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The Employer E-Letter: Labor and Employment Law News from the Duluth, Minnesota law firm of
Hanft Fride, A Professional Association.
Editor, Richard R. Burns, rrb@hanftlaw.com or 218.529.2433.
Please feel free to forward this e-mail or share it with others. If there are other topics of interest to you or any other suggestions concerning this newsletter, please let us know.
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THIS MONTH'S TOPICS:
- VOTING LEAVE
- HARASSMENT SUIT MAY RESULT FROM NEGLIGENCE
- BONUSES AND OVERTIME
- EMPLOYEES OF CARE AGENCIES EXEMPT
- TIP OF THE MONTH
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VOTING LEAVE
Minnesotans vote on November 6. Therefore, it is a good time to remind employers that, under Minnesota law, a person is to be given "sufficient time off" to vote, and this time is paid. The Wisconsin rule is more specific, requiring that, with advance notice, a person be given up to three consecutive hours to vote, but this is not paid time off. Minnesota law requires no advance notice.
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HARASSMENT SUIT MAY RESULT FROM NEGLIGENCE
In a recent Seventh Circuit case, which includes Wisconsin, the Court determined whether a sexual harassment suit might result in potential liability for negligent actions. Consistent with prior cases, the Court suggested that a harassed employee normally needs to make a specific complaint in accordance with the employer's procedures. In the case at hand, a third party informed a supervisor of potential harassment and the supervisor made no effort to contact the alleged victim or the vice president who could make sure the problem was addressed. The Court determined this to be an unreasonable response and found it was negligent behavior. Bombaci v. Journal Community Publishing Group, Inc. (7th Cir. 2007).
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BONUSES AND OVERTIME
Employers often want to provide year-end bonuses, but are concerned with whether or not they need to be included in overtime calculations. Under applicable rules, discretionary bonuses are not includable if they meet two tests: (1) they are left up to the employer to decide to pay or not to pay; and (2) the amount is not determined until the end or near the end of the bonus period. Also, holiday bonuses can be provided regularly without necessarily meeting the two criteria, so long as they are not measured by, or directly dependent upon, the number of hours worked, production or efficiency, or are so substantial employees consider them part of their wages. Holiday bonuses are considered a gift and a reward for service.
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EMPLOYEES OF CARE AGENCIES EXEMPT
Under the Fair Labor Standards Act (FLSA), covered employers are generally required to pay employees a minimum wage and overtime wages. The FLSA, however, exempts persons "employed in domestic service employment to provide companionship for individuals … unable to care for themselves." The U.S. Supreme Court, in reversing a lower court, held that a regulation that clarified this exemption and made it applicable to persons employed by an agency (other than a family or household) was valid and enforceable. Long Island Care At Home, Ltd., et al. v. Coke, (U.S. Sup. Ct. 2007). Domestic service employees include, but are not limited to, nurses, caretakers, gardeners and babysitters employed on other than a casual basis. In case you employ one, it also applies to such persons as governesses, butlers and footmen.
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TIP OF THE MONTH: For the year 2007 and following, the Internal Revenue Service, in Revenue Ruling 2006-56, has clarified the tax treatment to an employer of routinely paying per diem allowances in excess of the federal per diem rates, and not tracking the allowances and not requiring the employee either to actually substantiate all the expenses or pay back excess amounts. In such cases, the employer must make the entire amount of the expense allowance (not just excess over the federal per diem rate) subject to withholding for and subject to income tax and pay employment taxes on such amounts. Employers also need to be reminded that all travel expenses must be substantiated, including receipts for amounts over $75.00, or the income deduction will be lost.
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Hanft Fride's business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth Minnesota. Visit our website at www.hanftlaw.com. In addition to general information on the firm and our attorneys, you can find past issues of this newsletter. Keep checking back for new information, and let us know if there is anything you would like to see added to the site that would help you and your organization. Our employment lawyers include Richard Burns, Tom Torgerson, Rob Merritt and Gabe Johnson.
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The information provided in this E-letter is general in nature and should not be used as a substitute for professional services and advice. The communication and receipt of this information is not intended to create an attorney-client relationship. Readers should consult with their legal counsel before taking any action on matters covered in this E-letter.
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To subscribe or unsubscribe to Employer E-Letter, e-mail your request to Richard R. Burns, rrb@hanftlaw.com or call 218.529.2433.
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Copyright 2007 by Hanft Fride, P.A. All rights reserved. Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802. Phone 218.722.4766; fax 218.529.2401.
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