What happens if you issue an employee a paycheck and he or she doesn’t cash it? Most paychecks are void after 90 days, and it costs money to reissue them. Plus, it is a hassle not being able to reconcile your balance sheet because of the outstanding ...


I Have an Employee Who Won’t Cash His Paychecks. What Can I Do? and more...

I Have an Employee Who Won’t Cash His Paychecks. What Can I Do?

What happens if you issue an employee a paycheck and he or she doesn’t cash it? Most paychecks are void after 90 days, and it costs money to reissue them. Plus, it is a hassle not being able to reconcile your balance sheet because of the outstanding paychecks. Can you force the employee to sign up for direct deposit? Can you charge the employee for all of the expenses you incur because the employee can’t get around to cashing the check? What about firing the employee?

It might sound counterintuitive, but the only thing you are legally allowed to do is that last option. You cannot require an employee to sign up for direct deposit, as the Illinois Wage Payment and Collection Act prohibits employers from doing this. It also requires employers to give employees a paycheck if the employee wants it.

What about offering to pay the employee in cash? An employer can do this (although if the employee wants a paycheck the employer is required to provide one), but the Wage Payment and Collection Act also requires the employer to make this option available to every other employee. So, unless you want to give every employee cash who wants it, it probably is not a great idea to start giving one employee cash.

You also cannot deduct the costs of having to reissue checks out of the employee’s paycheck. The Wage Payment and Collection Act requires an employee to provide written consent to any deduction from his or her paycheck. It also only permits certain things to be deducted from a paycheck, none of which are fees resulting from a failure to cash it.

However, an employer is not prohibited from disciplining an employee for failing to cash a paycheck. No law makes it illegal to implement a policy requiring employees to deposit their paychecks after, say, 30 days, and then suspending or firing an employee for failing to this. It may not be a bad idea to put into place a policy saying that an employee will receive an oral warning for not cashing a paycheck after 15 days, a written warning for not cashing it after 30, a suspension for not cashing it after 45, and then will be fired for not cashing it after 60.

Say the employee never cashes the paycheck. What do you do with the money that was supposed to go to that employee? Don’t put it back into your company’s bank account! Pursuant to the Revised Unclaimed Property Act, if an employee fails to cash a paycheck within one year, the paycheck is presumed to be abandoned and it then becomes property of the State. Once this happens the employer must send a report to the State Treasurer notifying it that it is holding abandoned property and then it must mail a check for the amount of the uncashed paychecks to the Treasurer.

If you have an employee who won’t cash a paycheck, you might want to speak with him or her before doing anything. It is possible that the employee doesn’t realize why it is a problem not to cash a paycheck. If you find yourself in this odd situation, let us know and we can walk you through what you should do.

What Should I Do When I Get a Request for a Reference from a Former Employee?

If you are an employer, supervisor, or anyone who has managed other people, you will probably at some point get a phone call inquiring about a former employee who has listed you as a reference. This can be awkward, especially if the former employee was not exactly the best at his or her job. Here are some suggestions for anyone who finds him or herself in this situation:

Be Honest.
We’re all nice people, and we don’t want to hurt anyone’s job prospects. But giving a former employee a glowing review just to be nice is not a good idea. If that former employee might pose a danger to others or is totally unqualified for the position he or she has applied for and you fail to disclose this when asked, you could find yourself a defendant to a lawsuit. A previous employer can be held liable for failing to disclose an ex-employee’s potentially violent, dangerous, or irresponsible tendencies when that employer knows about them and is asked. So if you supervised bus drivers, and one of your drivers was fired for showing up drunk to the job, and you are asked why that person was fired and you fail to give an honest answer because you want to be nice and help your former employee, you could be liable if he or she gets the job and then crashes the bus when intoxicated. You do not have to go out of your way to disclose all of the dirt that you have on a former employee, but you also should not cover up bad behavior.

Be Accurate.
Make sure the information you provide about the former employee is accurate. If you provide inaccurate information and that employee is not hired as a result, you could potentially be sued for defamation. It is a good idea to review an employee’s personnel file before giving the reference and making sure that your recollection of the employee is consistent with everything in the file. Remember, the Personnel Record Review Act gives an employee the right to examine his or her personnel file, so you do not want to say something that contradicts what is contained in that file.

