Sheehan Phinney Bass + Green, P.A. USA - New Hampshire
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1 LABOR AND EMPLOYMENT DESK BOOK Sheehan Phinney Bass + Green, P.A. USA - New Hampshire CONTACT INFORMATION James P. Reidy Sheehan Phinney Bass + Green, P.A jreidy@sheehan.com 1. Do you have a plant closing law in your jurisdiction and if so, what does it require? (For U.S. jurisdictions, please answer: Is there a Baby WARN Act in your state and if so, what does it require?) New Hampshire does not have a Baby WARN Act. However, the Rapid Response and Dislocated Worker Director of the State of New Hampshire Department of Resources and Economic Development, along with the applicable local government official, must be notified by the employer of plant closings. N.H.R.S.A. 282-A:45-a requires employers to file a mass layoff notice with the N.H. Department of Employment Security if it temporarily or permanently lays off 25 or more employees in a calendar week or for at least seven days or for a vacation/holiday shutdown or plant closure. 2. Are there special rules on releases/waivers in your jurisdiction? Pursuant to N.H. R.S.A. 275:50, an employee s right to wages and minimum pay may not be waived. There are no other special rules under New Hampshire employment law concerning releases or waivers. In general, in order for a release of liability for negligent conduct to be enforceable under New Hampshire law, the release must clearly and specifically indicate the plaintiff s intention to release the defendant for injuries caused by the defendant s negligence. See Allen v. Dover Co-Recreational Softball League, 148 N.H. 407, 807 A.2d 1274 (2002) and cases cited therein.
2 3. What are the equal employment opportunity/ non-discrimination categories in your jurisdiction (For U.S. jurisdictions, please answer: Are there protected categories beyond Title VII in your state?) Yes. Pursuant to N.H. RSA 354-A:7, marital status and sexual orientation also are protected categories under New Hampshire law. Age is a protected category, but includes any age, not just over 40 years. 4. What are the minimum wage and overtime rules (and exemptions) in your jurisdiction? N.H. RSA 279:21 -- minimum wage as of September 1, 2008, is $7.25 per hour. New Hampshire also has an overtime statute. N.H. RSA 279:21,VIII requires payment of time and one-half on overtime pay for certain employees who work more than forty (40) hours in any one work week. This section of the minimum wage statute was adopted to cover employees who work for employers who are not covered by the FLSA. Employees who are employed by an amusement, seasonal or recreational establishment, as set forth in the statute, are exempt from these state law overtime requirements. 5. Is there employment-at-will, or some other rule, in your jurisdiction? What are the exceptions? New Hampshire recognizes the employment-at-will doctrine. In general, in the absence of am employment contract, an employer in New Hampshire may terminate an at-will employee for any reason that is not prohibited by law and the employee may voluntarily quit at any time and for any reason. See Porter v. City of Manchester, 2004 N.H. LEXIS 87, 849 A.2d 103, 21 I.E.R. Cas. (BNA) 642 (2004); Cloutier v. Great Atlantic & Pac. Tea Co., Inc., 121 N.H. 915, 436 A.2d 1140, 115 L.R.R.M (1981). New Hampshire courts have also recognized a wrongful discharge cause of action as an exception to the at-will doctrine. In order to prove a wrongful discharge claim, the employee must establish the following two elements: (1) the discharge was motivated by bad faith or malice, or based on retaliation; and (2) the discharge was contrary to public policy. Id. 6. What are the legal obligations upon terminating an employee in your jurisdiction? New Hampshire law requires that an employer must pay an outgoing employee all wages owed to the employee. If the employer discharges the employee, the employer must pay all wages in full within seventy-two (72) hours. N.H. RSA 275:44, I. In the event the employee quits or resigns, or if the employee s work is suspended as a result of a labor dispute, or when the employee is laid off, the employer must pay all wages earned by the employee no later than the next regular payday either through regular mail channels or by mail if requested by the employee. N.H. RSA 275:44, II-III. If the employee gives at least one pay period s notice of intention to quit, and the employer does not permit the employee to work out the period of notice, the employer shall pay all wages earned by the employee within seventy-two (72) hours. N.H. RSA 275:44, II; see N.H. Admin. R., Lab (e). Wages may include vacation pay, severance pay, personal days, holiday pay, sick pay and payment of employee
