Hiring and the Law —
Terminations and the Law

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: How do you terminate an employee?

Answer: With great care and consideration.

This is not an action to take when you finally get so frustrated with an employee’s performance failures that you just have to let him or her go. A loud Donald Trump-like “your fired!” may feel satisfactory at the time—but can also set the company up for legal claims by the employee who was let go.

Preparing to let an employee go actually starts when an employee is hired. Most employee lawsuits arise when the employee didn’t see the termination coming—no one set the expectations or let the employee know when he or she was not meeting them. Therefore, the steps to take to attempt to avoid employee lawsuits stemming from terminations include the following:

  • Job descriptions that let employees know what is expected from their particular job.
  • An Employee Handbook that lets employees know what is expected of them as your employee in general.
  • Managers who give performance feedback as part of their day-to-day interactions with employees. A “good job on that report today!” or a “Tony—you really need to get here on time; we’re counting on you” can go a long way with employees. Don’t wait until an annual review to let an employee know how he or she is doing. Employees should always know where they stand with a company.
  • Annual performance reviews—which are accurate and honest and don’t identify everyone as satisfactory even when they are not. How can an employer support a defense to a wrongful termination lawsuit that an employee was just awful when the performance review says “satisfactory”?
  • Performance Management in the form of coaching/counseling, verbal warnings (which are then documented with written memos to file), written warnings, performance probations, suspensions (with and without pay), and other actions taken to be sure that employees are well aware that their performance, behavior, attitude, etc. on the job are far from acceptable and are not satisfactory.
  • Terminations only after the employee has been told what is expected, corrected when the standards were not achieved, given several chances to make the grade, and has failed to perform as expected.

With all of these in place, employees will be less likely to presume that the termination was because they were black, brown, pink or purple. They will know very well that their employment was terminated because they failed to deliver as required by their employer. In addition—with all of these factors in place, an employer just may be pleasantly surprised when an employee actually improves and the termination is avoided.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.



To see how our employee test can help you bring better people on board watch this three minute video.



If you have ever interviewed someone and later discovered a "different" person is working for you, check out our new book How To Hire The Right People.


Hiring and the Law —
Should You Provide Employees With Paid Sick Days?

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question:  An applicant I’m considering hiring asked how many sick days she will get, but my company does not offer paid sick days.  Are we required to do so?

Answer:  Whether a company is required to offer paid sick days depends on a number of factors—the main one being geography.  A number of locations require certain employers to provide paid sick days to their employees.  For example, the state of Connecticut requires that companies with 50 or more employees provide paid sick days.  Philadelphia has a paid sick day requirement for city workers and certain companies that do business with the city, and the city of Seattle also has a paid-sick-day city ordinance.  Although many such laws are pending around the country, few are actually being implemented because they are generally opposed by the business community.  If your business is in a location that does not require you to provide paid sick days, then you are generally not required to do so—but there is a key exception to that rule.

This has to do with the difference between employees who are eligible for overtime pay and those who are not. An earlier tip also addressed this subject.  If an employee is properly classified as being exempt from the regulations that require the provision of overtime pay for work over 40 hours in a work week, then the employee can be paid by the hour for any hours worked and pay can be withheld if the employee does not work.  If, on the other hand, the employee is what is called “exempt” from the overtime pay requirements and paid on a salary basis, federal law requires that the employer pay that employer their entire salary for every week the employee works with only limited exceptions where deductions can be made from that employee’s weekly salary.  For example, if an exempt salaried employee takes a personal day for personal reasons, and you do not provide paid personal days, one day of pay can be deducted from the exempt employee’s weekly salary.  However, if the reason the salaried employee is absent is because the employee is sick, it is not so easy.  The regulation allows employers to deduct absences for illness from the salary of an exempt employee only if (1) the employer has a sick day policy and (2) the employee either is not yet eligible for the sick days or has used up their sick day allotment.

Here’s an example of how this works:  Let’s say that your new exempt salaried employee, Chris, is entitled to 3 sick days per year, but your sick day policy says that employees can’t use sick days until they have been employed for three months.  Chris gets a stomach bug in the second month of employment and needs to stay home.  That day can be unpaid since Chris is not yet entitled to the 3 sick days.  Similarly, if Chris uses the 3 days and then needs another one in the same calendar year, that additional day does not have to be paid either.  Those sick days can be deducted from Chris’s weekly salary.

In the same scenario without a company sick day policy, if Chris takes a sick day in any week in which Chris performs work, the company cannot withhold pay for those sick days—without regard to how many sick days Chris takes in a year.  The only exception would be if Chris is out sick for an entire work week and performs no work in that week.  In that case, only, Chris would not need to be paid.

Because of this legal requirement, we generally recommend that companies offer a minimum number of sick days in a sick day policy so they are not caught in a situation of having to pay an exempt employee who is not coming to work his or her entire salary for the week.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.



To see how our employee test can help you bring better people on board watch this three minute video.



If you have ever interviewed someone and later discovered a "different" person is working for you, check out our new book How To Hire The Right People.


Hiring and the Law —
Determining Who Can Get Paid On A Salary

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question:  I’m hiring a new employee and want to pay her on a salary instead of hourly.  Is that OK?

