Maternity Leave

You just found out your employee is pregnant.  Many employers hear this news with some measure of dread as they contemplate requests for months of maternity leave.  Some of that dread is fueled by confusion about exactly what the law requires.  Contacting an attorney before doing anything else could not only calm your worries, but also prevent a costly mistake.

When thinking about maternity leave, the first thing that comes to mind for most people is FMLA.  Indeed, FMLA does require maternity leave, but smaller employers are exempt, and not all employees qualify.  (For more information on FMLA, go here for a wealth of blogs and podcasts.)  But the analysis does not stop with FMLA. 

First and foremost, it is illegal to discriminate in employment based on pregnancy.  So, if you were thinking about taking care of this "problem," by simply firing your pregnant employee, think again.  (Specifically, think about whether you would want your wife, daughter, sister, friend, or yourself to get fired because of pregnancy.)  The laws against pregnancy discrimination apply to more employers and employees than FMLA.  In Washington, the Law Against Discrimination applies to employers with 8 or more employees.  Some cities, including Seattle, have a similar law which applies to employers of all sizes. 

Not discriminating against a pregnant employee obviously includes more than simply letting her keep her job.  In fact, it includes some maternity leave.  WAC 162-30-020, which discusses pregnancy discrimination under Washington law, says in part:

4) Leave policies.
(a) An employer shall provide a woman a leave of absence for the period of time that she is sick or temporarily disabled because of pregnancy or childbirth. Employers must treat a woman on pregnancy related leave the same as other employees on leave for sickness or other temporary disabilities. For example:
(i) If an employer provides paid leave for sickness, or other temporary disabilities, the employer should provide paid leave for pregnancy related sickness or disabilities;
* * *
(iv) If the employer permits extensions of leave time (e.g., use of vacation or leave without pay) for sickness or other temporary disabilities, the employer should permit such extensions for pregnancy related sickness or disabilities.
(b) There may be circumstances when the application of the employer's general leave policy to pregnancy or childbirth will not afford equal opportunity for women and men. One circumstance would be where the employer allows no leave for any sickness or other disability by any employee, or so little leave time that a pregnant woman must terminate employment. Because such a leave policy has a disparate impact on women, it is an unfair practice, unless the policy is justified by business necessity.
(c) An employer shall allow a woman to return to the same job, or a similar job of at least the same pay, if she has taken a leave of absence only for the actual period of disability relating to pregnancy or childbirth. Refusal to do so must be justified by adequate facts concerning business necessity.

Before denying a pregnant employee leave, even if you think it is justified by "business necessity," please consult with an attorney for advice about your specific situation.

Unpaid Wages, Part 3

In Parts 1 and 2, I discussed some of the consequences for not paying wages and strongly advised employers to pay their employees in full and on time whenever at all possible.  The trouble is, sometimes it just isn't possible because the money isn't there.  In that all-too-common situation, the employer is often "judgment proof."  In other words, even if the employee wins the lawsuit and gets a judgment, they cannot collect on it because there are no assets to take.  You can't squeeze blood from a beet. 

Washington's lawmakers recognized how often employers in unpaid wage cases are judgment proof and, in their attempt to ensure payment of wages, made certain individuals personally liable for unpaid wages.  Under RCW 49.52.070, any "officer, vice principal or agent of any employer" who wrongfully withholds wages shall be personally liable (except when the employee knowingly submits to the withholding, as discussed in Part 2.)  In practice, courts have interpreted this to mean those with some control over the payment of wages, especially check-writing authority, are personally liable.  Ellerman v. Centerpoint Prepress, 143 Wn.2d 514 (2000); Durand v. HIMC Corp., 151 Wn.App. 818 (2009).  The Durand court also noted that personal liability in these cases does not turn on piercing the corporate veil, so an employer's corporate structure does not protect the individuals from personal liability.  Federal law on the issue is similar, though not identical.  It is worth taking a look at this post for a discussion of federal law.

Individuals who have some control over the payment of wages need to be sure those wages are being paid.  Otherwise, they risk personal liability and may end up paying those wages out of their own paychecks.

Unpaid Wages, Part 2

In Part 1, I warned that financial inability to pay an employee's wages is insufficient to avoid a finding of willfulness and double damages.  But what is sufficient?  Washington courts have, so far, acknowledged only two instances when an employer's wage withholding was not willful, resulting in only single damages:

1. When the employer was careless or erred in failing to pay, or
2. When a bona fide dispute existed between the employer and employee regarding the payment of wages. 

Morgan v. Kingen, 166 Wash.2d 526, 534 (2009).  The typical case of carelessness or error is an inadvertent bookkeeping mistake.  In the case of a bona fide dispute, there must be a fairly debatable dispute over whether an employment relationship exists, or whether all or a portion of the wages must be paid.  Schilling v. Radio Holdings, Inc., 136 Wash. 2d 152, 161 (1998).  These exceptions are of no use to the employer who did not pay wages simply because there were insufficient funds to do so.

There is another route for avoiding double damages.  Double damages are not available to any employee who "knowingly submits" to the wage withholding.  RCW 49.52.070.  But, again, this is a narrow exception.  "A person knowingly submits to withholding of wages when he or she intentionally defers to his or her employer the decision as to whether, if ever, he or she will be paid."  Durand v. HIMC Corp., 151 Wn. App. 818, 836-37 (2009) (citing Chelius v. Questar Microsystems, Inc., 107 Wn. App. 678 (2001)).  In Durand, the court noted that staying on the job after the employer fails to pay does not constitute knowing submission.  The court also emphasized that the employee only agreed to temporary non-payment and always expected to be paid the full amount he had earned when the employer was financially able.  In other words, if an employer fails to pay its employees on time, but convinces them to continue working by making assurances that they will be paid in full later, the employees are not knowingly submitting to the withholding and the employer may still be liable for double damages.   

My esteemed colleague offers her two cents on wage withholding here.  For advice on your specific wage withholding issues, consult an attorney.