Preliminary Questions

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1 John L. Knorek, Esq. Jennifer L. Gitter, Esq. Preliminary Questions 1) Should you have a handbook? 2) What is your corporate culture? 3) Trash the old, build a new house, or just remodel? 4) Hard copy or digital? Disclaimers At-Will Statement EEO Policy & Harassment Ethics/Whistleblower Productive Workplace/Workplace Violence Acknowledgment 1

2 Disclaimers: Is your handbook a contract? The contents of this Handbook are presented as a matter of information only. Because business judgments and needs of our customers will change, the policies described herein are subject to change by the Company. For that reason, it is important to understand thatthe contents of this Handbook are offered only as guidelines to current policies and do not create a separate or additional employment contract, express or implied, or any other agreement, between you and the Company. The Company reserves the right to modify, change, disregard, suspend, or cancel at any time without written or verbal notice all or any part of the Handbook s contents at will as circumstances or changes in the law may require. However, no one other than the Board of Directors of the Company or President has the authority to change any of these policies or enter into any agreement for employment for any specified period of time or to make any agreement contrary to the policies described in this Handbook. Chapter 33, pg. 366 The At-Will Statement YOUR EMPLOYMENT WITH THE COMPANY IS AT- WILL; that is, you retain the right to terminate your employment with the company, without prior notice or reason, and the company retains the right to terminate your employment at any time, without prior notice or reason. Chapter 33, pg. 369 The At-Will Statement A signed acknowledgement of at-will status can preclude liability Woodruff v. Hawaii Pacific Health (Haw. Ct. App. 2014) BUT cannot discharge at-will employee if the discharge violates a clear mandate of public policy Parnar v. Americana Hotels, Inc. (Haw. 1982) Need both a DISCLAIMER and AT-WILL statement Chapter 33, pg

3 EEO Policy and Harassment The Company seeks to employ the best qualified individuals and to provide them with opportunity for advancement in a manner which does not discriminate because of race, color, religion, sex including gender identity and expression, age, national origin, ancestry, marital status, arrest and court record, disability, sexual orientation, citizenship, credit history, military service, victim of domestic or sexual abuse status, or other grounds protected under applicable state and federal laws, regulations, and/or executive order. Any form of harassment of any employee because of any protected status is also prohibited. Chapter 33, pg. 367 EEO Policy and Harassment Sexual harassment may include unwelcome sexual advances, requests for sexual favors, and any other verbal, visual or physical conduct of a sexual nature involving either members of the opposite sex or the same sex. Sexual harassment also may include unwelcome sexual flirtations or propositions, verbal abuse of a sexual nature, subtle pressure or requests for sexual activities, unnecessary touching of an individual, graphic or verbal commentaries about an individual's body, sexually degrading words used to describe an individual, a display of sexually suggestive objects or pictures in the work place, sexually explicit or offensive jokes, or physical assault. Any employee who feels a target of sexual harassment, including but not limited to any of the conduct listed above, by any supervisor, management official, other employee, board member, customer, contractor, vendor, guest or any other person, should bring the matter to the immediate attention of your manager/supervisor or Human Resources. Chapter 33, pg. 367 EEO Policy and Harassment Should you have a zero tolerance harassment policy? 3

4 Ethics &Whistleblower [E]mployees will not be subject to any discrimination, adverse action of any kind, threats, or retaliation because an employee or a person acting on behalf of an employee: (1) reports or is about to report to the Company or a public body, verbally or in writing, a violation or suspected violation of a state or federal law, rule, ordinance, or regulation, or a contract executed by the state, a political subdivision of the state, or the United States, unless the employee knows that the report is false; or (2) is requested to participate in an investigation or hearing by a public body, including a court. This Company maintains a reputation of the highest standards of lawfulness, responsibility, and accountability. All employees shall at all times: comply with all laws and the highest standards of business ethics and conduct in the performance of their job duties; avoid situations which might involve a business conflict with the Company s business, or an appearance of a conflict, between their personal business interests and the business interests of the Company; and protect confidential and proprietary trade information held by the Company or entrusted to it. Chapter 33, pg. 368 This policy does not apply where the disclosure of confidential trade information is protected by an employees constitutional, statutory, or other protected rights.... Productive Workplace/Workplace Violence The Company will not tolerate verbal or physical intimidation or threats of violence toward any employee. Any employee who believes that the actions or words of a supervisor, fellow employee, resident, vendor, or third party constitute physical intimidation or threat of violence should report or complain as soon as possible to the appropriate supervisor, the manager/supervisor, or any other member of management. All complaints of physical intimidation or threats of violence will be investigated promptly and in as confidential a manner as possible by the Company. Any employee, supervisor, or manager who is found after appropriate investigation to have engaged in any physical intimidation or threat of violence of another employee will be subject to appropriate disciplinary action, depending on the circumstances, up to and including termination. This policy also prohibits retaliation against any employee who has made a good-faith complaint of physical intimidation or threat of violence or who has cooperated with the investigation of such a complaint. Chapter 33, pgs Acknowledgment I hereby acknowledge receipt of the Company Employee Handbook and agree to read and abide by the guidelines and procedures contained herein.... Chapter 33, pg

