Devora Lindeman

Hiring and the Law — Should You Respond to Inquiries From Rejected Applicants?

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: : An applicant I recently rejected emailed me and asked if I could tell her why I didn’t hire her or what she did wrong in the interview so she could do better in the future. Do I have to answer her? If so, what can I say?

Answer: From a legal perspective, no. You have no legal obligation to respond to her email at all. In fact, should you choose to answer, there could be legal liability created for your company depending on your response. This is one of those situations where there is no straight forward answer.

You should be aware, however, that recruiters are recommending that disappointed candidates send “rejection follow-up” letters and emails to the hiring manager that rejected them. They are also telling the candidates that they should pester (my word) the hiring manager for the reason “why.” Thus, it is likely that you will see more of this type of follow up inquiry from rejected applicants.

Even though you have no obligation to explain your reason for the rejection, it is important that you do have a clearly articulated reason “why”—even if you never share it with the candidate. This is needed to defend against a failure-to-hire discrimination claim from a candidate who feels that he or she was rejected based on their age, race, national origin, religion etc. Thus, keep in mind that the inquiry may be a fishing-expedition from a disgruntled candidate and not just an effort to learn from their mistakes.

Nevertheless, there may be certain situations where you might want to respond. How you respond to a rejection follow-up inquiry depends on why the candidate was rejected. For example, would you have hired the person if you did not have a better candidate? Or, is there no way that the applicant would ever get a job with your company?

If the inquiry is from someone that you really liked and would have hired but they were the runner-up, you might want to maintain communication with the person in case another position for which they are suited opens up in the future. In that case, it is likely safe to say something like “You were a (very) strong applicant and we enjoyed meeting with you, but we had another candidate whose background (or whose experience or whose skill-set) was a better match for our needs at this time. If another position opens up that is a good match for your skills, we may reconsider your application at that time. Please let me know where you land.” That lets the applicant know that they interviewed just fine and maintains communication with a possible future recruit. It also is a good networking move, especially if they are in your industry so that their take-away from their interaction with your company is positive.

In such communications, however, never say you will consider them, or that you will reach out to them, but say, instead, that you may consider doing so. You don’t want to make any promises. What if something opens up in two years and you have completely forgotten about this applicant, but you said we “will reach out to you”? While it is unlikely that the applicant would know about the position two years down the road, and hopefully they are gainfully employed by then, to best protect your company you do not ever want to tell an applicant that you will do something unless you are 100% certain that you will.

If the applicant was someone you would never hire, you need to be careful in terms of what you say. That person may simply have been a bad fit for your company—but telling the applicant that may communicate that they weren’t the right age, or race, or gender etc., which of course would be discriminatory. If you have something specific you can say (for example, there were typos in the revised résumé they gave you at the interview; they knew absolutely nothing about your company and you expect your applicants to do some homework; they came to the interview in jeans; etc.), and you want to help the applicant do better next time, you could mention something along those lines. This would be pointing out very objective criteria that the person could not argue with you about.

When it comes to a more subjective determination, it may be best to just say that you are sorry, but it is not your practice to provide that information. Or—you don’t respond to the email/letter at all.

Or, you call your friendly employment lawyer, talk through the situation, and determine what to do that best protects you and your company with regard to that specific rejected applicant.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Hiring and the Law — Testing Just One or Two Staff?

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question:  Can an employer do personality or other similar testing on just 1 or 2 of his or her existing staff to find out about them without also testing the rest of the staff? Is this opening the door to potential legal action?

Answer:  The answer depends on why the employer wants to do the testing.  One of the main concerns with employee testing is to ensure that it is not done in a discriminatory manner.  If the employer appears to be singling out the women for testing, when not testing the men for example, or makes other divisions along lines that could be perceived as being discriminatory, the employer runs the risk of an employee claim that the action was, indeed, taken for discriminatory reasons. This is especially so if an employee suffers an adverse employment action as a result of the testing.

