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Do Not Take Advantage Of Employee With Great Work Ethic

On Behalf of | Oct 12, 2016 | Employment Law

As owners of a company at times we are fortunate enough to have an employee with a strong and productive work ethic who: while in the office who gets along with everyone; works very diligently; takes work home; and only takes advantage of a small portion of the paid vacation available to the worker each year.  Those employees should know that you notice their superb effort and productivity.  We are in a capitalist society and it is expected to reward those members of the team who perform better than others; whether it be by a bonus or otherwise. The same employee who does not ask for a raise when entitled to one may be the one who finds another job and gives a two week notice without you ever realizing the worker was considering leaving.

There are also legal issues in regards to the employee who takes work home.  If the employee and takes work home but does not record the at home work on her time record, since the employer knows the employee is taking work home, the employer is permitting the employee to work and usually hourly wages, and perhaps overtime pay for hours over forty per week, are due.  While all is harmonious between the employer and the employee and a claim is not likely to be made by the employee, it is quite possible that later the employee may leave and at that time seek legal redress for the monies he/she are owed.  There could also be an audit of the employer’s records by the United States or New Hampshire Department of Labor and this information may be uncovered and the wages would then have to be paid resulting in an unexpected cash-flow crunch upon the employer of a wage expense, and perhaps penalties, that it did not know it would be incurring. Require proper time records and pay what is due when due.

Another concern is that when an employee does not take the vacation he/she is entitled to, unless the vacation policy in writing clearly states that vacation cannot be carried over into subsequent years, the employer upon the employee leaving may find the employee claiming a substantial amount of unpaid vacation pay for up to three years.  Paid vacation is not a requirement under New Hampshire law; however, if it is part of a policy or procedure then it does become wages enforceable under the New Hampshire Department of Labor’s Rules.  The New Hampshire Department of Labor would further find that absent a clear policy that the unused vacation pay is not payable to the employee upon leaving that it is, in fact, payable.  For the employee that has three weeks’ vacation in any particular year, yet only used a total of one week, the employer may not find it surprising that it has to pay the two-week’ vacation.  However, if the employer has not taken the time to specify in the policy that vacation cannot be carried over each year and the employee has only taken one of the three weeks of vacation for the last three years, the employer may be surprised that it could have to pay up to six weeks’ worth of vacation; being two weeks for each of the three years.  For business owners considering a vacation policy first it should be in writing and given to the employee like all employment policies. Second, in considering whether to allow a carryover of untaken vacation to subsequent years consider the purpose of a company giving paid vacation. Generally owners agree to pay for vacation as part of a competitive compensation package to attract good job candidates and so that employees take time off and are refreshed when they return to work.  If the employee is allowed to accrue vacation year after year and have it paid out upon leaving, that is of little value to the company.

Furthermore, in certain jobs, such as in bookkeeping, having the employee be forced to take two consecutive weeks off may be prudent in that if the bookkeeper is stealing from the company, it is quite possible that if the bookkeeper does not have access to financial records of the company for a period of two weeks that others doing the bookkeeper’s job during the two week period will be able to find any irregularities that the bookkeeper was hiding.  Further, as to the “checks and balances” within the company, it often prudent to have an officer of the company that does not have check-writing authority nor authority to put the entries of the checks into the accounting system to have the bank statements mailed to her residence. While many bank statements, including the processed checks are available online, receiving an actual physical copy by that officer at the residence is often more likely to result in that officer reviewing those processed checks within a few days of receipt to see if there any abnormalities and thereafter follow up with the accounting department to any particular check that is questioned.  For example a check could be made payable to the bookkeeper’s mortgage lender or to cash yet entered into the accounting system as payable to e regular vendor of the company so as to look legitimate when just reviewing the accounting records. This system would uncover that embezzlement scheme and will also decrease potential embezzlement in that anyone who has the motive to steal from the company yet knows the likelihood of being caught is high is less likely to do so.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].