5 Do you need to update your polices? A quick summary Salary level required for FLSA exemption increased from $455/week ($23,660 annually) to $913/week ($47,476 annually) FLSA will cover an estimated 4.2 million workers who are currently exempt Future automatic updates to salary level thresholds every 3 years, beginning in 2020 Employers can now use nondiscretionary bonuses and incentives payments (including commissions) to satisfy up to 10% of the standard salary level Do you need to change or update your handbook? Update or add FLSA-related provisions to ensure compliance, including: Off-the-clock work; meal and rest breaks; travel time; mobile device use; overtime; timekeeping; payroll Example: Overtime Require prior approval Failure to obtain approval will result in discipline, up to and including discharge (but you cannot refuse to pay!) Example: Timekeeping Nonexempt personnel must record daily hours worked. These hours are recorded on a time card or time sheet and you are responsible for its accuracy. You and your supervisor must sign your time card or time sheet at the end of each pay period. You must record only your own time and may not record time for another employee. Any changes must be made and initialed by your supervisor Chapter 33, pg

6 Do you need to change or update your handbook? Example: Travel Time Non-exempt employees may be required to travel as part of the job from time to time. Hotels, meals, and transportation costs may be reimbursed by the Company when an employee is required to travel for Company business. Employees should seek the lowest rate for hotel and transportation expenses, and use good judgment when selecting meals. All travel and entertainment costs incurred for business purposes and deductable under the Internal Revenue Code will be reimbursed by the Company if approved in advance and submitted to the Company on the appropriate reimbursement form with supporting receipts and/or invoices. The Company may request additional information to substantiate your reimbursement request. FLSA Safe Harbor If employer (1) has a clearly communicated policy prohibiting improper deductions, including a complaint mechanism, (2) reimburses the employee for improper deductions, and (3) makes a good faith commitment to comply in the future, the employer does not lose the exemptions for employees if improper deductions were made unless the employer willfully violates a policy by continuing the improper deduction after receiving employee complaints. Chapter 33, pg. 371 FLSA Safe Harbor Employees who are paid a salary and are exempt from the overtime provisions cannot have their pay reduced unlessthey: Are absent from work for one or more full days for personal reasons other than sickness or disability; Are absent from work for one or more full days because of sickness or disability (including work-related accidents) if the deduction is made in accordance with our sick leave policy, and/or PTO policy; Receive jury fees, witness fees, or military pay, which will be offset against their salary due for that particular week; Receive penalties for infractions of safety rules of major significance which will be deducted from their salary due for that particular week; Receive unpaid disciplinary suspensions of one or more full days for infractions of workplace conduct rules; Terminate their employment, in which case employees will be paid the proportionate amount of their full weekly salary for the time actually worked in their last week of employment; and Take unpaid leave under the Family and Medical Leave Act. This means that exempt employees will receive their full salary for any week in which they perform any work without regard to the number of days or hours worked unless one of the seven above-listed exceptions apply. The Company prohibits improper deductions from an exempt employee s salary. Improper deductions are those deductions that are not permitted by one of the seven exceptions listed above. Any employee who believes that an improper deduction has been made from his/her salary should make a complaint to his/her supervisor, Department Head, or the Director of Human Resources as soon as practicable. The Company will conduct a prompt and thorough investigation of the complaint. If the investigation determines that improper deductions were made, the Company shall reimburse the affected employee for any improper deductions and make a good-faith commitment to avoid improper deductions in the future Chapter 33, pg