There may be times, however, where testing a few, but not all, of an employer’s current employees may be appropriate.  For example, if the employer is choosing between two candidates for a promotion it would be acceptable to test both of those candidates, but not test any of the other employees who are not promotion candidates.  This is a legitimate reason to test only those two employees and not the others.  The testing done may give the employer insight into which employee to promote.

Thus, whether it would be legally prudent to test just one or two employees depends on the reason the employer wants to “find out about them.”

As with all testing, however (including pre-employment testing) it is best not to use the test as a tie-breaker or definitive determining factor in making any employment decision.  Test results should be looked at as part of a package of information that an employer is considering.  While testing can provide good insights into candidates and employees, it is prudent to consider all the information to hand in these situations.  This is especially so where the testing results do not jive with what has been observed about the employee.  For example, if the test shows the person has a good communication level, but the person who interviewed clearly did not – don’t rely on the test alone.  Consider what you observed and remember that it is the person, themselves, who is answering the test questions and is answering as to how they perceive themselves.

If, on the other hand, an employer is considering doing testing because an employee is not performing well and the employer wants to “find out more about” the employee—that may not be an appropriate time for testing.  The test results won’t change the fact that the employee is performing poorly and may, more likely, lead to a legal claim by the employee that he or she was being singled out for some reason when being “subjected” to testing.

Accordingly, whether an employer can test some, but not all, employees really depends on the situation.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Terminations and the Law — Severance

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I’m letting an employee go on Friday. Do I need to give her two weeks of severance?

Answer: As I’ve said in a number of my columns—that depends. The answer depends on a number of factors including whether you have a contractual obligation to the employee to pay severance, if you have a policy or severance plan guaranteeing severance pay to your employees, or if you have a practice of paying severance pay to similarly situated employees that you let go in the past. It also depends on certain legal considerations that I will discuss below.

Even though “everyone knows” that you are supposed to get two weeks’ notice or two weeks’ severance pay when you are let go from a job, this is not actually the case in the U.S. There is actually nothing under U.S. law that requires an employer to provide severance pay to an employee who has been discharged unless that employer has created the obligation him or herself. The “two weeks’ notice/two week’s pay” guarantee comes from union collective bargaining agreements. Most unions have negotiated that guarantee. But unless you have a unionized workforce with such a provision in an agreement, or have otherwise guaranteed severance through a policy, plan or practice, nothing requires that you give an employee you are letting go any additional compensation as severance.

That said, there may be legal considerations that weigh in to the determination as to whether to provide severance pay or not. These are issues that you should likely discuss with an employment attorney but such situations arise when either (a) you are letting an employee go who has already raised an informal legal claim against your company or (b) you are letting an employee go under circumstances that may tend to appear to be discriminatory, even when they are not.

In the first instance, you may have an employee who is performing poorly and who is being performance managed to try to get her to improve. When she sees the handwriting on the wall that she is about to be let go, she may claim that she was being sexually harassed in an effort to divert attention off her, or to try to protect her job. Of course, you need to take the complaint seriously, investigate it, and take whatever action you deem appropriate to stop any harassment you confirm. However—if you let that employee go after such an investigation it could appear that you were firing her in retaliation for making a sexual harassment complaint. In such an instance, and to avoid a retaliation claim, it may be prudent to offer some amount of severance in exchange for the employee signing a severance agreement waiving all legal claims against the company. That way, the business can have closure on the situation.

Similar situations arise when a company is looking to terminate an employee who just advised that she is pregnant, or he has cancer, or who has become too elderly to perform at the necessary speed. Providing severance pay (along with a severance agreement drafted by an attorney) can be a way to ease an employee’s transition out of the workplace, and avoid a discrimination lawsuit that can be costly and time consuming.

Thus, the answer to your question most likely is “probably not.” But this is a situation where a call to your local employment counsel to discuss the facts of this particular situation may be prudent to prevent other legal headaches down the road.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Terminations and the Law — Payout of Vacation Days on Termination of Employment

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I just let an employee go for not meeting job expectations. She sent me a text message asking when I would be sending her payment for the vacation days she didn’t use. Do I have to pay her for those?

