HRM PARTNERS,INC.

INITIAL UNEMPLOYMENT CLAIMS CONTINUE TO DROP

hrm — Wed, 22 Feb 2012 21:34:46 +0000

The number of Americans who applied for first-time unemployment benefits dropped again recently to the lowest level in almost four years, providing additional evidence that the national economic recovery is picking up steam. In the week ending February 11, the adjusted initial unemployment claims was 348,000, a decrease of 13,000 from the previous week’s revised figure of 361,000. The 4-week moving average was 365,250, a decrease of 1,750 from the previous week’s revised average of 367,000.

The latest numbers being reported are at the lowest level since March 2008, when the U.S. was in the early stages of the last recession and the trend strongly indicates that fewer people are losing their jobs and more are finding work.

The latest national unemployment rate for January 2012 was reported at 8.3% on February 3, 2012. The highest national unemployment rate reported during the past recession was 10.0% for October 2009. The U.S. unemployment rate remained at a level well above 9.0% throughout 2010 before it began a slow decline during 2011. 02.21.2012

CA STATE & LOCAL GOVERNMENTS & ADVOCACY GROUPS WORK TOGETHER FOR BACK PAY FOR SF RESTAURANT WORKERS

hrm — Wed, 22 Feb 2012 21:33:48 +0000

Collaboration between state and local enforcement agencies and advocacy groups was credited on Feb. 15 with helping workers at two San Francisco area Asian restaurants to recover $316,000 in back wages and tips, and for missed meal and rest breaks.

The Chinese Progressive Association, the Progressive Workers Alliance, and the Asian Law Caucus said collaborative efforts between the California labor commissioner, the San Francisco Office of Labor Standards Enforcement, and the San Francisco Public Health Department were responsible for getting the workers their wages.

Under San Francisco’s wage theft ordinance, whose enactment the groups backed, employers can be fined up to $1,000 for failing to pay the city’s minimum wage, which is $10.34 per hour this year. The California Department of Industrial Relations Division of Labor Standards Enforcement said the eight workers at Pho Clement and Pho Clement 2 restaurants will receive amounts ranging from $17,432 to $85,114. 02.21.2012

DILLARD’S DEPARTMENT STORE & CASE INVOLVING SEEKING MEDICAL CONDITIONS FOR ABSENCE

hrm — Wed, 22 Feb 2012 21:32:47 +0000

On February 9, 2012, a federal district court in California ruled that the Equal Employment Opportunity Commission can proceed to trial with claims that a former attendance policy at a Dillard’s Inc. store in El Centro, CA. violated the Americans with Disabilities Act because it required employees to disclose the nature of their medical conditions in order for health-related absences to be excused. (EEOC v. Dillard’s Inc., S.D. Cal., No. 08-01780, 2/9/12).

Denying Dillard’s motion for summary judgment, the U.S. District Court for the Southern District of California said a reasonable jury could find that the attendance policy, which the company rescinded in July 2007, contained a disability-related inquiry prohibited by the ADA.

By asking employees to disclose the nature of their absences and the conditions for which they sought treatment, the company’s inquiry “may tend to reveal a disability,” the court said. Furthermore, Dillard’s failed to present evidence that the question is job-related and consistent with business necessity, it added.

According to the court, Dillard’s opened the El Centro store in March 2005. Its attendance policy at that time provided that employees would not have their health-related absences excused unless they submitted doctor’s notes stating “the nature of the absence (such as migraine, high blood pressure, etc. … .).”

Three employees—Corina Scott, Irma Moreno, and Allyson Mazon—each claimed that Dillard’s management would refuse
to accept doctor’s notes that did not state their medical conditions and would require more specific notes to verify that they had legitimate medical reasons for absences.

After Scott voiced her belief that she did not need to disclose her medical condition, Dillard’s fired her in June 2006 for accumulating too many unexcused absences. Meanwhile, Moreno was discharged in May 2007 because she did not return from leave, while Mazon voluntarily resigned in February 2006.

Dillard’s rescinded its attendance policy in July 2007 and replaced it with one that no longer required a doctor’s note stating an employee’s medical condition.

Scott filed a bias charge with EEOC in June 2006, and the commission subsequently brought suit against Dillard’s in September 2008 on behalf of Scott and “others similarly situated.” EEOC sought compensatory and punitive damages and injunctive relief.

