HR Specialist: North Carolina

HR SPECIALIST

NORTH CAROLINA Employment Law

Trusted compliance advice for N.C. employers

In The News ...

Economic woes = spike in job discrimination lawsuits Employee lawsuits typically increase during recessions—and this one is no different. Private-sector employees filed 95,400 charges of job discrimination with the EEOC in 2008, a jump of 15.2% from the previous year and up a full 26% from 2006. Most popular claims (in order): race discrimination, retaliation, sex, age, disability, national origin and religious bias.

N.C. teacher’s lesson: You can be fired for rude online posting The Charlotte-Mecklenburg Schools fired one employee and disciplined seven others this year for offensive postings on Facebook, a social networking site. Example: The fired worker had posted a photo of himself shirtless and listing “Chillin’ with my n***as” as a favored activity. An elementary teacher listed “drinking” as a hobby. The lesson: You have the right to discipline or fire workers whose online musings harm your organization’s reputation.

Beware legal risk of jotting nasty notes in customers’ files In a classic Seinfeld episode, Elaine’s actions at her doctor’s office cause the doctor to make a note on her chart that says she is “difficult.” Do your employees make similar editorial comments about customers’ quirks in your internal files?

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North Carolina Employment Law is published by HR Specialist and is edited

by William H. Sturges and Frederick M. Thurman Jr., partners in the employment and labor law practice of Shumaker, Loop & Kendrick, LLP in Charlotte. You can contact them at wsturges@slk-law.com, fthurman@slk-law.com or (704) 375-0057.

(800) 543-2055

•

June 2009 Special Issue

Editors: William H. Sturges, Esq. and Frederick M. Thurman Jr., Esq., Shumaker, Loop & Kendrick, LLP, Charlotte

Altering time sheets can mean personal liability I f you’re responsible for approving time sheets or signing off on alterations to the hours reported by employees, take note: It’s not just your organization that risks a big fine and costly litigation. Your personal assets are also at risk, as a new court ruling shows.

That’s because the Fair Labor Standards Act allows employees to sue their bosses, execs and HR professionals for personal liability for altering pay records.

For that reason, make sure supervisors don’t tolerate—or, worse, encourage— off-the-clock work or altering of records.

Recent case: A group of “living assistants” (hourly workers) at a home for

the disabled worked 48-hour weekend shifts. They had to check on each resident every two hours, around the clock.

When they turned in their time sheets, managers routinely deducted eight hours because each living assistant supposedly got two four-hour breaks. The CEO then signed off.

The problem: The employees couldn’t leave the building during “breaks.” Because the time wasn’t their own, the court said it must be compensated.

The kicker: The court held the CEO personally liable, ordering him and the company to pay more than $500,000 to the employees. (Chao v. Self-Pride, No. 06-1203, 4th Cir.)

N.C. employees can win bigger lawsuit windfall I n North Carolina, it’s not just sexual harassment lawsuits brought under federal law that you have to worry about.

Your organization could face state tort law claims, such as “intentional infliction of emotional distress” or “negligent supervision,” if an employee’s behavior is extreme enough and management doesn’t take steps to stop it.

That can be a bigger problem than the federal claim. Why? Monetary damages are capped under federal law (Title VII). But state tort claims such as intentional infliction of emotional distress and negligent supervision don’t have caps.

That’s all the more reason to establish

a strong anti-harassment policy, train your employees regularly and thoroughly investigate all complaints.

Recent case: EDS employee Caryn Testa progressed up the corporate ladder

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Free report How to solve ‘he said/she said’ disputes For help in sorting out the truth in employees’ conflicting stories of harassment or name-calling, access our free white paper, Investigating Harassment: How to Determine Credibility, at www. theHRSpecialist.com/whitepaper.

IN THIS ISSUE

Recent N.C. employment law cases and advice . . . .1-3 Top 10 things to know about N.C. Wage and Hour Act . 6 A simple system to document performance . . . . . . . . 4 Know when to pay hourly employees for travel time . . 7 In The News: posters, safety, COBRA . . . . . . . . . . . . 5 The Mailbag: Your questions answered . . . . . . . . . . . 8

www.theHRSpecialist.com/NC

National Institute of Business Management

Can you hand out stricter discipline to bosses than rank-and-file staff?

