Q: The Holidays can be a gift to Plaintiffs’ attorneys and disgruntled employees. Are there any strategies that an employer should utilize so that this holiday season employers can enjoy the man with a red suit and not a New Year’s lawsuit?
A. Yes. Here is our BMJ Holiday Employment checklist. Check it twice.
○The Holiday Party
Just because the employees are offsite (or onsite after hours) does not mean they are not subject to sexual harassment rules and laws. Parties can cause employees to be merry, but they should not be too merry…or …well…just plain naughty. To that end, employers should remind employees to keep dress appropriate and their behavior nice.
Also, employers should think carefully before serving alcohol at their holiday parties. Not only may it facilitate inappropriate comments (and lawsuits in the new year), it may also lead to other more dangerous situations, like drinking and driving. To limit exposure, employers who still want to serve alcohol may want to limit employee alcohol intake by issuing drink tickets, employing private bar tenders (who check IDs and refuse to serve people who have had too much), and closing the bar early. Also, employers should offer rides or reimbursement for Uber or taxis.
Finally, employers should not require (or strongly suggest) that employees attend the party if it is outside working hours. If it is considered a requirement, then it is compensable time, and an employer will need to pay their employees for attending.
California does not require paid time off for holidays or additional wages for employees who work on holidays. If an employer does pay a holiday premium and employees work overtime, the premium does not need to be calculated in their overtime rate. In other words, premium holiday pay is not considered part of the “regular rate” of pay. Indeed, an employer is allowed to credit the time and one-half premium pay on holidays against the overtime otherwise owed to the employee. Additionally, small holiday gifts or discretionary holiday bonuses are not included in the “regular rate.”
Also, please note that if an employer does provide a paid holiday off (e.g., it provides 8 hours of pay and the employees are not required to come to work), this paid holiday off does not count as time worked to determine whether an employee worked more than 40 hours for the purposes of overtime.
Some employers like to give gift cards to their employees during the holidays. These may be deemed taxable income if the gift card can be considered a cash equivalent under Treasury Regulations section 1.132-6(c). The IRS considers a gift card to be a cash equivalent if it provides for the purchase of general merchandise, as opposed to being used to redeem a specified item.
While this is the time of year we all want to give back, remember that “volunteer work” is only allowed without contemplation of pay for individuals who volunteer for a nonprofit or like organization. In other words, an employer must be careful if their company is partnering with a charitable organization and their employees seek to donate their time. If an employer is directly involved in giving, the employer should take care to also give its employees their pay if the employees are providing their time to the charitable cause. Also, if the employees’ children want to help out (once school is out) you may run into child labor law issues.
○ Religion in the Workplace
The California Fair Employment and Housing Act prohibits religious discrimination of any kind. But, this is tricky because the law does not permit prohibiting all forms of an employee’s religious expression. As such, employers need to walk a delicate line. That said, employers should be wary of religious-themed décor and other forms of displays and expressions that discuss religion.
○ Payday falls on a holiday
An Employer’s established payday sometimes falls on a holiday. The Civil Code defines “holidays” (which includes every Sunday). If payday falls on a defined holiday, pay may be provided on the next business day following the holiday.
From everybody at the BMJ Employment Law Team – Happy Holidays and a lawsuit free New Year!