3 expenses when such benefits are paid as a matter of employment policy and/or practice. See N.H. RSA 275:43, III. 7. Are there any family and/or medical leave laws in your jurisdiction, and if so, what do they require? (For U.S. jurisdictions, please answer: Are there family and/or medical leave laws in your state beyond FMLA and if so, what do they require?) New Hampshire does not have a state law equivalent to the FMLA. However, New Hampshire does have a statute related to leave due to pregnancy. Pursuant to RSA 354- A:7,VI, an employer must permit a female employee to take a leave of absence for the period of temporary physical disability resulting from pregnancy, childbirth or related medical conditions. When the employee is physically able to return to work, her original job or a comparable position shall be made available by the employer unless business necessity makes this either impossible or unreasonable. See N.H. RSA 354-A:7,VI(b). N.H. RSA 354-A:7, VI(c) provides that for all other employment purposes (including receipt of benefits under fringe benefits under fringe benefit programs), pregnancy, childbirth, and related medical conditions shall be considered temporary disabilities. An employer must treat a female employee affected by pregnancy, childbirth or related conditions in the same manner as any employee affected by a temporary disability. Id. 8. Please list any miscellaneous, interesting or oddball laws in your jurisdiction, and state under what circumstances they pertain. New Hampshire does not have a state income tax. New Hampshire s Whistleblowers Protection Act, and the elements which must be established to assert a whistleblowers claim, are set forth in N.H. RSA 275-E. Providing the claimant has met the prerequisites set forth in this statute, a claimant may bring a whistleblowers claim before the New Hampshire Department of Labor. See N.H. RSA 275- E:4. N.H. RSA 275:57 sets forth an employer s obligations regarding the reimbursement of certain employee expenses. Other wage and hour statutes of interest include: N.H. RSA 275:43-a (2 hours pay rule and exceptions); N.H. RSA 275:30-a (lunch or eating period requirements); N.H. RSA 275:49 (notification, posting and records); and N.H. RSA 275:27 (records of hours and wages). N.H. RSA 275:37 prohibits employers from sex discrimination in the payment of wages. N.H. RSA 275:41-a sets forth the procedure for asserting an equal pay claim based on a violation of N.H. RSA 275:37. Pursuant to N.H. RSA 275:42, VII, when a final reconciliation of commissions results in a negative balance, the employer cannot recover any such balance from the employee.
4 N.H. RSA 275:48 and the New Hampshire Department of Labor regulation Lab set forth the only permissible deductions from employee wages under New Hampshire law. N.H. RSA 275:43-b and the New Hampshire Department of Labor regulation Lab set out the only permissible deductions from a salary. These apply to any salary, not just the salary paid to an exempt employee. N.H. RSA 275:49 and the New Hampshire Department of Labor regulation Lab require the employer to provide employees certain information in writing before they become effective, such as wage rate or change in wage rate, benefits and pay days and require the employee to sign any alteration in a time record and any change in wage rate. An employer must get permission from the New Hampshire Department of Labor if it wants to pay other than on a weekly basis. N.H. RSA 275-A:4-a prohibits the employment of illegal aliens, i.e., an alien whom the employer knows is not a citizen of the United States and not in possession of Form I-151, or any other document issued by the INS, which does not even exist any more. The New Hampshire Department of Labor reviews I-9 s in its audits and will find a violation of this statute if the employer does not have properly completed I-9 s per IRCA. The agency has not been challenged on this interpretation. 9. Does your jurisdiction have a law requiring employers to give employees access to, or a copy of, their personnel records? Yes. N.H. RSA 275:56, I requires an employer to provide, upon request by an employee, a reasonable opportunity for that employee to inspect the employee s own personnel file. If the employee requests copies of the personnel file, the employer must provide copies and may charge only reasonable copying costs for supplying the requested materials. A personnel file is defined very broadly under the New Hampshire Department of Labor s administrative rules, and will include all s created by management regarding the employee. See N.H. Admin. R., Lab If the employee disagrees with any information contained in the employee s personnel file, and the employer and employee cannot agree on the correction or removal of the information at issue, the employee may submit a written statement explaining the employee s version of the information together with supporting evidence of the employee s version. N.H. RSA 275:56, II. The employee s written statement shall be included in the personnel file and included in the transmittal or disclosure of the personnel file to any third party. Id. N.H. RSA 275:56, III provides that the provisions of this statute shall not require the disclosure of: a) information in the personnel file of a requesting employee who is the subject of an investigation at the time of his request if disclosure of such information would prejudice law enforcement; or b) information relating to a government security investigation.