Pay correct, timely wages in N.C. or risk double damages North Carolina’s Wage and Hour Act (NCWHA) says that if you fail to pay workers what they’re due, they can sue for those unpaid (or late) wages, plus a penalty of double what was due.

Your only defense to double damages: proof that you acted in good faith and reasonably—a tough task.

That’s why it’s vital for employers not to fall behind on wage payments and to be absolutely sure of the legality of any deductions or withholdings from an employee’s wages.

Recent case: Richard Mason worked in North Carolina under a written contract that called for a $300,000 base salary and a one-year-salary severance-pay package. After being fired, Mason sued for the severance.

He also said the NCWHA applied and demanded his payment be doubled.

The court agreed Mason was owed the severance. It sent the doubledamages issue to trial, where the employer will have to prove it acted in good faith when it withheld the severance. (Mason v. ILS Technology, No. 3:04-CV-139, WD NC)

ll employees are not equal in the eyes of the courts.

You can (and should) hold supervisors to higher behavioral standards than rank-and-file workers. You don’t have to treat them the same if they break the same rules.

As the following case shows, you can fire supervisors who get into fights with subordinates, even if you use softer discipline on employees who get into similar confrontations.

Recent case: Gerald Forrest, a supervisor for Transit Management of Charlotte, got into a physical altercation with one of his subordinates. The employer then gave Forrest a choice: resign or be fired.

Forrest, who is black, shot off a race discrimination lawsuit. He argued that two white employees weren’t fired after they got into a similar argument and physical confrontation.

The court dismissed his case, reasoning that it was quite a different matter

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North Carolina Employment Law • June 2009

Free white paper What your discipline policy should say The best way to protect against wrongfuldismissal lawsuits is to establish a clear progressive discipline policy. Access a five-step policy model in our free white paper, Designing a Progressive Discipline Policy, at www.theHRSpecialist.com/ whitepaper.

You can require employees to undergo medical evaluations

N.C. employees until, she said, a new male supervisor propositioned her, left her suggestive voice mails and got angry when she refused his advances. She reported this to HR but got no response.

After being transferred, Testa eventually quit following two years of being ostracized by managers. She sued under North Carolina tort law, alleging infliction of emotional distress and negligent supervision. The court said she had enough evidence to warrant a trial.

Under North Carolina law, persistent sexual advances and remarks that cause an emotional or mental condition diagnosed by a medical professional can be extreme enough to be the infliction of emotional distress. An employer’s failure to stop the harassment can make the company liable. Plus, failing to rein in the harasser can be deemed negligent supervision. (Testa v. EDS, No. 3:07CV-165, WD NC)

to have a supervisor pushing a subordinate around than two co-workers doing the same thing.

Forrest also tried to argue that a white supervisor wasn’t fired for a similar pushing incident. But the white supervisor and Forrest did not work for the same boss. And company rules gave disciplinary discretion to managers. The court said those who work for different supervisors aren’t a fair comparison.

(Forrest v. Transit Management of Charlotte, et al., No. 06-2245, 4th Cir.)

ave you ever suspected that one of your employees was not quite as injured or ill as he says? Employers certainly can insist on a medical examination to determine the exact nature and extent of workers’ medical problems— and any appropriate work restrictions.

Just make certain you treat all injured employees the same—don’t select some for more extensive testing and let others slide.

Recent case: Tommy Allen, who is black, worked for BMW on the assembly line and complained that he had carpal tunnel syndrome. Allen’s doctor agreed and placed him on medical restrictions that prevented him from returning to work at the plant.

BMW then sent Allen to another doctor, who could find no physical evidence of carpal tunnel syndrome. The company then scheduled a follow-up appointment

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to see whether he could return to work, and whether he needed any restrictions.

Allen missed the appointment.

BMW then warned Allen if he didn’t keep a new appointment, he would be fired. Allen showed, but refused to be examined. Instead, he asked the doctor to excuse him from work. When BMW found out Allen had refused the exam, it fired him.

