Tag Archives: Human Resources

U.S. Department of Labor Releases Proposed Overtime Rule

March 27, 2019


On March 7, 2019, the U.S. Department of Labor (DOL) released a Notice of Proposed Rulemaking (“NPRM”) proposing to revise the overtime salary thresholds under the Fair Labor Standards Act (FLSA). The proposed rule would increase the weekly salary threshold for exempt employees from $455 ($23,660 annually) to $679 ($35,308 annually).

The DOL made earlier efforts to revise the overtime salary threshold, which stalled due to heavy legal opposition.  This NPRM is a new effort by the DOL to address the current salary threshold that dates back to 2004.

Determining Exempt Status

In order to be exempt from FLSA overtime requirements, an employee must meet both the “salary test” and “duties test.”

Salary Test

An employee must meet two prongs of the salary test:

  1. The salary basis test – With limited exception, the employee be paid a predetermined amount, regardless of quality or quantity of work, and the amount must at least equal the required minimum wage.
  2. The salary level test – The minimum salary for an employee to qualify as exempt would be $679 per week or $35,308 annually.  This is the primary focus of the NPRM.

Duties Test

The duties test exempts those that primarily perform executive, professional and administrative duties. For additional information on the duties test, please refer to the DOL wage and Hour Division (WHD) Fact Sheet #17A.

Overtime Eligibility

Non-exempt employees, as defined under FLSA, must be compensated at 1 ½ times their normal rate of pay for any hours worked over 40 hours in a work week. Pay for time not worked such as vacation, sick leave, or holiday pay is not counted toward the overtime requirement. Non-exempt employees can be paid on an hourly, salary, piece rate, or commission basis so long as:  (i) they are compensated at or above the required minimum wage rate for all hours worked;  and (ii) are paid overtime for any hours worked in excess of 40 hours in a single work week.

In addition to FLSA requirements, an employer is still required to comply with any applicable state or local wage and hour laws.

Other Proposed Changes

The NPRM also includes the following:

  • An increase in the total annual compensation requirement for  “highly compensated employees” subject to the “minimal duties” test from $100,000 to $147,414 annually;
  • Employers may use non-discretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level; and
  • A statement of commitment by the DOL to periodically review the salary threshold.

The NPRM does not change the “duties test” for determining exempt status or change the current overtime protections for police officers, firefighters, paramedics, nurses, laborers or non-management employees working in maintenance, construction, or other similar occupations.

Additional information about the proposed rule is available at here.  Once the proposed rule is published in the Federal Register, interested members of the public will have 60 days to submit comments by visiting www.regulations.gov.

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Required Poster Update – Missouri Unemployment Insurance

April 24, 2018


The Missouri Division of Employment Security has recently released an updated Notice to Workers Concerning Unemployment Benefits poster.

The updated poster clarifies when and how eligible employees can apply for unemployment insurance benefits. The posting also discusses proper worker classification, and explains what workers should do if they think they may be misclassified. .

This poster is required to be posted in a location that is visible to all workers. If workers do not have access to the poster, they should be notified that they are covered by unemployment insurance.

Additional mandatory employment posters required by the State of Missouri as well as the Federal Government can be found on the Missouri Department of Labor and Industrial Relations’ website.

We urge clients to contact ThinkHR with any questions on state unemployment requirements as well as any other day-to-day HR questions.  Clients can also sign up to receive “ThinkHR Crunch,” a monthly newsletter for state and federal employment law alerts.  If you need assistance getting registered with ThinkHR, please notify your J.W. Terrill account representative and we will be happy to help!

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A Voice at the Table

July 18, 2017


The origin of Human Resources can be charted back to the industrial revolution. Then the Welfare Officer was tasked with overseeing workers’ wages and record maintenance.  Since that time, HR professionals have held a variety of titles including Labor Manager (1900s), Personnel Manager (1950s), Human Resources Manager (1980s), and finally HR Business Partner.  Wow, it took a while to make partnership.  What does a business partnership with HR really mean?

The look of HR depends on many characteristics such as company size, locations, and industry. HR can be an office manager, part of finance or its own free standing department.  It can wear one hat or many.  The HR leader could report to the owner, President, CEO, COO, even CFO. With so many variables HR can get lost and be absent from critical decision making.  This is the conundrum with Human Resources.

Human Resources should be the guard against employment liability. Whatever form HR takes, it has a unique role of ensuring the organization is compliant with employment regulations AND ensuring appropriate employee management.  This HR individual, or group of individuals, should be leading the defensive team and, as the saying goes, a pro-active defense is the best offense.  HR should be reducing risk by removing employment barriers so the organization can succeed, together.

If allowed to be a leader, HR not only reduces employment risk but also manages the risk when there has been an issue. The HR leader tends to be like Switzerland to be effective.  HR is a neutral voice that should be the in-house expert on managing employment liability within the organization.  That is the voice HR brings to the table and to the culture.  That is the value of the partnership.

No organization would want to be the next Uber or 21st Century Fox.  While we do not know the action or inaction of HR in those situations I think it is a pretty good guess that something failed in the partnership, or by not having an effective HR voice at the table. Something was fractured in both of those organizations’ structure or process.

What can organizations do? First, define the HR role you need.  Different size organizations will need different skill sets.  Select or educate the individual that suites your needs and is capable of being that neutral voice of managing employment risk.

Second, clean up your practices and policies. Be careful what you put in writing and what you don’t have in writing.  It is a fine line of what to share between the employer and employee.  An HR professional can manage that line.

Third, train, train, and more train. The untrained executives, managers, and supervisors are an unconscious liability.  Making cowboy decisions is not effective.

Lastly, invite HR to the table to listen. While large corporations get the headlines for their missteps, everyday managerial decisions that are a cautionary tale.  Consider the disability services company that settled an EEOC lawsuit for $100,000 for allegedly firing employees who needed extended medical leave.  Or a retail store in central Illinois that refused to accommodate employees with disabilities and was ordered to pay $424,045 in damages, lost wages and litigation costs (not including attorney fees). Can you afford $424,045, plus your legal fees, due to carelessness or error of judgment?

HR has a crucial voice in today’s leadership. If you want to take action in cultivating the HR partnership and need guidance, we can be of assistance.  We offer a wide variety of HR Consulting Services, all designed to enrich your organization and reduce your risk.  All services can be customized to suite your requirements.  We can be reached at hrconsulting@jwterrill.com.

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EEO-1 Reporting: Audit Now Could Save You from an Audit Later

July 12, 2017


The Equal Employment Opportunity Commission  (EEOC) requires all employers with at least 100 employees, federal government contractors and some first-tier subcontractors[1] to file an EEO-1 report annually. The filing deadline is usually September 30th but this year’s deadline has been extended until March 31, 2018. Why?

For the first time, the EEO-1 report will require employers to disclose compensation data. This change is to test compliance with The Equal Pay Act of 1963.  The EEOC has been addressing comparable pay for comparable work for over 50 years , and for the most part  the EEOC has “assumed” employers are in compliance.  The implicit trust has come to an end.  The EEOC has expanded the EEO-1 report to include compensation data for employers with at least 100 employees.  Federal contractors and subcontractors with 50 -99 employees are exempt from the new compensation data reporting.

Compensation data must be reported for each EEO-1 job category in the newly developed 12 pay bands:

(1) $19,239 and under;

(2) $19,240 – $24,439;

(3) $24,440 – $30,679;

(4) $30,680 – $38,999;

(5) $39,000 – $49,919;

(6) $49,920 – $62,919;

(7) $62,920 – $80,079;

(8) $80,080 – $101,919;

(9) $101,920 – $128,959;

(10) $128,960 – $163,799;

(11) $163,800 – $207,999; and

(12) $208,000 and over.

