 Hey good afternoon everybody and thank you for joining us today on Condo Insider. We're here every Thursday at three o'clock for about 20 minutes. Today we're going to do part two about labor. We're talking about labor laws as it relates to condos. So with me again today we have John Kanork with your company title is a tongue twister. Edrington Harris and Kanork. I'm going to get my name up there. Thank you for joining me here today for our second week and we're going to talk today about the elements that you would have in an employee handbook because I kind of became aware that some condo associations don't even have an employee handbook. They don't even have written policies and procedures. So hopefully with this segment we can get them going on creating their own or making sure that they have one available. Not really so much creating their own but making sure they have all the elements covered in their policies and procedures. So we want to start out with what topics do you put into your employee policies and procedures? Sure, sure. Thanks for having me back really and I really enjoyed it last time and hopefully we'll be as entertaining and informative as we can be on these topics. You know the employment law aspects of dealing with an association are oftentimes a headache and there's a few things you can do ahead of time to avoid those headaches and I think making sure you have a policy manual or employee handbook that covers the basics at least that will help guide you and protect you. We we talk about handbooks of serving several functions. One is it provides kind of like a standard explanation of how that association wants to manage the property. So it talks mostly about policies that apply to employees but can cover other things. So one reason to have a handbook is so that employees can look at what your policies are and answer their own questions saving managers a lot of time and avoiding different managers having different interpretations of what the policy is. So that that kind of consistency helps. But as a lawyer I also like to include into that handbook all the things that are really protective of your of your defenses in the event that there's some kind of claim. So you want to put in legal things that will legally protect you in the long run. So there's a third and maybe the overriding reason is to sell your association to potential employees and existing employees to let them know who you are and why it's great to work for your association versus some other company. And and it's nice to say some things that are unique to the property or unique to the way you operate. That said that those are the reasons why to have those policies. And so when we when we look at a handbook we get to think about OK what's all the aspects of employment. Well there's there are going to be those general employment policies that we're going to we're going to talk to you about that are like equal employment opportunity and harassment. So we've got those kind of policies. Then we also have policies that address your compensation. So how do we pay when do we pay. How do we calculate overtime. What do we deduct from your paycheck things like that. And then we'll have a section on benefits. And we were just speaking about this a little bit earlier about holidays sick leave vacation things like that that are unique to each property and and be presented many different ways. And we'll talk a little bit about that after you get through the benefits. Then you then you sometimes want to talk about how do we deal with internal issues. What do we have an open door policy. Is there a communications hierarchy. We want people to file. Who do you talk to about things. So we we want to set up a process so the employees generally know how to how to communicate. And then finally there's all the restrictive things like company regulations rules of conduct. Don't do this. Don't do that. That we want to put in there. That kind of layout very clearly what's going to happen if you don't behave. And what is not behaving mean for our association because it varies. It actually varies from property to property. So we'll talk about all those things. So let's let me talk about like maybe the first important thing to keep in mind with the handbook. And it goes back to my first talk on at will employment. At will employment is simply a contract principle. And back in the 80s the Hawaii Supreme Court held that handbooks can be enforceable contracts. If you issue them with the expectation that employees rely on them and follow them. And that's what we want to do. We want people to follow the policies in the handbook. So they are contractually enforceable unless unless you put a disclaimer in the handbook that says this handbook is merely a guideline. It is not contractually enforceable and does not change your at will status. So a disclaimer clause and a reaffirmation of the at will employment relationship is very important for every employee handbook. You could have scraps of paper laying around that are just policies that boards passed over the years that could be contractually enforceable. So you want to gather up all your policies put them in some kind of a format and say these are our guidelines. They're not contractually enforceable. You can't sue us if we don't follow one of the policies. And I have to remind everybody of that too. That your policy and guide book is there as a guideline to make sure your managers are consistent. Your GM follows what the board said is the policy. But the board ultimately has the authority to deviate from any of those policies if there's a good business reason to do so. It's not always illegal discrimination to treat people differently if there's a good business reason to do so. So don't look at the handbook as you know an ironclad contract. It's not. It's your guidebook like a budget. Yeah you want to follow the budget but you know sometimes things happen and you have to deviate from the budget and reassign priorities. So you may alter your policies if you have a good business reasons. So number one a disclaimer and a reaffirmation of the at will employment relationship is critical in any employee handbook or policy manual. The second thing is the EEO policy. Every time you get involved in some kind of discrimination litigation the first thing that you're going to get asked by the