Answer: The response to that question is again (as I’ve noted in other columns) a very lawyerly “it depends.” In this case, the answer depends upon the state your company is located in, as well as what your vacation policy says. Don’t have a vacation policy? Then the response defaults to your state’s law.

Many states have little to no legal requirements when it comes to vacation pay – unless the state includes accrued vacation days in the definition of “wages” and also has a requirement as to when all wages must be paid to an employee whose employment has been terminated.

Many states require final payment to terminated employees to be made no later than the next regular pay date. Some states, however, like California and Massachusetts, require you to hand an employee their pay—the final pay check—in the termination meeting—and specify that “final pay” includes accrued but unused vacation days.

Other states, like New York, tell employers to follow their own policy with regard to the payout of vacation days to terminated employees. These states allow employers to have what are called “use it or lose it” policies: if the employee does not use his or her vacation days, they are forfeited and not paid out upon termination of employment. If, however, your vacation day policy does not specify that days are forfeited, and is silent on that issue, you may be required to pay them out. If you are in a state that permits “use it or lose it” policies, it is prudent to include language both forfeiting unused vacation days upon termination and indicating that unused days will not be paid out.

If employees believe that they are owed for unused vacation days, and your state’s laws or regulations require that vacation days be paid out, terminated employees can usually go to your state’s Department of Labor and file a wage payment claim against your company seeking the value of the unpaid vacation days. Companies can handle such wage claims in the DOL alone, without the assistance of an attorney—but government agencies usually will provide more assistance to the employee than they will to you.

If your state has no law requiring pay out of vacation days, but your policy clearly says they are paid out and then you do not pay them, the employee would need to bring a lawsuit against your company (probably in small claims court) seeking payment under the policy probably alleging a breach of contract (i.e. the company promised to pay out unused vacation days and broke its promise (violated the contract) with regard to this employee). How successful such a lawsuit would be depends on a number of factors, including the language in your vacation pay policy and whether the court will consider the policy to be an actual contract the court can enforce.

Thus, to answer your question you need to first look at your vacation pay policy. If you don’t have such a policy, look to your state’s wage laws. To find them, go to your state’s Department of Labor web site (or the website for the equivalent state agency that handles employee wage issues for your state; for example, in Oregon the agency is called BOLI – Bureau of Labor and Industries). Most such web sites have an “FAQ” (frequently asked questions) section specifically for employers and often you can find your answer there. You also probably can call that agency and ask the question without giving any identifying information about yourself or your company—but that is not always the case. For certainty in terms of what to do (and how to fix your policy if needed for the future), consult with a management-side employment lawyer familiar with the law in the state where your company is located.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Hiring and the Law — Appropriate Applicant Communications

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I’ve been communicating with a potential applicant by text message. Is that appropriate?

Answer: In a word – no. All communications that employers have with applicants and employees can have legal implications for the business. Employers have legal obligations to employees and applicants, and one of the best ways to prove that those obligations were satisfied is to have documentation of the exchanges. That documentation should be dated, should use good grammar and punctuation and should be professionally drafted. “C U 2night?” or “LOL-grt resume!” or “When cn u start?” are not the sort of communications you should be having with an employee or applicant and can be an embarrassment, at the least, if you had to present them to a jury.

Putting aside the grammar, punctuation and professionalism arguments (which should be self-evident), employers should keep records of all communications with employees and applicants so that (a) you know what transpired and (b) you can rely on them if needed. How do you get text messages into your personnel or applicant’s file? Many cell phones do not have a mechanism by which to forward the text or get it printed out. But even if they can be printed out or otherwise saved, see professionalism argument, above.

