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Deductions from final paycheck in Colorado

We are going to let an employee go because of excessive misuse of his company credit card. He used it for numerous personal expenses. The employee admitted to using it by accident, and we were just about to give him the benefit of the doubt even though there were over 240 personal charges. Then we caught him in a big lie regarding one of the charges, which is why we have decided to term his employment at our company. Can I withhold what he owes us from his last paycheck? We are in Colorado. Thank you.

The Colorado Department of Labor and Employment outlines permissible deductions from employee wages to include the following:
1. Deductions mandated by local, state, or federal law, such as taxes, FICA requirements, garnishments, and court-ordered deductions.
2. Deductions for loans, advances, goods or services, and equipment or property provided by an employer to an employee pursuant to an enforceable written agreement.
3. Deductions to cover the cost for theft if a report has been properly filed with law enforcement.
4. Deductions authorized by an employee that are revocable, including medical insurance, savings plans, stock purchases, pension plans, charities, and deposits to financial institutions.
5. Deductions for union dues.
6. Deductions for the amount of money or value of property that the employee failed to properly pay or return when the terminated employee was entrusted with such money or property.

Impermissible deductions include those for property damage or as fines for employee behavior or actions. Wage deductions cannot reduce an employee’s compensation below the minimum wage.

So, an employer is able to recoup, via wage deductions, expenses incurred by an employee misusing a company issued credit card for personal purchases. However, a written agreement that complies with Colorado law must be in place prior to such deductions.

Keep in mind, under Colorado law, when an employee is fired, the employer must give him a final paycheck immediately, or within six hours of start of the next business day if the payroll office is closed, or within twenty-four hours if the payroll office is offsite.

July 29th, 2014, 12:18 PM |  Posted in: Compensation |
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Employee asked to be laid off

An employee on leave asked me to fire her or lay her off so that she can collect unemployment. She hs advised me through a text message that she does not intend to return to work and that if I do not lay her off, she will eventually return and quit, I have no idea what is really wrong other than the fact that she has had a note (well really a prescription pad) stating that she cannot work for another 30 days. What advice do you have for what our options are that are fair to us? We pay 50% of her health care premiums.

Whether the employee is on a legally protected leave or a personal leave, the employer still has obligations to uphold and ways to reduce its expenditures.

The Family and Medical Leave Act (FMLA) entitles eligible employees to take up to 12 workweeks within a 12-month period of job protected, unpaid leave for a serious health condition. Under the FMLA regulations, employers are required to maintain an employee’s coverage under any group health plan while the employee is on leave. Also, an employee on FMLA leave is entitled to job reinstatement upon return from leave. However, if an employee on leave provides notice of her intent not to return to work, the employer’s obligations change.
The FMLA regulations are clear that if an employee gives unequivocal notice of intent not to return to work, the employer’s obligations under FMLA to maintain health benefits, subject to COBRA requirements, and to restore the employee’s job cease. However, these obligations continue if an employee indicates he or she may be unable to return to work but expresses a continuing desire to do so. The text message can be accepted as a resignation notice assuming it is unambiguous and without a doubt expresses the employee’s intent to not return to work.

It’s recommended to print the text message and send follow up communication to the employee. A formal letter is preferable. Indicate in the letter that you have received her text message stating her intent to not to return to work and her resignation is accepted effective immediately. Be sure to follow any normal resignation procedures such as requesting the return of an ID badge or other company property. Retain copies of all documentation.

It’s in the employer’s best interest to ensure the employee’s intent not to return to work is clear. The slightest ambiguity should be clarified with the employee prior to accepting the message as resignation and terminating health benefits. If the employee rescinds her notice and states she will be returning to work, the employer is within its rights to periodically check in with the employee while on leave to ensure her intent to return to work.

Employers are able to seek reimbursement for health care premiums paid on the employee’s behalf if an employee doesn’t return from unpaid FMLA leave. Premiums cannot be recovered if the employee was on a paid leave or cannot return to work due to circumstances beyond the employee’s control, such as a FMLA qualifying condition. The employer’s intent to recoup premiums should be communicated to the employee at the time the leave was authorized. Employers can recover the costs through salary deductions; however, such deductions comply with federal and state regulations.