Also, don’t guess or speculate. If you are asked a question and you don’t know the answer, just say you don’t know or can’t remember. Do not provide an answer unless you know it is accurate. Guessing wrong about the answer to a question could leave you open to a defamation lawsuit. Keep your answers brief-the more information you volunteer, the greater the chance to get yourself in trouble.

Check to See Whether a Non-Disclosure Agreement Exists.
Many separation agreements include non-disclosure agreements where both the employer and the employee agree not to discuss why the employee left or other aspects of the employee’s time on the job. So, check with HR or the former employee’s personnel file to make sure that you are not violating a non-disclosure agreement by giving the reference. If a non-disclosure agreement does exist, let a lawyer look it over before you give the reference.

Don’t Say an Employee Was Let Go Because of Age, Disability, Pregnancy, Etc.
This is common sense, but do not say that an employee was let go because of his or her race, sexual orientation, religion, gender, sexual identity, etc. Also, don’t say that an employee was let go because she became pregnant, or he or she fell victim to a disease or developed another type of disability or got to be too old. Such statements leave you open to lawsuits for violating Title VII, the Americans with Disabilities Act, Pregnancy Discrimination Act, Illinois Human Rights Act, Age Discrimination in Employment Act, and several other laws.

It may not be a bad idea to create a written policy that should be followed when someone in your organization provides a reference. Feel free to contact us if you would like help creating this. Also, feel free to give us a call if you have questions or would like advice before you give a reference.

At Will Employee Can Be Terminated Based on Spouse’s Actions

The First Amendment protects a number of rights of public employees-speech, political affiliation and the like. Rarely, if ever, have we heard of an employee who claimed that they were discharged in violation of their First Amendment right to intimate association. It happened recently in Iowa.

Tamela Muir, who was an at-will employee serving as a jailer and dispatcher for Decatur County Sheriff’s Office, was married to Bert Muir, who became the elected Sheriff of Decatur County. Ben Boswell became Muir’s Deputy Sheriff. 

Boswell received a complaint from a female dispatcher who alleged that Bert had sexually harassed her. An investigation followed and uncovered additional allegations of harassment. A petition, supported by six affidavits of Sheriff’s employees, was presented to Bert to remove him Sheriff . Bert immediately resigned. Boswell was named acting Sheriff, and placed Tamela on administrative leave upon advice that “problems” might arise if Tamela “was allowed to remain working around employees whom her husband had harassed, and who had signed affidavits in support of her husband’s removal from office.” 

Later, Boswell sent a termination letter to Tamela. Boswell stated in the letter that he did not want the employees to be concerned about retaliation from their complaints or that employees would find that he had divided loyalty between them and Bert. Tamela sued for unlawful discharge, claiming that the Sheriff violated her First Amendment right to intimate association by discharging her as a result of the allegations against her husband.

The 8th Circuit Court of Appeals found that the right to intimate association protects “the formation and preservation of certain kinds of highly personal relationships,” including marriage. but noted that when reviewing an intimate association, right-to-marry claim, the key question is whether the government “directly and substantially interfere[d] with the ... right to enter and maintain [a] marital relationship.” In other words, the right to marry “does not invalidate every state action that has some impact on marriage.”

Here, the 8th Circuit found:
“the fact that Tamela and Bert’s marriage was a motivating factor in Boswell’s decision to terminate Tamela does not mean that Boswell directly and substantially interfered with their marriage. Indeed, Boswell did not significantly discourage their marriage, make their marriage practically impossible, or act with the goal of poisoning their marriage.” 

We think if Tamela’s and Bert’s marriage became poisoned, it was far more likely the result of the six sexual harassment allegations and not Boswell’s termination of Tamela.


Unlimited PTO May Not Be as Hassle Free as You Think

“No one keeps track of vacation time and sick days anymore,” one of my friends in HR recently told me. “Everyone gives unlimited PTO these days.” And she’s right—unlimited PTO has become far more common in the last decade, with many employers with younger workforces, like those in tech and sales, providing unlimited PTO. I have heard unlimited PTO described as the “wave of the future” on more than one occasion.

