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‘Tis the Season: Parties, Gifts and Weather Issues for Employers

Employer-Sponsored Holiday Parties: Do’s and Don’ts
Employer-sponsored holiday parties are a good way to spread seasonal cheer and boost morale among employees. But, without proper planning, a company holiday party can become a legal nightmare. Here are some simple suggestions for employers to follow in planning the festivities.

  • Review pertinent company policies with employees and supervisors prior to party day. For example, remind employees about the company’s policies on harassment, workplace violence, retaliation, drug and alcohol use, and dress code. Employers may want to even circulate copies of relevant policies to all employees beforehand.
  • Have managers be on the lookout for inappropriate conduct at the party and remind them of the company’s procedure for handling complaints or what to do if prohibited conduct is observed.
  • Consider NOT serving alcohol. While many employees can enjoy a glass of eggnog without becoming belligerent, serving alcohol at a company sponsored party is always a gamble. Think about having a lunch time or pot luck event instead.
  • If alcohol is served, forget the open bar and stick to beer and wine. Also, plan on having alternative transportation options for those who cannot safely drive and address underage drinking concerns if underage employees will attend.
  • Avoid calling it a “Christmas party” and stay away from other religious themes and decorations. Be mindful that not every employee has a religious affiliation, and many may not celebrate any holidays during this time of the year.
  • Don’t hang mistletoe (this is asking for problems)!
  • Don’t forget to go over the company’s social media policy with employees again before the party. Use the policy to remind employees about restrictions on posting images and/or comments from the event or using the company’s logo or name online.

Ho, Ho, Ho: Bonuses and Holiday Gifts
Employers often give employees gifts or bonuses during the holiday season. It is important for employers to determine whether these payments are to be included in the regular rate for calculation of employee overtime. Under the Fair Labor Standards Act (FLSA), gifts paid as a reward for service are excluded from the regular rate as long as the amount given is not dependent on production, hours worked or efficiency. The FLSA specifically identifies Christmas bonuses as gifts that qualify for exclusion from the regular rate. This is true even where the bonus is paid yearly so that employees expect to receive it. However, bonuses will not qualify for the exclusion if the amount is so great that it can only be assumed that employees count it as part of their regular wages, or if the bonus amount is tied to production, hours worked or efficiency.

Generally, bonuses, other than those considered to be holiday gifts, are only excluded from the regular rate if the decision to pay and the amount are determined at the sole discretion of the employer. Bonuses will not be considered discretionary under the FLSA if they are paid pursuant to a contract, agreement or promise causing employees to expect the payments regularly. An employer’s custom or practice of paying regular bonuses can suggest that the payments are nondiscretionary. Although not required, it is always a good idea for employers to have and follow a written policy explaining that the payment of bonuses and the amount are within the employer’s total discretion.

Old Man Winter: Leave and Pay Issues during Inclement Weather
While the holiday season brings cheer to most, it also often means snow, ice and leave issues for many employers. It is important for employers to be ready for inclement weather before it strikes in the event the company must close its doors or employees are unable to safely travel to work. Employers should have a written policy to address leave and pay issues arising during inclement weather. Here are some tips to help employers get through winter’s woes.

  • Nonexempt employees – The FLSA only requires that employers pay nonexempt employees for hours actually worked. Thus, an employer is not required to pay nonexempt employees if they are unable to travel to work in inclement weather. This is also true where the company has to shut its doors due to the weather.
  • Exempt employees – If the worksite is closed for less than a full workweek due to inclement weather, an employer is required to pay exempt employee’s full salary. Under the FLSA, an employer must pay exempt employees their full weekly salary for any week in which any work was done. If an exempt employee choses to stay home for a full day due to the weather, the absence is considered personal by the Department of Labor (DOL) and the employer may make a deduction from the employee’s weekly salary for the full day absence. However, employers may not make deductions from exempt employees’ salaries for partial day absences.
  • Because the FLSA does not require employers to provide vacation time, it is permissible for an employer to direct exempt employees to take vacation time or deduct from their accrued leave in the event the worksite is closed or if employees are unable to travel due to inclement weather. However, exempt employees must still be paid their full weekly salary even if they have no vacation or accrued leave available.