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MINNESOTA Employment Law

Trusted compliance advice for Minnesota employers

In The News ... Minnesota employers face new employment tax crackdown Minnesota is one of 29 states that have signed memoranda of understanding with the IRS to share enforcement information on employment tax collection matters. The move is part of the IRS’ Questionable Employment Tax Practices (QETP) initiative. QETP attempts to identify and prosecute employment tax schemes and illegal practices. Employers may reasonably expect that tax records provided to state agencies also will make their way to the IRS. Any discrepancies between state and federal filings may trigger audits by one or both enforcement entities.

E-mail horror story: Supervalu defrauded for $10 million Supervalu Inc., of Eden Prairie, lost more than $10 million after one of its employees was tricked into wiring money to fraudulent bank accounts it thought belonged to two vendors: American Greetings Corp. and Frito-Lay. The grocery chain received two e-mails from people claiming to represent the two companies and asking Supervalu to send checks to new bank account numbers. Supervalu sent more than $6.5 million to the fake American Greetings account Continued on bottom of page 5

Minnesota Employment Law is published by HR Specialist and is edited by Carl Crosby Lehmann, an attorney in the Employment Law Practice Group of Gray Plant Mooty in Minneapolis. Contact him at (612) 632-3234 or (800) 543-2055

June 2009 Special Issue

Editor: Carl Crosby Lehmann, Esq., Gray Plant Mooty, Minneapolis

Pay for unused vacation time? It’s your call now I f a Minnesota employer terminates employees for misconduct, can it refuse to pay them their unused vacation or paidtime-off (PTO) benefits? That question was answered this year when the Minnesota Supreme Court decided that vacation benefits are “wholly contractual” and employers are free to devise their own vacation pay policies without violating. As a result, your company policy— not state rules—will dictate when employees are eligible to collect accrued and unused vacation or PTO time after their departure. For that reason, Minnesota employers should review their vacation or PTO

policies now. Make sure the policy clearly communicates the conditions under which employees can collect (or lose) their unused vacation/PTO pay after leaving the company. Then—because the new ruling says such policies are “contracts”—you should require employees to sign a written acknowledgment that they’ve reviewed and understand the policy. Recent case: Fresenius Medical Care fired a dialysis assistant, Susan Lee, for misconduct. It refused to pay Lee her unused PTO benefits because, as company policy dictated, employees lose

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Warn managers: Don’t promise a rehire call “I

f we have an opening, we’ll give you a call.” Your supervisors may make such throw-away comments to help laid-off employees feel better. But those are some legally dangerous words. Why? If you don’t follow through on that call, the former employee could sue you for retaliation—even if he or she never actually applied to be rehired. The best advice: Tell departing employees you’ll consider them for any openings they’re qualified for if they apply. Then explain how you post openings and leave the ball in their court. Recent case: Percy Green was laid off from his city government job. Green

had earlier complained about fraud. Before Green was shown the door, his supervisors told him they’d be in touch if any openings arose. Later, Green sued when he discovered that the city had added four employees in his position and never called him. He argued he hadn’t been rehired in retaliation for his earlier complaints. The city claimed he could not file a retaliation lawsuit because he never officially reapplied. But the 8th Circuit Court of Appeals (which includes Minnesota) said Green didn’t have to apply since his supervisors had told him they would call. (Green v. City of St. Louis, et al., No. 06-3349, 8th Cir.)


Minnesota employment law cases and advice . . . 1-3 Lawsuit-free termination meetings . . . . . . . . . . . . . .6 Log employee performance—8 tips . . . . . . . . . . . . . 4 Paying for travel time . . . . . . . . . . . . . . . . . . . . . . . . 7 New sexual harassment risk . . . . . . . . . . . . . . . . . . 5 The Mailbag: Your questions answered . . . . . . . . . . 8

National Institute of Business Management

Do your hiring tests simulate true working conditions?

