Archives for posts with tag: employers

A couple of months ago I wrote an article on the risks posed to business owners by work related accidents.  This month the article will be addressing the broader topic of work place injuries.  Specifically, injuries suffered by employees while on the job.  Texas, like most states, creates strong incentives for businesses to provide their employee’s coverage for work-related injuries by purchasing workers’ compensation insurance.  Workers’ compensation is a state-regulated insurance program that helps people with work-related injuries and illnesses.  Although providing worker’s compensation insurance is not mandated by the State of Texas, most employers in labor intensive business, such as construction or manufacturing, purchase worker’s compensation insurance.  However, the Texas workers’ compensation insurance system has been criticized as both expensive and ineffective.  For this reason, some employers have opted not to provide workers’ compensation insurance, and take on what can be significant litigation risks that arise when employees are injured on the job.

When determining a business’ potential liability for work place injuries, the first question to be asked is whether the business has workers’ compensation coverage.  If the answer is yes, then the risk and exposure is very low and primarily related to a potential increase in workers’ compensation premiums.  This is because the Texas Labor Code makes the recovery of workers’  compensation benefits the exclusive remedy for an employee covered by workers’ compensation insurance.  This means that generally injured employees and their families cannot sue an employer for damages arising out of a work place injury if the employee is covered by workers’ compensation insurance.  There are only one exception.  If the employer’s gross negligence was a cause of the employee’s injuries, then the employee or his surviving family (if the employee was fatally injured) can recover exemplary damages in addition to workers’ compensation benefits.

For employees injured on the job, workers’ compensation insurance provides payment for medical care for the treatment of their injuries; and, depending on the type and severity of the injury, workers’ compensation may also provide payments to replace some of an injured employee’s lost income, up to time and dollar limits set by law; compensation for burial expenses for employees killed on the job; and death benefits for dependents of employees killed on the job.  Benefits for lost wages are based on a percentage of the employee’s income.  If the injury is severe but does not result in death, the employee’s additional benefits are determined based on a medical exam and the application of a formula to the doctor’s determination of percentage of impairment.  Death benefits are determined based on a formula that takes into account the employee’s current earnings and his age at the time of death.

Employee rights groups have criticized the workers’ compensation system  arguing that it limits employees’ access to the doctors of their choosing and the benefit payments do not adequately compensate employees.  Employer friendly groups have complained the insurance in some industries is cost prohibitive.  Both employer and employee groups have complained that they system fails to effectively treat injuries so that the employee can return to work as soon as possible.  An additional risk associated with carrying workers’ compensation insurance for the employer is the potential for liability arising from what is referred to as workers’ compensation retaliation.  Workers’ compensation retaliation claims can arise if an employee is terminated when they have filed or are going to file a claim for workers’ compensation benefits.  Generally, Texas law does not allow employers to terminate an employee for having filed a claim for worker’s compensation benefits.  Because of these problems and risks, some businesses have decided not to participate in the workers’ compensation system.  These businesses are commonly referred to as non-subscribers.

Non-Subscribers are required by the State of Texas to file an annual notice with the Department of Justice, post notices in their personnel offices and workplaces that they do not provide workers’ compensation insurance, and tell each new employee in writing that they don’t have workers’ compensation insurance.  From a liability standpoint, non-subscribers  have increased exposure to lawsuits by injured employees.  Injured employees can sue non-subscribers over workplace injuries.  If they’re sued, non-subscribers can’t argue in court that the injured employee’s negligence caused the injury; another employee’s negligence caused the injury; or the injured employee knew about the danger and voluntarily accepted it.  Generally, injured employees seek to recover damages for lost wages, medical care, and pain and suffering.

Some non-subscribers mitigate the risk of employee suits by providing occupational insurance coverage and/or by providing health insurance and short term and long term disability coverage.  For some employers, these coverages would  have been provided anyway and/or can be obtained for a lower cost than worker’s compensation coverage.  When these coverages are in place, then can discourage lawsuits because the employee’s healthcare needs will be insured and, in the event of a lengthy work absence, there will be some wage replacement.  When the right benefits are in place, insurance can also be a more efficient method of recovering losses for the employee as well.  This is so because most attorneys who file suits against non-subscribers receive a fee of one-third to forty percent of any recovery.

Texas is one of a minority of states that does not require employers to participate in a worker’s compensation insurance system.  Like all freedoms, this one involves a risk.  Therefore, a careful risk benefit analysis should be done by any employer who engages in a business where there are frequent or potentially catastrophic injuries.  If you need help weighing your options, more information about this topic is available on the Texas Department of Insurance webpage and from licensed agents who specialize in selling workers’ compensation insurance.

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If you’ve been hit by another car or truck, check to see if the driver is wearing a uniform or if the vehicle they are driving has company logos on it. In addition to the driver being held liable for his or her own negligence, their employer may also be liable if the driver was acting in the scope of their employment (in other words, if they are acting in the furtherance of the employer’s business). For example, if the defendant driver is making a delivery for his or her employer and hits you, he or she is probably acting within the scope of their employment. However, an employee is not acting within the scope of their employment if he or she departs from the furtherance of the employer’s business for a purpose of his or her own not connected with their employment and has not returned to the place of departure or to a place the employee is required to be in the performance of their duties. For example, if the defendant driver, while making a delivery, decides to run home to check on their dog and hits you pulling out of their driveway, the defendant driver would have deviated from the furtherance of his employer’s business. While the defendant driver is individually liable for his negligence, the employer would not be. If you have been injured in an automobile or truck accident, call Brian Cartwright at (940) 891-0003 to set up a cost-free consultation to discuss the facts of your case and determine what your rights are. I look forward to visiting with you next time. Brian T. Cartwright, Board Certified, Personal Injury Trial Law, AV-Rated, Martindale-Hubbell, Shareholder, Alagood Cartwright Burke PC.