The court noted that Dillard’s may avoid liability under the ADA if it demonstrates that its absence policy was job-related and consistent with business necessity.

However, this burden is “quite high,” the court said, and Dillard’s failed to present evidence that it “needed to know the nature of the employee’s medical condition because of excessive absences or in order to protect the health and safety of its other employees.”

Additionally, the company “makes no attempt to explain why it is necessary for the doctor’s note to state the medical condition for which an employee is being treated,” it said.

The court also pointed out that Dillard’s rescinded in 2007 the policy at issue. “If the Policy was indeed job-related and a matter of business necessity, Dillard’s has failed to explain how it is now able to operate as a business without such policies,” the court
said. 02.21.2012.

DO YOU HAVE INDEPENDENT CONTRACTORS & AND SHOULD THEY REALLY BE EMPLOYEES?

hrm — Sat, 18 Feb 2012 00:10:31 +0000

One of the hottest topics in the HR world currently is that of independent contractors and whether they are misclassified and should be employees. Although there are loads of test to help you figure that out, the problem is that there are too many tests from too many sources and many employers get confused and don’t want to wade through all the documentation. Although it’s not the only source, one of the best ways to get an idea if you have a problem on your hand is to take a look at the following questions that come out of the Internal Revenue Service 20-Factor test. Although the 20-factor test has been updated in recent years to become an 11-factor test, this test is still very relevant.