Answer:  As with many legal questions, the answer is “maybe.”  That is especially the case if what you are really asking is whether you have to pay her for every hour she works, and overtime pay if she works over 40 hours in a work week, or whether you can just pay her a salary without regard to how many hours she works.  It’s a legal question as to whether an employee is entitled to overtime pay.  An employer cannot designate every employee as “salaried” and presume that the company does not need to pay overtime pay.

The way the law works in the U.S., and the way it works generally in the states that have their own overtime pay regulations, is that employers need to pay overtime wages (time-and-one-half their regular hourly rate) to employees who work over 40 hours in a work week, when their jobs fall in certain categories.  It is not how an employee is paid that alone determines whether he or she is entitled to overtime pay.  That entitlement is also based on the employee’s duties and responsibilities.  The way the law reads is that all employees are entitled to overtime pay if they work over 40 hours in a work week—unless the employee fits into one of the listed exemptions from the overtime pay regulations based on the employees’ duties and responsibilities.  Thus, whether the exemptions apply depends on what the employees do all day.

If an employee fits into one of the exemptions, he or she is considered “exempt” from the overtime pay requirements.  In that case, the exempt employee generally can be paid a consistent salary without regard to how many hours the employee works in a work week.   If an employee does not fall into one of the exemptions to the overtime pay regulations, that employee is “non-exempt” and must be paid overtime wages if he or she works overtime hours.  A “non-exempt” employee may be paid by the hour or paid a salary, but if that employee works over 40 hours in a work week the employee is still entitled by law to overtime pay.  It is the extremely rare organization that has no “non-exempt” employees.

Generally employees that are entitled to overtime pay are receptionists, secretaries, administrative clerks, data entry folk, bookkeepers, schedulers, dental assistants, paralegals, warehouse workers, mail room employees, benefits clerks, payroll clerks, stock clerks, cashiers, wait staff, janitors, safety inspectors, messengers, drivers, computer help-desk employees and other non-managers with limited discretion, just to name a few.

There’s often an analysis of a person’s position that needs to be done to determine whether the company has sufficient arguments that the job should be classified as an exempt position.  The main recognized exemptions from overtime pay are:

  1. Executives (those who are senior managers over recognized areas of an organization who supervise two or more full-time employees or 2 full-time-equivalents) who are responsible for the supplies, production, performance, budget etc. of their area; who delegate their work, do performance reviews, etc.
  2. Professionals (with advanced degrees like lawyers, doctors, CPAs, architects, etc.)
  3. Administrative employees – people who are senior employees working on an administrative area of the business (i.e. HR, Marketing, Finance, Legal, Compliance, etc.) who have independent discretion and judgment, who can bind the company, sign checks, direct policy, etc.  There’s another exemption for computer people who are programmers, software and systems designers, and who perform more sophisticated IT tasks, and an exemption for creative professionals (writers, directors, choreographers, etc.).

The above is just a quick overview and by no means discusses all of the factors to consider.

In addition, under federal law, in order for an employee to be considered to be exempt under the executive or administrative exemption, the employee must be paid a regular salary of at least $455.00/week, which amount cannot be lessened in any workweek in which the employee performs work except for some very specific situations. (Could you give an example or two here?) For example, a company cannot deduct amounts for loss or breakage from an employee’s salary, for days the employee is off to serve on jury duty, or for partial day absences for any reason.  A company could lessen the salary if the employee took a whole personal day off, however, or took a sick day beyond the number provided in a company sick-day policy.

So the bottom line is that I cannot tell from the information you provided whether the employee in question is entitled to overtime pay.  However, you are certainly permitted to pay her a salary instead of hourly (i.e. $600.00/week without regard to whether she works 35, 37 or 40 hours in the week).  The issue becomes—what are you required to do under the law if that individual works more than 40 hours in a workweek (which, by the way, is not the same thing as over 80 hours in two weeks)?


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.



To see how our employee test can help you bring better people on board watch this three minute video.



If you have ever interviewed someone and later discovered a "different" person is working for you, check out our new book How To Hire The Right People.


Hiring and the Law —
Independent Contractor Versus Employee? (2)

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I need to hire a PR person, but I’d like to try out a candidate as an independent contractor for a while and then, if it works out, bring him or her on as a full time employee. Can I do that?

Answer: Generally, it is not prudent for a business to hire an individual as an independent contractor in a position for which you would hire an employee. Whether a person providing services for your company is properly classified as a contractor or an employee is not up to you—there are laws and regulations that govern that classification. When you get it wrong, a number of government agencies can impose fines, fees and penalties on your business, and this would best be avoided. For this reason, it may not be proper for this PR person to be an independent contractor.

Whether an individual is an independent contractor or an employee is going to depend on a number of factors, but the most important one is usually the degree of control you impose over when, where and how the person delivers services for your company. Think of someone you may hire to paint your house or apartment. You tell the painter you’d like him or her to be there on Tuesday. The painter says no. But he or she can be there on Thursday. The painter will tell you what you need to pay for the paint job. And, if you don’t like it, you can find another painter. The painter advertises painting services to the world at large and you found the painting company on Angie’s List or through a recommendation. That’s an independent contractor.

