Last week, we shared three areas in which employers should focus their handbook review for 2019. This week, we reveal three additional areas of focus.
#1: Vacation Policies
No federal, state, or local law requires employers to provide vacation time, but some laws impact employers that offer it. For example, some states explicitly prohibit policies that force employees to forfeit accrued, unused vacation and other paid time off (also known as use-it-or-lose-it policies). In these cases, employers must generally allow employees to carry over accrued but unused vacation from year to year, or pay employees for the unused time at the end of the year. Similarly, in these states, employers are required to pay out any accrued, unused vacation at the time of separation.
States generally handle unused vacation in one of three ways:
- Expressly prohibit use-it-or-lose-it policies. These states require carryover from year to year and payout at separation;
- Permit use-it-or-lose-it policies but only if the employer has a written policy that explicitly states it will not carry over accrued, unused vacation to the following year and won't pay employees for accrued, unused time at separation; or
- Don't require employers to carry over accrued, unused vacation to the following year or pay employees for unused time at separation unless they have a policy that says otherwise.
Note: In some of the states that prohibit use-it-or-lose-it policies, a reasonable cap on accruals may be permitted. In such cases, employees have to "use" some of their time in order to earn any additional time. Here are some factors to consider as you draft or review your vacation policy.
Does the policy:
- Address carryover and payout at separation and comply with state law?
- Encourage use?
- Define who is eligible?
- Indicate how much time off is available and how it accrues?
- Include procedures for requesting vacation time and state how much notice employees must provide?
- Communicate that vacations will be granted based on scheduling needs and may be restricted if necessary?
#2: Pregnancy Accommodation Policies
In recent years, many states have enacted laws that require employers to provide reasonable accommodations for pregnancy, childbirth, and related medical conditions. A reasonable accommodation is generally a change or modification made to the structure or manner of an employee's position allowing them to perform the essential functions of the role, absent an undue hardship on the business. If you're subject to a pregnancy accommodation law, you may be required to have a written policy (it's a best practice even if it isn't required). Here are some factors to consider as you draft or review your policy.
Does the policy:
- Define who is eligible for such leave?
- Give examples of possible accommodations? Note: Some states have specific requirements for the types of accommodations employers must provide. In such cases, the policy should include all of those examples.
- Address medical certifications demonstrating the employee's need for an accommodation?
- State whether the leave is paid or unpaid?
- If leave is the accommodation, discuss reinstatement when the leave is over?
- Describe how it interacts with other leave policies?
- Prohibit retaliation against employees who request or use an accommodation?
- Indicate how employees can request an accommodation?
#3: Pay Secrecy Policy
Pay secrecy policies should generally be avoided by all employers. Under Section 7 of the National Labor Relations Act (NLRA), employees have, among other things, the right to act together to improve wages and working conditions and to discuss wages, benefits, and other terms and conditions of employment, with or without a union. The National Labor Relations Board (NLRB), which enforces the NLRA, and many courts have found that rules that prohibit employees from discussing their pay with co-workers violate the NLRA. Additionally, some states and local jurisdictions have enacted laws in recent years that expressly prohibit pay secrecy policies. Therefore, avoid policies that could be construed to restrict employees' rights to discuss their wages or other rights. Additionally, make sure any confidentiality provisions are clear that wages and other conditions of employment are not considered to be confidential information.
When drafting and reviewing your employee handbook, make sure your policies comply with all applicable federal, state, and local laws and are consistent with current best practices.