The Top 10 Employment-Related Things WISPs and Telecom Companies are Doing to Get Sued Many of the discussions on the WISPA lists revolve around ways that WISPs and telecom companies can (or don’t!) comply with FCC regulations. Overall, the WISPs, ISPs, and telecommunications companies that we represent are extremely well-versed in these areas. In our experience (other than the odd “patent troll” cases that Lewis Bergman and a few others have faced), telecommunications companies most often get sued for reasons that are completely unrelated to their core operations! We’ve put together these top 10 areas that our clients have encountered that have led to lawsuits or audits, and we will be discussing them as part of the panel discussion “As We Grow - Learn How to Protect Yourself Against Legal Issues” at 3:45 p.m. on Tuesday afternoon at WISPAPALOOZA. Is your company in compliance with the latest guidance? Do you know if your company could pass an audit or defend against a lawsuit? Don’t risk fines, penalties, and fees unnecessarily. WISPA members who use Franczek Radelet services have access to special rates and lower-cost services not available to non-members. Franczek Radelet’s dedicated WISPA liaison, Doug Hass, can be reached anytime at [email protected]<mailto:[email protected]> or (312) 786-6502 to discuss any questions you might have about the ten areas below, or anything else. We can also set a time to meet at WISPAPALOOZA to discuss any questions in person. 1. Classifying all employees as exempt, whether they are or not It can seem easier just to pay everyone a weekly salary and avoid the complications of meal and rest breaks, overtime, time clocks and more. Everyone makes the same amount of money every week—easy right? Unfortunately, under both state and federal law, many jobs are not exempt from overtime requirements, or meal and rest breaks. Employees cannot agree to an exemption, either. Many employers are sued for failure to provide meal and rest periods for non-exempt employees improperly classified as exempt. We recently defended a small telecommunications company in a lawsuit by their handful of installers for unpaid wages and overtime that resulted in a settlement of $170,000. The employer thought they were making it easier for everyone by just paying a salary and giving some of the employees a 1099. They never sought an attorney’s review, and by the time they were sued, it was too late. 2. Classifying employees as independent contractors This is currently one of the most litigated areas, both by workers and by state and federal agencies. Just because your employee works two jobs or because you both agree that giving him or her a 1099 is better does not make that person an independent contractor. As suggested above, installers are among the most common misclassified telecom workers, followed closely by sales staff. Do you pay any employees a salary? Do you pay any workers using a 1099? Do you pay anyone on a “commission only” basis? Do you do work for public entities, like federal or local government, that mandates a “prevailing wage”? If you have not had an employment attorney review each of you job classifications in the past year, we strongly encourage you to do it now rather than after you get sued or audited. 3. The ICE man cometh! Failing to complete Form I-9 What do Abercrombie & Fitch, Chipotle, Hoover Vacuum Cleaners and Krispy Kreme all have in common? All of them failed government audits of their I-9 forms in recent years, paid millions of dollars in fines for their noncompliance, were forced to immediately terminate large segments of their workforces, and endured the resulting bad publicity that comes with being one of “those” employers. U.S. Immigration & Customs Enforcement (ICE) audited over 3,000 companies last fiscal year, and will break that record this year. Since 2009, ICE has levied over $60 million in fines and filed criminal charges against nearly 200 business owners, managers, and supervisors—most of them small businesses with under 50 employees. Have you properly completed all I-9 forms for every employee (including yourself!)? Do you know if your company could pass an audit? Don't risk fines of up to $1,100 per violation (or more) or possible criminal charges because of paperwork errors that we can help you correct now. 4. Flexible lunch breaks 20 states (CA, CO, CT, DE, IL, KY, ME, MA, MN, NE, NV, NH, NY, ND, OR, RI, TN, VT, WA, WV) have laws requiring non-exempt employees to receive lunch breaks and/or work breaks. Some states even stipulate WHEN you must give these breaks. If you have employees in any of the states above, talk to us about your current practices so that we can help you avoid some very common—and very costly—errors. 