Steps for Employers to take in order to Mitigate Risk

On this episode of The Legal Zone, managing attorney Regina Campbell, of The Campbell Law Group, PA, introduces the steps employers may take in order to mitigate risk.

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The Campbell Law Group P.A. while representing clients whether in civil, corporate, commercial, employment, or family law matters, our company’s primary goal is first to help clients minimize the need for unnecessary litigation and conflict where possible.

Contact us by calling our office at (305) 460-0145 or emailing us at service@thecampbelllawgroup.com.

Transcript

0:05

good morning everybody welcome to the

0:07

legal zone with regina campbell

0:09

uh very proud to say that this is our

0:12

episode one i'm sorry

0:13

season one episode three a podcast

0:16

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0:17

better and we

0:18

hope to get all the kinks down shortly

0:20

uh we are going to be moving into apple

0:21

podcast soon so hopefully we're going to

0:23

see you there as well and you become a

0:24

subscriber

0:25

if not you can always view any of our

0:27

past podcasts also on youtube

0:30

and which guess we also encourage you to

0:31

be a subscriber also of our channel on

0:33

youtube

0:35

today we're going to talk a little bit

0:36

about steps for employers to mitigate

0:39

risks

0:40

this is a really important topic and

0:41

many business owners do not realize the

0:43

amount of risk that they actually run

0:45

by the way they're doing business most

0:47

of us are small

0:48

businesses within the united states and

0:50

particularly in florida that is the case

0:52

and we have a tendency to run informally

0:54

um

0:55

you know johnny i want you to work on a

0:58

salary a thousand dollars a week

1:00

this is what you're going to do for me

1:02

okay or

1:03

uh you know you know susie or you're

1:06

going to work nine to five

1:07

i want you to clock in and clock out or

1:09

you know fill in a time sheet

1:10

and we don't give it much thought part

1:12

of the problem is there's not other

1:13

policies in place for instance to limit

1:15

the employee's ability to work overtime

1:18

or to require the employees seek written

1:20

approval to work overtime prior to

1:22

incurring this

1:23

all the times is abuse unfortunately

1:25

there is a little bit more of this also

1:26

going on with remote work

1:28

uh because it's harder for employers to

1:30

watch their employees

1:31

without putting additional sort of

1:33

procedures in place in order to keep

1:34

them sort of accountable these employees

1:36

and

1:36

we'll talk a little bit about that in a

1:37

moment but most of the time people do

1:40

not realize their employees business

1:41

owners do not realize that they are

1:43

actually running a risk of potentially

1:45

having overtime claims

1:47

or retaliatory uh discharge claims um

1:50

particularly you know within the fair

1:52

labor standard act

1:54

so regina they said what is that i don't

1:56

understand

1:57

most of the time employers are coming to

1:59

me when they've been threatened with a

2:00

lawsuit with an administrative

2:01

proceeding

2:02

or potential with an actual lawsuit an

2:03

flsa lawsuit

2:05

so this is the time which i explained to

2:07

them and almost watch their heads spin

2:09

go i don't understand how can that be

2:11

um very often and i'll explain to you a

2:13

moment what what these lawsuits are like

2:15

and how we try to mitigate them with

2:17

putting certain policies and procedures

2:19

ahead of the lawsuits

2:20

okay so basically uh they're

2:23

surprised to see that they're also being

2:25

sued personally

2:27

how can that be i'm doing this in a

2:29

business don't i have protection under

2:30

the corporate veil

2:31

and i explained to them i said well

2:33

unfortunately no because what happens is

2:35

with these type of lawsuits

2:36

the statute actually permits the

2:38

employee to sue

2:40

the employer um i mean the actual

2:43

individual employer for wages that might

2:46

not have been paid

2:47

well how can this be well employment

2:49

wages are highly regarded and protected

2:51

in this country

2:52

and a lot of times there are there's

2:54

been some scrupulous and

2:55

employers and business owners also that

2:57

try to get around

2:58

potentially not paying uh you know

3:00

employees so they might

