Employee or independent contractor? Proposed bill to target misclassification

Today's post comes from G.Neil's HR News Weekly:

Mistakenly classifying employees as independent contractors not only violates the Fair Labor Standards Act (FLSA), but it also deprives workers of certain rights.

The Payroll Fraud Prevention Act recently introduced in the Senate would take a firm stance against employers who misclassify workers.  The bill would require employers to:

•    Keep records clearly indicating the status of each worker as an employee or non-employee
•    Notify workers of their classification as an employee or non-employee
•    Pay steeper penalties for misclassifying workers and violating their overtime and minimum wage rights

The bill would also provide protections to workers who are fired or otherwise discriminated against for trying to be reclassified as employees. Further, the DOL’s Wage and Hour Division (WHD) will conduct audits on industries that frequently misclassify workers.

In a press release, Ohio Senator Sherrod Brown stated,

“Intentionally treating workers as subcontractors when they really are employees is payroll fraud: it cheats workers, taxpayers and other businesses that play by the rules.”

Need help determining whether a worker is an employee or an independent contractor? Check out easy-to-use software for guidance.

Taking care of employees who are caregivers

As if the demands of balancing a full-time job and raising children weren't enough, many employees are facing an added strain these days: Taking care of aging mothers, fathers and other family members. For these employees, "caregiver" is just one more hat they must wear, and the daily juggling act can be exhausting.

So while you're accustomed to accommodating the needs of employees with young children (providing daycare benefits and flexible scheduling for doctor's appointments and school functions, for example), you might want to extend that generosity to employees with elderly parents, as well. It's not enough to be a "child-friendly" business, but an "eldercare-friendly" business, too.

As outlined in an online article at The News-Enterprise, thinking along these lines benefits companies and caregiver employees in many ways, including:

>> Easier to attract and maintain the best workers
>> Increased productivity by reducing stress on employees
>> Less employee absences and disruptions in the work schedule
>> Enhanced community image, which can attract new customers

For forward-thinking employers, recognizing the situation is the first step: Taking care of  elderly or ill parents puts a significant financial and personal strain on employees. The next step, then, is to explore ways to ease the burden on these employees and offer valuable reinforcement. This might come in the form of:

  1. Health and information fairs covering adult day care, nursing home evaluation, insurance issues and services like "meals on wheels"
  2. Flexible work hours, including telecommuting opportunities and job sharing
  3. An employee attendance policy that recognizes caregiving obligations and includes paid time off (PTO) that doesn't necessarily distinguish between vacation and sick days
  4. Onsite caregiver support groups

The risk of ignoring the situation is great. According to a 1999 study by the MetLife Mature Market Institute, 16 percent of survey respondents indicated that they had to quit their jobs entirely in order to meet the needs of elderly parents. Many other respondents indicated that they passed up job promotions, training opportunities, or career-advancing projects because of their caregiving obligations.

Obviously, it makes sense to help those employees who are helping others. Otherwise, you could lose trained, highly qualified employees who feel caught between their obligations at home and at work.

Are your employees a good investment?

I know that no one likes to be thought of as "just a number" and that we talk a lot about morale, mood and other feel-good aspects of the workplace on this blog. But at the end of the day, a business needs to make money - and if its employees aren't contributing to the bottom line, there's a problem.

The term ROI - return on investment - is bandied about quite often in financial circles. But what if you applied this same formula to your company's personnel? How valuable is Ken, Katie and Karl to your business compared to the cost of employing them (salary, benefits and other company-provided perks)? Do your employees' contributions outweigh the cost of keeping them on board?

While it's not always easy to put a dollar sign on a person's efforts and achievements, it can be an interesting exercise - whether at review time or any time. 

For example, is Ken in sales securing enough sales to cover his costs? While he may be pulling in great numbers, if his sales are spread around to multiple customers and require you to hire additional customer service representatives, his value isn't as strong. 

Or how about Katie, the customer service advisor who's great with her team but moody on the phone? If her snarky attitude has caused a handful of customers to take their business elsewhere, her value suddenly drops. How much did each of these customers spend a year - profit that you lost?

Then there's Karl in the warehouse. He's a solid, hard-working guy, but a bit accident prone. In three years, he's been in two workplace accidents that involved lengthy and costly workers' compensation claims. Your investment in Karl, then, involves more than just his hourly wages.