To complete the EEO-1, employers must count the number of employees they have in each pay band for each job category based on sex and ethnicity or race.  To determine the appropriate pay band, employers will use using Box 1 on the employee’s W – 2 form.  Reporting of specific salaries of each individual employee will not be required.

This will allow the EEOC to get a snapshot of compensation by job category, sex and ethnicity or race of the employees. For example, an accounting firm may report that it has 12 employees in the “Professionals” job category in pay band 5, which is $39,000 – $49,919, who are men and black; and that it also has 25 Professionals in pay band 5 who are men and white.   Additionally, the EEOC will require hours worked to be reported.  Non-exempt employees will be reported within the requirements of Fair Labor Standards Act (FLSA), and employers will have a choice for exempt.  They may either:  (a) Report 20 hours per week for each part-time employee and 40 hours per week for each full-time employee; or (b) Report actual number of hours worked by exempt employees, full- or part-time, if they prefer to do so.

What will the EEOC do with the data? It will be used for investigative purposes.  According to the EEOC, the new data will improve investigations of possible pay discrimination, which may contribute to persistent wage gaps.

While March 31, 2018 seems like a long way off, employer should get their ducks in a row. The best place to start is an audit of your current compensation structure by job categories, employee sex and ethnicity or race.  You will want to see what the numbers tell you, because they will tell the EEOC the same thing.  Not only do you want to identify the discrepancies, But:

  • Can you justify the discrepancies?
  • Is the justification documented?
  • Is your practice consistent?
  • Is your practice prone to create discrepancies?

If you cannot defend your compensation practice you will need to dissect the structure and apply remedies. This can be done through a compensation study that could include internal benchmarking, an examination of salary grades and bands, and possibly an FLSA study on exemptions.

A compensation audit can be time consuming, overwhelming, and costly. But, a self-initiated audit will be less so than an EEOC audit.  So, before you complete the 2017 EEO-1 Report  take advantage of the gracious extension provided by the EEOC and make your numbers  right.

Need assistance? Email J.W. Terrill’s HR Consulting department at hrconsulting@jwterrill.com.


[1] First-tier subcontractors with 50 or more employees and at least $50,000 in contracts have an EEO-1 reporting obligation.

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Missouri Human Rights Act Amended

July 5, 2017


The Missouri Human Rights Act (MHRA) is the state law equivalent of Title VII, which prohibits employment discrimination based on a number of protected characteristics – namely race, color, religion, national origin, sex, age, disability status or genetic information. The MHRA also prohibited employment discrimination based on those characteristics. It was unique, however, because for the past several years it required a person suing under the MHRA to prove that a protected characteristic was a “contributing factor” to an employment decision; Title VII and the majority of other state laws require the protected characteristic to be a “motivating factor.”

The difference between “contributing factor” and “motivating factor” may be semantics, but many employment law attorneys believe the former is a less rigorous requirement. The MHRA now requires claimants to show that their protected classification “actually played a role in the adverse decision or action and had a determinative influence on the adverse decision or action.”

The Amendments also remove individual liability from the MHRA and impose caps on compensatory and punitive damages. Previously, a claimant could sue not only his or her employer, but also the person responsible for taking the discriminatory action or for permitting it to take place. Now, the MHRA excludes from the definition of employer “an individual employed by an employer.” The MHRA also uses a sliding scale to cap damages awarded in addition to back pay based on the employer’s size. The caps range from $50,000 (for employers with 5-99 employees) to $500,000 (for employers with more than 500 employees).

Ogletree Deakins attorneys Burton Garland, Robert Stewart and James Paul have summarized the MHRA Amendments.

The new provisions take effect August 28, 2017.

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St. Louis Minimum Wage Rollercoaster

July 5, 2017


St. Louis passed an ordinance in 2015 that raised the minimum wage in the city’s limits with automatic increases in the following years. Before it could take effect, however, it was blocked by a lawsuit that made its way to the Supreme Court of Missouri. The Court upheld the ordinance and the minimum wage in St. Louis jumped to $10 per hour on May 5, 2017. That two year climb toward a higher minimum wage was quickly followed by a speedy drop.