3:02

run up a tab so to speak with the

3:04

employees uh

3:05

you know misuse the employment laws

3:06

within the company and then shut down

3:08

the company and think they're going to

3:09

get away from the actual liability

3:11

so the statute permits the employee to

3:13

actually sue a manager or someone

3:15

directly in charge of their hours or the

3:17

finances of the company which is usually

3:18

in small companies

3:20

the manager or the owner so they can be

3:22

sued for these employees wages so

3:24

even if the company goes out of business

3:26

the individual is still how liable for

3:28

potentially any judgment that's received

3:30

for these type of wages

3:32

that's usually one of the biggest

3:33

shockers that might that business owners

3:35

um get and that here and i try to

3:37

explain to them

3:38

you know why the the policies behind

3:40

that and why that occurs in this type of

3:42

area of law

3:43

okay and i explained to him regina we

3:45

agreed you know we agreed it's a

3:47

thousand dollars a week johnny said it

3:49

was okay he's been working like that for

3:50

five years i don't understand how can he

3:52

turn around and try to sue me for

3:54

overtime wages

3:55

when we had an agreement well under the

3:57

flsa

3:58

it's irrelevant what the parties agreed

4:01

to

4:01

if the employee is not properly

4:03

classified as a non-exempt employee or

4:06

they're classified as exempt which is

4:08

pretty much usually a salaried employee

4:10

but they're misclassified then they

4:11

should be receiving overtime for any

4:14

hours worked over 40

4:15

it's irrelevant what the agreement of

4:17

the party is what's important is

4:19

actually

4:19

uh what the law says and then in which

4:22

case

4:23

the employer says to me well okay all

4:25

right i don't have a problem you know

4:27

johnny didn't really actually work that

4:28

much over time

4:29

and then we talked a little bit about

4:30

lunch breaks and whether or not he's

4:32

given relieved from duty during the

4:33

lunch breaks or does he work during

4:35

lunch breaks

4:35

and we try to calculate the potential

4:37

hours that johnny could have worked

4:39

overtime

4:40

and even then often it's only four or

4:42

five hours maybe every couple of weeks

4:44

it's really not that much

4:46

why is johnny requesting 20 hours a week

4:49

over time

4:49

for the last three years well johnny's

4:53

probably capitalizing on the fact that

4:54

there's no time

4:55

keeping records there's no indication of

4:57

when johnny actually worked

4:59

which is ultimately the employer's

5:01

responsibility so you say well retained

5:03

i wouldn't keep time keeping records

5:04

because i

5:05

he was exempt he was salaried i didn't

5:07

need them well the problem is when you

5:09

misclassify

5:10

somebody if the owner should still on

5:11

the business owner to have those

5:13

timekeeping records so that when you do

5:14

go before a court or an administrative

5:16

proceeding or judge

5:17

to figure out the money owed to Johnny

5:19

you have an ability to do so

5:21

if not you're going to have to prove

5:22

what Johnny is saying is not true

5:24

which is actually a little bit harder

5:26

than you can imagine because it turns

5:27

into a he said she said

5:29

and you'll be surprised often when

5:30

employees have left or they're no longer

5:32

willing to testify to what actually

5:34

occurred

5:35

some of those employees are also brought

5:36

into the lawsuit so in which case they

5:38

become plaintiffs and of course they're

5:39

not going to be cooperative and actually

5:41

testify to what occurred or did not

5:42

occur so these

5:44

issues you do not want to rely on

5:46

gathering evidence later on to prove

5:48

these things it's important to have time

5:49

keeping records

5:50

well Regina if the person's salaried by

5:52

what I keep timekeeping records people

5:53

say and I said well first thing

5:55

first thing you need to do is make sure

5:56

that they're actually properly exempt

5:58

okay

5:59

if they're not properly exempt or you're

6:01

not sure which is a very

6:03

a very complex actual analysis depending

6:05

on the type of jobs

6:06

that people have most of the time exempt

6:08

employees might be

6:09

high-level professionals computer sort

6:11

of programmers

6:13

there's a particular area for art and

6:15

creativity but you have to fall within