When it comes right down to it, you're looking at the same qualities you typically consider: attitude and actions. The difference with ROI is whether those qualities are advancing the success of your business, making each employee a worthwhile investment. Ideally, your employees bring in a positive ROI, making your "personnel" portfolio as robust as your personal financial investments.

Top 3 employment law trends to keep on your radar

Running a business these days is certainly no picnic, thanks to the still-struggling economy and near-constant employment law risk. Management must maintain that perfect balance of awareness and action - or find themselves on the receiving end of a costly, potentially crippling lawsuit.

According to Shanti Atkins, Esq., president and CEO of ELT, the biggest employment law concerns plaguing employers today are:

1) Discrimination. And the claims aren't predominantly sexual harassment anymore, but also sexual orientation, religious and disability discrimination. Are your anti-harassment and anti-discrimination policies in order and, even more important, are you training your managers and staff - thoroughly and regularly?

2) Violence and bullying. Did you know that approximately 20 percent of all violent crime occurs in the workplace? This is no time to ignore bullying and other threatening behavior that could escalate into something more dangerous. Be on the lookout for early warning signs and encourage employees to report concerns immediately so that you can respond appropriately.

3) Wage and hour violations. Perhaps the biggest risk of them all, wage and hour class action lawsuits have expoded. In fact, these claims account for a whopping 84 percent of all employment class action lawsuits. Just as alarming, the Department of Labor (DOL) estimates that more than 80 percent of employers are out of compliance with federal and state wage and hour laws. Not knowing is no excuse. Make sure you're educated on the latest Fair Labor Standards Act (FLSA) guidelines and that you carefully explore any gray areas.

At long last, the final ADAAA regulations are here

Although the Americans with Disabilities Act Amendments Act of 2008 (“ADAAA”) went into effect January 1, 2009, the EEOC just recently released the long-awaited final regulations. The new regulations, which are effective May 24, 2011, reflect the more than 600 public comments the Equal Employment Opportunity Commission (EEOC) received from a wide range of stakeholders.

What stays the same: The basic legal requirement that employers not discriminate against individuals with disabilities who are qualified for a job, with or without reasonable accommodations. The final regulations maintain the ADA’s definition of “disability” as a physical or mental impairment that substantially limits one or more major life activities; a record (or past history) of such an impairment; or being regarded as having a disability.

What changes: How these terms are interpreted – with many more conditions falling under the definition of “disability.” For example, impairment doesn’t necessarily have to prevent or restrict performance of a major life activity to be considered substantially limiting. In addition, episodic impairments, such as epilepsy, are considered disabilities if they limit activity.

“Under the new law, the focus is on how the person was treated rather than on what an employer believes about the nature of the person’s impairment,” the EEOC stated at the time the regulations were announced.

As with the existing ADA rules, you should err on the side of caution. It’s best to assume that most employees with physical or mental impairments are covered under the ADA … and make every effort to cooperate with impacted employees. For guidance on the many nuances of the new ADA rules, check out the handy guide available on the ADA website.

New E-Verify tool helps job seekers verify employment eligibility

Today's post comes from G.Neil's HR News Weekly:

The launch of E-Verify Self Check – a partnership between the Department of Homeland Security (DHS) and the Social Security Administration (SSA) – means U.S. job seekers can now check their own employment eligibility status before obtaining jobs. 

This voluntary, secure service is the first online tool of its kind, designed to allow workers to review their employment eligibility in their job search, as well as correct any errors in their DHS and SSA records. Doing so can protect them from potential difficulties in being hired by an E-Verify participating employer. This preliminary step can create efficiencies for businesses, as well.

“E-Verify is a smart, simple, and effective tool that allows us to work with employers to help them maintain a legal workforce,” said Secretary of Homeland Security Janet Napolitano. “The E-Verify Self Check service will help protect workers and streamline the E-Verify process for businesses.”

How to fight back against FMLA abuse

In the hands of honest employees, legitimate physicians and efficient HR professionals, the Family and Medical Leave Act (FMLA) helps millions of workers cope with critical health conditions and care for sick family members.