Allen sued for race discrimination, alleging a white employee with a similar condition had not been fired for refusing to cooperate with medical evaluation procedures.

But the 4th Circuit Court of Appeals rejected his claims. It said the white co-worker had cooperated and did receive a carpal tunnel diagnosis after his doctor and the company’s selected doctor both examined him. (Allen v. BMW Manufacturing, No. 07-1626, 4th Cir.) (800) 543-2055

Start FMLA certification ASAP to avoid ‘leave stacking’ mployees eligible for FMLA leave can’t stack their 12 weeks of unpaid FMLA leave on top other paid leaves if your organization chooses to run FMLA leave concurrently with paid leave (as it should).

But here’s the key point: You must tell employees that you intend to run FMLA leave concurrently with paid leave. If you don’t, they can take the FMLA leave later and extend their time off and other FMLA job protections.

It’s your obligation to designate leave as FMLA-qualifying whenever you become aware of an FMLA-qualifying condition. It’s not up to your employees to choose.

That’s why it’s important to start the FMLA certification process as soon as possible after you know the employee is absent for a covered reason.

Recent case: Willie Gladden has diabetes, high blood pressure and other “serious” conditions that would qualify him for FMLA leave. He started taking paid leave on Jan. 4. His employer didn’t request FMLA certification until Feb. 11. The company then made his

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FMLA leave retroactive to Jan. 4.

It fired Gladden about one month after his 12 weeks of FMLA leave would have expired, counting back to Jan. 4.

Gladden sued, claiming his FMLA leave truly didn’t start until he received notice that his employer was applying his FMLA eligibility.

The court sided with Gladden and allowed the case to go trial. (Gladden v. Winston-Salem State University, No. 1:05-CV-01032, MD NC) Final tip: Make sure to track your requests for FMLA certification and let the employee know when his or her FMLA leave starts and ends. Also, track receipt of FMLA correspondence.

Free report How to Wipe Out Fraud and Abuse Under FMLA For an 11-step process to prevent fraud

by FMLA users, access our threepage primer, How to Wipe Out Fraud and Abuse Under FMLA, at www. theHRSpecialist.com/whitepaper.

Returning soldiers aren’t at-will … temporarily I

f you plan to terminate an employee who recently returned from military duty, you need a clear, business-based reason for your action. You can’t fall back on “at-will status” as a reason for firing in such cases.

Reason: You may know that federal law—the Uniformed Services Employment and Reemployment Rights Act, or USERRA—provides job protection to soldiers and reservists returning from active duty or training. But you may not realize that USERRA temporarily cancels the returning employee’s at-will status.

How long till at-will status returns?

USERRA says returning soldiers who are gone more than 180 days receive that extra protection for one year. Those gone for 30 to 180 days get six months’ worth of extra protection.

Recent case: A computer tech faced www.theHRSpecialist.com/NC

frequent discipline for tardiness. She also served in the U.S. Naval Reserve.

The company fired her for continued tardiness soon after she returned from a military deployment.

She fired off a USERRA lawsuit alleging the company didn’t have just cause for its actions. But the appeals court disagreed, saying she’d been warned and that the firing reasons rose to the level of “just cause.” (Francis v. Booz Allen Hamilton, No. 05-1523, 4th Cir.) Final tip: In USERRA cases, employers have the burden of proof and must show their actions were “reasonable.” That means employees who file USERRA lawsuits will likely have their cases heard by a jury and not dismissed earlier in the process. That makes each case potentially very expensive, even if you ultimately win.

Legal Briefs Harassment alert! Negligent hiring/supervision law applies Employers that ignore their employees’ sexual harassment pleas—beware. Not only may you be liable under Title VII, but you may be liable under state law, too.

And that can mean huge damage awards far beyond federal caps.

Recent case: Michelle Allison and a co-worker at a Marshalls store complained that a fellow store employee commented on their bodies, grabbed them, lifted their shirts and otherwise sexually harassed them. They said management didn’t do anything until a customer also complained that the same employee commented that her bottom looked nice in her jeans. Finally, Marshalls fired the man.