Unused vacation time (Cont. from page 1)

their rights to PTO benefits if fired for misconduct. Lee sued, arguing that her earnedbut-unused PTO benefits constituted “wages” under Minnesota Statute §181.13 and, therefore, must be paid at the time of her termination. A lower court agreed. But the Minnesota Supreme Court rejected that argument. It said that the statute tells employers when to pay terminated employees, but not what to pay them. Matters such as paid time off are “wholly contractual.” Paid time off is not “wages and commissions” within the law. (Lee v. Fresenius Medical Care, Inc., A05-1887) While this ruling does give Minnesota employers more freedom to establish their own vacation and PTO policies without fear of liability, it also adds a cautionary note. The court said that if employers do promise to pay employees for their unused vacation time but fail to do so, the penalty and attorneys’ fees provisions of the statute will apply.

efore you create an applicant screening test—whether it’s for blue- or white-collar jobs—make sure it relates directly to the work the person will be doing. “Somewhat applicable” tests won’t fly in court. Then, after you launch the new test, evaluate it regularly to see whether it’s causing you to reject a disproportionate number of “protected” applicants (e.g., women, minorities). The EEOC is pursuing employers whose screening tests change the workplace composition. Recent case: Women accounted for 46% of those hired for sausage-packer jobs at a meatpacking company. But that percentage fell to just 15% after the company instituted a new pre-hire lifting test. (The proportion of female and male applicants stayed the same.) A jury decided the company discriminated against 52 women who failed the test and weren’t hired. The



Minnesota Employment Law • June 2009

5 steps to lawsuit-proof job tests 1. Make sure the test measures attributes or skills actually required for job success. 2. Administer tests consistently. 3. Obtain the applicant’s written consent to be tested. 4. Keep results confidential. 5. Monitor how the testing impacts protected groups.

Forcing new-age spirituality can spark old-school lawsuit

Prevent handbook from becoming a contract: 4 tips While this ruling says PTO policies in employee handbooks are a “contractual” item, employers want to avoid giving at-will employees any inkling they may be contractual employees. Courts generally agree employers can do this with these steps: 1. Include a disclaimer that says the handbook isn’t an employment contract. 2. Reinforce that employees are atwill throughout the manual. State that they can be terminated for any reason or no reason, or leave whenever they choose. 3. Have employees sign a statement that they’ve received the handbook and have read it. 4. Include a statement that any section that conflicts with state law may be invalidated without affecting the rest of the handbook.

women were awarded $3.3 million. The seven-minute test required applicants to lift 35 pounds of sausages at least six times per minute. But the EEOC showed that employees, while at work, performed just 1.3 lifts per minute. Almost all men passed the test, but only 40% of women did. (EEOC v. Dial Corporation, No. 05-4183, 8th Cir.)

ou can encourage employees to follow certain Judeo-Christian values at work, such as cooperation, honesty and kindness, but it’s never appropriate to require adherence to a particular religion or religious practices. Even if your leaders have strong religious beliefs, it must accommodate workers who don’t agree with that stance. That may mean excusing workers from retreats, prayer groups or other religious-based activities. And make sure religious belief (or lack of) never becomes a hiring, or benefits criterion. Recent case: The owner of a loghome company required employees to carry a copy of the company’s core values, which includes “spirituality.” He also required participation in “mindbody energy seminars,” during which employees were to cleanse negative


energy from past lives. The cleansing occurred through “muscle testing” in which employees would extend their arms while answering a question while another person pushed down on their arms. If the arms resisted, the answer to the question was “yes”; if the arms could be pushed down, it was “no.” Soon after sales rep Doyle Ollis objected to the sessions because of his Protestant beliefs, he was accused of sexual harassment. The owner investigated the incident through “muscle testing.” Ollis failed and was fired. Ollis sued for religious discrimination, saying he was retaliated against for objecting on religious grounds. A jury sided with him and the appeals court agreed. (Ollis v. HearthStone Homes, No. 06-2852, 8th Cir.) (800) 543-2055