6:17

doing a certain amount of duties within

6:18

that scope of each

6:19

one of these exemptions in order to be

6:22

able to classify for it

6:23

most of the time people have mixed bags

6:25

you know mixed duties some that fall

6:27

within the exception some that do not

6:29

now if you have some duties that are

6:31

sort of ancillary to the

6:32

employee's specific job that fall

6:35

outside the exemption

6:36

a lot of times that's something that may

6:38

not actually uh cut against the

6:40

exemption it just may

6:41

have to be analyzed to make sure that's

6:42

an ancillary and sort of a minor

6:44

thing minor duties that occur now

6:46

primarily the person is engaged in

6:48

exempt duties exempt duties so basically

6:51

um

6:52

it's an analysis but i always tell my

6:54

clients

6:55

in the event of any doubt as to how to

6:57

do this or pay an employee the best

6:59

thing to do is pay them hourly

7:01

it's usually the safest thing you're not

7:02

have to worry about exemptions

7:04

unless for instance they're a teacher uh

7:06

government workers have other types of

7:07

exemptions or depending on the type of

7:09

work they do and of course lawyers

7:10

lawyers actually do not

7:11

we're we are exempt we are

7:14

we're one of the few that you cannot um

7:16

you know there's not a question or it's

7:17

not it's a little

7:18

the analysis is not as hard if you're

7:20

doing purely legal work in a legal

7:22

office

7:23

as a lawyer but these are things that

7:26

people do not often understand they kind

7:27

of co-mix it well I'm giving him a

7:29

salary that's what we agreed to

7:30

well it's insufficient for most cases

7:33

and it's most of the time going to

7:34

attract a lawsuit

7:36

that's usually when i find these

7:37

lawsuits come about when someone's a

7:38

mixed employee or not properly

7:40

classified

7:41

invariably the employee realizes well

7:43

that employer is not going to have time

7:44

keeping records

7:45

and i got them and worst case i can

7:47

entrench them in litigation it's going

7:48

to be rather expensive as they try to

7:50

prove this

7:51

and most of the time the employee is not

7:53

paying for any fees

7:54

it's usually on a contingency that

7:56

another law firm is going to take their

7:57

type of cases

7:59

and the other attorney's attorney the

8:01

other the employee's attorney

8:03

basically uh will litigate the case and

8:06

of course

8:06

if they're in these type of cases this

8:08

little strange employees owed any money

8:10

at all

8:11

even if it's by accident not you know no

8:13

malice no intent to you know shortcut

8:16

the employee

8:17

the attorney is entitled to all the

8:19

attorney fees for bringing the case

8:21

which often can be 10 20 30 40 50 60 70

8:24

000 dollars for the employees even more

8:27

for the employee's attorney and that

8:29

does not even include what you've spent

8:30

on your actual attorney to defend the

8:32

case

8:32

so these are sort of a different animal

8:35

so to speak to the way you

8:36

treat them in litigation where you deal

8:37

with them my solution one of my tips

8:40

would be to be proactive deal with it

8:42

ahead of time as best as you can

8:44

there are certain things that we can do

8:45

in employment agreements to mitigate

8:46

this potential risk

8:48

but more importantly time keeping

8:49

records making sure you have a properly

8:51

documented employee file is very

8:52

important

8:53

and specific policies in place so that

8:55

you can point to them

8:57

they say okay no over to in order to

8:58

incur overtime for instance an overtime

9:00

policy

9:01

in order to actually be able to work

9:03

overtime you must seek

9:05

x person's permission and you make sure

9:06

it's a person of a high level's

9:08

permission

9:09

to uh work overtime in any given week

9:12

in writing so that it's been authorized

9:15

otherwise the owners is on the employee

9:17

if they do not seek that permission

9:18

previously

9:19

also you might want to put in policies

9:20

that the employee has let's say 10 days

9:22

from the time in which they receive

9:24

their paycheck

9:25

to note any discrepancies on the time

9:27

sheet you know if there's anything wrong

9:29

basically so these are things that would

9:31

be very helpful of course you always

9:32

have the employee sign off on everything

9:34

