The New Hampshire Department of Labor publishes the Top 10 New Hampshire Labor Law violations every year. The list provides a great opportunity for employers to review their policies and make sure that they are in compliance with New Hampshire Law.
Here are the top ten violations explained:
1. Failure to secure and maintain workers compensation coverage and misclassification of employees.
Misclassification as an Independent Contractor
A worker is an employee and not an independent contractor if the worker “may be permitted, required, or directed by any employer, in consideration of direct or indirect gain or profit, to engage in any employment.” For a worker to be exempted from this definition the person must meet all of the following criteria:
- The person possesses or has applied for a federal employer identification number or social security number, or in the alternative, has agreed in writing to carry out the responsibilities imposed on employers.
- The person has control and discretion over the means and manner of performance of the work, in that the result of the work, rather than the means or manner by which the work is performed, is the primary element bargained for by the employer.
- The person has control over the time when the work is performed, and the time of performance is not dictated by the employer. (But an employer can require an set a completion schedule, range of work hours, and maximum number of work hours and in the case of entertainment, the time such entertainment is to be presented for an independent contractor).
- The person hires and pays the person’s assistants, if any, and to the extent such assistants are employees, supervises the details of the assistants’ work.
- The person holds himself or herself out to be in business for himself or herself or is registered with the state as a business and the person has continuing or recurring business liabilities or obligations.”
- The person is responsible for satisfactory completion of work and may be held contractually responsible for failure to complete the work.
- The person is not required to work exclusively for the employer.
If an independent contractor does not meet ALL of the above criteria, the employer must treat that worker as an employee. Workers who qualify as:
- Qualified real estate brokers or agents (see RSA 281-A:2, VI(b)(2));
- Direct sellers (see RSA 281-A:2, VI(b)(3));
- Real estate appraisers (see RSA 281-A:2, VI(b)(4));
- Inmates of a correctional facility required or allowed to perform services for which no significant remuneration is provided (see RSA 281-A:2, VII(b)); or
- Volunteers (make sure to check RSA 281-A:2, VII(b), as some additional conditions apply)
- A person providing services as part of a residential placement for individuals with developmental, acquired, or emotional disabilities
are exempted from the statutory definition of “employee.” (Note: this definition only applies to classification of employees for the purposes of New Hampshire labor laws, and not for other state and federal agencies. Employers should contact a qualified employment lawyer if they have questions about classification of employees).
Failure to Secure Workers Compensation Coverage
Before hiring an employee, New Hampshire law requires that employers obtain workers compensation insurance coverage, or obtain permission from the labor commissioner to self-insure. Employers can learn more about these requirements here and here.
2. Failure to pay all wages due for hours worked, fringe benefits, breaks less than 20 minutes, etc.
Employers are required to pay employees for all hours actually worked, not just hours scheduled.
Consider this common situation: An employer has a policy that all overtime must be preauthorized, but an employee works overtime without prior authorization. In this scenario, the employer must pay the employee for the overtime work—at the overtime rate—even though the employee violated the employer’s policy. The employer may, however, discipline the employee for the policy violation.
3. Failure to have a written safety plan, joint loss management committee, and safety summary form if required.
New Hampshire employers with fifteen or more employees must form a Joint Loss Management Committee, develop a written safety plan, and file a safety summary form with the Department of Labor.
Employers can find out more information about how to form a Joint Loss Management Committee and develop a written safety program here. Employers can find out more about how to file Safety Summary form here.
4. Employment of Undocumented Workers Prohibited.
State and Federal laws require employers to obtain documentation showing an employee’s eligibility to work in the United States. Employers can find a list of documents that establish an employee’s eligibility here.
5. Failure to keep accurate record of all hours worked.
Employers are required to make and keep records of the hours an employee works, showing the time work began and ended and any applicable meal periods. Any time record that has been altered must be signed or initialed by the employee. The Department of Labor requires employers to maintain these records for at least four years.
6. Failure to provide written notice to employees of their wage rate, pay period, pay.
Employers are required to notify employees, in writing, of their wages and the day and place of payment at the time the employee is hired. The employer is required to maintain a copy of the written notice, signed by the employee.
In addition, if an employer makes changes to an employee’s wages or the time or place of payment, an employer must inform its employee, in writing, before any change goes into effect. The employee must sign the notification and the employer must maintain a signed copy of the notification in its records.
Employers must also notify employees, in writing or by posting notice, of its policies regarding vacation pay, sick leave, and other fringe benefits.
Employers should note that New Hampshire law defines “wages” broadly as:
“compensation, including hourly health and welfare, and pension fund contributions required pursuant [an] agreement adopted for the benefit of an employee and agreed to by his employer, for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission, or other basis of calculation.”
Thus commission and bonus plans can fall under the definition of wages.
7. Illegal employment of workers under 18 (not having proper paperwork, hours violations, or working in a hazardous environment).
There are certain requirements and restrictions for employees who are under the age of 18. Employers can review applicable New Hampshire laws and regulations here.
For employees under the age of 16, an employer must obtain a certificate (except under certain circumstances such as when a child works for his or her parents, grandparents, or guardian). Details regarding the requirements for certificates may be found here and here.
8. Failure to pay two hours minimum pay at their regular rate of pay on a given day that an employee reports to work at the request of the employer.
On any day an employee reports to work, the employee must be paid at least two hours pay at the employee’s regular rate of pay. This requirement does not apply to municipalities and ski and snowboard instructors at ski areas in certain circumstances. It also does not apply to employees who are regularly scheduled to work for periods less than two hours.
9. Illegal deductions from wages.
Employers may only make deductions from an employee’s wages as required by state or federal law (i.e. payroll taxes) or with the written authorization of the employee for benefits to the employee. Permissible benefits are listed in RSA 275:48(1)(b) and include common withholdings, such as health and retirement plan contributions. Employers must also give employees a statement of deductions made from their wages each pay period in which a deduction is made.
10. Failure to pay minimum wage for all hours worked.
New Hampshire’s minimum wage is the federal minimum wage, $7.25 per hour. Employees of restaurants and hotels who customarily receive more than $30 of tips per month may receive a base wage no less than 45% below the minimum wage. The minimum wage does not apply to employees engaged in household labor, domestic labor, farm labor, outside sales representatives, summer camps for minors, newspaper carriers, non-professional ski patrol and golf caddies.
Both employers and employees who have questions about compliance with New Hampshire employment laws should consult with a qualified employment law attorney.
Helpful links from the New Hampshire Department of Labor: