Giving employees raises and bonuses can be complicated. As we previously discussed, misclassifying a bonus can result in an accounting nightmare. And one well-intentioned employer misstep, such as promising an employee payment of a bonus, can quickly reclassify a discretionary bonus as a non-discretionary bonus that must be accounted for in a non-exempt employee’s regular rate. When workers unionize, an additional wrinkle is added to the complex landscape of bonuses and raises – whether or not an employer must continue to give raises and bonuses to its employees after they unionize.
While the Act is broadly applicable to qualifying businesses, employers should pay special attention to their duties under the Act as described below.
When terminating an employee, an employer should create documentation showing the reason for and circumstances relating to the termination. The documentation serves two purposes. First, it helps the employer remember why it terminated the employee, especially in situations where the original decision makers are no longer with the employer. Second, it will help the employer defend challenges to the termination decision (e.g., a discrimination claim). For example, if the employer has contemporaneous documentation showing it terminated an employee for a legitimate reason like failure to follow safety practices, that documentation will lend credibility to the employer’s version of events and help discredit the employee’s claim the termination was for a different, improper reason.
The Massachusetts General Court has passed legislation that, if signed by the governor, will comprehensively reform the law governing employee noncompetition agreements and trade-secret misappropriation. If enacted, these laws will become effective October 1, 2018, giving Massachusetts employers only two months to assess their current practices and adapt to the new laws.
Last Thursday, July 26, the California Supreme Court issued an opinion concluding that coffee retailer Starbucks must pay its employees for off-the-clock duties that take several minutes per shift. In issuing its opinion, the Court rejected Starbucks’ request to invoke a federal wage rule (known as the de minimis doctrine) that excuses employers from paying employees for small, hard-to-measure increments of time.