and periodically do audits of your

9:36

payrolls to make sure everyone's

9:37

properly

9:38

classified and being properly paid

9:40

whether it's deductions let's not forget

9:42

deductions also if they're given to

9:43

exempt depending on how

9:45

like for instance paid time off is done

9:47

with exempt employees

9:49

can get you in trouble for the most part

9:52

exempt employees can only be given

9:53

um full days off you know eight hour

9:56

intervals so to speak because they're

9:57

normally salary

9:58

so this is a very very complex area of

10:00

law and it's very important to sort of

10:02

stay on top of it if you have any

10:03

questions

10:04

if you have any questions on how to pay

10:05

someone hourly is always you know

10:07

employees always the best way

10:09

okay but um you know how to do

10:11

reimbursements

10:12

what if you in advance the loan to

10:14

employee these things can

10:16

can sometimes get employers into trouble

10:18

so it's something to keep an eye on very

10:20

closely

10:21

uh another indicate another sort of

10:23

source right now is very very um

10:26

uh sort of a hot topic right now which

10:27

is this covid you know can you require

10:30

employees to get vaccinated uh the EEOC

10:33

says yes with provided you have certain

10:35

exceptions for legitimate medical

10:37

exemptions or reasons why they cannot

10:38

take the vaccine or for legitimate

10:40

religious reasons you know they're not

10:42

allowed you know you can't require

10:44

someone to take a vaccine and you have

10:47

some ability as an employer to question

10:49

as to you know whether or not this is

10:50

actually

10:51

uh they're using the exemption properly

10:53

but we want to be careful with any kind

10:54

of medical questions because

10:56

at one point an employer can step over

10:58

the boundaries of privacy and in which

11:00

case they can get themselves into

11:01

trouble

11:02

but also coveted policies in the office

11:04

of some

11:05

if you know if you're not requiring your

11:06

employees to be you know vaccinated

11:08

what are the policies for using for

11:10

using masks for using certain equipments

11:12

for cleaning up after yourself for

11:14

remaining distance

11:15

these are certain type of policies that

11:17

should be in place right now when it's

11:18

something that's very important

11:20

overall reaching for the company and

11:22

implying implicating all the employees

11:24

in their health

11:25

another example of another policy that's

11:26

very important and many people do

11:28

business owners have employee handbooks

11:30

that contain very you know

11:32

a litany of policies from harassment you

11:35

know policies of anti-harassment who to

11:37

report to

11:38

all the way down to what your uniform

11:39

should look like charities if you're

11:41

tardy how you're supposed to report them

11:42

every day what's considered tardy

11:45

documentation of any disciplinary action

11:47

in the folder

11:48

sort of a tiered level of your

11:50

disciplinary sort of uh

11:52

you know process in the company so that

11:54

people can follow it and the most

11:56

important thing is regardless of what

11:57

policy you put into place

11:59

it must be equally applied to everybody

12:01

now of course there are some policies

12:03

that

12:03

don't you know you may have an

12:04

executive's not going to wear a uniform

12:06

that may not apply to the executive but

12:09

policies that can apply across the board

12:11

need to be

12:12

implemented um equally on everybody

12:15

you got to be very careful not to make

12:16

it look like you're picking and choosing

12:18

when to implement or enforce a policy as

12:21

that can start to look like

12:22

and uh discrimination basically you know

12:25

of that particular employee

12:26

for whatever reasons um but that's one

12:29

way that you may potentially

12:30

uh catch a lawsuit another thing we

12:33

talked about is uh early on is that we

12:35

were discussing retaliatory discharge

12:37

claims they

12:38

often accompany right after an employee

12:41

leaves

12:41

or feels pushed out after a workman's

12:44

comp claim

12:45

in other words they feel like they're

12:46

being penalized for

12:48

putting in a claim for workman's comp

12:50

and if they're basically allegation is

12:52

that the employer

12:53

got rid of them because they use

12:54

workman's comp um

12:56