FACTOR	QUESTION TO EMPLOYER	COMMENT
Factor 1 Instructions	Do you have control on determining when, where & how work is done?	A worker who is required to comply with other persons’ instructions about when, where, and how he or she is to work is ordinarily an employee. This control factor is present if the person or persons for whom the services are performed have the right to require compliance with instructions
Factor 2 Training	Do you provide company training to the worker?	Training a worker by requiring an experienced employee to work with the worker, by corresponding with the worker, by requiring the worker to attend meetings, or by using other methods, indicates that the person or persons for whom the services are performed want the services performed in a particular method or manner.
Factor 3 Integration	Is the work performed by the worker a key part of your business operation?	Integration of the worker’s services into the business operations generally shows that the worker is subject to direction and control. When the success or continuation of a business depends to an appreciable degree upon the performance of certain services, the workers who perform those services must necessarily be subject to a certain amount of control by the owner of the business.
Factor 4 Services Rendered Personally	Do you insist that one particular person perform the work?	When an employer is insisting that a particular person perform the work, it can be strongly assumed that the work performed is being controlled by the employer. However, when the worker retains control over such things as hiring, supervising & paying helpers, the situation looks more like an independent contractor relationship.
Factor 5 Hiring Assistants	Do you hire, supervise and pay a worker’s assistants?	If the person for whom the services are performed hires, supervises, and pays assistants, that factor generally shows control over the workers on the job. However, if one worker hires, supervises, and pays the other assistants pursuant to a contract under which the worker agrees to provide materials and labor, and under which the worker is responsible only for the attainment of a result, this factor indicates an independent contractor status.
Factor 6 Continuing Relationship	How long have you employed the worker?	The longer the business relationship continues, the more likely the worker is an employee. The shorter the business relationship continues, the more likely the worker is an independent contractor.
Factor 7 Set Hours of Work	Do you require the worker to work certain hours at your worksite?	The establishment of set hours of work by the Employer is a factor indicating control and therefore strongly indicating the person is an employee. The more a worker has control over their hours and work schedule indicates an independent contractor.
Factor 8 Full Time Work Requirements	How much time do you require the worker to devote to your operation?	If the worker must devote substantially full time to the business of the person for whom the services are performed, such person has control over the amount of time the worker spends working and impliedly restrict the worker from doing other gainful work. An independent contractor, on the other hand, is free to work when and for whom he or she chooses.
Factor 9 Working on Employer Premises	Must the worker perform work activities at your physical business location?	If the work is performed on the premises of the person for whom the services are performed, that factor suggests control over the worker, especially if the work could be done elsewhere. Work done off the premises of the person receiving the services, such as at the office of the worker, indicates some freedom from control. However, this fact by itself does not mean that the worker is not an employee. The importance of this factor depends on the nature of the service involved and the extent to which an employer generally would require that employees perform such services on the employer’s premises. Control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route, to canvass a territory within a certain time, or to work at specific places as required.
Factor 10 Order or Sequence Set	Does the worker need to follow your business process or do they have the flexibility to decide how to accomplish the work?	If a worker must perform services in the order or sequence set by the person for whom the services are performed, that factor shows that the worker is not free to follow the worker’s own pattern of work but must follow the established routines and schedules of the person for whom the services are performed. Often, because of the nature of an occupation, the person for whom the services are performed does not set the order of the services or sets the order infrequently. It is sufficient to show control, however, if such person or persons retain the right to do so.
Factor 11 Reports	Do you require the worker to submit regular reports?	A requirement that the worker submit regular or written reports to the person for whom the services are performed indicates a degree of control.
Factor 12 Payment Method	How do you pay the worker?	Payment by the hour, week, or month generally points to an employer/employee relationship. Another strong indication that the worker is an “employee” is when the employer provides benefits such as insurance to the worker. An independent is generally paid by the job, project, assignment, etc., or receives a commission or similar fee and has his/her own established benefits program.
Factor 13 Expenses	Do you reimburse the worker for business and/or travel expenses?	If the employer ordinarily pays the worker’s business and/or travel expenses, there is a strong indication that the worker is an employee. An employer, to be able to control expenses, generally retains the right to regulate the worker’s business activities.
Factor 14 Tools & Materials	Are you providing the worker with an office, internet, computes, tools to accomplish work?	The fact that the person for whom the services are performed furnishes significant tools, materials, and other equipment tends to show the existence of an employer-employee relationship.
Factor 15 Significant Investment	Does the worker have their own office facilities to conduct business besides your office?	If the worker invests in facilities that are used by the worker in performing services and that are not typically maintained by employees (such as the maintenance of an office rented at fair value from an unrelated party), that factor tends to indicate that the worker is an independent contractor. On the other hand, lack of investment in facilities indicates dependence on the person or persons for whom the services are performed for such facilities and, accordingly, the existence of an employer-employee relationship. Special scrutiny is required with respect to certain types of facilities, such as home offices.
Factor 16 Realization of Profit or Loss	Does the worker receive set wages?	An employee may be rewarded, disciplined, demoted or fired depending on their job performance; However, an independent contractor can realize a profit or incur a loss from his/her work.
Factor 17 Working for More than One Business at a Time	Does the worker perform work for other people besides you?	If a worker performs various services for a multiple of unrelated persons or firms at the same time, that factor generally indicates that the worker is an independent contractor. However, a worker who performs services for more than one person may be an employee of each of the persons, especially where such persons are part of the same service arrangement.
Factor 18 Availability of Worker’s Services to the General Public	Does the worker offer his/her services to the public?	The fact that a worker makes his or her services available to the general public (e.g., internet, newspaper, TV advertisement) on a regular and consistent basis indicates an independent contractor relationship.
Factor 19 Employer’s Right to Fire Worker	Can the worker be fired “at will” or does he/she have a contract with term and requiring him/her to produce certain results.	The right to discharge a worker is a factor indicating that the worker is an employee and the person possessing the right is an employer. An employer exercises control through the threat of dismissal, which causes the worker to obey the employer’s instructions. An independent contractor, on the other hand, cannot be fired so long as the independent contractor produces a result that meets the contract specifications.
Factor 20 Worker’s Right to Quit	Can the worker end the working relationship without any liability?	If the worker has the right to end his or her relationship with the person for whom the services are performed at any time he or she wishes without incurring liability, that factor indicates an employer-employee relationship as opposed to a contractual relationship that specifies a term beginning and end date.

INDEPENDENT CONTRACTOR VERSUS EMPLOYEE: NO SIMPLE DEFINITION

hrm — Fri, 17 Feb 2012 23:49:41 +0000

The subject of who is an “independent contractor” and who is an “employee” has become an important topic over the past few years. With the explosive increase in the use of independent contractors by private employers, state and federal governments, with a concern on evaporating tax revenues, are placing increased pressure on employers to classify their workers correctly. Recently, California State updated their labor codes to place severe monetary and non-monetary penalties on employers that willfully misclassify their workers as independent contractors. In addition, The U.S. Department of Labor has also recently announced that it has joined up with 12 U.S. states to coordinate efforts to combat the intentional misclassification of workers by employers seeking to reduce their costs.