Moreover, a company’s access to its managers’ text messages is only practical as long as those managers are employed—especially as managers often text from their personal cell phones, rather than from equipment provided by the company. What manager do you know is going to print out or otherwise save every text message with an employee? Once a manager is terminated (for whatever reason) those important company communications depart with the manager (and his or her phone). If those communications had been had on the company’s email system, this would not be a problem.

Additionally, with these quick messages, employers often omit important statements that us employment lawyers love to see in communications with employees to protect the business. Or they “forget” to have important communications with the individual at all, such as advising applicants that they are actually hired; putting information in writing that your state may require be provided to applicants and/or new hires; specifying start dates etc.

More often text message fiascos happen when employees are out on leave and are not returning when the employer expects. The quick messages between employer and employee can be convenient—but they provide absolutely no protections to employers if the employee (who was out on disability or pregnancy-related leave) then brings an employment discrimination lawsuit against the employer claiming that the employee was denied reinstatement because of his or her disability/pregnancy.

While it may seem to be a hassle in this day and age to use old-fashioned snail-mail letters or, heaven forbid, a fax machine—at least communicate with employees by email or other messaging system that retains messages and allows easy printing of the communication string. But there are times when snail-mail with official and professional letters printed out on letterhead, and signed by an actual person, is probably the better way to go. If you must – draft the letter; use an electronic signature and email it as a PDF. That can be just as sufficient.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Hiring and the Law — Terminations and the Law

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: How do you terminate an employee?

Answer: With great care and consideration.

This is not an action to take when you finally get so frustrated with an employee’s performance failures that you just have to let him or her go. A loud Donald Trump-like “your fired!” may feel satisfactory at the time—but can also set the company up for legal claims by the employee who was let go.

Preparing to let an employee go actually starts when an employee is hired. Most employee lawsuits arise when the employee didn’t see the termination coming—no one set the expectations or let the employee know when he or she was not meeting them. Therefore, the steps to take to attempt to avoid employee lawsuits stemming from terminations include the following:

  • Job descriptions that let employees know what is expected from their particular job.
  • An Employee Handbook that lets employees know what is expected of them as your employee in general.
  • Managers who give performance feedback as part of their day-to-day interactions with employees. A “good job on that report today!” or a “Tony—you really need to get here on time; we’re counting on you” can go a long way with employees. Don’t wait until an annual review to let an employee know how he or she is doing. Employees should always know where they stand with a company.
  • Annual performance reviews—which are accurate and honest and don’t identify everyone as satisfactory even when they are not. How can an employer support a defense to a wrongful termination lawsuit that an employee was just awful when the performance review says “satisfactory”?
  • Performance Management in the form of coaching/counseling, verbal warnings (which are then documented with written memos to file), written warnings, performance probations, suspensions (with and without pay), and other actions taken to be sure that employees are well aware that their performance, behavior, attitude, etc. on the job are far from acceptable and are not satisfactory.
  • Terminations only after the employee has been told what is expected, corrected when the standards were not achieved, given several chances to make the grade, and has failed to perform as expected.

With all of these in place, employees will be less likely to presume that the termination was because they were black, brown, pink or purple. They will know very well that their employment was terminated because they failed to deliver as required by their employer. In addition—with all of these factors in place, an employer just may be pleasantly surprised when an employee actually improves and the termination is avoided.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Hiring and the Law — Should You Provide Employees With Paid Sick Days?

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question:  An applicant I’m considering hiring asked how many sick days she will get, but my company does not offer paid sick days.  Are we required to do so?

Answer:  Whether a company is required to offer paid sick days depends on a number of factors—the main one being geography.  A number of locations require certain employers to provide paid sick days to their employees.  For example, the state of Connecticut requires that companies with 50 or more employees provide paid sick days.  Philadelphia has a paid sick day requirement for city workers and certain companies that do business with the city, and the city of Seattle also has a paid-sick-day city ordinance.  Although many such laws are pending around the country, few are actually being implemented because they are generally opposed by the business community.  If your business is in a location that does not require you to provide paid sick days, then you are generally not required to do so—but there is a key exception to that rule.