and in which case of course that is a

12:57

protected activity to use workman's

12:59

compensation so that can be considered

13:01

a retaliatory discharge under the

13:03

workman's compact

13:04

but a lot of times on the overtime uh

13:06

when you see an employee starting to

13:07

behave a certain way this is also why

13:09

it's important to have policies that are

13:10

evenly applied and sort of implemented

13:13

when someone misses work and doesn't

13:15

call in or someone doesn't come back in

13:17

the lunch hour and time it's important

13:18

to document it

13:19

because often these employees that are

13:20

going to sue you on the flsa acts or

13:22

anything of that nature of wages they

13:25

sometimes have a tendency to act out

13:26

right before

13:27

and they know you don't have policies in

13:29

place and you haven't documented their

13:30

record to show

13:31

that 10 times last month they were late

13:33

it's just all verbal

13:35

basically discussions with them or

13:37

reprimands

13:38

um they they're going to say they're

13:40

going to act out potentially

13:42

they're going to leave and they're

13:43

they're going to say they were fired

13:44

because they complained about their

13:45

overtime

13:46

and since they never complained five

13:48

years before the first time that they

13:50

ever complained you went ahead and fired

13:51

them

13:52

that's considered a retaliatory

13:53

discharge and can also

13:56

potentially give them additional damages

13:57

so you want to be careful the context of

13:59

everything

14:00

if you implement and apply everything

14:02

equally you will not have this issue

14:03

because all employees will be treated

14:05

the same

14:05

when any employee is late their file is

14:07

documented

14:08

it might be a simple reprimand you know

14:10

so-and-so is late okay i want you to

14:11

recognize it today

14:13

and recognize the policy that if you're

14:14

late more than three times for instance

14:16

that you will be

14:17

given a sort of you'll be put on

14:18

probation or a warning

14:20

whatever your system is or procedures

14:22

you want to put into place

14:24

put them in place put them in writing

14:25

make sure every employee is aware of

14:27

them and that they're also implemented

14:28

fairly across the board

14:30

to everybody okay so you know the you

14:34

know these are just a couple of tips to

14:35

kind of keep in mind

14:36

um you know as far as employers it's

14:39

very very important also to make sure

14:40

you have your workman's comp insurance

14:42

you have general liability insurance

14:44

most of the time it's required if you're

14:45

in a location or a business

14:47

these are more not workman's comp is

14:49

required in most cases

14:50

depending on the type of business that

14:52

you're in or if you're you know have a

14:53

certain amount of employees

14:55

but general liability depending on the

14:56

location where you're at may or may not

14:58

be

14:58

uh required but it's highly recommended

15:00

um

15:01

also any type of insurance related to

15:03

car insurance that maybe your employees

15:05

are doing errands with their own

15:07

car or potentially a company car you

15:09

want to make sure that

15:10

they're covered in general another area

15:13

in which a lot of employees or

15:14

sorry employers get themselves into

15:16

trouble is independent contractors

15:18

they think well if i make an independent

15:19

contractor i don't have to pay the extra

15:21

taxes i don't have to pay workman's comp

15:23

i have to pay health insurance

15:25

i'm going to make them independent

15:26

contractor well going back to the

15:28

original conversation we're talking

15:30

about misclassification

15:31

just because you classify somebody's

15:33

independent contractor you can even have

15:34

them sign an agreement

15:36

saying an independent contractor but if

15:38

you control

15:39

their schedule their tools their ability

15:42

their you know their work hours for the

15:43

most part and they're

15:44

heavily reliant on the company where

15:46

they basically look more like employees

15:49

um they're going to be considered

15:51

employees and in which case that you're

15:52

going to be penalized enough to pay all

15:54

the

15:55

the taxes going backwards uh employment

15:58

taxes and potentially

15:59

everything else that goes with that and

