Independent Contractor or Employee? Better Be Sure, And Fast!

Many employers incorrectly classify an employee as an independent contractor.  Some employers do it intentionally (to avoid workers' compensation and payroll taxes); but most are unaware of what the difference in classification actually is.

If you use Independent Contractors (also known as 1099's), you better audit all of them at once.  The IRS is about to launch comprehensive audits of 6,000 businesses.  The focus is - you guessed it - properly classifying employees.

Please take a moment to review the criteria the IRS uses to determine whether a person should be classified as an employee or Independent Contractor.  It's about control.  I've had clients insist a person is classified as a 1099 simply because that person requested classification that way! (That's wrong as well, by the way).

Get a qualified consultant or employment attorney to audit your practices and procedures as soon as possible.

Courtesy Baker Hostetler

Small Business Planning for H1N1

The Small Business Administration recently published “Planning for 2009 H1N1 Influenza Season Preparedness Guide for Small Business.”

Here are seven H1N1 preparedness steps that the government recommends you review and apply as appropriate to your place of business:

1. Identify a Workplace Coordinator -This person would be the single point of contact for all issues relating to H1N1 and be responsible for reaching out to community health providers and implementing protocols for dealing with ill employees - in advance of any outbreak or impact on the business.
2. Examine Policies for Leave, Telework and Employee Compensation - Obviously this will vary by business, but the emphasis here is on refreshing yourself and your employees about what your company's health care plans cover in the event of sick leave as a result of H1N1. You should also re-evaluate leave policies to ensure a flexible non-punitive plan that allows for impacted individuals to stay at home. Employees may also need to stay at home to care for sick children or telework in the event of school closures - so be prepared for this by implementing appropriate teleworking infrastructures in advance.
3. Determine who will be Responsible for Assisting - Appoint an individual or individuals who will be on-hand to assist ill personnel at your workplace - essentially a "go-to" person, who may be the same as the person chosen as your workplace coordinator.
4. Identify Essential Employees, Essential Business Functions, and Other Critical Inputs - Make plans to maintain communication and ensure clear work direction with critical personnel and vendors (and even customers) in the event that the supply chain is broken or other unpredictable disruptions occur.
5. Share your Pandemic Plans with Employees and Clearly Communicate Expectations - Consider posting a bi-lingual version of your preparedness plan, leave information, health tips, and other H1N1 awareness resources across all your work locations and online if you operate an Intranet.
6. Prepare Business Continuity Plans - Absenteeism or other work place changes need to be addressed early on so you can maintain business operations. Get tips on common sense measures your business can take from Business.gov here.
7. Establish an Emergency Communication Plan - Hopefully your business already has some form of emergency communication plan. If not, document your key business contacts (with back-ups), the chain of communications (including suppliers and customers), and processes for tracking and communicating business and employee status.

Managing Social Media in the Workplace

The impact of social media in the workplace is growing.  Time is being wasted, employees are 'friending' each other and liability for these issues is a litigation attorney's dream come true.

RSJ/Swenson has prepared a special report on Managing Social Media in the Workplace, based on Eric Swenson's recent presentation at the CalCPA Employment Practices Conference.  You can download the report here.

And bosses & managers: Don't "friend" your employees!

Retaliation Claims on the Rise

It's always been easier for lawyers to prove retaliation in the workplace than harassment, discrimination, or even wrongful termination.

With so many people now out of work, it's natural that retaliation claims against employers is now on the rise - 23% this year over last.

The classic example of retaliation comes from an employee who did the right thing - a whistleblower notification, a complaint against a supervisor or fellow employee - and that was terminated, transferred or had other repercussions from their employer.

A good article on this trend is from the Wall Street Journal.

Credit Reports for Hiring? Still A Bad Idea!

Using a credit report is becoming more popular for businesses hiring employees.  We've always felt this was an unnecessary risk to employers because:

1. What is the business justification?  If a job requires an employee to handle large amounts of cash, or have access to the same, that's good justification.
2. If someone has a bad credit report - especially in these economic times - does that make them a poor candidate for a job?  Not necessarily.
3. There is a risk that women and minorities may be disproportionately affected, and that could cause big problems.

So unless you have a good reason to do it, don't!