curse words and other dramatic punctuation. As we live in an international community, consider cultural differences in the content of the email. Finally, remember that just copying an attorney on an email or any other communication does not necessarily protect that communication under the attorney-client privilege.

What is the deadline for employers to pay their first premiums and file their first reports for Washington’s Paid Family and Medical Leave?

Washington’s Paid Family and Medical Leave Act requires employers and employees to pay premiums that will fund paid family and medical leave benefits for Washington employees beginning next year. The Employment Security Department (ESD) has extended the deadline to July 31, 2019 for employers to remit their first premiums and file their first reports under this new law. ESD extended the deadline, originally set for April 30, 2019, to allow additional time to develop the online portal that employers will use to remit premiums and file reports. Premiums are a total of .4% of employees’ gross wages; the employee’s portion is .253% and the employer’s portion is .147%. Employers with less than 50 employees in Washington are not required to pay the employer’s portion of the premium.

Is my company required to allow employees to have flexible work schedules or to telecommute?

Companies have no legal obligation to allow their employees flexible schedules or to telecommute, except in certain circumstances such as disability accommodation. But if your company wants to offer these options for its employees, the company should have a written policy about flexible scheduling and telecommuting to set expectations and make clear the company rules for allowing it. When determining which employees are eligible for flexible scheduling or to telecommute, the company should decide by job category, not by the individual employee. Companies also need to consider potential overtime issues, company/client confidentiality, cybersecurity, and other issues before agreeing to have any worker telecommute. Also, all companies should make clear that they do not provide equipment for the home workplace and that it is the responsibility of the employee to create a safe workplace at home.

Do I have to pay my employees if we close due to a snow day?

This is a frequent concern this time of year. With frosty days recently shutting down many local businesses, employers and business owners may be wondering if you have to pay your employees if you close your place of business for a few days due to inclement weather. The first step is to make sure you are following your internal policies, employee handbook and employment contracts. If you haven’t promised employees payment on snow days, then you are not required to pay your hourly employees if your business is closed and they are instructed to stay home. The law requires they be paid only if they are authorized or required to be on duty. (Seattle-based food or retail businesses who employ more than 500 people worldwide may need to pay hourly workers under Seattle’s Secure Scheduling ordinance.) Exempt salaried employees should be paid their regular salary.

Are employee arbitration and class action waivers good for my business?

A class action is a lawsuit brought by a group of people who allege they suffered similar injuries caused by the same defendant. Not only are class actions expensive for a company to defend, but they can have a significant adverse effect on morale, particularly when brought by current or former employees alleging their employer didn’t pay them all their wages. A 2018 US Supreme Court decision held that employers can require employees to resolve claims with “single plaintiff” arbitration rather than joining with other employees in a class action lawsuit. While the use of an Arbitration Agreement and Class Action Waiver signed by your employees lowers your risk of having to defend a class action, there are certain requirements for the agreement and waiver to be effective. Employers should be aware there are both pluses and minuses associated with employee arbitration and class action waivers which must be considered before deciding to utilize these types of agreements.