It shouldn’t surprise you that an employment lawyer will advise you to have an employee handbook.
But it may surprise you is that I would rather you have no handbook than one you write yourself.
Why would I say that?
Well, a handbook is an important legal document in lawsuits and labor audits. If you have non-compliant policies, it can create presumed liability automatically. In other words, non-compliant policies are like an admission of guilt.
In some cases, no written policies (for example, with respect to certain breaks, required notices, and pay policies) can also create a presumption of guilt. But non-compliant policies are a greater danger.
By far, my recommendation is that you have a lawyer-drafted, compliant employee handbook. Here is a short video on four good reasons why:
So now you know why you should have an employee handbook. Is downloading one off of an internet resource good enough?
NO! Employment laws are complex and numerous. Boilerplate employee handbooks often have provisions that sound reasonable to you as the employer, but are in fact illegal in some jurisdictions or may mislead you into doing something illegal.
I write several handbooks a year. I have never found a good template off a website (and I have tried several). I ended up creating my own template and checklist for management decisions. (You can choose different policies depending on how you want to run your business, and I advise on the financial, business and legal implications of those decisions as part of the drafting process.)
An employee handbook is a 50 page legal document that you should not attempt to DIY. Call a pro. And keep it updated!
Does it matter if I have an employee handbook?
“Does it matter if I have an employee handbook?” Yes! Here are four good reasons why. 1. A handbook teaches your managers and your employees the proper and legal way to do things. It’s not always commonsense. 2. A handbook empowers you to politely tell an employee “No” to a special request because it is against policy. This keeps everything fair. 3. A handbook can be used to defend you, should an employee lie about a situation to a court or governmental agency. 4. Employers are required to provide certain notices in writing to their employees, and a handbook is a good way to do it. Failure to provide these notices can result in lawsuits, fines and even criminal penalties. So yes, a handbook is essential and it should be reviewed by an employment lawyer annually. Does your business need employment law help? Visit us at bellatrixlaw.com to apply for our Employer Protection services.
Eric is really angry. Less than a year ago, he started a business with four guys he knew from friends of friends. They shared the dream of opening a sports bar dedicated to soccer that would serve international beer and bar food.
They found the perfect spot and signed a lease. Eric personally guarateed the lease and put $30,000 down for a deposit. He paid for all the kitchen equipment and hired a contractor to bring the building to code.
His partners (they were all equal according to the one page document he typed up) chipped in for a little while. One brought in some TVs. Another bought some beer and tended bar sometimes. Another pitched in a few thousand dollars to buy some advertising to announce their grand opening.
After a month, the first partner was run out by Eric after taking cash from the till. He never came back.
Then one of the partners got sued for pinching the waitresses. Eric became embroiled because they were not a registered partnership or corporation.
Six months in, Eric ran out of savings before the bar started turning a profit and he got behind on rent. He asked the third partner for money. Instead, the third partner took all the TVs and left.
The waitresses quit because they were paid late. There was no cash for food or beer. And the landlord said that Eric was personally responsible for the five year lease — a debt of $250,000 at least.
After a few more months of barely scraping buy, Eric closes the doors to his dream bar. And the landlord sues.
Although this is a fictional story, I get a call from someone like Eric at least once a month. The details vary, of course. But the story is more or less the same: an erstwhile entrepreneur gets burned by less-than-honest partners or landlords and now has major problems. He’s broke, depressed and ruined.
It’s a really depressing story for an optimistic entrepreneur like me. But sadly, 80% of businesses fail within their first year. And the blow up is usually spectacularly devasting for an owner like Eric.
I am CONVINCED that many businesses would not fail if they had simply started off right. New business owners make a lot of the same mistakes that lead to failure. These include:
Not organizing legally, following ALL the steps necessary (e.g. just filing an LLC is not good enough)
Failing to keep professional accounting records from Day 1 and getting into tax problems
Not having good contracts with business partners and investors (this is one of the biggest mistakes)
Getting stuck in a bad commercial lease
Not having adequate resources to deal with all the things a new business must do because of lack of planning or education, which destroys cash flow because of constant traps and problems
Failing to follow good employment and pay practices from Day 1
Underestimating what starting and running a successful business takes
Eric didn’t call me before starting his business. If he had, I would’ve given him my ebook, How to Start A Business… Legally: A Quick and Easy Checklist.
I cannot stress this enough. Getting set up right and under the guidance of someone who has started or help start many businesses will save you thousands of dolalrs and help prevent failure.