Once, twice, three times a harasser: The legal risks of hollow discipline threats “D

o that one more time and you’re through!” Have supervisors in your organization (or even you) uttered this phrase before? A new 8th Circuit court ruling shows that if your threats are simply empty promises, be prepared to pay up in court. That’s why, as in parenting, managers and HR must follow two rules: 1. Don’t bluff. If, for example, you truly intend to give alleged harassers two or three (or more) strikes, don’t threaten termination after the first incident. Courts will see your backtracking as giving employees the green light to continue their behavior. 2. Follow through. Mean what you say and execute your word. Otherwise, it’s a lot of “yadda, yadda” and courts won’t put up with idle promises in hostile work environments. Recent case: A school board investigation determined that employee David Herrera committed nine violations of the harassment policy, including rubbing up against female co-workers and asking for sexual favors. The school suspended Herrera and warned him that future complaints would result in

“immediate termination.” Herrera returned, earned another complaint, was again suspended and threatened with firing for future incidents. This time we REALLY mean it! But after he returned and triggered another complaint, he still wasn’t fired. A female co-worker sued for sexual harassment. The school argued that it shouldn’t be held liable because it disciplined Herrera each time. But the court rejected that argument, pointing to the school’s failure to follow up on its trio of firing threats. It said that responding correctly to the first report “doesn’t discharge the employer’s responsibility to respond properly to subsequent reports.” (Engel v. Rapid City School Dist., 8th Cir., No. 06-3936).

Free white paper Solving ‘he said/she said’ disputes When facing conflicting stories from employees, HR can’t just throw up its hands. For help in sorting out the truth, access our white paper, Investigating Harassment: How to Determine Credibility, at

Don’t let managers fly solo on terminations; HR should screen discipline records for bias N

othing will send a discrimination case to trial faster than obvious unequal treatment. That’s why it is important to have someone in HR do a complete review before the company terminates an employee for poor performance or rule violations. That review should be thorough and include an analysis of all recent discipline and performance assessment by the same supervisor who manages the employee. That way, someone not directly involved in management can spot any discrepancies or unfair treatment before it’s too late. Recent case: Virginia Schurmeier, an operations analyst for a Minnesota wholesale food company, was fired for

alleged poor performance. She sued, claiming the real reason was sex discrimination. Her proof: A male co-worker also had as poor (or worse) performance appraisals as she had, plus he’d been written up for the same mistakes by the same supervisor. Plus, she told the court that male bosses generally ignored women while catering to men by sharing cigars and scotch. It was all enough evidence for the court to order a jury trial. (Schurmeier v. Nash Finch Company, No. 06-3860, DC MN) Final note: If HR spots possible unequal treatment, consult an attorney before following through on the discharge.

Legal Briefs Wipe your handbook clean of risky, outdated policies If it’s been awhile since the last overhaul of your employee handbook, you may be courting danger. Establish a regular revision schedule, updating it once a year or whenever significant statutory changes occur. Block out time on your calendar, and don’t put it off. Handbooks must change with the times, and those that gather dust on the shelf may be more dangerous than having no handbook at all. Recent case: A female bank employee won her Equal Pay Act lawsuit that claimed a male worker earned more for doing the same job. She was able to win double damages by proving the discrimination was “willful.” How? The bank’s employee handbook, which hadn’t changed in years, included a policy that addressed scheduling problems of “ladies with children going to school,” and it said sick leave couldn’t be used for maternity leave. Those stereotypes appeared to reinforce a corporate attitude that men were more valuable. (Simpson v. Merchants and Planters Bank, No. 04-3972, 8th Cir.)

Late drug test doesn’t violate Minnesota law The Minnesota Drug and Alcohol Testing in the Workplace Act (the DATWA) lets you test employees for illegal drugs if you believe they’ve suffered a work injury. You can’t require drug tests on “an arbitrary and capricious basis.” Some employees have argued that the clause means employers can’t wait several months after an injury to do a test. Now a court has ruled late drug tests are fine if they can detect drug use at or around the time of the accident. Recent case: Nathel Harris hurt his back working at the Apple Valley WalMart store. He didn’t fill out an accident report. Months later, when he was on leave, he requested workers’ comp. The store then insisted he take a drug test. He refused and was fired. He sued, claiming that asking for the test two months after the accident was arbitrary and violated the DATWA. The court said no after Wal-Mart showed evidence that tests for marijuana can reveal the drug’s use up to 77 days after use. (Harris v. Wal-Mart, No. 07-1191, DC, MN)

