Employment legal battles loom on 2010 horizon

Add employee-filed lawsuits to the problems generated by the recession and add them to the list of concerns business owners should watch in the New Year, say two Chicago employment law attorneys.

The attorneys are Gary Wincek, a partner at Laner Muchin Dombrow Becker Levin and Tominberg, Ltd., and Greg Andrews, an attorney at Dykema Gossett PLLC. Both work management's side in labor law cases and count small businesses among their clients.

Legal issues arise in part because terminated employees today are more likely to fight what they see as unfair treatment by employers.

In times when replacement jobs were plentiful, a fired employee might have bellyached a bit to friends and family and moved on. Now, Wincek says, "When businesses purge the work force, more employees are asking 'Why me? I'm more senior. The reviews in my file are good.'"

The key, Wincek says, is to "be certain you have the documentation" to back up a dismissal.

That's one concern. Here, very much condensed from conversations last week with Wincek and Andrews, are other potential small business trouble spots:

• Overtime. "Titles mean absolutely nothing" when it comes to determining who is, and isn't, exempt from overtime pay requirements, says Andrews. What matters are "a flat and unchanging salary" and actual job responsibilities.

A salary-qualified employee likely is an executive exempt from overtime pay if, Andrews says, she manages at least two other full-time employees (or FTEs). On the other hand, a customer service manager who basically answers phones and follows a script probably must be paid overtime if he works more than 40 hours a week - despite the manager designation.

• Independent contractors. The problem comes when the independent contractor you hired finishes the task and files for unemployment benefits - especially if the independent contractor was a terminated employee brought back on a lower-cost independent contractor basis.

At the Illinois Department of Employment Security, that's a misclassified employee.

"IDES is taking a very aggressive approach on misclassifications," Wincek warns. Think fines and penalties.

To help avoid that pothole, Andrews says business owners should make certain the independent contractor is an incorporated business that offers services to other entities and is free to determine how the work will be done.

• Equal pay. Although the federal Lilly Ledbetter Fair Pay Act has made equal pay a more visible issue, Wincek notes that Illinois legislation five years ago extended equal pay provisions to companies with as few as four employees.

He also says the equality issue is more likely to surface after a termination.

Few employed workers are willing to rock the job boat today.

Employment issues are complicated, which means it's easy to innocently wind up in court - which means you perhaps should have a quiet conversation with a labor attorney.

• Questions, comments to Jim Kendall, JKendall @121MarketingResources.com.

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