Several days later, the Missouri legislature passed a bill that prohibited Missouri cities from establishing minimum wages higher than the state minimum wage. The bill also preempted and nullified all municipal minimum wage laws currently in effect. Missouri Governor Eric Grietens recently announced he would take no action on the bill, which under Missouri law results in it becoming law.

The Missouri law takes effect on August 28, 2017. On that date, the St. Louis ordinance will be void and the minimum wage in the City will return to $7.70. Employers may reduce wages to take advantage of the changing law, but should give impacted employees at least 30 days’ written notice before doing so, according to Ogletree Deakins lawyers Rob Stewart and J.T. Charron.

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What Does Your Handbook Say?

June 23, 2017


Do you even know? The employee handbook will (or should) answer many HR questions, and it is usually my first response to a client’s question.  The handbook should be the guide for HR, managers and the employees.  And while it won’t answer every question, it may give the quick answer, or direction for the answer (“Go see HR.”).

Seems simple enough, but what if the handbook isn’t compliant with employment laws or is outdated? Or what if it no longer suits the needs of organization?  What if the handbook is disorganized, or written in a complicated style?  If your handbook is just sitting on the shelf gathering dust, you might want to consider doing some housekeeping.

In nearly all employment disputes, the employee handbook is admissible evidence. If it is current, well written, and consistently practiced it can add a layer of protection for the employer.  If the handbook is not practiced or poorly written it can be evidence of a violation.  Which side would you like your handbook to support?

J.W. Terrill provides a Handbook Development Service in which we customize a handbook to fit an individual organization. Our process involves checking for regulatory compliance, supporting company culture and coordinating policies to avoid conflict. This works well for employers with 50 or more employees which have heightened employment obligations.

For smaller organizations, (less than 50 employees) there should still be structure and guidelines in place so everyone knows the expectations. But small groups do not need to comply with every employment law and communication could be as simple as standing in the middle of the office to address the employees. So a handbook for a small organization should fit the small organization. We now have a service specifically for small organizations, because every organization should be able to answer, “What does your handbook say?”

For information on handbook services please contact hrconsulting@jwterrill.com.

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St. Louis Minimum Wage Law Takes Effect Tomorrow

May 4, 2017


St. Louis’ new $10 per hour minimum wage law takes effect tomorrow, May 5, 2017. The City ordinance was originally scheduled to take effect on August 28, 2015 before a lengthy court battle that ended with the Supreme Court of Missouri affirming the City’s authority to issue the ordinance. As Jacob Kirn of the St. Louis Business Journal notes, the ordinance exempts businesses with fewer than 15 employees as well as businesses with under $500,000 in annual revenue. The ordinance raises the City’s minimum wage to $11 per hour in 2018.

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St. Louis Minimum Wage Is Going Up

March 2, 2017


We’ve been getting questions from clients about the St. Louis minimum wage law and what it means for their businesses now that the Missouri Supreme Court has upheld the law. St. Louis Post-Dispatch reporter Lisa Brown wrote about the law and Mayor Francis Slay’s forthcoming guidance on a grace period for businesses to become compliant. You can read Lisa’s article here.

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Overtime Rule – Dead? What Employers Still Need To Do

March 2, 2017


Since Reince Priebus, President Trump’s Chief of Staff, issued a memo on January 20, 2017, to freeze federal regulations that have not gone into effect, it is looking like the overtime rule might be losing its pulse. While this doesn’t mean it is absolutely over, it’s hard to imagine the Trump administration fighting to implement the Obama administration overtime rule.

Even though the overtime rule might not be a concern, employers still have some work to do. The bigger picture of the overtime rule was identifying which positions were exempt for overtime pay, and verifying the employees would be paid correctly.  Although the rule has been shelved,  any inaccuracies discovered in pay practices still need to be fixed.