June 2009 • Minnesota Employment Law


Compliance Corner

Insight from

Use this simple log system to document employee performance EEOC explains when it’s legal I to fire disabled workers

t happens to every manager: You sit down to prepare a staff member’s review and realize you can only remember what the person has done for the past few weeks. Or you let a single incident (good or bad) color your assessment. Never rely on memory to evaluate an employee’s performance. Instead, create a simple recording system. Such performance logs don’t need to be complicated or sophisticated—a sheet of paper in a folder or a file on your computer will do. (Be sure you keep it secure to maintain confidentiality.) Note: Courts will quickly dismiss many wrongful termination lawsuits if performance logs clearly demonstrate a history of performance problems.

Recording employee performance: 8 tips Create a file for each employee you supervise, including a copy of the employee’s job description, job application and résumé. Follow these steps for recording performance: 1. Include positive and negative behaviors. Recording only negative incidents will unfairly bias your evaluation. Make a point to note instances of satisfactory or outstanding performances, too. One way to ensure balanced

reporting: Regularly update employee performance logs, instead of waiting for a specific incident to occur. 2. Date each entry. Noting times, dates and days of the week may help to identify performance patterns—and problems that may cause them. 3. Write observations, not assumptions. Be careful about the language you use—your log could become evidence in court. Comments should only focus on behavior you directly observe. Don’t make assumptions about why the behavior occurred or judgments about an employee’s character. 4. Be specific. Example of poor documentation: “Employee was late three times last month.” Better: “30 minutes late on Feb. 5; cited traffic. 45 minutes late on Feb. 9; cited oversleeping. Hour late on Feb. 23; cited car problems.” 5. Don’t use biased language. A good rule of thumb: Any statement that would be inappropriate in conversation is also inappropriate in an employee log. That includes references to an employee’s age, sex, race, disability, marital status, religion or sexual orientation. 6. Be brief, but complete. Use specific examples, not general comments. Instead of saying, “Megan’s work was

STAFF Editor: Carl Crosby Lehmann, Esq., Gray Plant Mooty, (612) 632-3234 Contributing Editors: Anniken Davenport, Esq., Editorial Director: Patrick DiDomenico Senior Editor: John Wilcox, (703) 905-4506,

Publisher: Phillip Ash Associate Publisher: Adam Goldstein

Minnesota Employment Law • June 2009

The new EEOC Q&A document, The ADA: Applying Performance and Conduct Standards to Employees with Disabilities, helps employers draw the line on how far they must go to accommodate disabled workers. Access the new guidance at performance-conduct.html.

excellent,” say “Megan has reduced the number of data entry errors to less than one per 450 records.” 7. Track trends. Note patterns and flag prior incidents of repeated behavior. Bring your observations to the employee’s attention only after you’ve defined a specific problem. 8. Be consistent. Don’t comment about one person’s behavior if you ignore the same behavior in other employees.

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If you employ people with physical or mental disabilities, a new EEOC guidance document makes it clear that you can hold them to the same performance and behavior standards the rest of your employees are held to. You must, however, make “reasonable” accommodations so disabled employees can meet your standards.

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In The News … Don’t waste money buying government forms, posters Several government agencies are alerting business owners that they don’t need to pay for most forms and posters they’re required to use and post in their workplaces. These documents are typically available free through government web sites. Web sites ending in “.gov” are the only official government sites. Some private companies try to sell government documents using official-looking web sites. Advice: You can download most required federal posters free at the U.S. Department of Labor’s main poster page, Download mandatory Minnesota posters at

Meat packer, staffing firm settle with Muslim workers St. Cloud-based Gold’n Plump has agreed to pay $215,000 to a group of Somali Muslim workers to settle a religious discrimination lawsuit brought by the EEOC. The company also granted the workers an extra paid break for prayer during the second half of each shift. The timing of the added break will fluctuate to correspond with Muslim prayer rituals. (See “Gold’n Plump, Muslim workers agree on religious accommodations” in the November 2008 issue of Minnesota Employment Law.)