Someone like Eric spends $100,000 to open his bar, only to crash and burn in just a few months. Now he’s liable for another $250,000 just with a broken lease…. There are still employee liabilities and taxes to deal with (and that’s if the partners all just disappear). His legal fees with me are going to be a minimum of $50,000. Alternatively, he will bankrupt and lose everything.
In a more perfect universe, Eric would have come to me a year ago. He would have hired me for between $5000 and $18000 and I would’ve helped him set up everything and given him the benefit of my years experience in business start ups.
He would’ve avoided the bad partners, the bad lease, the sexual harassment lawsuit and the waitresses quitting.
He also would have been on track to avoid the plethora of other problems that come from starting a business.
And then his $100,000 investment would not have been such a hopeless risk!
If I practiced law just for money, I would rather have people like Eric pay me $50,000 or more to pick up the broken pieces of their dreams and help them move on.
But I’d rather more small businesses be successful. And the odds of that are much improved when you invest in the foundation when you start up.
In 2002, Congress passed a law known as the Sarbanes-Oxley Act, or SOX. SOX applies to both publicly- and privately-held companies, and imposes a rigid list of corporate best practices in an effort to deter acts of fraud. Companies who violate these standards risk exposure to a long list of civil and criminal penalties, as well as investment and loan denials. In short, failure to adhere to the provisions supplied by SOX presents allegedly non-compliant corporations with a battery of devastating legal and financial problems.
Whether your business needs experienced legal representation to challenge claims of non-compliance, or you are simply unsure whether your current practices align with SOX best practices and would like a closer review of your policies, the knowledgeable employment attorneys of Bellatrix PC are here to help. Our business risk review will identify and improve upon vulnerable areas in your employment and record-keeping policies to better protect you against legal claims in the future. If your organization has already been targeted by a lawsuit, our aggressive commercial litigation lawyers will prepare tactical defense strategies to protect your company’s best interests.
To arrange for a private legal consultation, call Bellatrix PC right away at (800) 449-8992.
What is Sarbanes-Oxley in Employment Law?
In response to the controversial and heavily publicized Enron and WorldCom bankruptcies, Congress passed the Sarbanes-Oxley Act into law in July of 2002. This act, which was quickly nicknamed “SOX,” is also known as the Public Company Accounting Reform and Investor Protection Act, or the Corporate and Auditing Accountability and Responsibility Act. These names provide a good idea of SOX’s general purpose.
The act has two primary objectives:
To deter and punish corporate fraud, accounting fraud, and acts of corruption among corporate executives.
To protect whistleblowers in whistleblower lawsuits, making the destruction of evidence and impeding federal civil investigations a crime.
It is crucially important for business owners to know that, contrary to common misconceptions, this act applies to privately held companies — not just publicly-traded companies. This means private companies may not destroy evidence or interfere with federal civil investigations by agencies such as OSHA, the EEOC, or the IRS, which implicates employment law. SOX also imposes specific restrictions on private placement securities solicitations, which is particularly important if you or your organization is raising capital from investors. Private companies must demonstrate full compliance with SOX before going public.
Sarbanes-Oxley also establishes corporate “best practices,” which include:
Establishing business policies and codes of ethics.
Monitoring conflicts of interest.
Establishing independent directors on the Board of Directors where appropriate.
Civil and Criminal Penalties for Violating SOX Best Practices
It is critically important for employers and business owners to note that the best practices delineated by Sarbanes-Oxley are not merely recommendations. On the contrary, failure to comply can result in a variety of debilitating civil and even criminal penalties being imposed on non-compliant companies. For example, depending on the severity of the offense, a maximum prison sentence can range from 20 to 25 years: nearly three decades of incarceration.
It is also important to remember that, in addition to the formal civil and/or criminal penalties imposed by judges or regulatory agencies, organizations which fail to comply with SOX best practices are often highly unappealing to lenders, venture capitalists, and other investors. If your company’s practices are deemed to be unethical, unsound, or otherwise fall short of the act’s requirements, the likely result is the denial of a loan or investment, or ongoing investor disputes. In other words, the negative financial consequences of non-compliance extend far beyond fines and penalties imposed by the government: they extend to your business opportunities and daily operations as well.
Finally, because SOX provides whistleblower protection provisions, a whistleblower whose rights are violated may seek special damages, back pay, reinstatement, and attorneys’ fees.
