Greetings!
Welcome to Kiesling Associates' monthly HR Matters newsletter.
Kiesling Associates is a CPA & Consulting firm in business since 1952. Our niche is in providing HR services to small and mid-sized organizations. We will provide proven solutions to enhance your business while allowing you to spend more time concentrating on operational matters.
Sincerely,
Brian Blahnik & Christie Hennessey
Kiesling Associates LLP
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** CLIENT ALERT **
NLRB Posting Requirement
The National Labor Relations Board (NLRB) has mandated that the poster is titled "Employee Rights Under the National Labor Relations Act," which has received a great deal attention from concerned employers and employer advocacy groups, must be posted by April 30, 2012. None of the various legal challenges to the NLRB posting rule prevailed. There is another legal challenge to the posting rule pending in a federal District Court, but no decision has been issued in that case and there is no reason to expect one will be issued before April 30.
With only a few exemptions, all employers, regardless of your company's union status,will be required to post the notice advising employees of their rights regarding unions. Specifically:
- The right to join a union;
- The right to bargain with the employer through representatives, such as a union, about wages, benefits, hours, and other working conditions;
- The right to discuss wages and benefits and other working conditions with co-workers;
- The right to take action with co-workers to improve working conditions by, among other things, making internal complaints to the employer or to a government agency or by asking for help from a union; and
- The right to strike and picket.
The poster also advises employees that it is illegal for an employer to prohibit employees from talking about unions during non-work time, such as breaks or before or after work. It notes that it is illegal for an employer to question employees about their support for a union in a way that discourages them from supporting a union, and to make promises of benefits in order to discourage union support.
Noncompliance may be treated as an unfair labor practice and can be used as damaging evidence in a lawsuit. The poster must be posted in conspicuous place where other notifications of workplace rights and employer rules and policies are posted and must be no smaller than 11" x 17". The NLRB also requires employers to include a link to the poster on internal or external web sites if other employment policies are posted there.
For your benefit, the poster may be downloaded by clicking here: New NLRB Poster
This may also be a good time to ensure that your other state and federal mandated posters are up-to-date.
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Independent Contractor or Employee?
When hiring independent contractors, organizations will want to make sure that government agencies view them as truly an independent business person and not as employees.
Many organizations struggle with this issue and others can be caught off guard during an employment audit as an individual they thought was an independent contractor should be an employee.
The issue of a worker's proper employment status can be raised in many ways, including unemployment claims, workers' compensation claims, wage/hour claims, tax issues and state or federal agency audits. Many factors are considered in deciding whether an employee is an independent contractor or an employee and each agency with a "stake" in this issue has its own test. Failure to consider these factors may lead an organization to a costly misclassification error.
The main consideration for determining whether a worker is an independent contractor or an employee is who has the right to direct and control the work that is being performed. The more the control the organization has, the more likely the worker is an employee and not an independent contractor.
Other significant factors to consider are:
- Is the service being provided similar to other services offered by the organization. (In other words, are there employees who are doing the same work?)
- Will this worker receive the same oversight/training as the organization's employees? (The more it appears the organization is in control of the worker the more it will appear to be an employer/employee relationship.)
- How will this worker be paid? Will it be hourly, monthly, or based on progress/completion of the project? (Invoices should be submitted and be paid at the same time as other outside vendors.)
- Does the worker provide his or her own tools, equipment or supplies and pays his or her own expenses? (These costs should be included in the prices of the services being performed and not handled separately.)
- How long will this person be providing these services? (The longer the person provides the services, the more it will look like an established employer/employee relationship.)
- Does this person have other clients they provide services for? (If they are only providing services for your organization then it would appear they are an employee.)
- Does this person have control over his or her own schedule and where they work? (The organization can only direct the result of the work to be done, not how the work is to be done.)
- Is there a written contract that states what both parties intend?
Mistakes can be costly to an organization. Employers who misclassify workers may end up with substantial tax bills and penalties for failing to pay employment taxes and not filing the required tax forms.
It is a good idea to periodically review all independent contractors for your organization. Has the relationship changed? Are there areas that may lean toward an employee status vs. an independent contractor status? If so, what changes can to be made to improve them?
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DOL Wage & Hour Audits
An auditor may come knocking at your door if you have errors in your payroll that result in a violation of the Fair Labor Standards Act (FLSA). It is estimated that more than one-half of all employer groups have misclassified their employees under FLSA, though many do not realize it.
Generally the Department of Labor (DOL) will initiate an audit after a current or former employee files a complaint or during a routine investigation. Much like an audit for a potential ERISA violation, the DOL will visit your organization to conduct interviews, examine time clocks and ensure that all employment notifications are available to your employees. The auditor will also review up to three years of wage and hour records to determine if there are any violations in your payroll practices.
To avoid an overtime DOL audit, consider these recommendations:
- Understand the language and content of FLSA to ensure that you will be in compliance with its regulations.
- Conduct an internal audit to reveal any misclassifications before the DOL has an opportunity to do so. Do this annually, or at the very least, when a red flag occurs. Red flags may include a reorganization that affects job classifications, changes in the federal or state law, or an increase in hours worked by employees who are not clearly exempt or non-exempt.
- Review your employees' job descriptions to make sure they are accurate and reflect the jobs that the individuals are actually doing.
- Review your employees' job duties to make sure they fall within the correct exemptions: administrative, executive, professional, computer or outside sales.
- Determine if you have properly calculated overtime for non-exempt employees. State laws differ, so make sure you understand your state's overtime laws.
- Make sure that all required employment postings are hung up and are visible to your employees.
- Consider having an attorney perform routine audits to support an argument that you were paying your employees "in good faith."
- Analyze your organization's timekeeping procedures, methods of calculating regular rate pay and child labor practices (if applicable).
- If your internal audit reveals a problem, remedy the situation immediately. Consult legal counsel again for the best way in which to fix the problem.
- Determine whether the state and federal laws differ in any way, and make sure you are in compliance.
- Pay employees who were misclassified for overtime pay under the supervision of your attorney.
© 2011 Zywave, Inc.
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose. |
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If you would like assistance in an HR matter, give us a call. We're here to assist you. | |
Brian Blahnik, PHR
Sr. HR Consultant
608-664-9110
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Christie Hennessey, PHR
HR Manager
515-223-0159
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