Firing / Terminating Employees in Texas – Creating a Paper Trail

Earlier in this blog, I mentioned documenting any employee disciplinary actions that you decide to take as an employer.

Documentation helps in a number of ways. First, it will help refresh your recollection of events if your decision is challenged at a later time. Next, it will provide a contemporaneous record to demonstrate that you are not simply “making stuff up” after the fact. And proper documentation can also demonstrate that you acted in a non-discriminatory and non-harassing manner.

When documenting your actions, consider including the following items:

• a copy of your employee policies, with the employee’s signed acknowledgment of those policies;
• a copy of any documents that you reviewed, tests that you performed, and interviews or statements that you obtained when you investigated the incident giving rise to termination;
• a copy of all prior warnings or disciplinary actions that you gave to the employee prior to making the decision to terminate employment;
• a copy of any response or explanation provided by the employee concerning his or her actions;
• a copy of any resignation letter or email from the employee;
• if termination is due to a reduction-in-force or “layoff,” documents reflecting the neutral business-related criteria that you used to select those employees who were terminated; and
• if possible, a signed acknowledgment that the employee has received his or her final pay with a full release of any future claims to overtime pay or other compensation.

When in doubt, particularly if you have had continuing problems with a particular employee, you may wish to consult with an outside legal professional or in-house counsel before taking firing an employee. 

By: Cynthia W. Veidt

 

Texas Employment Law Basics for Employers: Employee Discipline

Employers face the unenviable task of determining when and how to discipline employees for violations of the company’s policies or federal/state laws. Inevitably, the employer must consider whether taking disciplinary action will result in a claim by the employee of discrimination, harassment or other legal claims.

As an employer, you will never be “bulletproof.” But there are a few things that you can do to help minimize risk and maximize your defense when you must take appropriate disciplinary action.

First, make sure that you have communicated your policies and procedures to your employees in writing, preferably with a signed acknowledgment of receipt by each employee.  This should include your workplace rules and expectations concerning attendance, safety, employee conduct, and how you will address theft or other violations of criminal law, violations of non-discrimination and anti-harassment laws, and violations of workplace rules.

A progressive disciplinary policy is recommended, with a range of discretionary measures from an oral or written warning to immediate termination depending on the gravity of the violation. But if you do implement such a policy, be aware that you must BE CONSISTENT. No exceptions or exemptions for your favored or star employee should be allowed without a compelling and urgent (and reasonable) business necessity.

Make sure that the employee knows what your next step will be if the violations continue.

When you decide to take disciplinary action - document, document, document. Conduct an impartial investigation, obtain written statements from witnesses, make notes to the personnel file, and have the employee sign the warning or other disciplinary action.

Don’t act in haste or while emotions are running high. Take some time for reflection and consider all of the options available to you before deciding on a course of action.

When in doubt, run your proposed disciplinary action past another person. If you cannot articulate a neutral and compelling argument for taking that action, under these circumstances, you may wish to consider another alternative.


By: Cynthia W. Veidt, cindy@lpvlaw.com

Texas Law Basics for Employers: General Recordkeeping Requirements

What records should Texas employers keep in an employee’s human resources file? And for how long should you keep them?

Each employee should have a separate human resources file which contains, as a general rule of thumb:

• their job application / resume, 
• any background checks or test results that are related to their job duties (see our previous blog post on this topic), 
• a description of their essential job duties and functions, 
• their I-9 form with copies of accompanying identification documents proving eligibility for employment, 
• any offer letters or contracts detailing their compensation structure, 
• signed acknowledgement forms for any company policies and procedures and/or employee handbook, 
• their W-4 form, 
• any applications for benefit programs offered to your employee, 
• records reflecting the hours worked each week by that employee, as well as all paid holidays and all leave or vacation time (paid or unpaid) used by that employee (see separate blog post on FLSA requirements for calculation of overtime pay due to non-exempt employees), 
• performance evaluations, 
• disciplinary actions, and 
• payroll records.

Federal and Texas state laws require that you maintain many of these records for at least two, and sometimes three years.  However, because the statute of limitation for many employment-related claims can be four years from the date of an incident, you may wish to maintain these records for a five-year period. 

By: Cynthia W. Veidt

Texas Employment Law Basics for Employers: Avoiding Illegal Workers

You will be required to complete an I-9 form and other state-approved forms to report each new employee in Texas’ “new hire directory” (maintained by the Texas Workforce Commission) within twenty (20) days of that employee’s start date. This process will help ensure that your employees are eligible to work in the U.S., and is also used to track and collect social security, federal income taxes and other government-authorized deductions from that employee’s paychecks.

The confirmation process is usually pretty straightforward, but issues sometimes occur. For example, you’ve hired a new employee, but he or she refuses to disclose their social security number or claims not to have one. What should you, the new employer, do in this situation?

According to the U.S. Department of Homeland Security, you cannot legally require that the employee disclose their social security number (SSN). Although a social security card is the most common method of demonstrating that the employee is eligible to work in the United States, it is not the only method for proving eligibility.

This causes some problems for the new employer in Texas. You will be required to complete a “new hire” report form on which you must provide the employee’s SSN. Although there is little guidance from the various federal and state agencies, it appears that you may be able to avoid compliance issues by submitting an affidavit stating that the employee does not have an SSN or refuses to provide it.

You and the employee should each complete a Form P-1 (a privately-prepared form captioned the “Reasonable Cause Affidavit by Payor for Not Obtaining Payee’s Identifying Number”) which you can find via a quick internet search. Refusal by the employee to complete this form, in addition to his or her refusal to provide an SSN, may be grounds for termination. In addition, courts have stated that an employer is not required to hire someone who refuses to provide an SSN on his or her job application.

If this situation occurs, please consult with someone well versed in employment law to determine what rights and obligations/liabilities you may have as the new employer.

By: Cynthia W. Veidt, attorney

Texas Employment Law Basics for Employers: Hiring – Employees or Independent Contractors?

Many employers would prefer to consider their workers to be “independent contractors” rather than “employees.” Using independent contractors reduces payroll taxes and tax reporting requirements, provides some measure of insulation from potential liability, and eliminates the need to provide employee benefits. However, you should be very careful; simply calling someone an “independent contractor” will not protect you from potential liability. 

With increasing frequency, employers have found themselves on the wrong end of an investigation by state or federal agencies which determined that their workers do not meet the legal test to be considered independent contractors. Those employers must pay back taxes, penalties, and interest related to their newly-designated employees.

There is a test with about twenty (20) factors used by the government and Texas courts when determining whether someone is an independent contractor. It’s a very fact-specific analysis, in other words – it depends on each individual situation. But in general, a true “independent contractor” works independently of the employer’s control, and is usually able to work for more than one employer at any given time. If you dictate when, where and how the work is to be performed, you set the hours of work, you require full-time devotion to your business, and the worker has no ability to work for others in the same field of competition, you probably have an “employee.” 

By: Cynthia W. Veidt, Attorney