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SOX convictions can devastate even the most stable and robust of corporations. If you are at all concerned that your current employment or accounting practices are not in alignment with SOX provisions, it is absolutely crucial that you take immediate action to address the issue now before it is already too late. Failure to resolve legitimate concerns at the outset only increases the likelihood that costly, disruptive, and time-consuming litigation will arise in the future, draining your financial resources and damaging your organization’s reputation as a trustworthy and ethical business.
Let our team help yours. To start discussing your organization’s legal situation in a completely private consultation, call the experienced Sarbanes-Oxley lawyers of Bellatrix PC at (800) 449-8992 today.
The term “whistleblower” is defined as a person who reports illegal activity, fraud against the government, or other wrongdoing within a company, state agency, or organization. A federal law, called the False Claims Act, allows employees and other whistleblowers to bring a qui tam suit in the name of all taxpayers against companies who have overbilled or defrauded the federal government.
A state-level law, called the California False Claims Act, also encourages state employees and other whistleblowers to combat fraud and illegal activity by bringing claims against companies engaged in wrongdoing. If the whistleblower’s accusations are found to have merit by the government, and the company is subsequently charged, the whistleblower will receive statutory rewards for their courage in combating fraud against the government.
At Bellatrix PC, our experienced business lawyers are committed to defending entities accused of engaging in fraud, overbilling, and other wrongful financial and legal acts. Our legal team balances aggressive client advocacy with strict compliance with all pertinent state and federal laws, and is dedicated to assisting businesses of all structures and sizes. We will walk you through the nuances of the allegations against your entity, devise comprehensive defense strategies, and help your business explore its legal options for resolving the situation as rapidly, efficiently, and cost-effectively as possible.
To start discussing your goals in a completely confidential legal consultation, call Bellatrix PC today at (800) 449-8992.
Whistleblower Confidentiality Under California Law
The plaintiffs in whistleblower lawsuits, or qui tam lawsuits, are often referred to as “relators.” The California Whistleblower Protection Act, which protects the identity of relators, also authorizes the California State Auditor to accept complaints from both California employees and members of the general public who wish to confidentially report unlawful and unethical conduct.
Like the identity of the original relator, the confidentiality of these supplemental complaints is closely guarded. With a few special exceptions for law enforcement agencies conducting criminal investigations, complainants’ identities may not be revealed unless the complainant him- or herself grants permission for disclosure.
What Does the False Claims Act Prohibit?
The False Claims Act prohibits numerous types of fraudulent conduct, with some of the more common examples of prohibited acts including but not limited to:
A small business supplying false “minority-owned” certification, with the intention of securing additional government contracts, when the purportedly “minority-owned” business is in fact neither owned nor operated by a minority.
A healthcare professional billing Medicaid and/or Medicare for medical procedures, such as surgeries or examinations, which were never actually conducted. Medicare fraud is a widespread problem throughout the United States, with the Office of Management and Budget estimating nearly $48 billion in improper Medicare payments in 2010.
A government contractor falsely claiming compliance with federal safety regulations, such as those imposed by the Occupational Safety and Health Administratin (OSHA), when the pertinent regulations were in fact disregarded by the contractor.
A pharmaceutical company which encourages doctors and other healthcare professionals to prescribe patients drugs for uses which have not been approved by the Food and Drug Administration. This tactic is commonly referred to as “off-label” marketing.
Furthermore, California Labor Code Section 1102.5 provides several additional protections for individual employees. Pursuant to Section 1102.5:
(a) Employers are prohibited from creating, adopting, or enforcing any rules, regulations, or policies which would prevent an employees from whistleblowing, provided the employee in question has “reasonable cause” to believe that the information he or she is providing relates to a violation of state or federal laws or regulations.
(b) Employers are prohibited from retaliating against whistleblower employees. Once again, this provision is contingent upon the employee’s “reasonable cause” in believing that a violation or act of noncompliance has occurred or is occurring.
(c) Similarly to the provision of subdivision (b), employers are also prohibited from retaliating against employees who refuse to participate in illegal, unlawful, and unethical acts which violate state or federal laws or regulations.
(d) Employers may not retaliate against an employee for having exercised his or her rights under subdivision (a), (b), or (c) in any former employment.
(e) A report made by an employee of a government agency to his or her employer is a disclosure of information to a government or law enforcement agency pursuant to subdivisions (a) and (b).
Section 1102.5 is designed to protect California whistleblowers’ legal rights. Employers who violate this statute may be subject to civil penalties, as well as additional damages stemming from lawsuits, couched as retaliation, in violation of public policy or wrongful termination in violation of public policy claims.
