Answers to Some Common Corporate Conundrums

This post is by Ed Zalewski, an editor at J. J. Keller & Associates, a nationally recognized compliance resource company that offers products and services to address the range of responsibilities held by human resources and corporate professionals. Zalewski specializes in employment law issues such as discrimination and harassment, overtime, exemptions, and labor relations. He is the author of three guidance manuals (Employment Law Essentials, Employee Relations Essentials and Fair Labor Standards Act Essentials). For more information, visit www.jjkeller.com and www.prospera.com.

Running a business – or managing one unit, department, or team within a business – is not easy. Questions that have legal and/or regulatory implications pop up on a regular basis. Answers to some of those questions aren’t always straightforward, and can require insight into various statutes as well as case law. This article shares a few fairly common (and touchy) scenarios and some interpretive guidance.

An employee who put in his two-week notice later decided not to resign. However, our company already has taken steps to replace him. Can we move forward with letting him go?

In all states except Montana, employment is at will, which means that an employment relationship can be terminated at any time and for any reason (or for no reason at all), as long as the reason is not illegal. The fact that an employee rescinds his or her resignation does not give him or her guaranteed employment any more than he or she had before giving notice.

Upon notification of an employee’s intent to resign, employers often do start making plans to replace the individual and transfer knowledge and responsibilities. Employers may even question the loyalty of an employee who once tendered his or her resignation. These are all reasons that might compel an employer to consider terminating the employment relationship. However, companies should be aware that, depending on state law, this change of circumstances could make an employee eligible for unemployment benefits.

We do not allow tobacco products anywhere in or around our facilities, but now an employee is asking about e-cigarettes, saying they don’t contain tobacco. Must we allow these?

Some states have laws forbidding smoking in certain places of employment, and these laws may or may not address electronic cigarettes. However, where state law does not forbid the use of electronic cigarettes (or where the use of tobacco products is not regulated), it is up to your company to define the limits of your company policy. Employers may dictate what behaviors are and are not allowed on work time and/or on company property, and they can certainly adopt policies that are more stringent than state or federal law. If you choose, you may prohibit the use of electronic cigarettes within your facilities and/or on company grounds.

Our company gives gift cards to employees every now and then. Is there a certain amount after which these gift cards must be included and taxed as income to the employee?

Such gift cards would likely be considered a taxable benefit and should be treated as income and subject to payroll taxes and withholding. There is no minimum amount before a gift card is considered income.

According to the Internal Revenue Service Publication 15-B, Employer’s Tax Guide to Fringe Benefits, “[C]ash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare.”

One of our employees seems to be accident prone and keeps suffering work-related injuries. He has been out quite a bit on workers’ compensation leave. We are considering terminating him because of his unsafe work habits. Can we do this?

It can be risky to terminate an employee for being “accident prone,” but if there is evidence that the employee was properly trained and still failed to follow safety guidelines, you could terminate for violation of policies and procedures. An employee on workers’ compensation leave does not have greater rights to continued employment than any other employee (unless the injury leave runs concurrently with job-protected leave under the Family and Medical Leave Act). However, you may not terminate an employee solely because he or she files a workers’ compensation claim. If the safety violations would justify termination, then the injury claim does not prevent you from firing that individual.

A former employee contacted us to let us know that she felt she was sexually harassed by her male manager while on a business trip. This event allegedly occurred right before her manager terminated her for performance issues. We trusted the manager’s judgment with regard to the termination, but now we’re concerned. What can we do? Must we reinstate the employee?

Even though the individual is no longer your employee, you should investigate her claim thoroughly. Interview anyone who might have information about the situation. If your investigation does find that the manager behaved inappropriately, you should promptly implement discipline proportional to the offense. Be sure to record the date you became aware of the situation and the dates on which you took action.

If you relied only on the manager’s word to terminate the employee, look into the termination as well and make sure it was for a legal reason. If the manager lied or exaggerated the motives for termination, it might appear that he was simply looking for a way to terminate the individual to protect himself from a sexual harassment claim. If the employee was terminated unfairly, you could consider reinstating her, but you are not required to if the employee was terminated for legitimate, well-documented reasons.

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