If you are going to tell the PR person that he or she needs to work Monday through Friday from [9:00][5:00], with some networking events in the evenings at which you will require attendance, that you expect the PR person to perform certain functions and attain certain products or deliverables, and that the salary is x . . . that’s an employee, not an independent contractor.

When you bring someone on board as a contractor for some number of months, and then transition them to employee status during the same calendar year, you will need to provide that person with a 1099 for payments as a contractor, and a W-2 for payments as an employee. When the IRS receives a 1099 and W-2 for the same person, from the same company, in the same year, that acts as a red-flag—one of those classifications was likely incorrect (and for the most part, it was the contractor portion). Additionally, the Department of Labor will be concerned because the company would not have paid unemployment insurance taxes, or workers’ compensation contributions, for the contractor portion of the person’s working time.

When the IRS or Department of Labor investigates a potential misclassification situation, they don’t just focus on that one individual. Rather, they will seek to investigate everyone who works for your company to determine whether those individuals were properly classified.

Additionally, the company could have further problems if the “contractor” does not work out. When you terminate the contracting situation, it is possible that the “contractor” could then apply for unemployment insurance claiming that he or she was an employee. Or if the “contractor” gets hurt on the job, and files a workers’ compensation claim, there will be issues because he or she will not be on the company’s worker’s compensation policy and you will be litigating that individual’s status.

Even if you have an independent contractor agreement saying the person is not an employee, Unemployment (or Workers’ Comp) will look to the reality of the situation and the degree of control the employer had over the individual’s work. Based on that, as well as on other factors, the agency will determine whether the person was really a contractor or if he or she was an employee entitled to the claimed benefits.

For these reasons, it is best to use the hiring process to make determinations about prospective applicants, rather than counting on a “trial period” as an independent contractor. The successful candidate for this PR position should be brought on as an employee, not a contractor. If the employment of this individual is not working out, the company can opt to performance manage the employee or swiftly let the poor performing employee go. Either option is likely less risky than treating someone as an independent contractor when he or she is really an employee.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.



To see how our employee test can help you bring better people on board watch this three minute video.



If you have ever interviewed someone and later discovered a "different" person is working for you, check out our new book How To Hire The Right People.


Hiring and the Law —
Hiring a New Employee

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I’m hiring my first employee. What do I need to do?

Answer: There are quite a number of things that a business should do when it hires an employee for the first time. Although requirements vary state to state in the U. S., here are some things all new employers will likely need to do:

— Obtain an EIN (Employer Identification Number) from both the IRS and your state taxing authority so you can file your employment taxes. Your accountant may be able to assist with this.

— Coordinate with your accountant to be able to write payroll checks and withhold appropriate taxes for the federal government, as well as your state and locality. You may want to consider signing up with a payroll company, such as Paychex or ADP, but usually employers do not want to take this step with only one employee.

— Register with your state Department of Labor (or other applicable agency) with regard to Unemployment Insurance taxes. This is also something your accountant may assist with.

— Obtain Workers’ Compensation Insurance. Some states offer insurance through a state insurance fund and employers usually have the option of obtaining that insurance or private insurance. Consult with your insurance broker to determine the workers’ comp insurance that is appropriate for your company. Most states require this coverage if you have only one employee (although if you, the owner, are the only “employee” coverage is often not required or there is a way to opt-out).

— Register with your state’s New Hire Reporting agency. The Small Business Association has links to the state agencies on its website, here: New Hire Reporting for Your State | SBA.gov. This requirement is in place to find dead-beat-dads who are not paying child support, among other reasons.

— Obtain Short Term Disability Insurance if your business is in one of the locations which require it (currently New York, New Jersey, California, Rhode Island, Hawaii and Puerto Rico). Consult with your insurance agent.

— Determine what employment posters and notices you need to post in your workplace. Both state and federal laws require notices about discrimination in the workplace, wage and hour laws, and other legal issues be posted. These are often in an employee lunch room, or other location where employees would see them. There are many poster services on the internet.

— Ensure that your applicant paperwork is legally compliant. Yes, you probably can pick up a job application at Staples, but that does not guarantee that the form asks the questions that are pertinent to your business, or that are legal in your state. Educate yourself about the employment laws of your state. Often, your state will have a website with answers to questions about these issues.

— Some states have requirements regarding information that needs to be provided to new hires when they start working, generally about things like their compensation and pay days. Some states require that this information just be provided. Others require that it be in writing and that you have proof that it was relayed. An internet search for “new hire requirements [your state name]” can provide helpful information.

Although this may seem overwhelming at first, hiring your first employee means that your business is growing and expanding which is a good indicator. Both your accountant and your insurance agent can help you get things in place that are needed when hiring employees. As you expand, having an employment lawyer can also help you ensure compliance with the various employment laws. You want to make sure that you lay a good foundation and do things right from the start.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.



To see how our employee test can help you bring better people on board watch this three minute video.



If you have ever interviewed someone and later discovered a "different" person is working for you, check out our new book How To Hire The Right People.


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