An employee on a personal leave of absence outside a state or federal protected leave can be managed in the same way as if she was on FMLA leave. Employers should provide clear, written expectations regarding the employee’s responsibilities while on leave and the employer’s intent to recoup health plan premiums if the employee doesn’t return from leave when the leave is authorized. Doing so ensures the employee is aware of her responsibilities.


Attendance during Pregnancy

I have a pregnant employee. What are the employer rights in regards to attendance if the employee is not using FMLA until later in the pregnancy. Example: she is calling in because “she doesn’t feel good” but it not necessarily being related to the pregnancy. She is not under any medical restrictions at this time..we’re happy to work with her, but feel that she is taking advantage of her situation. Do we have to accommodate that or are we able to apply regular attendance rules for her? She is not under restrictions at this time. I am aware of treating her the same as any other temporarily disabled or ill employee. I need to know what accommodations need to be made while she is NOT on any type of leave of absence.

The same time and attendance policies should be applied to the pregnant employee as to any other employee. Though being pregnant doesn’t necessarily award special rights to an employee, there are legal parameters to be aware of.

Under the Pregnancy Discrimination Act (PDA), if an employee is temporarily unable to perform her job due to pregnancy, the employer must treat her the same as any other temporarily disabled employee, as you mention. Thus, if other temporarily disabled workers are expected to adhere to the company’s time and attendance policies then the pregnant worker is expected to do so as well. The PDA also forbids discrimination based on pregnancy when it comes to any other aspect of employment, including pay, job assignments, promotions, layoffs, training, fringe benefits, firing, and any other term or condition of employment.

Pregnancy itself is not considered a disability under the Americans with Disabilities Act (ADA); however, pregnancy related conditions such as gestational diabetes may be considered a disability. An employer may have to provide a reasonable accommodation for a disability related to pregnancy, absent undue hardship. Flexible schedules or light duty may be considered reasonable accommodations.

The Family and Medical Leave Act (FMLA) entitles eligible employees to take up to 12 workweeks within a 12-month period of job protected, unpaid leave for a serious health condition. FMLA leave may be taken intermittently or on a reduced leave schedule under certain circumstances. However, it seems the employee’s absences are not due to medical issues at this time; so, the ADA and FMLA most likely will not apply right now.

It’s recommended to have a conversation with the employee. Explain the affects her time and attendance issues are having on the office and her job responsibilities. Inform her that she will be awarded the same benefits as any other employee with a medical condition, but no more. Make her aware that if she has medical issues due to her pregnancy that she may apply for intermittent FMLA leave or reasonable accommodations can be discussed. Make it clear that she will be held to the same time and attendance policies as any other employee including the consequences of not following such policies. Be sure to follow up and document continued policy violations. Hopefully, the conversation will enlighten the employee as to both her and the employer’s responsibilities in this situation.

July 27th, 2014, 1:17 PM |  Posted in: Human Resources Management, Labor Laws |
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Restaurant Wage and Hour Laws in Louisiana

I have a couple of questions? 1. Can a company do a letter to servers stating to them that the company will not pay the difference between there tip wage and base pay if they do not make minimum wage in a pay period? 2. Can a hourly server cross train as a cook within the same pay period? 3. Can you have more than one cook on a salary in a restaurant? This is for the state of LA. I am the Human Resource Manager here and am not familiar with the laws for a restaurant business. Thanks for your input.

Louisiana doesn’t have state minimum wage or tips/gratuities laws. So, we defer to the federal Department of Labor, specifically the Fair Labor Standards Act (FLSA), for guidance.

The FLSA establishes minimum wage, overtime, recordkeeping, and youth employment standards. Most American workers are covered by the FLSA. There are two ways in which an employee can be covered by the law: enterprise coverage and individual coverage. Enterprise coverage refers to businesses or organizations employing at least two employees, having an annual dollar volume of sales or business done of at least $500,000, and hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies. Absent enterprise coverage, employees are protected by the FLSA if their work regularly involves them in interstate commerce.