This has to do with the difference between employees who are eligible for overtime pay and those who are not. An earlier tip also addressed this subject.  If an employee is properly classified as being exempt from the regulations that require the provision of overtime pay for work over 40 hours in a work week, then the employee can be paid by the hour for any hours worked and pay can be withheld if the employee does not work.  If, on the other hand, the employee is what is called “exempt” from the overtime pay requirements and paid on a salary basis, federal law requires that the employer pay that employer their entire salary for every week the employee works with only limited exceptions where deductions can be made from that employee’s weekly salary.  For example, if an exempt salaried employee takes a personal day for personal reasons, and you do not provide paid personal days, one day of pay can be deducted from the exempt employee’s weekly salary.  However, if the reason the salaried employee is absent is because the employee is sick, it is not so easy.  The regulation allows employers to deduct absences for illness from the salary of an exempt employee only if (1) the employer has a sick day policy and (2) the employee either is not yet eligible for the sick days or has used up their sick day allotment.

Here’s an example of how this works:  Let’s say that your new exempt salaried employee, Chris, is entitled to 3 sick days per year, but your sick day policy says that employees can’t use sick days until they have been employed for three months.  Chris gets a stomach bug in the second month of employment and needs to stay home.  That day can be unpaid since Chris is not yet entitled to the 3 sick days.  Similarly, if Chris uses the 3 days and then needs another one in the same calendar year, that additional day does not have to be paid either.  Those sick days can be deducted from Chris’s weekly salary.

In the same scenario without a company sick day policy, if Chris takes a sick day in any week in which Chris performs work, the company cannot withhold pay for those sick days—without regard to how many sick days Chris takes in a year.  The only exception would be if Chris is out sick for an entire work week and performs no work in that week.  In that case, only, Chris would not need to be paid.

Because of this legal requirement, we generally recommend that companies offer a minimum number of sick days in a sick day policy so they are not caught in a situation of having to pay an exempt employee who is not coming to work his or her entire salary for the week.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Hiring and the Law — Determining Who Can Get Paid On A Salary

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question:  I’m hiring a new employee and want to pay her on a salary instead of hourly.  Is that OK?

Answer:  As with many legal questions, the answer is “maybe.”  That is especially the case if what you are really asking is whether you have to pay her for every hour she works, and overtime pay if she works over 40 hours in a work week, or whether you can just pay her a salary without regard to how many hours she works.  It’s a legal question as to whether an employee is entitled to overtime pay.  An employer cannot designate every employee as “salaried” and presume that the company does not need to pay overtime pay.

The way the law works in the U.S., and the way it works generally in the states that have their own overtime pay regulations, is that employers need to pay overtime wages (time-and-one-half their regular hourly rate) to employees who work over 40 hours in a work week, when their jobs fall in certain categories.  It is not how an employee is paid that alone determines whether he or she is entitled to overtime pay.  That entitlement is also based on the employee’s duties and responsibilities.  The way the law reads is that all employees are entitled to overtime pay if they work over 40 hours in a work week—unless the employee fits into one of the listed exemptions from the overtime pay regulations based on the employees’ duties and responsibilities.  Thus, whether the exemptions apply depends on what the employees do all day.

If an employee fits into one of the exemptions, he or she is considered “exempt” from the overtime pay requirements.  In that case, the exempt employee generally can be paid a consistent salary without regard to how many hours the employee works in a work week.   If an employee does not fall into one of the exemptions to the overtime pay regulations, that employee is “non-exempt” and must be paid overtime wages if he or she works overtime hours.  A “non-exempt” employee may be paid by the hour or paid a salary, but if that employee works over 40 hours in a work week the employee is still entitled by law to overtime pay.  It is the extremely rare organization that has no “non-exempt” employees.

Generally employees that are entitled to overtime pay are receptionists, secretaries, administrative clerks, data entry folk, bookkeepers, schedulers, dental assistants, paralegals, warehouse workers, mail room employees, benefits clerks, payroll clerks, stock clerks, cashiers, wait staff, janitors, safety inspectors, messengers, drivers, computer help-desk employees and other non-managers with limited discretion, just to name a few.