5. Vehicle use agreements Telecom employers are among the heaviest users of vehicles—both personal and company-owned—for business. Yet, most employers that we talk to have no policies or agreements in place for their employees who use these vehicles. Who is responsible for insurance? Does your employee’s insurance even cover work-related activity? What about texting while driving? If your employee gets in an accident, blows an engine, or gets a flat tire, who pays for the repairs? Don’t let your employees drive any vehicle for work without having a policy or agreement in place first. 6. Non-compete agreements Even in the highly competitive world of Internet providers, many employers still don’t require their key employees to sign non-compete agreements to protect company information and customer lists, and to keep employees from working for the competition. Human capital is nearly as important, if not more so, than your radios, routers, and towers. Talk to us about how best to protect your intangible business information in your state. 7. Regular harassment and discrimination training Rules vary on whether harassment and discrimination training is required by law. California, Maine and Connecticut mandate it; other states simply recommend it. Not only are EEO policies and EEO training for your first-line supervisors the best way to prevent harassment or discrimination, they’re also your best defense against a harassment or discrimination complaint. The first thing the EEOC or a plaintiff’s attorney will ask to see are your policies and your records of training. Don’t have any? It’s a big strike against you. Check with us to see if your state requires any discrimination training and to put together formal EEO policies if you don’t have them. 8. Letting employees decide which and how many hours they want to work each day Federal and state laws restrict the number of hours an employee can work without payment of overtime. “Comp time” or “flex time” is not generally allowed by federal law for private employers. If you have a formal or informal comp time or flex time policy, you need to follow the rules to ensure you don’t incur overtime or back pay liabilities along with penalties. Check with us for more details on which laws apply in your state regarding pay and scheduling. 9. Terminating employees for taking a leave of absence Even for smaller employers (as few as 5 employees in some cases), state and federal law may protect employees from being fired for taking family or medical leave, military leave, workers’ compensation, or serving on jury duty, just to name a few. The EEOC can even require you to provide a “reasonable accommodation” of…more leave! Before you decide to let someone go who was, is, or will be taking leave, check with us to make sure that you have documented everything appropriately and taken all the steps you can to mitigate any risk. 10. Failing to provide a final paycheck or to pay accrued vacation Many states, including Illinois for example, require employers to give employees their final paycheck at termination, and to include accrued benefits like vacation or paid time off. Even if your employee has not returned uniforms, phones, laptops or other items, you may not be able to withhold a final paycheck or make deductions from it. The vast majority of states permit “use it or lose it” vacation policies (but not California!), but even the most employer-friendly states often have some requirements for employers to follow. Accrued but unused vacation or paid time off can be considered a form of earned compensation that you must pay out when an employee leaves. Failing to pay final paychecks as required are an easy way to end up defending wage claims, lawsuits, and audits. Compliance is usually very easy! We can help you understand what your state requires you to have in place to avoid this common and expensive mistake. Do you have questions or topic ideas for future Franczek Radelet Legal Updates? E-mail or call Doug Hass at [email protected]<mailto:[email protected]> or (312) 786-6502.
Douglas A. Hass Associate 312.786.6502 [email protected] Franczek Radelet P.C. 300 South Wacker Drive Suite 3400Chicago,IL 60606 312.986.0300 - Main 312.986.9192 - Fax http://franczek.com<http://www.franczek.com/> Franczek Radelet is committed to sustainability - please consider the environment before printing this email. ________________________________ Circular 230 Disclosure: Under requirements imposed by the Internal Revenue Service, we inform you that, unless specifically stated otherwise, any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or tax-related matter herein. ________________________________ For more information about Franczek Radelet P.C., please visit franczek.com. The information contained in this e-mail message or any attachment may be confidential and/or privileged, and is intended only for the use of the named recipient. If you are not the named recipient of this message, you are hereby notified that any dissemination, distribution, or copying of this message or any attachment thereto, is strictly prohibited. If you have received this message in error, please contact the sender and delete all copies. ________________________________
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