The women sued for sexual harassment and negligent hiring and supervision under North Carolina law. The court said they should get a jury trial, given the store’s apparent refusal to do anything about the harassment. (EEOC, et al. v.

TJX Companies, No. 7:07-CV-66, ED NC, 2009)

Courts crack down on workers’ comp for minor injuries It used to be that an employee who continued to suffer any pain following a workrelated injury could continue receiving workers’ compensation payments until she was fully healed. Now, however, the North Carolina Industrial Commission judges are getting tougher on pain that isn’t backed up by medical evidence.

That’s good news, because appeals courts rarely overturn the commission’s initial workers’ comp decisions.

Recent case: Gloria Cooper slipped while working at McDonald’s. She was off work until a few weeks later, when doctors said she could return without restrictions.

The Industrial Commission ordered compensation payments for those few weeks, but no more. She appealed, arguing that she was disabled by back and neck pain.

The North Carolina Court of Appeals refused to overturn the Industrial Commission’s decision. (Cooper v. BHT Enterprises, No. COA08-711, North Carolina Court of Appeals, 2009)

June 2009 • North Carolina Employment Law

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Compliance Corner

Insight from TheHRSpecialist.com

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

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.

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 www.eeoc.gov/facts/ 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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Publisher: Phillip Ash Associate Publisher: Adam Goldstein Editorial Director: Patrick DiDomenico Copy Editor: Cal Butera Production Editor: Nancy Asman Customer Service: (800) 543-2055, customer@NIBM.net

HR Specialist: North Carolina Employment Law (ISSN 1937-8432) is published monthly by the National Institute of Business Management LLC, 7600A Leesburg Pike, West Building, Suite 300, Falls Church, VA 22043-2004, (800) 543-2055, www.theHRSpecialist.com. Annual subscription price: $299. © 2009, National Institute of Business Management. All rights reserved. Duplication in any form, including photocopying or electronic reproduction, without permission is strictly prohibited and is subject to legal action.

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North Carolina Employment Law • June 2009

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Editors: William H. Sturges, Esq., Frederick M. Thurman Jr., Esq., (704) 375-0057, Shumaker, Loop & Kendrick, LLP, Charlotte Contributing Editor: Anniken Davenport, Esq., HRNCeditor@NIBM.net Senior Editor: John Wilcox, (703) 905-4506, jwilcox@NIBM.net

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In The News …

Don’t waste money buying workplace forms and posters Several government agencies are alerting business owners they don’t need to pay for most forms and posters required to be displayed in their workplaces. Those documents are often available free on government web sites.

Take note: Web sites ending in “.gov” are the only official government sites.

Some private companies try to sell posters and government documents using official-looking sites.

Advice: You can download most required federal posters free at the U.S. Department of Labor’s main poster page, www.dol.gov/osbp/sbrefa/poster.

You can download mandatory North Carolina posters at www.nclabor.com/ posters/posters.htm.

Employers must meet new COBRA notice obligations Don’t overlook this key part of the federal economic-stimulus law passed earlier this year: Employers are required to provide notice to departed employees about the ex-employee’s ability to purchase COBRA continuing health insurance at a reduced rate.

People who were “involuntarily terminated” between Sept. 1, 2008, and the end of 2009 are required to pay only

Notes in customers’ files (Cont. from page 1)

If so, be careful. A recent lawsuit shows the potential legal dangers.

The case: A drugstore customer asked the pharmacist not to mention the types of drugs she was picking up at the counter. The pharmacist made note of her request in the internal computer system, but added in his notes: “CrAzY!!” and “She’s really a psycho!!”

When a friend picked up the woman’s prescription, the printout receipt accidentally included these comments. The woman sued for libel, noting the comments were available to every pharmacist in the drugstore’s chain.