There’s often an analysis of a person’s position that needs to be done to determine whether the company has sufficient arguments that the job should be classified as an exempt position.  The main recognized exemptions from overtime pay are:

  1. Executives (those who are senior managers over recognized areas of an organization who supervise two or more full-time employees or 2 full-time-equivalents) who are responsible for the supplies, production, performance, budget etc. of their area; who delegate their work, do performance reviews, etc.
  2. Professionals (with advanced degrees like lawyers, doctors, CPAs, architects, etc.)
  3. Administrative employees – people who are senior employees working on an administrative area of the business (i.e. HR, Marketing, Finance, Legal, Compliance, etc.) who have independent discretion and judgment, who can bind the company, sign checks, direct policy, etc.  There’s another exemption for computer people who are programmers, software and systems designers, and who perform more sophisticated IT tasks, and an exemption for creative professionals (writers, directors, choreographers, etc.).

The above is just a quick overview and by no means discusses all of the factors to consider.

In addition, under federal law, in order for an employee to be considered to be exempt under the executive or administrative exemption, the employee must be paid a regular salary of at least $455.00/week, which amount cannot be lessened in any workweek in which the employee performs work except for some very specific situations. (Could you give an example or two here?) For example, a company cannot deduct amounts for loss or breakage from an employee’s salary, for days the employee is off to serve on jury duty, or for partial day absences for any reason.  A company could lessen the salary if the employee took a whole personal day off, however, or took a sick day beyond the number provided in a company sick-day policy.

So the bottom line is that I cannot tell from the information you provided whether the employee in question is entitled to overtime pay.  However, you are certainly permitted to pay her a salary instead of hourly (i.e. $600.00/week without regard to whether she works 35, 37 or 40 hours in the week).  The issue becomes—what are you required to do under the law if that individual works more than 40 hours in a workweek (which, by the way, is not the same thing as over 80 hours in two weeks)?


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Hiring and the Law —Independent Contractor Versus Employee? (2)

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I need to hire a PR person, but I’d like to try out a candidate as an independent contractor for a while and then, if it works out, bring him or her on as a full time employee. Can I do that?

Answer: Generally, it is not prudent for a business to hire an individual as an independent contractor in a position for which you would hire an employee. Whether a person providing services for your company is properly classified as a contractor or an employee is not up to you—there are laws and regulations that govern that classification. When you get it wrong, a number of government agencies can impose fines, fees and penalties on your business, and this would best be avoided. For this reason, it may not be proper for this PR person to be an independent contractor.

Whether an individual is an independent contractor or an employee is going to depend on a number of factors, but the most important one is usually the degree of control you impose over when, where and how the person delivers services for your company. Think of someone you may hire to paint your house or apartment. You tell the painter you’d like him or her to be there on Tuesday. The painter says no. But he or she can be there on Thursday. The painter will tell you what you need to pay for the paint job. And, if you don’t like it, you can find another painter. The painter advertises painting services to the world at large and you found the painting company on Angie’s List or through a recommendation. That’s an independent contractor.

If you are going to tell the PR person that he or she needs to work Monday through Friday from [9:00][5:00], with some networking events in the evenings at which you will require attendance, that you expect the PR person to perform certain functions and attain certain products or deliverables, and that the salary is x . . . that’s an employee, not an independent contractor.

When you bring someone on board as a contractor for some number of months, and then transition them to employee status during the same calendar year, you will need to provide that person with a 1099 for payments as a contractor, and a W-2 for payments as an employee. When the IRS receives a 1099 and W-2 for the same person, from the same company, in the same year, that acts as a red-flag—one of those classifications was likely incorrect (and for the most part, it was the contractor portion). Additionally, the Department of Labor will be concerned because the company would not have paid unemployment insurance taxes, or workers’ compensation contributions, for the contractor portion of the person’s working time.

