Avoiding Common Errors in Employment Documents: A Checklist
In the fast-paced world of employment law, where scandals and groundbreaking lawsuits are front page news, more mundane requirements for documentation that employers provide to candidates and employees can fall through the cracks. While these requirements may not be as sensational as the latest sexual harassment allegations or the potential repeal or scaling back of the Dodd-Frank Act, overlooking them can expose employers to potentially devastating liability. Below is a checklist of fundamental provisions and best practice tips with regard to standard documents that are frequently omitted or neglected by even the most sophisticated employers. This checklist concerns important employment law issues under New York and Federal law. To the extent an employer has employees in jurisdictions other than New York, it is imperative to consult local counsel regarding these issues.
I. Employment Contracts/Offer Letters
- While often required by law (seeNew York State Wage Theft Prevention Act), even where it is not mandatory, it is best practice to clearly delineate in an offer letter or contract whether an employee’s position is eligible for overtime pay. For more information, seeNew York Wage Theft Prevention Act – Annual Notice Requirement Rescinded.
- Determine whether to include an arbitration provision and, if so, make sure the clause expressly includes discrimination claims, and consider whether to include a class action waiver. For more information, seeAre Class Action Waivers Enforceable? Until the Supreme Court Rules, It Depends Where You Are Located.
- Omit language forbidding employees from disclosing compensation information, as such prohibitions are against the law in a growing number of jurisdictions, including New York, and are disfavored by the NLRB. In addition, include a carve-out that permits employees to report possible violations of law to, and participate in investigations by, government authorities or self-regulatory organizations. See II below.
- Include the Defend Trade Secrets Act’s (“DTSA”) “immunity notice” in connection with nondisclosure provisions to ensure availability of the company’s remedies of double damages and attorneys’ fees for potential claims under the DTSA. For suggested language, seeEmployers Must Take Action to Reap the Full Benefits of the Defend Trade Secrets Act.
- Include clear language stating that bonuses are discretionary and that the individual must be employed on bonus payday to be eligible to receive a bonus.
II. Separation/Severance Agreements
- Ensure that nondisclosure agreements include carve-out provisions that permit the individual to report possible violations of law to, and participate in investigations by, governmental authorities or self-regulatory organizations such as the SEC, OSHA, FINRA, and the EEOC. For more information, seeRecent Developments Require Employers to Redraft Employee Confidentiality Agreements to Explicitly Permit Reporting to Governmental Agencies and FINRA.
- Consider including a provision stating that the individual will not apply for employment with the company and/or the company will not rehire the individual, keeping in mind those provisions are generally disfavored by the EEOC.
Continuing Obligations/Company Property
- Reference continuing post-employment obligations, such as noncompetition, nonsolicitation and confidentiality, and attach documents previously executed by the former employee. Direct former employees to return all company information and property, and to affirm that they have retained no electronic versions of such material, whether on email accounts, hard drives, cloud storage or otherwise.
- See I above.
III. Employee Handbooks/Policies
Paid Family Leave
- Be aware of the requirements of the New York Paid Family Leave Act, which is effective Jan. 1, 2018. Final regulations were adopted on July 19, 2017, specifying mandatory information for employers to provide to employees in their policies.
New York City Sick Leave
- New York City employers must ensure compliance with the Earned Sick Time Act, which mandates specific information be contained in employer policies and notice be provided to employees. For more information, seeNYC Passes Revised Sick Leave Rules – and This Time You Won’t Need a Pain Reliever.
- Consider removing broad policies prohibiting employees from taping conversations in the workplace, in light of the Second Circuit’s decision affirming the NLRB’s prohibition of such policies. For more information, seeCan You Hear Me Now? No-Recording Policies Violate the NLRA.
- Ensure that leave related to the birth, adoption or placement of a child for foster care, separate and apart from disability leave, does not differ by gender.
- See I above.
- See II above.
IV. Hiring Process
- Several jurisdictions, including New York City as of Oct. 31, 2017, are following the trend of prohibiting inquiry about an applicant’s salary history. In these jurisdictions, remove all requests for salary history in applications and elsewhere, and train recruiters and managers on appropriate interview questions to ask regarding compensation. For more information, seeNew York City Passes Legislation Banning Salary History Inquiries During Interview Process.
Criminal and Credit History
- A growing number of jurisdictions, including New York City, prohibit questions regarding criminal history on applications or during the interview process before a conditional offer is made, except in narrow circumstances. In addition, many jurisdictions, including New York City, prohibit checking or inquiring about the credit history of applicants and employees, with limited exceptions. For more information, seeNew Legislation Limits NYC Employers' Use of Credit and Criminal History.
For any questions or concerns regarding the above, or any other questions about what should be included in employment contracts, separation agreements, policies or hiring documents, please contact a member of the Kramer Levin Employment Department.