Handling Former Employees Request For Personnel Files And Payroll Records

September 28, 2009

In any given month, we receive calls from employers whether or not they have to provide former employees with copies of their personnel files and/or payroll records. The easy answer in both situations is “yes.” In reference to personnel file requests it is obvious that the individual may be contemplating taking it to an attorney or their attorney has asked them to get a copy so that he or she may see if there is anything contained in it that may sway them in either a direction to file a lawsuit or to pass on filing. The reason for these requests normally have to do with an allegation of discrimination or wrongful termination. In some cases the attorneys get an authorization from the former employee to make the request.  Under the California Labor Code they are entitled to it and the employer can be fined for not providing it. If you receive such a request and want us to review the file before it is sent just give us a call. As many of you probably already know, under the labor code an employee is only entitled to copies of papers that have been signed by the employee, however, these requests by former employees include copies of the entire file. We review the file to ensure that there is nothing in the file that should not be there (such as I-9’s as an example).

Payroll records request are different and the reason for asking for them normally has to do with a possible wage and hour claim. Honoring these requests are more cumbersome because they can ask for records going back 3 years. These requests can be either verbal (by current employees as well) or in writing. You must grant access to inspect the records within 21 days of the employee’s request. If you do not provide the records you can be required to pay the employee $750.00.

As a final note employers may also receive a subpoena for records (either for a personnel file or payroll records) and it has nothing to do with the employer. They are normally requested because there is some type of litigation going on. Look in the “caption” portion (Smith v. Smith) and look to see who is being sued. Divorces or some other civil litigation are both common for such requests. Don’t worry about those.

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House Moves To Extend Unemployment Benefits BY 13 Weeks

September 28, 2009

Despite predictions that the “Great Recession” is running out of steam, the House (Washington) is expected to pass a bill that would extend unemployment insurance benefits by 13 weeks. The extention would supplement the 26 weeks of benefits already offered by California. Critics of the bill are already weighing in that in their opinion such a measure would be a disincentive to looking for work and that extending the benefits would be at a time when the economy is showing signs of recovery could be counterproductive.

I can tell you that the number of unemployment claims processed by Potts & Associates have been diminishing over the past several months which, for us, is a sign that our clients may have stabilized their respective workforce or have substantially slowed down in laying off staff. Either way it is a good sign on a smaller state and national scale. Hopefully by the end of the year we can all be looking toward a more promising 2010.


Employees Copying Company Files Before Resigning-Court Says Ok!

September 20, 2009

In another irritating, anti-employer decision, the Ninth Court Circuit of Appeals (covering California) ruled that an employee who copied company files before resigning did nothing wrong! The practice of such behavior is not surprising. It happens more than you may think and with technological advances comes more creative ways for employees to take confidential information away from their place of business. Personal data storage devices and email permits information to be easily transmitted without the employer’s knowledge. Sad but true.

The facts in this case were actually very simple. A former employee had emailed numerous files from his work computer to his personal email account, as well as to his wife’s email account before he left the company. The files that he copied included financial statements, marketing data, and personal information about the employer’s clients. In addition, he used an administrator’s password to access the company’s network after he left the company.

The employer sued arguing that the former employee violated the federal Computer Fraud and Abuse Act, which prohibits unauthorized computer access, or access to computer systems that exceeds authorization. The court ruled that since the employer had given the employee (former) authorization to access company files the employee had done nothing wrong.

Where did the employer go wrong? They failed to have an established policy prohibiting employees from copying company files for personal use or emailing them to a personal email account. Furthermore, how in the world did the employer fail to change the access codes after the employee left?

Now let’s discuss what an employer should do to try and safeguard their confidential information.

1. Have a policy in place prohibiting employees from copying company files for personal use (or emailing);

2. Limit access to highly confidential information to a select few;

3. Change the codes upon the departure of individuals who had access to the sensitive information;

4. Have a selected “IT” person monitor who is accessing the information and note any downloading of files;

5.  Have a policy in place limiting the use of personal data storage devices (or even bringing them to work).

We have clients who prohibit employees from bringing cellphones or other such devices to work. Such policies are not an infringement on their individual rights. Good luck!


Two Newly Enacted California Statutes-Noose Hanging and Sports Betting Pools

September 14, 2009

According to A.B. 412 any person who hangs a “noose,” knowing it to be a symbol representing a threat to life and for the purpose of terrorizing another, on the property of a school, park, or place of employment can now be punished by imprisonment in the county jail and or/fined up to $5,000! This act is considered a hate crime.

According to A.B. 58 participation in a bet, wager, or betting pool (football season is here!) with another person, or group of persons, who are not acting for gain, hire or reward other than that which is at stake for every participant based on the result of a contest or event, including a sporting event, shall no longer be a misdemeanor nor felony! Yep, that means prior to this change any of you that got in on the office pool for events like the World Series or Superbowl could have been convicted of a misdemeanor or felony! Well that law has been changed. Now, it is only an infraction (like getting a ticket), punishable by a fine not to exceed $250.00 (whew, just in time for the upcoming baseball playoffs. LOL).


Employer May Be Liable For Injuries To Pedestrians Caused By Executive Returning From Conference

September 14, 2009

After returning home from a three-day business conference, an executive from Warner Brothers was involved in an automobile accident that killed one and injured two other pedestrians.  Plaintiffs argued that the employer was liable based on a legal theory called “Respondeat Superior” which simply means the employer is liable because he was working at the time. Warner Brothers argued that they were not liable because of the “going and coming rule” which provides that an employer is not subject to vicariuos liability for accidents that occur during an employee’s commute to or from workplace. Plaintiffs argued that the conference was a “special errand” and that the employer, therefore, was not protected by the going and coming rule. When it was all said and done, the trial court threw the case out, but the Court of Appeals reversed that decision and held that the executive was on a special errand for the employer and, therefore, he was acting within the course and scope of his employment until he arrived at home or deviated from the errand for personal reasons.

This case obviously has far reaching implications. Anytime an executive (or an employee on a special errand-going to the post office to drop off mail on the way home) is returning from a business appointment and heading home arguably the employer may be liable until they reach their home. If they stop at the grocery store on the way home that breaks the causal connection and anything that happens after that brief stop is on them.


Labor Board Approves Reduction In Managers’ Hours & Compensation

September 8, 2009

For years the California Labor Commisioner had strict guidelines regarding managers’ compensation and any reduction in their wages. In an about-face the California Division of Labor Standards Enforcement issued an opinion that concluded that an employer facing economic difficulties will not violate California law by reducing the work schedules (and compensation) of managers, supervisors, and other employees who are exempt from overtime.

Previously, you may recall, the Division of Labor Standards Enforcement (DLSE) had concluded that reducing an exempt employee’s salary following a corresponding reduction in hours violated the “salary basis test,” which required that exempt employees be paid for the entire week if they worked any part of it. Now, according to the DLSE, employers who are facing economic difficulties are free to reduce exempt employees’ work schedules and salaries as a cost-savings measure. As an example, an employer may instruct some or all of its exempt employees not to come to work on Fridays and reduce their salaries by a corresponding 20 percent.

There are some “caveats” that clients need to be aware of. The DLSE also made it clear that the employer better be able to show:

1. That the employer is experiencing “significant economic difficulties”;

2. that once business conditions permit, the employer intends to restore the prior workweek and salary levels; and

3. the affected employees will still be earning a monthly salary of at least twice the state minimum wage for full-time employment.

As a final note, the opinion letter does not involve non-exempt (hourly) employees. An employer is always free to reduce their hours.