E-mail horror story Continued from page 1

and nearly $3.6 million to the fake FritoLay account before realizing it had been scammed. The FBI was able to intercept the money before it was taken out of the accounts, but Frito-Lay, American Greetings and Supervalu all laid claim to the money. The courts are sorting it all out. The hard lesson: Remind all employees never to respond to unsolicited and unexpected e-mails. In fact, insist that any changes to payment methods be initiated the old-fashioned way—via snail mail. Encourage staff to pick up the phone when suspicious.

Minn. Supreme Court ruling adds to sexual harassment risks A Minnesota Supreme Court decision has made it easier for employees to hold their employers liable for sexual harassment. For the first time, the court has ruled that sexual harassment cases brought under the Minnesota Human Rights Act (MHRA) should follow the rules laid out for federal Title VII sexual harassment cases. The decision means employers can do precious little to escape liability if a supervisor harasses a subordinate and then takes or threatens to take an adverse employment action against that employee. The employee who says she was harassed doesn’t have to prove her employer knew or should have known about the harassment and failed to take timely and appropriate action. In the wake of this decision, it simply doesn’t matter that you have a great harassment policy or complaint procedure. (Frieler v. Carlson Marketing Group, No. A06-1693, Supreme Court of Minnesota, 2008) Bottom line: This decision makes it more crucial now than ever for HR to carefully investigate any and all adverse employment decisions and formally approve them in advance. Gone are the days of simply rubber-stamping supervisors’ discipline decisions. Instead, make absolutely sure that demotions, promotions and terminations are based on objective factors.

The Work Connection (TWC), a St. Paul-based staffing agency that referred workers to Gold’n Plump, settled a companion EEOC lawsuit for $150,000. That suit charged TWC with requiring applicants for Gold’n Plump assignments to sign a form stating they would not refuse to handle pork products, which violates Muslim beliefs. As part of the settlement, TWC has agreed to toss the “pork form” and offer jobs to applicants who were turned down because of it.

Tooth Fairy ups the ante The results of the annual Tooth Fairy Poll from Delta Dental of Minnesota show that payments for teeth are up 44% in the state. The average gift to children is currently $2.10 per tooth here, up from $1.46 last year, and higher than the national average of $2.09. Many consider the gift an indicator of the health of the economy, as it is a highly discretionary outlay. If so, the poll results fly in the face of other current indices. When asked about the increase, the Tooth Fairy said it was part of a stimulus package.

Best Buy hit with huge lawsuit claiming unpaid overtime Best Buy, the national electronics retailer headquartered in Richfield, is facing a massive class-action lawsuit by employees claiming they weren’t

paid overtime that was due. Jason Hall, an employee at Best Buy for two months, argued that he and other employees should have been paid for time spent undergoing security searches and working through breaks. Workers waited 15 minutes or more to be searched after shifts, adding up to an hour or more per week, Hall claims. The lawsuit seeks class-action status for everyone who worked at 25 Best Buy stores in Pennsylvania since October 2003. The same court in 2006 handed a group of Wal-Mart employees $140 million in back wages in another classaction wage fight. Note: Huge verdicts like this in recent back-wage lawsuits have employees and lawyers alike re-examining workers’ habits and looking for tasks performed off the clock. That’s why you must forbid hourly employees from doing any work off the clock.

Free online resource Complying with the FLSA Overtime Rules The U.S. Department of Labor has strict standards for determining which employees are exempt from the Fair Labor Standards Act and which are nonexempt-and to whom you must pay overtime. Get all the details by downloading our free white paper Complying with the FLSA Overtime Rules.Visit

June 2009 • Minnesota Employment Law


In the Spotlight

by Carl Crosby Lehmann, Esq., Gray Plant Mooty, Minneapolis

10 steps to stress-free, lawsuit-free termination meetings Which day of the week is best T to fire, hire and give reviews? erminations are the hardest things HR professionals and supervisors have to do—and probably the most legally dangerous. One wrong word can trigger a lawsuit. To handle terminations well, you need to keep calm and communicate your message without escalating the tension. Here’s a 10-step process:

1. Be prepared Review the facts ahead of time to make sure the termination decision was sound. Document legitimate business reasons supporting the action. Ensure the termination won’t breach contractual obligations; and that people closest to the situation will confirm the underlying facts. Prepare a meeting script so that when emotions become raw, you can stay on message and cover all the issues that need to be addressed.