Advice: Use this example to remind employees to avoid writing down their personal comments about customers.

www.theHRSpecialist.com/NC

To avoid safety violations, know N.C.’s top targets The North Carolina Department of Labor’s Occupational Safety and Health Division found serious violations in about 5,000 workplaces. Here are the 10 most frequently cited serious violations in private-sector general industry, followed by the specific OSHA standard: 1. Machine guarding, 1910.212(a)(1) 2. General duty clause (Employers shall provide a workplace free from recognized hazards), NC General Statute 95-129(1) 3. Abrasive wheel machine guarding exposure adjustments, 1910.215(b)(9) 4. Continuous grounding path, 1910.304(f)(4) 5. Eye and body drenching or flushing facilities, 1910.151(c) 6. Abrasive wheel machinery work rests, 1910.215(a)(4) 7. Eye and face protection, 1910.133(a)(1) 8. Points of operation guarding, 1910.212(a)(3)(ii) 9. Protection from open-sided floors, platforms and runways, 1910.23(c)(1) 10. Unused openings in electrical boxes or fittings, 1910.305(b)(1)

35% of their COBRA costs. Employers can collect a credit for the other 65% on their payroll tax returns.

Advice: Don’t try to reinvent the wheel. The U.S. Department of Labor is offering a sample COBRA notification letter that employers can use. Find links to those model notification letters and more about the COBRA law at www.theHRSpecialist.com/stimulus.

Local Burger King is latest fish caught in fed’s teen harassment net A Burger King in Clemmons will pay $85,000 to a teenage employee who was subject to unwanted touching, sexual advances and requests for sexual favors from the store’s general manager. When the worker complained to assistant managers, they did nothing.

The EEOC has been cracking down in recent years on employers who tolerate harassment of their teen employees.

Note: Your anti-harassment policy must give workers at least two avenues to file sexual harassment complaints.

New online tool helps employers (and employees) calculate OT pay The U.S. Department of Labor debuted a useful new tool that employees—and you—can use to calculate an employee’s overtime pay. The Fair Labor Standards Act Overtime Calculator Advisor (www.dol.gov/elaws/otcalculator.htm) asks a set of questions about pay periods, hours worked, hourly pay scales and

additional compensation.

Advice: Employees will be using this tool to check whether you pay them correctly, so you should get to it first.

N.C. employers named to Fortune’s ‘best to work for’ list Fortune magazine recently published its list of the “100 Best Companies to Work For,” and five North Carolina employers made the list. Cary-based SAS Institute was ranked 29th, in part for its outstanding on-site child care program. Kimley-Horn & Associates, also headquartered in Cary, was ranked 38th and was noted for the freedom it gives to new employees in carving out their careers. Cisco Systems and Network Appliance, both in Research Triangle Park, also made the top 100 list, along with Alston & Bird of Charlotte.

Can you tell a worker to peel off his anti-Muslim bumper sticker?

A civilian employee at Camp Lejeune is suing the Marine Corps for demanding that he remove anti-Muslim stickers from his car. The employee, whose son was a victim of the 2000 bombing of the USS Cole in Yemen, was told to remove decals that read “Islam = terrorism” and “We died and they rejoiced.”

A spokesman for Camp Lejeune, said the base received two complaints. The employee’s lawsuit claims the base violated his free speech and equal protection rights.

June 2009 • North Carolina Employment Law

5

In the Spotlight

by Frederick M. Thurman Jr., Esq., Shumaker, Loop & Kendrick, LLP, Charlotte

Top 10 things to know about the North Carolina Wage and Hour Act of wages and emM 7 Advances ployee loans. any employers are familiar with the basic requirements of federal wage-and-hour law—the minimum wage, how to calculate overtime and who must receive it. But the North Carolina Wage and Hour Act is often a mystery to employers and employees alike.

Here are the top 10 things you should know about the act.

selects. An employee may be required to accept payment by direct deposit.

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ings, particularly those not required by law, can get complicated. Pay careful attention to both the statutory language (N.C. Gen. Stat. § 95-25.8) and to the interpretive regulations (13 N.C. Admin. Code § 12.0305).

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Where to find the act. The act is codified in the General Statutes, beginning with section 95-25.1 and continuing through section 95-25.25. The act and the North Carolina Department of Labor’s interpretive regulations are both available online at www.nclabor. com/wh/Wage_Hour_Act_Packet.pdf.