agency doing the investigation is send us a copy of your EEO policy that you've shared with your employees. And if you don't have one they're going to go uh-oh you're not a good employer. You're not telling people you're not going to discriminate. I had that happen today. It was in an EEOC investigative interview and the EEO asked the company where's your policy. We had one but you know that's the first thing they're going to ask. So you want to make sure your EEO policy isn't cut out of some mainland handbook because we have unique categories of protection that we talked about a little bit last time in Hawaii that include you know gender identity expression and victim of domestic and sexual violence. So our EEO policy is not only going to say we we don't discriminate against race, sex, and religion but all these other categories. So we're going to have that in there. We're going to have a harassment policy too that says in addition to discrimination we forbid any form of harassment and we will identify in that harassment policy who can who is prohibited from harassing you. So as an employee you are not supposed to be harassed by your supervisor or boss, by your co-workers, or by owners, residents, vendors, contractors, or any third party that comes onto property. But we also want to tell employees very clearly if you feel that you're being harassed or discriminated against in any way this is what you do. You call the general manager, you call or tell the property manager, you call or tell the president of the board and you want to provide alternatives to just one source. So if that person is the problem you can go around that person and ultimately the board president I guess has the ultimate responsibility. We don't always include the board president into these policies because you don't want to include anybody that doesn't understand what the legal obligation is towards your employees and if your board president hasn't been trained on how to handle a harassment complaint you're in worse shape putting that person's name on the list of who to complain to then you are just let me get to the general manager and property manager and it's you know you got to kind of think through who the board president is or whether your association wants the board president to be involved in these kind of things if necessary or just have the general manager and property manager if you have one to report to the board president whatever complaints are made that might be the better way. Now that said many of the property management companies have model handbooks that they will provide to you as a managed property and that's a that's a good basic format I've reviewed several of them in town but everybody is a little unique so when you do adopt one it's always good to have legal counsel review it just to make sure that you haven't changed something that shouldn't be changed or deleted something that should have been kept in there. So the next after after we get through the disclaimer at will and then the EEO policy on this discrimination and harassment with a procedure to report it and language that says you know we're going to take appropriate action to end this harassment is and all the rest of the things that legally you should say the next policy that's kind of important to have is a whistleblower policy we like to call it an ethics policy and what it does is it parallels the language in the Hawaii whistleblower protection act that tells employees that we don't retaliate against any employees for reporting things that they think are illegal or unsafe or for pointing out a breach of a contract with the city and county or anything like that so we have one of these general kind of policies that basically track the same reporting procedure that we use in a harassment policy but address employees internal complaints that they feel show that the company is doing something illegal or unsafe or just unethical in some way that raises a concern so that we catch those things before the employee feels that they've been treated unfairly or retaliated against for raising them and then we tell employees we won't retaliate against you for raising these things in good faith so if we know that you know it's false and you're just making up this allegation to get even with a co-worker or your supervisor you might be disciplined the same thing would be true in a discrimination or harassment claim but the point of it all is yeah you have to make these allegations in good faith so we have an ethics whistleblower policy in almost every handbook the other I think critical policy along those lines is to have a policy that forbids any kind of workplace violence threatening or otherwise and we call that a productive work environment policy there's always a good political politically correct way of saying whistleblower and that's ethics policy and correct way of saying workplace violence which is a productive workplace environment policy and and basically it forbids any kind of threatening or intimidating conduct in the workplace including bullying and that catches a lot of bad behaviors before they get in get into a level of being legally actionable in some way and as I may have mentioned before Hawaii OSHA says that every employer should have a workplace violence policy as part of its overall safety obligations so at least I know of one case where a Hawaii company was fined by Hawaii OSHA for not having a workplace violence policy so it'd be good incorporate that into your employee handbook so now we've got all these policies about you know if you feel you're discriminated against or retaliated against for pointing out something illegal or unethical or you're getting threatened this is how you report it this is who you report it to this is what we're going to do about it and you won't be retaliated against for in good faith reporting these so that's kind of I get you through the the normal kind of EEO and policies but then you get to get into the mandated benefit laws like payment of wages and and overtime and things like that so there's always a section on compensation one of the critical things to have is a what they call a safe harbor policy for the Fair Labor Standards Act most businesses are covered by the Fair Labor Standard Act if you have a budget of a half a million dollars you're going to be covered as an enterprise