2. Determine the right place Don’t add to the employee’s embarrassment by meeting where others might see or hear what’s going on. Select a private location where there will be no interruptions. If the employee becomes angry or argumentative, you may need to get up and leave once you’ve communicated the decision. For that reason, don’t use your own office.

3. Have a witness If another observer is present, the employee will have less opportunity to later make false accusations about events that occurred during the meeting. The witness should be a managerial employee —one who is not emotionally invested in the termination.

4. Don’t debate the decision You don’t need the employee’s agreement that the termination is justified. Just communicate the decision. Refuse to engage in any argument over its merits. If the termination is because of performance reasons or misconduct, the employee should already be aware of the reasons behind the decision. You gain nothing by trying to convince the employee that he or she deserves to be 6

Minnesota Employment Law • June 2009

fired. Such a discussion will only ratchet up the tension. On the flip side, if the person is being fired for performance, don’t offer compliments on aspects of his or her work. Doing so may make you feel better, but it will only infuriate the worker because it will appear that he or she is being fired for no reason.

5. Focus on transition issues If the employee has company property, make arrangements now for its immediate return. If the employee has a noncompete or other continuing obligations, inform him or her of your expectations. Make arrangements for removal of the employee’s personal belongings. The focus should not be on an amicable separation between the parties.

Fire on Mondays. This lets dismissed workers start looking for a job right away. Make job offers on Thursdays. If candidates need time to think, this gives them one extra day. If you give them the whole weekend, they may find another offer. Give good job reviews on Fridays. It sets the mood for a good weekend, which can be a reward in itself. It also prevents satisfied workers from “kicking back” for the rest of the week. Give poor job reviews on Mondays. This provides employees time to work out improvements during the week, instead of stewing about them all weekend. Source: Challenger, Gray & Christmas study

6. Handle final pay Under some state laws, when an employee is involuntarily terminated, the employer must pay all earned and unpaid wages within 24 hours after the employee’s demand. To avoid any potential dispute over when a demand was made, most employers simply have the final paycheck available at the termination meeting.

7. Respond to inquiries, but don’t rush Some state laws permit terminated employees to request copies of their personnel records. Know the law in your state. Review these types of requests with your legal counsel.

8. Consider severance When severance benefits add up to a significant amount, they should be conditioned upon an agreement releasing the company of any and all legal claims. Employers must meet various legal requirements for such releases to be enforceable. Work with your legal counsel to make certain your release agreements are enforceable.

9. Document the discussion After the meeting, you and the witness should document what happened. If you did a good job of preparing a script

and sticking to it, you should be well on your way to completing your documentation even before the meeting begins.

10. Maintain confidentiality Resist the urge to use this event as a lesson to other employees—or to put to rest rumors about why the employee left the company. With the exception of those who have a legitimate need to know more, employees and customers should simply be told that the person is no longer employed with the company. Treating departing employees with dignity and respect will go a long way toward minimizing the inevitable tension that exists when communicating the termination decision. Making a plan and sticking to it are the keys. By doing this, you will avoid the traps that often cause termination meetings to be more stressful and combative than they need be. Carl Crosby Lehmann is an attorney with Gray Plant Mooty’s Employment Law Practice Group in Minneapolis and the editor of HR Specialist’s Minnesota Employment Law. Contact info: (800) 543-2055

Nuts & Bolts

Rules of the road: Know when to pay hourly employees for travel time don’t need to pay nonexempt emYandouployees for their commuting time to from the workplace. That’s simple. But what if such employees occasionally travel off-site (or even overnight) for work reasons? When to pay nonexempt workers for travel locally or on overnight trips baffles many employers. Mistakes can spark anything from mild complaints to class-action lawsuits—a black eye for you either way. The Fair Labor Standards Act (FLSA) sets rules on compensating hourly employees for travel time. The best way to decipher them is by using a case study.