OvertimeOverhead.  It’s a challenge facing employers and employees.  For many businesses, labor cost is the single greatest overhead expense.  Unfortunately, many employers try cutting corners that they should not, in particular in the area of overtime wages.  The Fair Labor Standards Act (or FLSA) is a federal labor law that requires employers to pay overtime compensation (at time-and-a-half) to employees who are not exempt under the Act for all hours worked over a prescribed threshold period (typically, 40 hours per week).  Most employees are non-exempt, meaning that they are entitled to overtime pay.  The most common exceptions to this rule involve some administrative, executive and professional employees, computer professionals, outside sales employees, and certain retail employees.  Liability exists under the FLSA even for unintentional violations.

But what if a business only employs a few people?  Is the business exempt from paying overtime?  The answer is no. Unlike many other federal laws, the FSLA does not depend upon the number of persons employed.  Instead, the FLSA covers businesses engaged in commerce or in the production of goods for commerce (i.e., handling, selling, or otherwise working, on goods or materials that have been moved in or produced for commerce).  The FLSA’s coverage is very broad, and the courts typically interpret it that way.

But what about salaried managers and individuals that have really important sounding, executive job titles?  Are they exempt?  If the manager’s/executive’s salary is less than $100,000.00, then the inquiry typically focuses on the nature of the job and how the employee performs it.  For example, if the employee cannot hire or fire other employees, or does not regularly direct the work of at least 2 employees, overtime must usually be paid.

But what about salaried employees?  Does overtime get factored into their pay?  The answer is typically yes, in most instances overtime is still required.

Is it acceptable for an employer to get around overtime by allowing the employee to volunteer their time?  No.  The FLSA does not recognize “voluntary unpaid overtime” or “donated time” as legitimate exceptions to avoid paying overtime.

What about a signed, written agreement with the employee waiving any claim they might have to overtime?  Is that acceptable?  Under the FLSA, such agreements are null, void and completely unenforceable.

Is comp time an acceptable alternative to paying overtime?  For a governmental employer, probably so.  In the private sector, comp time is generally not permissible.  It should be noted that a private employer may adjust an employee’s schedule within the same week to ensure that their total hours worked do not exceed 40 hours.  However, overtime hours may not be averaged out over a longer period of time except in exceedingly narrow cases of certain employees of residential care facilities.   Otherwise, any overtime worked within a workweek must be paid for that workweek.

Is overtime required to be paid to an independent contractor?  If a worker is truly an independent contractor, then overtime may be avoided.  The problem is that too often employers get cute, slap an independent contractor label on the worker, but then treat them as if they are employees.  If workers are truly employees, regardless of the title they hold, and if they work more than 40 hours in a workweek, the employer must pay the worker overtime pay if they do not qualify for an overtime exemption.  There is no way to contract around that.  There is no piece of paper and no amount of explanation that will overcome the finding of an employment relationship if the Department of Labor or the IRS, or a state employment security agency, determines that an employer/employee relationship exists.  For this reason, employers must be very familiar with the various tests for determining whether a worker is an employee or an independent contractor.  The controlling factor is whether the employer controls the details of how the person’s services are performed.

At the end of the day, uncertainly under the FLSA can cause serious problems.  Court’s may award an affected employee damages, including unpaid base wages, overtime pay (at time-and-a-half), liquidated damages of an amount equal to all of the employee’s unpaid wages and overtime pay, attorney’s fees, and court costs.  So for both employers and employees, care should be taken to make sure that the FLSA is followed and overtime is paid where required.

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Employers can breathe a limited sigh of relief in the state of Texas.  Some employers claimed that they could not hire and retain otherwise qualified and productive adults who had criminal records, even though they had served their time and were rehabilitated, for fear of being sued for negligent hiring or negligent supervision.  HB 1188, and codified in Chapter 142 of the Texas Civil Practice & Remedies Code, was passed and enacted into law effective September 1, 2013, which now provides that a lawsuit may not be brought against an employer, general contractor, premises owner, or other third party solely for negligent hiring or failing to adequately supervise an employee, based on evidence that the employee has been convicted of an offense.  This was claimed to be an important stamp for employers because approximately 20 percent of Texas adults are reported to have a criminal record.  Of course, HB 1188 does not, amongst other things, preclude a lawsuit for negligent hiring or supervision if the employer, general contractor, premises owner, or other third party, knew or should have known of the person’s conviction and the offense that was included in a list of certain specified offenses, including a sexually violent offense under Article 62.001 of the Texas Code of Criminal Procedure.

Brian T. Cartwright is Board Certified in Personal Injury Trial Law and can be reached at bcartwright@dentonlaw.com and www.dentonlaw.com