and most condos do so you're so you're covered by federal wage and hour law and that means that people who are salaried exempt are not entitled to overtime but to be salaried under the Fair Labor Standards Act you can't make deductions from the salary for quality for problems with quality or quantity of work so as a exempt supervisor if I work one hour in a work week I get my full work week to pay unless I've exhausted sick leave and it's a whole day absence and that's what this policy is intended to do there are seven special reasons you can deduct from a salary exempt employee's pay and this policy lays out those seven reasons so whole day absences for sickness after I've exhausted any sick leave policy program that I have whole day absences for personal reasons you can't deduct partial day absences for any reason you can offset partial day absences with sick leave or vacation but once sick leave or vacation is exhausted I can't deduct from your salary just because you didn't show up one afternoon I can fire you for not showing up but I can't deduct from your salary which guess is the way the law works used to say a salary is a salary is a salary that means you get that salary regardless of the quality or quantity of work that you do however there are other exceptions you can be suspended for violation of safety rules and not be paid for a suspension due to the violation of safety rules you can be suspended for a violation of conduct rules um suspending you for three days for sexually harassing a resident or something like that and if not being fired right but so suspensions without pay for salary exempt people can count absences for family leave and there's a few others but you want that policy in there because it says again if you think your salary was improperly deducted let us know and we'll look into it and correct it that avoids this problem if you incorrectly deduct from a salaried exempt person's pay they lose the exemption and you would owe overtime to that salaried exempt person from that point on every other person in that job category that is under the same supervisor so it can have a serious consequential financial impact if you're not careful and this policy helps prevent um incorrect deductions um I think it's also good um so the other thing you have to put in the compensation section is to define what your work week is for non-exempt people businesses get to decide what the seven-day period is that you look at to determine whether you owe overtime after 40 hours in a work week so for your non-exempt folks they need to know it's Sunday through Monday or Tuesday through Monday or Saturday through Friday or whatever seven consecutive days you want to use you get to define that and it may vary based on your schedule operations however you want to look at things but the wage and hour laws all look at overtime and your pay obligations based on your seven-day period everything is done week to week there's no such thing as comp time you got to be at paid overtime for um any hours worked in excess of 40 in a work week so we want to define what our work week is and we also need to define in this benefit section what our sick leave vacation or PTO policy is the state wage and uh the state laws in Hawaii do not regulate how much vacation or if you give vacation the state laws do not regulate how much sick leave you give or even if you do pay for sick leave some businesses don't have sick leave some businesses don't have vacation and you don't have to or PTO but the state of Hawaii says under the payment wages statute and regulations that if you do provide sick leave or vacation or PTO you have to tell employees what that policy is in writing and if you're going to change it you have to inform them in writing in advance of any change so you can't just say to somebody after they plan their vacation oh we took vacation away from you we i'm sorry we didn't tell you you have to tell them in advance because the state will enforce your policy but there's no mandate on whether you have a policy to provide it or not um and likewise there's no no policy and no law that requires you to give people time off or pay for holidays just because the government shuts down doesn't mean you have to shut down and or get paid extra for working on that holiday um and so uh if you're going to give employees some extra benefit like a holiday pay or a day off on a holiday that should be in your employee handbook and that is again something that's completely uh unique to each property and i mean if if you're in a healthcare institution you got to work every day of the year anyways yeah so you don't need to have holidays basically or you could pay you know some kind of premium pay if you're scheduled to work on a holiday um there's another state law that requires that employers grant a period of leave to employees that's the victim of the victim leave act and it has to do with victims of domestic or sexual violence uh businesses that have less than 30 employees or something like that have to grant up to five days of unpaid leave and businesses with more employees have to grant up to 30 days of leave during which time employees can use any form of applicable paid leave that they would otherwise have so like if you do give vacation or sick leave and that would apply to my absence because i'm seeing a counselor or i'm seeing a doctor or i'm seeing a psychologist or something yeah then then i would get to use my paid leave and that absence for that five days or for that 30 day period is protected meaning it can't be used against me uh for attendance purposes um or anything like that uh and i'm guaranteed my job uh when i come back from that kind of leave so victim leave law another important one to include and if you have more than 50 employees and that's there's a few there's there's several uh community associations that have over 50 employees and surprisingly it's not that unusual uh you're subject to the federal family and medical leave act and you should have a policy on federal family and medical leave which generally grants up to 12 weeks of paid of unpaid leave a year there's some exceptions for military leave that go up to 26 weeks but basic rule has to do with my own illness or if i'm caring for a family member that's y'all um and then you get up to 12 weeks of protected leave and guaranteed return