Personnel Records: What Goes Where

Confusion abounds when it comes to deciding which employee personnel records go where, who can access which records and who cannot, and how records should be segregated. Human resource employees have long understood that an employee’s workers’ compensation records should be segregated from the employee’s typical personnel file containing such things as an application for employment, resume and salary change forms.

For the small employer, however, these kinds of decisions must be addressed by management, who may not always be experienced in the nuances of human resource law. In essence, three files should be maintained for each employee:

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Employer-Sponsored Group Health Plans & HIPAA

If small business employers think that the Health Insurance Portability and Accountability Act—or what we fondly refer to as “HIPAA”—only applies to health care providers, they need to think again. Small business owners need to get hip to HIPAA because those that offer employer-sponsored health plans (as most do) must also protect the privacy of employees’ medical information.

Physician practices typically understand they are “Covered Entities” under HIPAA due to their status as medical providers but many are unaware they may carry the title of Covered Entity” by way of their employer status.

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Effective June 1, 2005 — Employers Must Comply With FTC Rule on Disposal of Consumer Report Information and Records

The Rule, 16 CFR Part 682, implements Section 216 of the Fair and Accurate Credit Transaction Act of 2003. It is designed to reduce the risk of consumer fraud and related harms, including identity theft, created by improper disposal of consumer information. It applies to every person over which the Federal Trade Commission has jurisdiction, that, for a business purpose, maintains or otherwise possesses consumer information. Thus any company, regardless of industry or size, that possesses or maintains consumer information for a business purpose is subject to the Rule. Obvious examples are consumer reporting agencies, lenders, insurers, employers, landlords, government agencies, mortgage bankers, automobile dealers and other users of consumer reports.

“Consumer information” is defined as any record about an individual, whether in paper, electronic, or other form, that is a consumer report or is derived from a consumer report. It also includes a compilation of such information. It does not include information that does not identify individuals, such as aggregate information or blind data.

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Are All IT Jobs Exempt From Overtime Requirements Under the Fair Labor Standards Act?

Most companies are under a common perception that all jobs involving computers are complex, require exceptional expertise and are therefore exempt from the requirement of overtime pay under the Fair Labor Standards Act. Legally, this is not true. As a preventive measure, companies should audit their workforce to make sure that their information technology workers are properly classified. Failure to do so could cause companies to lose their exemption from paying overtime for all misclassified employees, payment of two to three years of back pay and the payment of double damages.

There are three possible applicable exemptions available to avoid overtime pay for information technology jobs. They are: (1) the computer related exemption under 29 CFR Section 541.400; (2) the administrative exemption under 29 CFR Section 541.200; and (3) the executive exemption under 29 CFR Section 641.100. This article will focus only on the computer related exemption.

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The ADA: Alcohol and Drug Abuse in the Workplace

Alcohol and drug abuse are recurrent problems in the workplace, costing the economy billions of dollars annually in lost production, lost wages, medical expense and injury. Thus employers have an economic selfinterest in confronting alcohol and drug abuse. In doing so, those with 15 or more employees risk incurring substantial liability for discrimination if they fail to comply with the Americans With Disabilities Act (ADA).

The ADA protects job applicants and employees with drug and alcohol problems against discrimination in employment if they are qualified individuals with a disability. A “qualified individual with a disability” is an individual with a disability who, with or without reasonable accommodation, can perform the essential functions of the employment position that such person holds or desires. Under the ADA, a “disability” is: (a) a physical or mental impairment that substantially limits one or more major life activities; (b) a record of such impairment; or (c) being regarded as having such an impairment. Alcoholism and drug addiction are disabilities.

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Three Top Reasons Why Employees Sue

Employment law does not address every imagined wrong, inequality, meritless promotion, mean act or omission that occurs in the workplace. The employment at will doctrine attempts to strike a balance—admittedly falling more adversely on employees. In many instances, a workplace can be like a sandbox/jungle, with no seemingly credible or impartial mediator overseeing an employee’s livelihood and the family’s survival. The employee consequently feels “wronged”.