Home-to-work travel Let’s say Robert Smith is a nonexempt employee who sometimes travels for work. It’s clear that you don’t need to pay for his commute to work; the Portal-to-Portal Act of 1947 covers that. But suppose you ask Robert to pick up some company documents on his way in to work. In that case, you’d pay him from the time he picks up the documents. The law says that if the travel is for the company’s benefit, it’s compensable. If it’s purely commuting, it’s not.

Working at different locations The U.S. Department of Labor says travel time spent by employees as part of their principal activity, such as travel among job sites during the workday, is considered “work time” and must be paid. For example, say Robert reports to headquarters before making his rounds to visit other company locations. In that case, the commute to headquarters is commuting time, but all travel from headquarters until his last stop is paid time. Time from the last stop to home is unpaid commuting time. Any travel that is a regular part of the employee’s job is paid time.

Out-of-town day trips Generally, time spent traveling to and returning from the other city is work time. You can exclude the employee’s regular commuting time and meal breaks. For example, say Robert drives to the airport and takes a 6 a.m. flight to a seminar in Chicago. He arrives at 8:30 a.m. and takes a cab to the seminar. The seminar runs from 9 to 5, with an hour lunch break. After the seminar, he chats with friends for an hour

before taking a cab back to the airport. He flies back to his base city and drives home. Which hours count as “compensable” time? You don’t have to pay Robert for his trip to the airport; that’s commuting time. But you do have to pay him from the time he arrives at the airport through his flight, cab ride and during the Chicago seminar. (You don’t have to pay for his lunch period.) Do you pay for Robert’s chatting time with friends? If there are no other flights home until later, yes. But if Robert simply opts for a later flight to swap stories with his buddies, the answer is no. The cab back to the Chicago airport and the flight home are paid time. The drive home from the airport is considered unpaid commuting time. Final tip: Make sure nonexempt employees understand when they will be paid before they travel. Spell out the rules clearly in your employee policies.

Next Nuts & Bolts: Interview questions Coming soon: The FMLA

Know the rules for rest periods, on-call time, training and more In addition to travel time, employers face many other questions about what counts as “compensable time” under federal and Minnesota laws. Here are answers to some of the stickier issues: ON-CALL TIME. Employees required to remain on call on the employer’s premises are considered working while on call. Employees required to remain on call at home (or who can leave a message where they can be reached) are considered not working (in most cases) while on call. WAITING TIME. Employees are paid for waiting time when they are “engaged to

wait.” Employees fall under that definition if they’re required to be at a work site while waiting to perform work. REST AND MEAL PERIODS. You typically must pay employees for short rest periods, usually 20 minutes or less. You generally don’t need to pay employees for bona fide meal periods (typically 30 minutes or more). Minnesota law requires an “adequate rest period” for every four hours worked, and “sufficient” unpaid meal time for employees who work eight consecutive hours or more. SLEEPING TIME. Employees required to

be on duty for less than 24 hours are considered “working,” even if they’re permitted to sleep. Employees required to be on duty for 24 hours or more may agree with their employer to exclude from hours worked any scheduled sleeping periods of eight hours or less. TRAINING PROGRAMS AND MEETINGS. You don’t have to pay employees for time spent at training programs, lectures or similar activities as long as they meet the following four criteria: (1) The event is outside normal hours. (2) It’s voluntary. (3) It’s not job-related. (4) No work is performed during that time.

