Mass E-mails, Medical Data, Extra Pay

By Diane Lacy, Linda K. Anguish and Ruhal Dooley Dec 1, 2003

December 2003, HR Magazine

Q: An employee we involuntarily terminated recently is sending mass e-mails to our employees, stating that the termination was wrong and that the company doesn’t treat employees fairly. These messages are disturbing employees and causing loss of productivity. What can we do to stop this and prevent similar conduct by other former employees?

A: It may be possible to use technological means to block these e-mails. This would be an option to explore with the company’s IT specialists. Also determine if the employee signed a separation/severance agreement that includes a clause that prohibits disparagement or defamation against the employer. If such a non-disparagement agreement exists, contact the former employee to remind him of this and request that the messages stop immediately. If the former employee continues sending messages, check with your attorney regarding legal remedies.

If there is no signed separation agreement that includes a non-disparagement clause, you still may want to discuss this situation with the corporate legal counsel. The company may be able to file a lawsuit against the former employee for defamation (false or misleading statements that damage reputation).

In a recent court case, an employer facing similar conduct from a former employee filed a lawsuit against the individual citing violation of a type of trespass, called trespass to chattel, which involves damaging but not actually intruding on real property. The initial decision favorable to the employer, however, was overturned by the state supreme court, which cited freedom of speech protection for the former employee. A summary of the Intel Corp. v. Hamidi case decision was featured in the July 11 Court Report found on HR News online.

As with other employee relation situations, employers need to focus on prevention strategies. For example, whenever an involuntary termination occurs and a separation/severance agreement is used, consider including a non-disparagement clause in the agreement. Also, the May/June issue of SHRM’s Legal Report, “Protecting Your Organization’s Reputation Against Cybersmear,” includes 10 recommendations for preventing cybersmear.

As with any binding agreement, check with your attorney for definitive guidance.

Q: I am confused by my obligations under the HIPAA privacy regulations. Do I need to obtain an authorization form from my employees for every situation involving health-related information?

A: The Health Insurance Portability and Accountability Act’s privacy provisions require employers to obtain authorization from an employee when protected health information (PHI) is used for purposes other than treatment, payment or health plan operations. However, employers can avoid this requirement by requesting the information directly from the employee, rather than from the health care provider or the health plan itself.

For example, most employers will provide employees who request leave under the Family and Medical Leave Act (FMLA) with paperwork and ask that they have the Certification of Healthcare Provider form completed. FMLA documentation received in this manner is considered an employment record, not a health care record and, therefore, is not covered by HIPAA.

Similarly, an employee with a hidden disability requesting an accommodation under the Americans with Disabilities Act (ADA) may be asked to provide documentation of an ADA disability from his or her health care professional. In addition, an employer may ask an employee to provide a doctor’s note under the terms of an employer’s absence policy.

To create firewalls between health records and employment records, employers should maintain those categories of records in separate files. Also, employers should not request more information than is needed under the particular circumstance.

For example, using the Labor Department’s model DOL Certification form, can help ensure that an employer receives only the information authorized under FMLA regulations.

Finally, employers should remember that other laws’ recordkeeping provisions, such as those under the ADA, still apply.

There will be circumstances when obtaining information directly from an employee will not be possible or practical, and in those instances the employer may need authorization. Such scenarios couldinclude sending an employee for a second medical opinion as permitted under FMLA regulations, where the employer expects to receive a medical report from the physician. Another common situation could be one in which a human resource representative contacts a health plan to assist an employee in resolving a claim issue.

However, workers’ compensation issues rarely should require authorization; transactions necessary to comply with state workers’ compensation laws are specifically exempted from the regulations.

According to the U.S. Department of Health & Human Services, “An authorization must specify a number of elements, including a description of the protected health information to be used and disclosed, the person authorized to make the use or disclosure, the person to whom the covered entity may make the disclosure, an expiration date and, in some cases, the purpose for which the information may be used or disclosed.”

Q: I want to pay my exempt staffers more than their salaries for the extra work they do. How do I pay them if tracking their time jeopardizes the exempt status?

A: As you know, exempt employees are not subject to the Fair Labor Standards Act’s (FLSA) requirement to pay overtime at time and a half of the regular rate of pay. You are not obligated to pay overtime to an exempt employee, but if you want to, you may—without jeopardizing the exempt status.

As long as the exempt employee is paid on a salary basis, you have met your FLSA compensation obligation. Compensating beyond the salary does not dilute or nullify the salary basis. Therefore, above the salary, you can pay a bonus, straight time overtime (STOT), or even time and a half of a regular rate without violating the requirements for the salary basis test.

If you pay a bonus, you don’t have to track hours worked at all. If you pay STOT or time and a half, you will need an hourly rate. To calculate the hourly rate, divide the annual salary by the number of hours to be worked in a year. Hours worked in a year can be figured, for example, by multiplying a 40-hour workweek by the number of weeks in operation each year (for example, 52) for 2,080 hours per year. To figure compensation for an exempt employee you wish to compensate beyond his regular salary, divide his annual salary—for example, $52,000—by 2,080 hours. Using the STOT method, you would give the employee $25 per hour you wish to pay extra. Using the time-and-a-half method, $37.50 per hour is what you would pay.

It is acceptable to track the time of exempt employees for the purposes of performance, discipline and other organizational matters, but not for the purposes of pay. The more you track an exempt employee’s hours, the more ammunition you provide a Department of Labor auditor examining the classification of positions. For that reason, employers that want to reward the extra efforts of their exempt employees often allow time off or special consideration at bonus time. Nevertheless, it is permissible to count the hours that an exempt employee works in order to compensate that employee over and above the salary basis.

Note: The material in “HR Solutions” is provided as general information and is not a substitute for legal or other professional advice. National members may reach the Information Center by calling (800) 283-7476 and choosing option #5 or by using the Information Center online assistance request form.

Dyane Holt, SPHR, and Shari Lau, SPHR, are information specialists with SHRM’s Information Center. Naomi Cossack is knowledge manager for the center.


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