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If your company has been charged with committing fraud or other violations of the False Claims Act, the California Whistleblowers Protection Act, or Section 1102.5 of the California Labor Code, it is a serious matter which demands immediate attention from an experienced legal professional.
The employment law attorneys of Bellatrix PC represent entities of all structures and sizes, ranging from small start-ups to large and firmly established corporations, and are prepared to handle even highly complex multi-party litigation cases. Don’t wait until it’s already too late to address your legal issue: call the law offices of Bellatrix PC today at (800) 449-8992.
The Occupational Health and Safety Act of 1970, also called the OSH Act, mandates federal safety regulations which the majority of private sector employers must comply with. The provisions delineated by the OSH Act are strictly enforced by OSHA, or the Occupational Safety and Health Administration, and if an employee alleges unsafe working conditions by filing an OSHA complaint, the business which is allegedly in OSH Act violation may be assessed considerable civil penalties of up to $70,000 per violation. OSHA conducts tens of thousands of inspections each year, and if an inspector determines the existence of a hazardous condition, the ultimate result may be litigation in federal court.
If you are are a business owner who is concerned about your workplace safety policies, or if an employee has already brought a workplace safety complaint against your company, the experienced employment law lawyers of Bellatrix PC can help. Whether you’d like to identify vulnerable areas in your current practices through our business risk review service, or you are already facing a lawsuit and need aggressive legal representation, our OSHA attorneys are here to assist.
To arrange for a private legal consultation, call the law offices of Bellatrix PC right away at (800) 449-8992.
What is the Occupational Safety and Health Act?
The OSH Act created OSHA with the purpose of making sure that the safety and health concerns of all American workers were being met. In order to continuously accomplish this goal, the OSH Act focuses on two broad areas:
Enforcing occupational and public safety laws.
Providing information and assistance to employers, workers, and the public regarding workplace safety and health issues.
Employers must bear in mind that OSHA, which has jurisdiction over private sector employers excluding self-employed persons or sole proprietors and workers on family-owned farms, aggressively enforces compliance with federal safety regulations across a wide variety of industries. This is particularly true of industries which are known to be statistically prone to injuries and fatalities among workers, such as construction, logging, and manufacturing.
The OSH Act covers private sector employers and their employees in the 50 states and certain territories and jurisdictions under federal authority. Additionally, the State of California, under an agreement with OSHA, operates its own occupational safety and health program to bolster the federal regulations. The Department of Industrial Relations administers this program, which is named the California Occupational Safety and Health Program, or Cal/OSHA. The Division of Occupational Safety and Health, or DOSH, is the principal executor of the plan, which oversees enforcement and consultation.
Cal/OSHA Compliance and Work Site Inspections
Cal/OSHA applies to all public and private employers in the state, with the following six exceptions:
Employees of the United States Postal Service
Private sector employers located on Native American lands
Maritime activities on the navigable waterways of the United States
Private contractors working on land designated as exclusive federal jurisdiction
Employers who require federal security clearances
The Cal/OSHA enforcement unit conducts “programmed” and “unprogrammed” inspections of work sites.
A programmed investigation is the result of a) being randomly selected in a specific industry, or as part of a national or local workplace safety and health emphasis program, or b) an inspection of another location operated by the same employer, but was not the reason the first visit was initiated.
An unprogrammed inspection is the result of an accident, complaint, or referral that an alleged incident occurred at a work site that may have violated the health and/or safety of workers.
During the inspection process, the Cal/OSHA inspector will hold an opening conference to explain the reason for and scope of the inspection. The inspector will then complete a walk-around to view the work site, conduct employee interviews, take photographs, and collect environmental samples to see if a violation has occurred. Once the investigation is completed, the Cal/OSHA inspector will hold a closing conference to discuss any alleged violations and requirements for abatement.
If a citation or notice is received, an appeal may be submitted to the Occupational Safety and Health Appeals Board in reference to the violation, proposed penalty, or abatement requirement. Any appeal must be made in writing within 15 working days of receipt of the citation. If an employer fails to notify the Appeals Board of their appeal within the 15 working day limit, and no notice is filed by an employee or employee representative within that time, the citation becomes a final order not subject to review by any court or other agency.