As employers learned with the overtime rule, the first step in determining the Fair Labor Standards Act (FLSA) exemption is the Salary Basis Test.  While the overtime rule tweaked the salary basis, many employers overlooked the second test to qualify as exempt, the Duties Test.  The position must comply with one of the duties tests to be exempt from overtime pay.  So, employers should subject each unique position to both the salary basis test and the duties test to get a final determination on the exemption from overtime.  Unless both tests are met, the position is non-exempt and employees in those positions are entitled to overtime pay.  A position cannot be forced into exemption.  You can try, but the DOL is pretty savvy at determining exemption status.

In addition to misclassification, another issue is paying employees correctly within the classifications. It is a common occurrence to come across misunderstandings on how each classification should be paid.  Sometimes employers can get too “crafty” in looking for ways to reduce payroll and violate FLSA requirements.

Exempt positions are paid a predetermined amount (salary basis) and pay is not dependent on the hours or days worked, or the quantity or quality of the work performed.  Situations in which an employer can make permissible deductions to an exempt employee’s salary are a short list:

  • Exempt employees do not need to be paid for any workweek in which they perform no work. Answering work related text messages and emails are considered working.
  • Exempt employees who are absent for a full day or more for personal reasons other than sickness or accident.
  • Exempt employee absences of a full day or more caused by sickness or disability, if the company maintains a plan that provides compensation for loss of salary caused by sickness and disability and the employee exhausted his or her “bank” of leave.
  • Penalties imposed for violation of safety rules of major significance
  • To offset any amounts received by an employee as jury or witness fees or military pay. However, deductions may not be made for absences caused by employee jury duty, attendance as a witness or temporary military leave.
  • Unpaid disciplinary suspensions of one or more full days for breaking workplace conduct rules.
  • Partial weeks worked during the initial or final weeks of employment.
  • In some cases, when a salaried/exempt employee has worked a reduced or intermittent work schedule under the Family and Medical Leave Act (FMLA).

The employer may not make deductions from an exempt employee’s pay for absences caused by the employer or by the operating requirements of the business; such as the business being closed for inclement weather. If the exempt employee is ready, willing and able to work, deductions from the employee’s pay may not be made when no work is available.

Additionally, the permissible deductions need to be applied consistently. If you deduct one exempt employee’s pay to offset jury duty fees you need to do it to all exempt employees.

Following the guidelines for the DOL’s permissible deductions is vital. If an employer makes an impermissible deduction this could violate the exemption status.  Violating the exemption status will render the position non-exempt and the individual in the position will be eligible for overtime, and could incur penalties per each misclassification.

Alternatively, non-exempt get paid for actual hours worked, all hours worked.  It does not matter if the employee was not scheduled to work.  If the employer requires or allows an employee to work, on or off the clock, the employer has suffered or permitted the employee to work and the employee needs to be paid.

Since non-exempt positions are paid by hours worked it is important to know what the DOL considers compensable hours. Problems occur if employers are not aware when non-exempt employees need to be paid.  The DOL has Defined Non-Exempt Compensable Time and includes:

  • Waiting Time
  • On-Call Time
  • Sleeping Time and Certain Other Activities
  • Lectures, Meeting and Training Programs
  • Travel Time

But the one that is often breached is rest and meal time. Rest periods of short duration, usually 20 minutes or less, are common and are customarily paid for as working time. These short periods must be counted as hours worked. Unauthorized extensions of authorized work breaks need not be counted as hours worked when the employer has expressly and unmistakably communicated to the employee that the authorized break may only last for a specific length of time, that any extension of the break is contrary to the employer’s policy, and any extension of the break can be disciplined.

While bona fide meal periods (typically over 20 minutes) generally do not need to be compensated as work time, the employee must be completely relieved from work duties during the meal break. If the employee is not relieved and performs any job duties, whether suffered or permitted, the employee must be paid for that meal break.

A common example would be if a non-exempt employee is eating a meal while at their desk working, or if the company has a lunch meeting, the employee must be paid. If the employer makes a deduction then it could be in FLSA violation of:

  • Not paying an employee for time worked;
  • Unauthorized deduction if your payroll system automatically deducts for meal breaks; or
  • Violating state laws that require meal breaks.