When the IRS or Department of Labor investigates a potential misclassification situation, they don’t just focus on that one individual. Rather, they will seek to investigate everyone who works for your company to determine whether those individuals were properly classified.

Additionally, the company could have further problems if the “contractor” does not work out. When you terminate the contracting situation, it is possible that the “contractor” could then apply for unemployment insurance claiming that he or she was an employee. Or if the “contractor” gets hurt on the job, and files a workers’ compensation claim, there will be issues because he or she will not be on the company’s worker’s compensation policy and you will be litigating that individual’s status.

Even if you have an independent contractor agreement saying the person is not an employee, Unemployment (or Workers’ Comp) will look to the reality of the situation and the degree of control the employer had over the individual’s work. Based on that, as well as on other factors, the agency will determine whether the person was really a contractor or if he or she was an employee entitled to the claimed benefits.

For these reasons, it is best to use the hiring process to make determinations about prospective applicants, rather than counting on a “trial period” as an independent contractor. The successful candidate for this PR position should be brought on as an employee, not a contractor. If the employment of this individual is not working out, the company can opt to performance manage the employee or swiftly let the poor performing employee go. Either option is likely less risky than treating someone as an independent contractor when he or she is really an employee.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Hiring and the Law —Hiring a New Employee

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I’m hiring my first employee. What do I need to do?

Answer: There are quite a number of things that a business should do when it hires an employee for the first time. Although requirements vary state to state in the U. S., here are some things all new employers will likely need to do:

— Obtain an EIN (Employer Identification Number) from both the IRS and your state taxing authority so you can file your employment taxes. Your accountant may be able to assist with this.

— Coordinate with your accountant to be able to write payroll checks and withhold appropriate taxes for the federal government, as well as your state and locality. You may want to consider signing up with a payroll company, such as Paychex or ADP, but usually employers do not want to take this step with only one employee.

— Register with your state Department of Labor (or other applicable agency) with regard to Unemployment Insurance taxes. This is also something your accountant may assist with.

— Obtain Workers’ Compensation Insurance. Some states offer insurance through a state insurance fund and employers usually have the option of obtaining that insurance or private insurance. Consult with your insurance broker to determine the workers’ comp insurance that is appropriate for your company. Most states require this coverage if you have only one employee (although if you, the owner, are the only “employee” coverage is often not required or there is a way to opt-out).

— Register with your state’s New Hire Reporting agency. The Small Business Association has links to the state agencies on its website, here: New Hire Reporting for Your State | SBA.gov. This requirement is in place to find dead-beat-dads who are not paying child support, among other reasons.

— Obtain Short Term Disability Insurance if your business is in one of the locations which require it (currently New York, New Jersey, California, Rhode Island, Hawaii and Puerto Rico). Consult with your insurance agent.

— Determine what employment posters and notices you need to post in your workplace. Both state and federal laws require notices about discrimination in the workplace, wage and hour laws, and other legal issues be posted. These are often in an employee lunch room, or other location where employees would see them. There are many poster services on the internet.

— Ensure that your applicant paperwork is legally compliant. Yes, you probably can pick up a job application at Staples, but that does not guarantee that the form asks the questions that are pertinent to your business, or that are legal in your state. Educate yourself about the employment laws of your state. Often, your state will have a website with answers to questions about these issues.

— Some states have requirements regarding information that needs to be provided to new hires when they start working, generally about things like their compensation and pay days. Some states require that this information just be provided. Others require that it be in writing and that you have proof that it was relayed. An internet search for “new hire requirements [your state name]” can provide helpful information.

Although this may seem overwhelming at first, hiring your first employee means that your business is growing and expanding which is a good indicator. Both your accountant and your insurance agent can help you get things in place that are needed when hiring employees. As you expand, having an employment lawyer can also help you ensure compliance with the various employment laws. You want to make sure that you lay a good foundation and do things right from the start.


*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

Scroll to Top