By Karen Galipeau Forner
Managing Attorney
Washington state employers face a great body of city, state, and federal employment laws that they must navigate, and it would take a book to outline all of them. There are a few keys areas, however, that stand out above the rest as frequently causing problems and leading to expensive litigation for employers.
Hiring Issues
When it comes to employment laws affecting standard hiring practices, there are three common pitfalls: (1) prohibited questions on job applications and interviews about criminal convictions and other protected categories; (2) improper background checks or screening tests; and (3) improper processing of the required I-9 form to determine an employee’s authorization to work in the United States.
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Collect forms used at application and hiring phases.
Review current employment application(s) and related forms.ΩCollect and review a sample of completed I-9 forms and assess current handling of completed forms.
Assess current background check and screening tests (if any) and collect related forms.
Review background check and screening forms.
Classifying Workers
State and federal law distinguishes between workers owed overtime pay (non-exempt employees) and those who are not (exempt employees). Much costly litigation centers on the allegation that a company has misclassified a group of employees as exempt when in fact those employees were non-exempt and due overtime pay. Similar lawsuits focus on the appropriate classification of workers as employees (protected by wage and hour laws) rather than independent contractors (non-employees excluded from wage and hour protections).
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Determine the extent of exempt and independent contractor classifications.
Evaluate the process that the company uses for determining exempt or independent contractor status.
Compensation Requirements
Washington State boasts one of the highest minimum wages in the country, and the minimum wage is even higher in the City of Seattle depending on the size of the employer. For construction companies working on federally- or state-funded projects, employees must generally be paid the prevailing wage (set by government standards).
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Collect names, jobs, and locations for all employees to ensure compliance with minimum wage laws.
Evaluate the company’s status for purposes of Seattle’s minimum wage requirements (i.e., determine factors to designate Seattle division as small, medium, or large employer).
Assist in identifying any projects on which prevailing wage rate must be paid and evaluate compliance of any subcontractors on projects.
Work and Break Time Reporting and Requirements
Employers must keep accurate records of all the time their non-exempt employees work, which means a consistent and accurate time reporting system is crucial. Washington employers must also give each employee regular (paid) rest breaks and provide an opportunity to take a (usually unpaid) meal break. While seemingly straightforward, there has been much litigation in Washington lately about missed rest and meal breaks, and this is an area in which many employers fall short.
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Assess current time reporting system.
Evaluate current rest and meal break practices; review related policies.
Protected Leave Entitlements
Employees in Washington State are entitled to a minimum amount of leave from work. The most commonly used leave includes family medical leave (both state and federal), pregnancy disability leave, family care, and paid sick and safe leave. (Employers will have obligation under the Paid Family and Medical Leave Act, beginning January 1, 2019.) Additional laws entitle employees to leave for military duty (or when a spouse is deployed to military duty), for victims of domestic violence, and for disability-related reasons.
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Collect and review relevant leave policies and forms.
Identify gaps in policy (if any) and prepare language to fill gaps.
Risk Class Reporting and Tracking Hours
Every employer operating in Washington is required to report and pay into the Workers’ Compensation system for each employee hour worked. The workers’ compensation classification system contains over 300 classifications based on the type of work performed. Each classification, or “risk class,” has an assigned rate that is used to calculate an employer’s workers’ compensation premium. When you first set up your workers’ compensation insurance with the Department of Labor and Industries, the department assigns a basic classification and probably several risk classes for your business. Employers are required to properly classify each employee hour worked in the proper risk classification assigned by the department. Employers can run into problems when they incorrectly classify their employee hours, when they do not keep adequate records to substantiate their reporting, or when the nature of their business changes but their risk classes do not. Incorrect reporting can lead to an audit of up to three years, citations, civil penalties and interest, and license suspension, and can even prohibit that company from bidding on public works projects.
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Collect and review risk class reporting documents.
Analyze risk classes and project descriptions to evaluate whether employee hours are being properly reported.
Record Keeping and Notice Requirements
City, state, and federal law requires employers to keep particular employment records for at least a three-year period. It is helpful, however, to keep some records even longer because it could help an employer defend against a lawsuit or government investigation. A good recommendation, therefore, is to keep payroll and personnel information for five years after an employee’s separation from employment (whether voluntary or involuntary). This includes records of how much each employee was paid (including whether pay was straight time, overtime, commission, piecework, etc.), how many hours they worked, and requests for leave. Some records should be kept even longer, including any employment contracts (subject to a six-year statute of limitations).
Employers are also required by city and state law to give each employee particular notices upon hire. The City of Seattle, for example, requires employers to give employees written notice of specific “employment information” upon hire or at any change in employment status that includes the employer’s name, physical address and contact information, pay rate, pay basis, regular pay day, and tip policies. More notices are required every time a paycheck is issued (or at least monthly, whichever happens more regularly) to inform each employee about his or her paid sick leave balance.
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Assess employment information given to employees at hire.
Review a sample of paycheck stubs to evaluate adequacy of regularly required notices.
Handbook Review
While no law requires an employer to issue employee handbooks, most employers use handbooks as a valuable management tool. Indeed, they are particularly useful in distributing a company’s anti-harassment and discrimination policies. These policies are necessary to establish an important legal defense available to employers should harassment or discrimination litigation arise, but more importantly, a well-drafted policy and communicated reporting procedure can stop a problem in its tracks. Other policies or explanations of employment standards often included in handbooks, while not legally necessary, go a long way to ensuring consistent treatment for similarly situated employees and is a convenient tool for distributing other information required by law to be distributed to employees. It is crucial that handbooks be reviewed to ensure they are up to date with the ever-changing and expanding state and federal employment laws.
To assess and analyze compliance with city, state, and federal laws in these areas, a company should do the following, ideally with a human resources expert or an employment attorney:
Collect current handbook or employment policies issued to employees.
Review and revise current handbook for compliance with state and federal law.
This is not an exhaustive list of the state and federal law that Washington employers face. These eight areas represent, however, the most common pitfalls that employers can fall into. Ensuring compliance in these areas will go a long way toward protecting your company from potential problems and expensive litigation. ß
Karen Galipeau Forner is the founder and managing member of K-Solutions Law in Bellevue, Washington. Karen represents employers in the areas of workplace safety, workers’ compensation, administrative appeals, and employment law. She is a frequent presenter at continuing legal education seminars and to employer groups. Karen has over 25 years’ experience defending and resolving a wide range of workers’ compensation, WISHA, and employment law matters. Prior to starting K-Solutions Law, Karen worked as senior attorney at a law firm in Seattle and for the Washington State Attorney General’s Office. She was the Program Advisor for the Industrial Insurance and Washington Industrial Safety and Health Act (WISHA) Discrimination Programs for more than 10 years and the Program Advisor for the Workers’ Compensation Sren also litigated complex WISHA, Industrial Insurance, Third Party, and Crime Victims Compensation Act cases. She recently served on the Washington State Bar Association Character and Fitness Board.