While federal wage and hour laws require non-exempt employees to receive overtime pay for any time worked over 40 within the defined workweek, employers need to know their state overtime laws as well. Some states have daily overtime requirements in addition to the workweek.

Additionally, private employers need to always pay non-exempt overtime as required. It is completely prohibited for private employers to use compensatory time (comp time) in lieu of paying non-exempt employees overtime wages.

While the FLSA Overtime Rule is now nothing but a shadow, the lesson from the overtime rule is employers still need make sure the positions are classified correctly and they are making proper deductions and paying as required by FSLA. Those rules have not changed.

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28th Right To Work State

February 22, 2017


On February 6, 2017, Missouri’s newly appointed Governor signed legislation making Missouri the 28th right-to-work (RTW) state. Gov. Greitens’ signature was the final step to push a very long battle driven by Missouri Republicans and state business groups. But what does it mean to be a RTW state?

RTW states allow non-union workers to work in union shops. Most states with RTW laws have language very similar to the following:

“No person shall be denied employment on account of membership or non-membership in a labor union.”

This language technically prohibits union security agreements that require union workers to pay fees (union dues) to get or keep a job in a union shop. For example, if you wanted to work as a roofer but didn’t want to join the roofers’ union, under prior Missouri law you either wouldn’t be hired or would be terminated if you already started working. In a RTW state, like Missouri, the individual can continue working without joining the union or pay the union dues required by a union security agreement. It should be noted that RTW does not apply to federal workers, workers on military bases and workers under the National Railway Labor Act, such as airline and railroad workers. Those institutions would still be allowed to force unionization and the unions can still require the payment of dues.

Obviously, this is a continuous topic for the unions, which oppose RTW legislation. To compound the situation for unions, RTW laws can extend the same compensation and benefit package (and even offer union representation) to workers who elect not to join the union. Since the non-union workers do not pay fees it could reduce the union’s funds which are used to organize and advocate for union workers.

The RTW bill does not allow employers to interfere with the employee’s right to concerted activity or to organize. The National Labor Relations Board (NLRB) governs federal labor laws and bans employers from obstructing employees to join or form a union.

Advocates of RTW legislation believe mandating open shops (allowing non-union workers in union shops) is more attractive for new businesses and job growth within the state. The U.S. Bureau of Economic Analysis reports that RTW states saw 8.6 percent job growth between 2005 and 2015, while employment in non-right-to-work states grew only 5 percent.

How will RTW impact Missouri?

Looking forward, Gov. Greitens’ signature does not automatically make RTW the law. The RTW legislation is scheduled to go in to effect August 28, 2017. With that said, Missouri AFL-CIO President Mike Louis and Missouri NAACP President Rod Chapel have filed a petition for referendum with the Secretary of State’s Office. For the referendum to be approved by the General Assembly, the petition will need signatures from 5 percent of the voters from two-thirds of the state’s congressional districts, about 90,000 signatures, before August 28th. If they succeed, right-to work will be place on a ballot for a statewide election in 2018.

If, and when, the RTW law would take effect there will not be much immediate change. Open shops will not see any change; they would remain status quo. Current union shops are covered by the grandfather clause in the RTW bill which states that RTW will not affect any bargaining agreement implemented prior to enactment of the law. As those agreements expire, however, the RTW law will prevent any future agreements to require the payments of union dues.

2017 is shaping up to be a formidable political year.

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Employee Handbook Misconceptions

January 27, 2017


Does an Employee Handbook Really Matter? Yes it really does.

This is just one example of the many misconceptions employers may have about their company handbook. For so many reasons, handbooks do matter.

It’s no surprise that handbooks and employment laws create a level of confusion. As we say in the HR world, we are living in a state of grey until a determination is made in the courts. We want to stay several steps ahead of that and avoid the courts altogether.