Source: Adapted from U.S. Department of Labor fact sheet No. 22,

June 2009 • Minnesota Employment Law


The Mailbag

by Carl Crosby Lehmann, Esq., Gray Plant Mooty, Minneapolis

Can we dock final paycheck for lost property? We’d like to have all employees sign a policy stating that if they leave the company and fail to return their key cards for any reason, they authorize the company to take $20 out of their last paychecks. Can we have such a policy? — M.K., St. Cloud


Your proposed policy may violate Minnesota law. An employer cannot make a deduction from an employee’s wages for lost or stolen property (or any other claimed indebtedness) unless the employee—after the debt has arisen—voluntarily authorizes the employee in writing to make the deduction. One exception: If the employee is making a purchase or borrowing from the employer, you can agree, in writing, to deduct regular payments from wages or at termination. The written agreement must be made before the purchase or loan. Employers that violate this law are liable to the employee for twice the amount of the deduction made. There’s another approach to your problem that seems to accomplish your goals without implicating the wage deduction law. At the time you hire the employee, you could charge the person the $20 for the key card with the understanding that when he leaves, if he returns the key card he will get his $20 returned to him.

When to pay for restroom and meal breaks Our production employees get paid for eight hours over an 8 1/2-hour shift. During the shift they get a halfhour meal break. They aren’t allowed to leave the facility, but they do leave their workstations during their breaks. During the remainder of their shifts, employees are permitted to use the restroom when they want. Are we complying with our legal obligations? — T.L., St. Paul


Your practices with regard to meal and rest periods comply with the law. Under Minnesota law, employers must allow each employee a meal break for every eight consecutive hours worked. The meal period doesn’t have to be paid if it is a “bona fide meal period.” A bona fide meal period exists when the employee is completely relieved of duty for a sufficient amount of time. A break of 30 minutes is sufficient. It’s not necessary that the employee be permitted to leave the employer’s premises if the employee is otherwise completely freed from duties. With regard to other breaks, Minnesota law requires

employers to allow employees a break of sufficient time to use the restroom once every four hours. It sounds like you are providing this break, but that you don’t provide it at any set times during the shift. That should be fine, as long as your managers and supervisors are aware that employees have the right to at least a couple of these breaks during their shifts. Rest periods of less than 20 minutes may not be deducted from total hours worked, so it is appropriate that you are paying employees during these breaks.

Unauthorized overtime: Can we refuse to pay? We have an hourly employee who keeps working unauthorized overtime. He has been explicitly directed not to work more than 40 hours without prior approval from his supervisor, but he still frequently submits time records with overtime hours. Can we address his insubordination by refusing to pay him the overtime? — B.T., Moorhead No, you should pay him for the overtime hours. Employers must pay nonexempt employees for all hours worked. When the hours worked exceed 40 in any workweek, employers must pay time and one half the nonexempt employees’ regular rate of pay. Courts have awarded overtime pay even in cases where employees worked remotely and refused to follow their supervisors’ orders not to work any overtime hours. The potential for wage-and-hour claims is not worth the hassle, especially when there are other ways of addressing his insubordination. Assuming he is an at-will employee, you can discipline him in a number of ways ranging from warning, demotion, suspension and even termination. While you are addressing this problem, you should also look into what internal systems and practices you can implement to avoid unauthorized overtime work. For example, many companies use software that will monitor the hours worked during each workweek, and alert managers when an employee is nearing 40 hours.


Carl Crosby Lehmann is a member of the Employment Law Practice Group at the law firm of Gray Plant Mooty in Minneapolis. He advises employers on personnel matters, drafts employment policies and litigates employers’ interests. Contact him at (612) 632-3234 or To submit your Mailbag questions to Minnesota Employment Law, e-mail them to or fax them to (703) 905-8042.


Notify employees if you’re tracking them by GPS

Restaurant caught in birthday suit: now it must pay

More businesses are using GPS systems to track their employees for productivity, safety and customer service reasons. If employees complain that GPS systems violate their privacy, take note: You’re legally allowed to use the technology to track employees while they’re on the job, but it’s wise to first let them know you’re doing it.

A restaurant chain agreed to pay a $38,750 settlement to a waitress who sued after being fired for refusing to sing “Happy Birthday” to customers. She refused because her religion (Jehovah’s Witness) forbids birthday celebrations. The EEOC sued the restaurant on her behalf, claiming religious discrimination in violation of Title VII of the Civil Rights Act.

Minnesota Employment Law • June 2009

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HR Specialist: Minnesota Employment Law  

HR Specialist: Minnesota Employment Law sample issue