But the law can take a fraudulent turn when it’s abused by dishonest individuals, costing you thousands of dollars in unnecessary expenses and lost productivity. And claims are on the rise. According to a report by FMLASource, an affiliate of ComPsych Corporation, FMLA claims have increased more than 10 percent, largely due to the struggling economy and more workers pursuing their FMLA benefits.

Stand up to FMLA violations ...

At its most basic, the FMLA provides qualified employees with up to 12 weeks of unpaid leave per year for the birth or adoption of a child, to care for a spouse or immediate family member with a serious health condition or to recover after an employee’s own serious health condition. New FMLA military leave rules also provide job-protected leave rights to employees who care for service members with a serious injury or illness, or who face “qualifying exigencies” because a covered military member is on active duty or has been notified of an order to active duty.

But what is designed to help employees in a time of need is also rife with fraud. The following practices can help you stay on the right side of the law and protect you from mistreatment even in the most difficult situations:

Require employees to submit leave request forms – Putting pertinent information in writing often deters an employee from pursuing an unnecessary absence. An Employee FMLA Leave Request gathers the necessary information to determine an employee’s FMLA eligibility without violating privacy laws.

In addition, requiring employees to provide 30 days advance notice for foreseeable FMLA leave allows you to make scheduling adjustments and remain productive.

Obtain medical certifications, too – An easy way to keep employees honest is to require additional documentation in the form of medical or military certifications. Again, with G.Neil’s help, you can secure four different types of certification:

•    Medical certification (family member) – Completed by a healthcare provider to verify the employee’s need to care for a family member with a serious health condition
•    Medical certification (employee) – Completed by a healthcare provider to verify an employee’s serious health condition
•    Military certification (exigency) – To verify an employee’s need for FMLA leave for military duty
•    Military certification (injury/illness) – To verify an employee’s need to care for a covered service member/veteran with a serious injury or illness

In most circumstances, once you inform an employee of the need for certification, the employee must complete the certification and return it to you in 15 days.

It’s also acceptable to require employees to submit a recertification every 30 days for serious health conditions, as well as demand a second or third opinion. Dishonest employees may use friends and acquaintances in the medical field to supply questionable certifications. If you have suspicions about the validity of the certification, you can challenge it by requiring an objective healthcare provider to review the injury or illness.

Make employees tap all paid time prior to taking unpaid FMLA leave – Employees are less likely to manipulate FMLA benefits if they have to use their vacation days and other paid time off first.

Calculate leave using a “rolling” 12-month period – It’s wise to calculate the hours of an employee’s leave in a 12-month period, rather than a calendar year. This prevents employees from “double dipping” by taking 12 weeks of leave at the end of the year and 12 weeks at the beginning of the following year.

Require "fitness for duty" certifications for employees returning to work - When employees return from leave for their own serious health condition, you can require a fitness for duty determination. Keep in mind, however, that a fitness for duty certification cannot be required for a return from intermittent leave (time off from work on an occasional basis, rather than entire days at a time).

Structure FMLA leave around your needs – You are entitled to demand that medical treatments take place after hours, if they’re available. Employers can also transfer an employee who takes intermittent leave to a position less disrupted by frequent absences, as long as the pay and benefits are comparable.

Train managers and supervisors Your managers and supervisors should know the basics of the law, including qualifying reasons for leave and notice requirements. With a greater awareness of the law, red flags can be identified and addressed sooner.

Passing over the unemployed would be unlawful under new bill

Today's post comes from G.Neil's HR News Weekly:

Being out of work is hard enough. Not getting work because you’re out of work is even harder.

If a proposed bill is passed, employers will have a legal obligation to guard against this very situation. Shortly after the Equal Employment Opportunity Commission (EEOC) held a public hearing on unemployment discrimination, Rep. Henry Johnson of Georgia introduced a bill that would make this type of discrimination unlawful.

The Fair Employment Act of 2011 would add “unemployment status” to the list of protected classes under Title VII of the Civil Rights Act. Specifically, “unemployment status” is defined as “being unemployed, having actively looked for employment during the then most recent 4-week period, and currently being available for employment.”

Regarding the bill, Rep. Johnson stated, “Employer discrimination against unemployed job applicants is fundamentally wrong. With unemployment at about 9 percent and with nearly 14 million Americans out of work, this discrimination will only prolong the crisis.”

Check back here for updates on the proposed bill.

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