New Year, New Updates!

Employment Policies Annual Checkup

Binders

A healthy employer and employee relationship is key to a productive work environment. By annually updating your employment policies and handbooks, you will maintain consistency, employee accountability, and legal compliance with the many ever-evolving employment laws. Here are some examples of the more important recent changes in the law that should be reflected in every employee handbook:

Maryland Sick and Safe Leave.  Effective February 11, 2018, all employers were required to update their employment posters and handbooks. The law requires employers to allow full-time, part-time, temporary and seasonal employees to accrue sick leave at a rate of 1 hour for every 30 hours worked up to a maximum of 40 hours annually. All employers are required to provide time off for sick leave, but employers with 15 or more employees are required to provide paid sick leave. The law provides costly fines and penalties if an employer fails to comply.

Anti-Sexual Harassment Policy: With the rise of sexual harassment complaints, it is more important than ever to implement an anti-harassment policy.  Such policy should include a definition of what conduct is prohibited, a clear reporting mechanism, assurance of prompt investigation, and a no-retaliation policy.

In addition, this past year Governor Hogan signed the “Disclosing Sexual Harassment in the Workplace Act.”  Effective October 1, 2018, the new law prohibits waivers of certain rights and remedies to sexual harassment claims in employment contracts.  It also requires employers with 50 or more employees to submit a report to the Maryland Commission on Civil Rights indicating (1) the number of settlements entered into based on allegations of sexual harassment; (2) the number of times the employer has paid a settlement to resolve a sexual harassment complaint against the same employee over the prior 10 years; and (3) the number of settlements of sexual harassment claims that contained non-disclosure provisions.  The first sexual harassment settlement reports must be submitted by July 1, 2020.

Drug Policy:  With the legalization of medical marijuana in over 30 states, employers should review and update their company drug policies.  Although in Maryland and in some other states, individuals may be issued a medical marijuana identification card, thereby allowing them to purchase cannabis for medicinal purposes, marijuana still remains an illegal substance under federal law. Accordingly, employees who use medicinal cannabis may be precluded from working on a federal government contract.  In addition, the mere fact that marijuana can now be used in some places, for limited purposes, does not mean that employers should automatically allow employees to use such substances in the workplace. Employers should evaluate how the use of such drugs may impact certain employee job responsibilities, including ones related to security and safety. As is always the case with employee policies, employers should communicate to employees the company policy regarding the use of marijuana in the workplace.

General Contractor Overtime Liability: Effective October 1, 2018, Maryland enacted a law making construction contractors jointly and severally liable for subcontractors’ failure to pay wages.  The new law makes contractors jointly and severally liable for wage payments on jobs for which the subcontractors have failed to pay their employees. This joint and several liability exists even if there is not a direct contractual relationship between the contractor and the subcontract that has failed to pay wages. Contractors should review and update their subcontractor agreements to ensure compliance with this new law.

Overtime and Safe Harbor Policy:  Properly classifying employees can save a company thousands of dollars in the event of a wage and hour claim.  In March of 2019, the U. S. Department of Labor plans to propose new overtime rules, which will raise the salary threshold for exempt employees.  With these expected changes, employers should review their overtime policies and ensure that they have a safe harbor policy in place.  The Fair Labor Standards Act provides a "safe harbor" that may preserve an employee's exempt status in the event impermissible deductions are made from an exempt employee’s pay. The rules provide that the salary basis component of the exemption test is not lost if the employer:

1.    has a "clearly communicated" policy prohibiting improper deductions, including a complaint mechanism;

2.    reimburses employees for any improper deductions; and

3.    makes a good faith commitment to comply in the future.

Equal Pay Policy:  The Maryland Equal Pay for Equal Work law provides that an employer may not prohibit an employee from inquiring about, discussing, or disclosing the wages of an employee or another employee, or requesting that the employer provide a reason for why the employee’s wages are a condition of employment. An employer is prohibited from requiring an employee to sign a waiver or other document to deny the employee the right to disclose or discuss the employee’s wages. The law also added pay transparency protections.  An employer’s pay policies should include pay transparency language.

Cheryl Brown is an attorney with the Business and Transactional practice group at Davis, Agnor, Rapaport & Skalny, LLC.  For questions regarding the update of your employment handbook, or your own labor and employment law matters, please do not hesitate to contact Cheryl.