Risky Business

Time-Off to Vote?

Our company, which has offices in 11 states, has received numerous inquiries from employees regarding our time-off policy for the purpose of voting in the upcoming general election. Is there a single law with national applicability that governs how employers must accommodate employees wishing to take time off from work to vote?

No. Although a citizen's general right to vote is established by federal law, the manner in which employers must accommodate employees wishing to take time off from work to vote is governed by state law. Unfortunately, since states are left to establish their own voting accommodation standards, there are significant differences in how employees may exercise their voting rights. For example, the time allotted to employees wishing to vote can vary from Nevada's "sufficient time," to Ohio's "reasonable time," or to Alabama's "one hour." Although Minnesota's statute does not set an express limit on the amount of time that an employee can take off to vote, it does provide that an employee has the right to be absent from work for the purpose of voting "during the morning of the day of that election." In some states, if the polls are open for a minimum period of time before the employee's regular shift begins, or if they remain open for a minimum period of time after the employee's shift ends, then the employee is not entitled to time off from work to vote. For example, in Georgia, an employee does not have the right to vote during his or her work hours if the polls are open for at least two hours before or two hours after the employee's regular work hours.

Other relevant issues include whether employees must be paid for the time they take off from work to vote and whether employees must give employers notice before taking time off to vote. However, some states have not enacted any laws addressing an employee's right to take time off from work to vote. Such a lack of uniformity among the states increases the likelihood that an employer will unwittingly violate an employee's right to vote. This is particularly relevant in cases involving employers that operate in several states because these employers may be required to afford their employees different rights depending on the state in which the employees work. Since the right to vote is widely regarded as fundamental, any violation of this right, even if unintentional, may be considered a serious legal infraction. Therefore, employers should consult with a licensed attorney before implementing a policy on an employee's right to take time off from work to vote.

Did You Know?

Did you know that in the event of a disaster, business interruption insurance can be just as vital to the survival of your business as coverage for your building and its contents?

While many business owners are concerned about property damage and the accompanying financial loss that can result from a disaster, they often neglect to protect themselves against the impact such damage could have on their revenue stream. That’s why they should consider acquiring business interruption insurance, which covers reductions in net income and provides an organization with the funds needed to pay normal operating expenses. Remember that a forced temporary closure of your business does not mean that your expenses stop. Payroll, mortgage/rent payments, money owed to suppliers, taxes, and even your own salary draw are all necessary expenses that you must meet. Business interruption insurance will keep needed capital flowing when you need it the most.

Extra expense insurance is also available to cover those expenses over and above normal operating costs that your company may incur as a result of maintaining operations during the repair/reconstruction period. Extra expenses are those that would not have been incurred had there been no loss or damage to your property, including the costs associated with relocating your business, such as renting space in a temporary location, advertising the new location, and obtaining additional equipment and supplies to sustain operations.

You have worked hard to establish your business and make it profitable. Being forced to suspend operations because of a fire, hurricane, or any other disaster has the potential to cause severe financial hardship. Adding business interruption coverage to your current insurance program is a prudent measure that can ensure that your company remains operational in the most difficult of circumstances—the times when the value of having the right insurance coverage becomes immeasurable.

Executive Exemption to Overtime Pay Requirement

We recently hired a full-time employee to assist our warehouse manager, who earns a salary of $500 per week, supervises and directs the assistant's work, and has the authority to report on the assistant's performance to management. Since our warehouse manager now supervises an employee, can we classify him as exempt from the Fair Labor Standards Act's overtime pay requirements?

No. Subject to specific exemptions, the Fair Labor Standards Act (FLSA) is the federal law requiring that employees be paid not less than time and one-half the employee's regular rate for time worked over 40 hours in a workweek. One such exemption is the executive exemption, which applies to employees: 1) who are compensated on a salary basis at a rate of not less than $455 per week; 2) whose primary duty is management of the business or of a recognized subdivision of the business; 3) who customarily and regularly direct the work of two or more other employees; and 4) who have the authority to hire or fire other employees or to recommend the hiring, firing, advancement, or promotion of other employees.

Although the employee in this situation appears to satisfy the first, second, and fourth requirements of the executive exemption, he clearly fails to satisfy the third requirement. The warehouse manager directs the work of only one employee, the newly-hired assistant, rather than the required minimum of two employees. Accordingly, the warehouse manager does not qualify for the executive exemption. While in some cases the facts clearly support the conclusion that the employee in question does not qualify for the executive exemption, as in this one, determining eligibility in other situations may require a detailed and fact-specific inquiry. This is especially true in cases in which either an evaluation of the employee's primary duties or of the employee's authority over subordinates is an issue. Employers who improperly classify an employee as exempt when that employee does not in fact qualify for the executive exemption face a much higher risk of being sued for unpaid overtime compensation and stand a much greater chance of losing that suit.

FMLA Provisions in Employee Handbooks

Due to the slowing economy, our company has been forced to downsize its workforce in the past two years, and, as a result, we are no longer large enough for our existing employees to qualify for coverage by the Family and Medical Leave Act (FMLA). Should we delete any references to the FMLA from our employee handbook?

Yes. The Family and Medical Leave Act (FMLA) was enacted to balance the demands of the workplace with the needs of families by allowing eligible employees to take reasonable leave for medical, health, or family reasons. The FMLA normally provides eligible employees with a total of 12 workweeks of leave during any 12-month period. However, the FMLA contains an exception to the statutory definition of "eligible employee" that applies to those employees at worksites where an employer employs fewer than 50 people-but only "if the total number of employees employed by that employer within 75 miles of that worksite is less than 50." This rule, known as the "50/75" provision, is an exception to the FMLA's general eligibility provision, which premises eligibility on an employee's having worked for the employer for at least 12 months and having worked a minimum of 1,250 hours during the previous 12-month period. Accordingly, employees who fall within the 50/75 exception are not entitled to FMLA leave.

However, the Seventh Circuit Court of Appeals recently held that an employee handbook may entitle an employee to FMLA leave even though, as a result of the 50/75 exception, the employee is clearly not eligible for it. The court relied on a provision in the company's employee handbook which stated that "all employees" who were employed with the company for at least 12 months and who had worked a minimum of 1,250 hours during the prior 12-month period were entitled to FMLA leave. The handbook did not contain any reference to the 50/75 exception. Under general contractual and reliance principles, the court held that the employee handbook may be considered a binding promise by the company to give FMLA-like leave benefits using eligibility requirements less restrictive than those in the FMLA. In other words, because of a poorly written employee handbook, the court held that the employee may be entitled to FMLA leave benefits even though he is not eligible for such benefits under the FMLA. If a company does not employ the number of workers required for FMLA eligibility, then the best way to avoid inadvertent extension of FMLA benefits is to remove any reference to the FMLA from the company handbook- after consulting legal counsel.