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Notifications regarding wages.

At the time of hire, employers must notify newly hired employees—either orally or in writing—of promised wages and scheduled paydays. Employment practices or policies regarding promised wages must be provided in writing or in a posted notice. Employees must receive at least 24 hours’ advance notice, in writing or in a posted notice, of any reduction in promised wages. For each pay period, employees must receive a written statement that itemizes all deductions made from that period’s paycheck.

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Method of payment. An employer may select any legal form of payment, as long as payment is made on the designated payday. Acceptable forms of payment include cash, money order, negotiable check, direct deposit to an institution whose deposits are insured by the federal government or direct deposit to an institution the employee 6

“Terminated employees must be paid all wages due on or before the next regular payday following termination.”

What is the minimum wage?

North Carolina’s minimum wage isn’t simply a regurgitation of the federal minimum. Instead, the act requires paying whichever is higher: $6.15 per hour or the federal minimum wage, which rose to $6.55 per hour on July 24, 2008.

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Withholdings. Handling withhold-

North Carolina Employment Law • June 2009

Basically, an employer may withhold a portion of an employee’s wages (1) when required or empowered to do so by state or federal law or (2) when the employee has provided a written authorization, signed on or before the payday for the pay period from which the deduction is to be made, indicating the reason for the deduction.

An authorization may be specific (when the amount of the deduction is known in advance) or blanket (when the amount of the deduction is not known in advance).

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Withdrawal of withholding authorization. Employees must be

allowed at least three calendar days prior to withholding to withdraw specific authorizations, if such deductions are for their convenience. Those deductions include withholding for savings plans, credit union installments, savings bonds, club dues, uniform rental and cleaning, parking and charitable contributions. Before an employer may withhold pursuant to a blanket authorization, the employee must be given notice of the amount of the proposed withholding and allowed at least three calendar days from the date of notice to withdraw the blanket authorization.

Advances of wages to an employee or a third party at the employee’s request are considered prepayment. A dated receipt for the advanced wages (signed by the employee) is sufficient to show that the advance was requested and made, and no withholding authorizations are required when the advance is later withheld from a paycheck. In the absence of an executed loan document, the principal of an employee loan is considered an advance of wages. However, withholdings related to interest and other related loan charges require written authorization.

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Disputed wages. When the amount of wages is in dispute, the employer must nevertheless pay the amount the employer acknowledges is due. An employee’s acceptance of a partial wage payment does not release any claim for the balance of the wages, and the employer may not demand such a release.

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Last paycheck. A terminated em-

ployee must be paid all wages due on or before the next regular payday following termination. However, commissions and bonuses due must be paid on the first regular payday after they become calculable. A final paycheck may be delivered either through regular pay channels or by mail if the employee requests it. If an employee requests sending the paycheck by mail, the employer may require notarized or witnessed consent. Regular pay channels or mail are the only two allowable delivery options. A friend picking up the check is not acceptable.

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Who can help if an employer is confused? Of course, your

attorney is always a good resource when addressing these issues. Also, the state Department of Labor offers some useful basic resources on its web site.

Wage and Hour Bureau information can be found at www.nclabor.com/ wh/wh.htm.

(800) 543-2055

Nuts & Bolts

Rules of the road: Know when to pay hourly employees for travel time Working at different locations Y

ou don’t need to pay nonexempt employees for their commuting time to and 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 Portalto-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.

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 FLSA 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 the federal Fair Labor Standards Act (FLSA). 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).

Employees must be completely relieved from duty during unpaid breaks and meal periods. Example: If you require your assistant to eat lunch at her desk in case a call comes in, she must be paid because she hasn’t been fully relieved of her duties.

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, www.dol.gov/esa/regs/compliance/whd/whdfs22.htm.

www.theHRSpecialist.com/NC

June 2009 • North Carolina Employment Law

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by Frederick M. Thurman Jr., Esq., Shumaker, Loop & Kendrick, LLP, Charlotte

Is there any requirement to offer vacation benefits?