In light of that, we thought it would be helpful to point out some of the common misconceptions we have come across when it comes to employee handbooks. The following is a list of our top three.

Misconception #1 – We Can Get By For Now

As long as we have something pulled together that resembles a handbook, we’ll be fine for now.

– When we have time, we’ll take a look and make sure the book corresponds to what we actually do in practice.

– We used this handbook at my last employer and it worked fine.

– I’ve heard having a handbook just opens the door to more lawsuits.

Issues to Consider

  • How difficult would it be to discipline an employee for something if your handbook contradicts your practice?
  • Would you be prepared if you had to turn over the company handbook in a lawsuit?
  • Could it appear discriminatory if supervisors are applying policies differently throughout the company?


  • If faced with a lawsuit, a thorough and compliant employee handbook will help show the company exercised “reasonable care” towards its employees. This goes a long way as a defensive posture.
  • Supervisors should be trained on the policies within the handbook and how to apply them. A handbook is only as strong as your weakest supervisor.

Misconception #2 –Were A Small Organization, This Doesn’t Really Affect Us

– We have 40 regular employees and use 10 employees from a temporary agency, so we don’t technically have 50 employees.

– We don’t really need to worry until we reach 50 or more employees.

– We only have 15 employees, I don’t think many laws and regulations apply to us.

Issues to consider

  • Do you have a joint employer relationship? For example, if you are using temporary employees from a staffing firm, the answer might be yes, depending on which regulation you are looking at and arrangements with the staffing firm.
  • The joint employer relationship can affect employee headcount under protections afforded by the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA) and the Affordable Care Act (ACA) to name a few
  • Many state and federal laws come into play, even for employers with just a small number of employees. For example, Title VII is a federal law that prohibits gender discrimination by employers with 15 or more employees. However, the Missouri Human Rights Act (MHRA) and the Illinois Human Rights Act (IHRA) also prohibit gender discrimination. The MHRA applies to employers with 6 or more employees and the IHRA forbids gender discrimination by all employers, even if they only have one employee.
  • These regulations will affect what employers will want to espouse in their handbooks.


The chart below indicates a just a few of the federal employment laws that are enacted by a small number of employees:

Federal Employment Laws

Number of EEs


Fair Labor Standards Act



Equal Pay Act



Occupational Safety and Health Act



Health Insurance Portability Act



Fair Credit Reporting Act



Uniformed Services Employment & Re-employment Rights Act



Americans with Disabilities Act



Pregnancy Discrimination Act


Title VII Title VII of the Civil Rights Act


Many states will also have very specific laws that apply to small employers. These include things like jury duty leave, voting leave, pay requirements upon termination and many more.

Misconception #3 – We are an Employment At-Will Organization, We Don’t Need a Bunch of Policies

We are an at-will employer, we can hire and fire at will.

– As long as we state we are an at-will employer in our handbook we are covered.

– Just because a supervisor promises an employee a job, that doesn’t imply a real contract.  

Issues to Consider

  • If handbooks are not drafted properly, they can actually become enforceable contracts between employees and the company.
  • While it is true that an at-will organization can hire and fire at will, it should not fire in violation of workplace rights laws, such as those prohibiting discrimination and retaliation.
  • Supervisors should be trained on the dangers of an implied oral contract.


  • Organizations will want to include a carefully drafted at-will statement in their handbook as part of their legal protections against employment claims.
  • Avoid any language that could be interpreted to promise job security in the handbook’s disciplinary policy, performance and raise policies, layoff policy, probationary policies, and so on.


Employment laws are a tightly woven web of complex concepts that can not only overlap but can sometimes appear to be in conflict with each other. Truthfully, handbooks can be your best defense when it comes to employment related issues. Or your worst enemy if done incorrectly.

If you would like to rewrite your employee handbook and avoid these misconceptions and risks, please contact J.W. Terrill’s HR Consultants at hrconsulting@jwterrill.com. We offer a comprehensive process that will help you with the strategic development and implementation of your final handbook. To learn more about our process, check out our overview here.

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