Under the FLSA, employees are classified as non-exempt or exempt. Non-exempt employees must receive at least minimum wage for each hour worked and overtime wages of one and one-half times their normal wage for each hour worked over 40 in a workweek. To qualify for exempt status under the FLSA, employees generally must meet certain tests regarding their job duties and certain compensation requirements. Exempt employees receive a fixed, pre-determined salary for a workweek.

Non-exempt workers are entitled to the federal minimum wage of $7.25 an hour. An employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips (except to the extent that they participate in a valid tip pooling or sharing agreement) and the employee customarily and regularly receives more than $30 a month in tips. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.

Employees must be informed in advance if the employer elects to use the tip credit, the amount of tip credit to be claimed, and the employer must be able to show that employees receive at least the minimum wage when wages and tips are combined. Also, tipped employees who receive $2.13 per hour in direct wages are still subject to overtime pay at one and one-half times the minimum wage, not one and one-half times $2.13.

To answer question #1, stating that the employer will not make up the difference if the employee doesn’t earn minimum wage is illegal. If combined wages and tips don’t equal the federal minimum wage, the employer must make up the difference.

To answer question #2, a non-exempt server may cross-train in other positions within the same workweek. The FLSA allows an employee to only have one classification based on their primary job duties. So, even if cooks in the establishment are exempt the server must maintain his initial classification as non-exempt and be paid for each hour worked. Assuming cooks don’t receive tips, the server must receive at least minimum wage for hours worked as a cook.

To answer question #3, there is no limit to the number of non-exempt salaried or exempt salaried employees in a restaurant. However, it must be ensured that employees are classified correctly. Please feel free to read our previous posts regarding FLSA classifications.

Misclassifying cooks as exempt is very common in the restaurant business. Since classification is not based on job title, it’s important to confirm that the cooks’ job duties and salaries meet the qualifications for exempt classification.

The restaurant industry can present a wide range of FLSA concerns. Managers who take a proactive role in ensuring FLSA standards are met will benefit in the long run. Some of the topics discussed in this post as well as other common FLSA issues in the restaurant industry can be reviewed in Fact Sheet #2: Restaurants and Fast Food Establishments Under the Fair Labor Standards Act (FLSA) provided by the Department of Labor.


Hourly employee absence

If a non-exempt employee is absent and not paid for the absent hours, but another hourly employee who is paid a higher wage does the job for the day, can the employer deduct the difference in pay from the first employee?

The federal Fair Labor Standards Act (FLSA), which establishes wage and compensation guidelines, requires non-exempt employees be paid for all hours worked in a workweek. Non-exempt employees must receive overtime pay at a rate not less than one and one-half times the regular rate of pay for all hours worked over 40 in a workweek. Generally, compensable hours worked include all time an employee is on duty or at a prescribed place of work and any time that an employee is suffered or permitted to work.

While an employer cannot refuse to pay a non-exempt worker for hours that the employee has worked, the FLSA does not prohibit employers from reducing a non-exempt employee’s hourly wage rate. The decrease cannot reduce the employee’s hourly pay below the minimum wage.

Employers may choose to reduce a non-exempt employee’s hourly wage for business need or disciplinary action. However, reducing a non-exempt employee’s hourly wage solely for the purpose of recouping wages paid to another employee is not advisable. Doing so exposes the employer to defending its actions in court for potential wage and hour violations as well as discrimination claims if the employee is being penalized for an absence covered under a federal or state leave or disability law. In addition to legal implications, such wage reductions will most likely decrease employee morale and job satisfaction leading to higher turnover and reduced productivity. Assuming the employee didn’t have a choice of which co-worker covered his shift, why should he be responsible for the additional wages needing to be paid to the second worker?

The overall cost to the employer may end up being significantly higher than the additional wages paid to the second employee. In reiteration, the reduction is question is not advisable.

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