Must I offer vacation time to my employees? If I do, must I pay terminated employees for their unused vacation time?

No and yes (but maybe not). The North Carolina Wage and Hour Act expressly provides, “No employer is required to provide vacation pay plans for employees.” When a vacation benefit is provided, terminated employees are generally entitled to be paid any accrued but unused vacation time. In order for the vacation time to be forfeited upon termination, employees must be notified in advance of the forfeiture policy, either in writing or through posted notices.

Q A

Workers’ comp for softball game injury If an employee is injured at a company-sponsored softball game, where participation is purely voluntary, is the injury compensable under workers’ compensation?

Probably not. The North Carolina Supreme Court recently weighed in on this subject and found an injury resulting from a go-kart accident during an employer-sponsored “Fun Day” was noncompensable.

For an injury to be compensable under North Carolina’s Workers’ Compensation Act, it must be an injury “arising out of and in the course of the employment.” Citing older authority, the court wrote: “Where, as a matter of good will, an employer at his own expense provides an occasion for recreation or an outing for his employees and invites them to participate, but does not require them to do so, and an employee is injured while engaged in the activities incident thereto, such injury does not arise out of the employment.”

Q A

Must small businesses provide COBRA-like continuation health coverage?

My company has fewer than 20 employees. Must my group health insurance policy still provide COBRAlike continuation coverage to terminated employees?

Yes, although COBRA does not apply. The North Carolina Group Health Insurance Continuation and Conversion Privileges Act, which has provisions similar to the federal COBRA Act, does include small employers. Like COBRA, it:

Q A

FYI Workers feel underpaid? They may be ‘overtitled’ Nearly 50% of people believe that they are underpaid in their current jobs, according to a new Salary.com survey.

But an analysis of those employees’ jobs and wages reveals that less than 22% actually were paid below the fair market value for their jobs. “Overtitling” is the biggest factor. “We found that 30% of respondents were likely overtitled,” says Bill Coleman, senior VP of compensation at Salary.com.

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North Carolina Employment Law • June 2009

• Provides continuation coverage under a group health insurance plan for up to 18 months • Requires that employees be allowed no fewer than 60 days to elect continuation coverage • Allows for the charging of up to 102% of premiums to electing participants The North Carolina act, however, does not include dental, vision care, prescription drug benefits “or any other benefits provided under the group policy in addition to its hospital, surgical, or major medical benefits.”

What does ‘right to work’ mean in North Carolina?

I always hear North Carolina is a “right to work” state. Does that mean there are limitations on how or why I may be fired? Does that have anything to do with “employment at will?”

Q A

Although they sound similar, “right to work” and “employment at will” are different concepts that do not contradict each other. “Right to work” generally means that membership in a recognized union may not be a condition of hire or continued employment. Thus, if your workplace is unionized in North Carolina, you cannot be required to join the union.

“Employment at will” is a common law concept that provides—absent a written employment agreement or collectivebargaining agreement—that either you or your employer may terminate the employment relationship at will, at any time, with or without notice and for any reason, as long as the reason is not made unlawful by statute (such as the federal Civil Rights Act) or other laws.

Hiring for the nonsmoking workplace

Q A

Can I refuse to hire a smoker?

Probably not. For private employers with three or more regular employees, it is unlawful in North Carolina to discriminate against an employee or prospective employee because he or she engages in or has engaged in “the lawful use of lawful products if the activity occurs off the premises of the employer during nonworking hours and does not adversely affect the employee’s job performance or the person’s ability to properly fulfill the responsibilities of the position in question or the safety of other employees.”

Frederick M. Thurman Jr. practices employment law at the Charlotte office of Shumaker, Loop & Kendrick, LLP. He is the current Chair of the Labor and Employment Law Section of the North Carolina Bar Association and has more than 12 years’ experience counseling employers on compliance and policies, representing employers in litigation and speaking on employment law topics. You can contact him at (704) 375-0057 or at fthurman@slk-law.com.

To submit your question to North Carolina Employment Law, e-mail it to HRNCeditor@NIBM.net or fax it to (703) 905-8042.

(800) 543-2055

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