Contact Our Employment Law Attorneys
If your business has received a Cal/OSHA citation or notice, it is wise to seek legal advice from a California OSHA lawyer. Bellatrix PC is well versed in Cal/OSHA law and can step in at any stage of the violations, from the time the compliance officers first appear at the work site, upon receipt of citations, at the conference with the area director, during discovery and trial, and on appeals before the Occupational Safety and Health Review Commission. Our legal group can also advise you on how to prevent such incidents from occurring again, and/or how to handle them correctly, should they occur in the future.
To begin discussing your matter in a private case evaluation, call Bellatrix PC at (800) 449-8992. Our California law offices are located in San Diego and Riverside.
That’s Elliot, the office cat. He’s actually not just an office cat, he’s my full time cat; but he hates being alone, so he goes to the office with me, where he promptly annoys everyone by sleeping in their inboxes or walking across their keyboards.
Elliot runs out the office’s front door at least once a day, only to be caught and brought back inside. It’s his thing. He never goes far… at least, he never did until last Thursday, when he ran around the city block. This seemed only marginally annoying at first, until after a couple hours it became obvious that Elliot had stepped in something caustic. He had a severe chemical burn on his paw, which he licked and turned into a severe chemical burn of his tongue and stomach. Elliot spent the weekend at the vet hospital.
On Monday, I tried to leave Elliot safe in his bed. But he complained and so I took him to the office with me. He wanted to go to the office as was his routine, even though he was sick!
Obviously, Elliot is a cat and not my employee, so having him come to the office when he is sick doesn’t impact my business too much. But it made me think about all the reasons why having sick employees in the office is a bad idea, no matter how much they insist on coming in (for whatever reason). So here’s a partial list of why you need to force sick employees to go home until they are better:
1. Contagions: if one employee has a contagious illness, they are contagious when they are early in the sickness, have a fever, are coughing or sneezing, and when they are carrying virus or bacteria on their hands. Those germs get into your air and are circulated around and get onto everyone’s phones, doorknobs and computers. Before you know it, after a few days to two weeks, half your workforce is out with the ebola virus. This grinds productivity to a halt. You get your customers sick or you get sick yourself. Passing around communicable diseases is bad for business.
2. Worker’s Comp Liability: if an employee is drugged up, tired, foggy, uncoordinated, etc., they may be more prone to accidents. Accidents at work equals worker’s compensation claims and lawsuits. Not only will this affect your premiums, but if it is a severe enough injury, it will trigger an automatic OSHA inspection, which almost always results in fines and other consequences when it turns out you aren’t quite as compliant as you expected!
3. Liability to Customers: it doesn’t happen too often, but occasionally I get a call from a client where an employee accidentally (or even on purpose) hurt or offended a customer to the point that the customer is threatening legal action. Here’s an example: a waitress who is lightheaded from a head cold accidentally pours hot coffee on a patron’s lap, severely burning him. That’s exactly the kind of stupid situation that could have been avoided by the employer forcing the sick employee to go home. Most of the time, it’s not worth the risk of keeping a sick employee out interacting with customers.
4. Disability and Leave Law Compliance: if you have an employee who is exhibiting health problems, you might have a trigger for ADA and leave law compliance. Not all sicknesses in the workplace are head colds. If you have any indication, whatsoever, that an employee may be suffering from something, you need to begin documenting the steps you are taking to obtain releases and accommodate disabilities, immediately. The interactive process under the ADA is a long process and is frequently handled improperly by employers. This leads to a lot of lawsuits and wasted money. Do not wait until the employee comes to you; be proactive. This is especially the case if the employee is a poor performer and in danger of being fired; you do not want a wrongful termination lawsuit on your hands!
5. Productivity Disruptions: here’s a basic bottom line point for you. If you have a sick or injured employee, they are half as productive for the same hourly price. Why spend that? This is especially foolish when the employee’s illness is prolonged by coming to work when they could stay home and use up their sick time (which is on the books already) and get back to full steam in half the time. It is also inefficient if extra time is being devoted to managing them, double checking their work, or picking up the slack, all because they are being “dedicated” by coming in while sick.
Here’s my advice. Allowing sick employees to work is penny-wise but pound-foolish. Make them go home!
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Alicia I. Dearn is the founder of Bellatrix PC, a woman-owned law firm with offices in Missouri and California. Bellatrix PC handles lawsuits and business transactions. We advise in business, employment, real estate, intellectual property, civil litigation, and election law.
The articles published by Bellatrix PC are for informational purposes only and do not constitute legal advice. If you have a legal issue, please get competent advice from a licensed attorney in your jurisdiction. Use of Bellatrix PC's site is subject to our Attorney Advertising Disclaimers.