16:00

all the benefits that they should have

16:01

received

16:03

so you once again get very cautious on

16:05

who you call an independent contractor

16:07

who you call what is in the business at

16:09

the end of the day employment law is a

16:10

very complicated area and it needs to be

16:12

in different areas need to

16:13

be analyzed also take into consideration

16:15

depending on the size of your company

16:17

if your company has more than 50

16:19

full-time employees

16:20

you're required to provide certain uh

16:22

you know medical benefits or pay a

16:24

penalty for not paying them on

16:25

particular each employee

16:27

keep in mind also that it's important to

16:29

periodically do audits and

16:31

classification checks

16:32

also as your company grows which is

16:34

hopefully the case right we always want

16:35

to see people grow and do better

16:38

basically you're going to start to hit

16:39

other levels so in other words when you

16:41

reach a certain amount of employees

16:43

other types of acts are going to now

16:45

apply to you so for instance the

16:47

American disability act

16:49

you might might apply to you have to

16:50

reach a certain amount of employees

16:52

osha is of course always there

16:54

particularly depending on the industry

16:55

and the type of company you have

16:56

and so forth so there's going to be

16:58

always another set of rules that are

17:00

going to apply to and potentially on the

17:01

state level as well many people don't

17:03

realize but even Miami-Dade county has

17:05

additional

17:06

employment ordinances that need to be

17:07

followed as well so there are additional

17:09

ones from a state level

17:10

down to a city down to a county level

17:12

that also have to be observed

17:14

so my you know tip overall tip i would

17:17

say to all the business

17:18

owners is that you should make sure at

17:19

least yearly you're running an audit

17:21

on your classifications on your payrolls

17:24

check to see what the new hourly minimum

17:26

wage is

17:27

um you know check and see maybe new

17:28

rules that might have applied

17:30

think about new policies that learn go

17:32

backwards and learn you know

17:33

what have we learned from this year what

17:34

are the kind of issues that we've had

17:36

with employees

17:37

okay let's put policies in place let's

17:38

make them clear let's sit everyone down

17:40

let's train them properly

17:41

and ultimately remember that a happy

17:43

staff makes a happy company

17:45

and hopefully a successful product and

17:48

it'll foster

17:49

you know employees staying longer

17:51

feeling better when they have clarity

17:52

feeling as if it's not oppressed

17:55

you know feeling as if there is a

17:56

mutuality within

17:58

between the company and the employee

18:01

sufficiently maybe

18:02

they want to stay with your company and

18:04

it's always better to have a happy

18:05

employee

18:06

where you have employees that are not

18:07

happy or are a bad apple shall i say

18:10

your policies will do a lot for you to

18:12

help you mitigate those risks that they

18:14

may be able to bring

18:15

so you know again once again think about

18:17

policies on how people can report up

18:19

concerns whether it's safety concerns or

18:21

harassment concerns or anything of that

18:23

nature

18:24

really type of policies you put in place

18:25

depends on type of business that you

18:26

have

18:27

and ultimately a business is a living

18:30

thing

18:30

so it grows and you learn from it and

18:32

you have new things that happen

18:33

such as in this last year and you adapt

18:36

and you may have to implement new

18:36

policies you never even thought of

18:38

based on what you're seeing out there

18:40

you know same thing with your clients

18:42

basically what we do we adapt to the

18:43

market the same is also with employees

18:45

but

18:46

most importantly it's important to stay

18:48

compliant

18:49

so hopefully this has been helpful for

18:50

everybody and uh

18:52

you know love to have you glad to see

18:54

you again we hope that you follow us on

18:56

our social media accounts

18:57

and become you know followers and they

18:59

also subscribe to our YouTube channel

19:01

and our new podcast channel that's apple

19:03

podcast channel is coming up

19:05

thank you so much and we look forward to

19:06

seeing you next time take care