When an employee approaches a lawyer to remedy that workplace “wrong”, the lawyer is often forced to advise the anguished employee that he or she attended law school, not justice school. Nonetheless, a lawyer’s duty to that complaining client is to look for certain acts, suspect classifications and/or factual patterns that evidence illegal aniums or unlawful motive. Accordingly, companies should plan for the worst, and attempt to avoid the more common minefields with sound policies and training.

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Mandatory Employment Arbitration Agreements-Employers May Not Achieve an Overall Cost Savings

Employment litigation continues to explode, fueled by the passage of the Civil Rights Act of 1991, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family and Medical Leave Act and increased sensitivity to sexual harassment. The number of employment discrimination claims increased by 2200 percent in the twenty-five years from 1969 to 1994, and now account for twenty to twenty-five percent of the federal court docket. Arbitration became an attractive alternative to litigation when a string of United States Supreme Court Cases were handed down in 1991. By 1997, the United States General Accounting Office found that nineteen percent of employers were using arbitration for employment disputes.

Mandatory employment arbitration agreements are entered prior to a dispute via a written contract. Arbitration clauses are commonly found in employment applications, employment manuals, or stand alone agreements. Such clauses require employees to submit any employment dispute to one or more impartial arbitrators for final and binding arbitration. Employment arbitration differs from other commercial arbitration proceedings; a mandatory employment arbitration clause must not remove remedies that an employee would otherwise have if the employee pursued the matter in civil litigation. Those remedies include the recovery of litigation expenses, including expert witness fees, attorneys’ fees, compensatory damages and punitive damages. This unique requirement for employment arbitration clauses is sometimes referred to as the “Remedy Rule.”

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Prompt Remedial Action Shields Companies From Liability From Sexual Harassment Allegations Lodged Against Co-Workers

This article addresses the legal standards of evaluating non-supervisory co-worker sexual harassment in the workplace. A “to do” list is provided below of the actions a Company should take to shield itself from liability.

To establish a case of sexual harassment by non-supervisory co-workers based on a hostile work environment, a plaintiff “must establish all of the following; 1) membership in a protected group, 2) the occurrence of unwelcome harassment, 3) a causal nexus between the harassment and her membership in the protected group, 4) the harassment affected a term condition, or privilege of employment, and 5) the employer knew or should have known of the harassment and failed to take prompt remedial actions.” Jacob-Mua v. Veneman, 289 F.3d 517, 520 (8th Cir. 2002).

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Beware—Proceed Cautiously—What the Missouri Employer Should Know About the Service Letter Statute and Defamation

Purpose of Statute

Missouri law protects the right of a discharged employee to request and receive an accurate service letter from his or her former employer. Section 290.140 of the Revised Statutes of Missouri was enacted to deter employers from damaging the employability of former employees by furnishing false or misleading information as to their service or false reasons for their discharge. Ryburn v. General Heating & Cooling, Co., 887 S.W.2d 604 (Mo. App. 1994).

Eligibility of Employee for Service Letter

If an individual is employed for at least ninety days by an employer with at least seven employees, he has the right, within one year from the date of discharge, to request a service letter from the former employer. R.S. Mo. § 290.140.1. The request must be made in writing and sent to the superintendent, manager, or registered agent (the “Agent”) of the former employer via certified mail, and must specifically reference Section 290.140 R.S. Mo.

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Two Bites at the Apple for Employees: Mandatory Arbitration Agreements

On January 15, 2002, the Supreme Court struck a blow to the strong federal policy favoring arbitration. It held that mandatory arbitration agreements do not foreclose or trump the Equal Employment Opportunity Commission‘s absolute right to seek victim specific relief (back pay, reinstatement, and punitive damages) on behalf of an employee in federal court.

Approximately ten percent of all employees sign mandatory arbitration agreements, which require them to bring all on-the-job disputes to binding arbitration and give up their right to sue in court. These types of agreements are increasingly more popular, and every day it seems a major employer announces that it is requiring employees to sign such agreements. Mandatory arbitration gives many benefits to employers including a reduction of overall litigation costs and settlement amounts. Employers also increasingly look to arbitration as a way of ensuring finality. However, the Supreme Court firmly rejected the notion that arbitration will solve all employment ills.

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