5 10. Does your jurisdiction outlaw or restrict drug tests, alcohol tests, genetic tests or any other kind of testing? New Hampshire law does not outlaw or restrict drug and/or alcohol testing. However, New Hampshire state discrimination law that prohibits discrimination on the basis of physical and mental disability, N.H. RSA 354-A, also applies to hiring tests. Under N.H. RSA 275:3, an employer may not require that applicants or employees pay the cost of a medical examination or the cost of furnishing any records that the employer requires as a condition of employment. New Hampshire law severely restricts genetic testing. See N.H. RSA 141-H. Pursuant to N.H. RSA 141-H:3, employers, labor organizations and licensing agents shall not solicit, require or administer genetic testing relating to any individual as a condition of employment, labor organization membership, or licensure. N.H. RSA 141-H:3, I(a). Employers, labor organizations and licensing agents likewise may not use genetic tests or the results of genetic tests when making decisions concerning employment, membership or licensure. See N.H. RSA 141-H:3, I(b). This statute does not prohibit the genetic testing of an employee who requests to undergo genetic testing and who provides written consent to such testing for the limited purposes of either investigating a workers compensation claim under N.H. RSA 281- A or determining the employee s susceptibility or level of exposure to potentially toxic chemicals. See N.H. RSA 141-H:3, IV. In addition, N.H. RSA 141-H:3 does not prohibit or limit genetic testing for evidence of insurability with respect to life, disability income, or long-term care insurance under the terms of an employee benefit plan. N.H. RSA 141-H:3, V. Under New Hampshire law, acquired immunodeficiency syndrome (AIDS) is considered a protected disability. Apart from New Hampshire s antidiscrimination law concerning AIDS, AIDS testing and reporting is also restricted under New Hampshire law. See N.H. RSA 141- F. New Hampshire does not have a separate statute concerning polygraph testing. 11. Does your jurisdiction have any special rules on the payment of sales commissions? Under New Hampshire case law, a person who is employed to solicit sales orders is entitled to the commission when the employer accepts the order. The employee s entitlement to commissions is unaffected by the fact that the payment for the order may be delayed. This general rule can be modified by the parties written agreement or by the parties conduct which clearly demonstrates a different compensation scheme. New England Homes v. R.J. Guarnaccia Irrevocable Trust, 150 N.H. 732, 846 A.2d 502 (2004); Galloway v. Chicago-Soft, Ltd., 142 N.H. 752, 713 A.2d 982 (1998). See also N.H. RSA 274:42, VII regarding reconciliation of commissions. This is very restrictive and will not allow the recovery of a negative amount at the final reconciliation.
6 12. What are the basic rules on enforcing non-competes and related agreements in your jurisdiction? New Hampshire courts have held that the public policy of New Hampshire encourages free trade and discourages covenants not to compete. National Employment Service Corporation v. Olsten Staffing Service, Inc., 145 N.H. 158, 761 A.2d 401 (2000); Concord Orthopaedics Professional Association v. Forbes, 142 N.H. 440, 702 A.2d 1273 (1997). New Hampshire courts will uphold a limited restraint if it is reasonable as applied to the particular circumstances of the parties. Id. A restraint on employment is reasonable only if it satisfies all three prongs of the following test for reasonableness: (1) it is no greater than necessary for the protection of the employer s legitimate interest; (2) it does not impose undue hardship on the employee; and (3) it is not injurious to the public interest. Id. If the covenant fails to satisfy one prong of this test, it is unenforceable. Concord Orthopaedics, supra. Whether or not a covenant is reasonable if a matter of law for the court s determination. Olsten Staffing, supra; Technical Aid Corp. v. Allen, 134 N.H. 1, 591 A.2d 262 (1991). Under New Hampshire law, covenants are valid only to the extent that the covenants prevent employees from appropriating the employer s legitimate assets. Concord Orthopaedics, supra. Legitimate assets of an employer may include trade secrets communicated to the employee during the course of employment, confidential information communicated by the employer to the employee, an employee s special influence over the employer s customers obtained during the course of employment, contacts developed during employment, and the employer s development of good will. Olsten Staffing, supra. A restraint must be narrowly tailored in both geography and duration in its protection of a legitimate asset of the employer. See Concord Orthopaedics, supra.
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