The logic behind unlimited PTO makes sense. Treat everyone like adults and let them take the time off that they need. As long as they get their work done, who cares when or where they work? Well, the government and employment lawyers do, making life needlessly difficult for employers like usual. Unlimited PTO may create a host of legal problems for employers.

The first problem with unlimited PTO is the Illinois Wage Payment and Collection Act, which requires employers to pay employees for any unused vacation time when they leave. If vacation time is unlimited, what happens when an employee leaves? Obviously that employee doesn’t get unlimited pay. Does the employee receive no pay? It’s not clear because no court has ruled on this yet.

The Illinois Department of Labor has weighed in on the issue though, and it believes that employers with unlimited PTO policies must pay employees who leave a monetary equivalent to the amount of vacation pay that the employee would have been permitted to take that year but did not. The Illinois DOL opinion is not binding on employers, but it may influence courts who rule on the issue.

The second problem with unlimited PTO is sick leave laws. The Cook County sick leave ordinance requires employers to pay employees for unused sick leave. Again, it is not clear what this means for unlimited PTO, as no court has addressed this.

Unlimited PTO also creates issues with the Family and Medical Leave Act. That law requires employers to provide employees with 12 weeks of unpaid leave, but also requires employers to use paid vacation and sick leave during this time off. How does unlimited PTO affect FMLA leave? Does it require employers to pay for all of the FMLA leave that an employee takes? Again, there is no court case that I have seen ruling on this issue.

Here is my advice for unlimited PTO policies: don’t make them truly unlimited. Say that employees are entitled to a reasonable amount of time off and put some parameters around when this time off can be taken. Without such parameters, if you fire an employee for taking too much time off, he could claim that this firing breached his employment contract because it permitted him to take “unlimited” time off. Also, address what happens during FMLA leave.

As for paying employees for unused vacation and sick leave, I would follow the DOL’s guidelines and establish a payout system for unused vacation time and, if you are in Cook County and in a municipality that is covered by its sick leave ordinance, do so for sick leave. I do not think that refusing to pay anything to a departing employee who has never taken a day off is a good idea.

Finally, keep track of the reasons that employees take days off. One of the reasons employees have unlimited PTO policies is so they don’t have to do this, but I think with the uncertainty regarding unused vacation and sick pay it is probably a smart move to do this.

An unlimited PTO policy needs to be drafted right so that it complies with all of these legal challenges. I would strongly suggest having an attorney either draft such a policy for you or to at least review the policy you have.

Independent Contractor Makes Employer Liable for Harassment

The way that America does business now is different than before. Where most employers hired full and part time workers to do their work, the trend now for employers is to outsource or use a mix of employees and independent contractors, depending on the task and the expertise involved. When a workplace has such a mix, the application of labor and employment laws can get complicated.

Such was the case decided by a Tennessee district court when sorting through the claims of a discharged employee who sued her former employer for gender discrimination, sexual harassment, retaliation. The former employee, a telemarketing assistant, claimed that she was the victim of unwanted attention, comments and touching from another staff member, a trainer in her department. She alleged that although she attempted to address her complaints to him directly, she ultimately complained to the company president after she was written up and demoted. She was fired the same day that she complained of the trainer to the president. The twist is that the alleged perpetrator was an independent contractor.

The company argued that it could not be liable for actions of an independent contractor because he did not have supervisory control over her. The court found though that the alleged perpetrator gave recommendations and advice to the president about staff to whom he provided training, therefore he did exert some control over the plaintiff and the company could therefore be liable. On the other hand, the court also found that because the alleged perpetrator was only at the worksite two days a week and because the described offensive behavior was only characterized as “inappropriate” that the conduct was not sufficiently severe or pervasive enough to rise to the level of sexual harassment as defined by law.

Employers should note that they can be just as liable for employment law violations perpetrated by independent contractors as they are by employees. It is especially important to include in any independent contractor agreement that they are responsible for compliance with all employment laws and liable for all damages resulting from their breach.