7 ADA FMLA Workers Compensation Victim Leave Americans with Disabilities Act Lowe s had a pattern and practice of discharging employees when they exceed its 180-day (and later, 240-day) maximum leave policy EEOCbrought suit claiming violations of ADA because Lowe s failed to engage in interactive process and provide reasonable accommodations Lowe s settled for $8.6 million in May 2016 Result: cannot discharge employees for using up your leave policy; must engage in an interactive process to determine if you can provide a reasonable accommodation by extending leave EEOCguidance: The ADA requires that employers make exceptions to their policies, including leave policies, in order to provide a reasonable accommodation. Chapter 33, pg Dep t of Labor FMLA Guidance 7

8 Workers Compensation: Haw. Rev. Stat (2) The Company pays the total premium to provide you with medical care, rehabilitation services, wage replacement benefits at 66 2/3% of average weekly earnings up to a maximum beginning with the fourth calendar day of disability, and permanent partial or total disability benefits if you sustain a work-related injury or illness. IT IS COMPANY POLICY AND YOUR RESPONSIBILITY TO REPORT ALL INJURIES AND ILLNESSES IMMEDIATELY TO YOUR SUPERVISOR. For disabilities covered by Temporary Disability Insurance or Workers' Compensation, the Company pays your medical insurance premiums for the month in which your illness/injury occurs. Thereafter, your individual medical premium will be paid for by the Company for an additional three (3) months, if you remain disabled; payments for all other insurance premiums are your responsibility. Chapter 33, pg. 379 Victim Leave Policies If you or your minor child is a victim of domestic or sexual violence, you may be eligible to take unpaid leave for a reasonable period of time, not to exceed five days per calendar year. An employee must have worked for the Company for at least six consecutive months to be eligible for leave under this policy. For purposes of this section, your minor child includes a biological, adopted, foster, or stepchild, or any legal ward of an employee under the age of majority.... An employee must exhaust any other paid or unpaid leave which is applicable and available before taking leave under this policy. For example, employees wishing to take victims leave who have available vacation leave must first use their vacation leave before taking unpaid victims leave. The total amount of paid or unpaid leave which may be taken because of domestic or sexual violence shall not exceed 5 days per calendar year. If you have 50 employees, must provide up to 30 days unpaid leave per year. Chapter 33, pg. 378 Telecommuting Policies Telecommuting as a Reasonable Accommodation 8

9 Telecommuting Policies If you allow telecommuting, create detailed handbook policies to address issues such as eligibility, scheduled workweek, work environment, safety and liability for injuries, timekeeping, equipment, etc. Example: Safety The telecommuter is responsible for designating and maintaining a workplace that is free from recognized hazards and that complies with all occupational safety and health standards, rules, and regulations. The telecommuter is responsible for maintaining an ergonomically correct workstation. Telecommuters requiring assistance in this regard should contact the Human Resources Department. Before a telecommuting arrangement is implemented, a designated representative of the Company will schedule a visit to the telecommuter s home worksite to inspect for possible work hazards and identify required modifications. Repeat scheduled inspections will occur on an as-needed basis. Consider an additional telecommuting contract establishing the terms and conditions of telecommuting (while still maintainining at-will status). Telecommuting as a Reasonable Accommodation EEOCv. Ford Motor Co. Jane Harris, who suffered from IBS, was employed byford to act as an intermediary between Ford s steel suppliers and its parts manufactures. Jane requested, as an accommodation for her condition, to work from home as needed up to 4 days/week. Ford refused, claiming she could not perform the essential functions of her job while telecommuting. Ford argued that regular and predictable on-site attendance was an essential function of her job. Though a divided 6 th Circuit ultimately found for Ford, it did not rule out that telecommuting could be a reasonable accommodation in some cases. If you allow telecommuting for non-disabled employees, will be difficult to deny it as a reasonable accommodation If physical presence in the workplace is an essential job requirement, and essential job functions could not be performed without it, put it in the job description. Should you have one? 9

10 Arbitration Agreements Because of the delay and expense involved in litigation before state or federal courts, or before state or federal agencies, EMPLOYER and I agree that any claim or dispute arising out of or relating to my recruitment, hiring, employment, employment benefits, or separation from employment with EMPLOYER shall be subject to final and binding arbitration, pursuant to the Federal Arbitration Act, 9 U.S.C. 1 et seq., or if not applicable, the Hawai i Uniform Arbitration Act, HRS Chapter 658A. However, nothing in this Agreement precludes Employees from initiating or participating in proceedings to adjudicate unfair labor practice charges before the National Labor Relations Board. The arbitration will be conducted at a location in Hawai i agreed to by EMPLOYER and me or absent agreement, by Dispute Prevention and Resolution, Inc. unless another entity is agreed to by EMPLOYER and me.... Chapter 33, pg

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