to work then when you come to the end of your handbook you ask everybody i acknowledge that i've read this handbook understand that i have to comply with these things although it's not a contract and i understand that i can be terminated at any time for any reason as long as it's not an illegal reason and i agreed to abide by these policies and rules and if i owe money to the company i agree to pay it back when i leave and if i don't then they can have it deducted from my final pay and that's your handbook acknowledgement page several paragraphs i signed my name i've read the handbook and now i'm bound by it but it's not a contract so that that's that's kind of the handbook and the other section of the handbook which takes up a little bit of time and effort is to make a list of the rules of behavior that you expect your employees to follow what can i be fired for that these calm codes of conduct or rules of conduct and it's like you know it says your employment is subject determination for any of the following reasons including but not limited to and then you got a list of like 35 different things that can happen bringing alcohol or illegal drugs on the property right reporting to work under the influence of alcohol or your legal drugs okay those are understood sleeping on the job or giving the appearance of sleeping on the job you can be fired mark i wasn't sleeping yeah but you were looking like you're sleeping your had your hat pulled over your face and you had your feet up on the on the security desk at midnight i'm sorry you know so so all those kinds of things that you might put in treating treating residents and owners with respect you can put in all kinds of of things that are are unique to an association's kind of operation or just generalize and those are generally listed in these model handbooks that the so that the property management companies have for you if you're one of those or um our law firm every year with the Chamber of Commerce of Hawaii publishes a desk manual on employment law there's a seminar at every august that we give that includes a sample model employee handbook in the back of it okay i have one question yes um the last week somebody had asked me that they're getting ready to do their budget and they are deciding to the board is deciding to remove two paid holidays so they're questioning whether they have to how far in advance do they have to notify the employee that they're taking off so a couple of paid holidays so holidays surprisingly aren't covered by our payment a wages statute so there's no regulation that has to be in advance in writing like a change in vacation or sick leave but i would recommend that number one it'd be in writing in advance and as far in advance as you can reasonably give employees notice so if if you can give them a month's notice that's great so we're changing our policy effective at the beginning of our fiscal year calendar year or beginning next month um they're no longer these two holidays or will no longer be recognized okay advance notice in writing i think is critical and as far in advance as you can okay and the other one and i know this is a common thing that it happens um from time to time is you have a resident manager that also it is happens to buy a unit in the building or he's he's already an owner and now he's hired as a resident manager so which is against a statute 107 right um so i mean how does that i mean well the one thing i do know is a resident once you're a resident manager you're not allowed to solicit proxies or do anything like that in an election but if you're an owner you can so i don't you put you put your resident manager in a conflict situation if you if he's also an owner so i discourage as much as possible associations from hiring anybody that resides on property as an owner now if they choose to buy a place on property i would i would suggest that you consider strongly to discourage that and say you can't live on property if you're going to be our resident manager because here's what happens everybody's resident manager leaves sooner or later and most often they leave under terms that are not really cordial between the board and them they usually are asked to leave or let go and so now you have a disgruntled former employee who's an owner who's going to be a pain in the side of the association for eternity as long as they own a own a unit on that on in that building or on that association's land so it's just brought with potential problems the same problems come up when you let him i'm going to address this now too that when you let employees work for owners right so i'm your maintenance guy everybody likes me i fixed the common elements i've been to your unit i fixed your toilet one day now i hire you off when you're off duty to come back to my unit and fix some of my plumbing or whatever it might be then the owner if you do a lousy job the owner can sue the association saying well you you recommended them you hired them so i thought they were okay to use and now they did a bad job and ruined all my furniture and i'm going to sue the association or that employee steals from them and they say well you were negligent in hiring them and i wouldn't have hired them for myself if you didn't have them working here uh or that employee gets hurt and says well i think i was just doing something for the association so now the association's workers comp applies it's dangerous it's dangerous to let employees work for owners outside of their normal work hours that outside employment should be limited to off the property or non non board members non you know not on property just like keeping the resident manager from living on property you just don't want that that extra liability okay i really want to thank you john already for participating i mean that was really quick i mean we could do another day of this okay so i really want to thank you for doing the two weeks that we did okay hopefully we i can come you can i we can come back again and talk a little bit more about labor because it is such a big subject for condos yeah i think we could we could talk about terminations and arbitration agreements if you want to some other day yeah that'd be great okay so thank you everybody for joining us we'll see you back here again next week on another subject in condo insider so thank you and have a great weekend