Got 1099's? Think Twice
By Kim Silvers, SPHR-CA
Independent contractors are becoming a dying breed in these United States. We've seen several cases this year where individuals have been found to be misclassified as independent contractors. The back taxes and penalties (think FICA match, unemployment insurance, workers' compensation premiums, liability for stock options and benefits) are staggering. In many cases, the worker has asked (sometimes demanded) to be an independent contractor only have the IRS or state Employment Development Department (EDD) second guess the employer's classification when auditing a 1099.
The US Department of Labor recently announced it has awarded more than $10 million to 19 states, including California, to audit worker misclassification where workers are improperly classified as independent contractors or fail to report the wages paid to workers. We're finding more of our clients are receiving notices of an EDD audit to review the classification of individuals who have received a 1099. Be especially careful of paying individuals who have been employed (received a W-2) and also received a 1099 in the same or later years.
The CA Department of Industrial Relations (DIR) lists the primary factors for determining when a worker is an employee or independent contractor. The following factors were adopted by the California Supreme Court in the case of S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989). Our comments are in italics:
Click here to learn more about independent contractors.
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NLRB Continues to Push Employers' Rights Right Out the Door
By Kim Silvers, SPHR-CA
In a stunning reversal of a National Labor Relations Board's (NLRB) 2007 decision, the Board ruled earlier this month that employees who use company email must be permitted to use it for union organizing and group discussions about terms and conditions of employment on non-work time. This decision affects almost all employers, with or without union employees, that have a corporate email system.
Section 7 of the National Labor Relations Act (NLRA) guarantees employees "the right to self-organization, to form, join, or assist labor organizations... and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." The Purple Communications case became a watershed event because of the NLRB's decision to allow employees to use the company email system for union organizing during non-work time.
Click here for the entire article.
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New Paid Sick Leave Law Brings Additional Employer Requirements on January 1, 2015
By Susan Breslauer, SPHR-CA
As you know, California's new paid sick leave law (AB 1522, also known as the Healthy Workplaces, Healthy Families Act of 2014) was signed by Governor Brown in September. The most critical part of the law requiring employers to grant all employees at least 24 hours of paid sick leave each year becomes effective on July 1, 2015. However, there are other parts of the law that become effective on January 1, 2015. These will require action on your part by the end of this month.
The Division of Labor Standards Enforcement (DLSE) has issued a Frequently Asked Questions link (www.dir.ca.gov/dlse/Paid_Sick_Leave.htm) addressing several issues.
In the meantime, there are the actions you must take to be prepared for Jan 1st:
Click here for the entire article on steps to be taken immediately.
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| 2015 Salary Budgets
WorldatWork reports that U.S. organizations will increase 2015 salary budgets slightly to 3.1 percent over the average 3.0 percent in 2014. Major metropolitan areas such as Los Angeles and San Francisco will likely be at the 3.1 percent range, while smaller markets such as San Diego, St. Louis and Portland (OR) will come in between 2.7 to 2.9 percent.
The survey projects there will not be any major changes in industry data over the 2014. Organizations in the educational services, health care and social assistance industries report the lowest salary increase budgets at 2.5 percent. The mining, quarry and oil industry leads with the highest salary increase budget at 3.8 percent; and the construction industry is next in line with a 3.7 percent salary increase budget.
Employers who wish to reward top performers are allocating their salary budget dollars to allow the top 5 - 20 percent of performers to receive higher percentage increases, while average employees receive less, and below average performers often receive minimal to no base pay increase.
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