The question whether a worker is an independent contractor or an employee is one that is determined through a review of the facts of any particular case along with the application of law and regulations for worker classification issues known as “common law.”

Common law flows primarily from court decisions. Under common law, the treatment of a worker as an independent contractor or an employee originates from the legal definitions developed in the law and depends on the employer’s right to direct and control the worker in the performance of his/her duties. Section 3121(d) (2) of the Internal Revenue Code provides that the term “employee” means any individual defined as an employee by using the usual common law rules.

Following this standard, an employment relationship or “employee” exists if the principal has the right to direct and control the worker who performs the services. Control exists where the employer influences not only the results to be accomplished, but also
the means and details by which the results are to be accomplished. That is, where the worker is subject to the will and control of the principal not only as to what is to be done, but how it shall be done.

On the other hand, an independent contractor is a worker or business entity that provides a good and/or service to another individual or business entity under the terms of a specified contract. The independent contractor is not subject to the employer’s control or guidance except for what is designated in a mutually binding agreement. The contract for a specific job usually entails the outcome of the good and/or service rather than the process or methods to fulfill the job. Under Department of Treasury Regulation 31.3401(c)-1, “physicians, lawyers, dentists, veterinarians, contractors, subcontractors, public stenographers, auctioneers, and others who follow an independent trade, business or profession in which they offer their services to the public” are usually considered independent contractors. If a service requires special skill, any specialist called in to perform the task is usually an independent contractor.

For many years the Internal Revenue Service (IRS) used a 20 Factor Test to determine as whether an individual was an employee or independent contractor. However, more recently the IRS, took the 20 Factor test and combined the factors into three broad categories that contain 11 factors. With IRS Publication 1779, Independent Contractor or Employee . . . the IRS details the three categories that include: (a) behavioral control; (b) financial control; and (c) Relationship of the Parties.

The common law test and its IRS factor and control tests may be the most well-known tests for determining worker status. However, in enforcing the Fair Labor Standards Act (“FLSA”), which contains federal minimum wage and overtime requirements, the U.S. Department of Labor (“DOL”) looks instead to the “economic reality” of the relationship and considers the following factors to be significant: (1) the extent to which the services rendered are an integral part of the employer’s business; (2) the permanency of the relationship; (3) the amount of the worker’s investment in facilities and equipment; (4) the nature and degree of control by the employer; (5) the worker’s opportunities for profit and loss; (6) the amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor; and (7) the degree of
independent business organization and operation.

Then, there’s the U.S. Courts. They use approximately 10 factors to determine if a worker is an employee or independent contractor. Many of the factors used by the courts are also used by the IRS. The common law test puts emphasis on who controls or directs the means or methods of work, like the IRS test.

The different tests and many factors considered in determining worker status create uncertainty for businesses. However, this
uncertainty is reduced to some degree by the many published federal court decisions and IRS and DOL opinion letters and rulings over the years. Many companies take some comfort in knowing that federal courts and agencies have examined and accepted similar independent contractor relationships. For federal law purposes at least, businesses are often able to model their independent contractor relationships based upon what upon courts, the IRS and/or DOL have said is correct. Moreover, businesses can go further and request formal determinations from the IRS concerning worker status by submitting an IRS Form
SS-8 (Determination of Employee Work Status for Purposes of Federal Employment Tax Obligations).

The last consideration with defining who is an independent contractor versus an employee is that of the individual U.S. states. Unfortunately, the situation gets more complicated and problematic for businesses when different states in which they operate establish their own tests for determining worker status. There are increasingly more states with statutes, legal standards as well as major initiatives established to define what constitutes an independent contractor. Although many of the statutes and
standards set up by individual states have similarities with the major rules already established under common law, you should check with your individual state to check for any additional factors or contradictions.

Finally, we come to what can an employer do. The following are a few recommendations to consider:

To determine if a worker you want to employ as an independent contractor qualifies, you should first review the IRS 11-Factor Test. You can easily do an internet browser search by typing “IRS 11-factor test for independent contractors” and get several examples of the test. Reviewing this test should give you fairly good idea of what you’re dealing with. In addition, you should check your individual state’s laws to see if they define independent contractors. In most cases, an individual state that has its own definition will have some variation of what is done at the IRS, Department of Labor or within the courts.
If you have a worker that qualifies as an independent contractor, you should formally define the relationship in an independent contractor agreement. Also, you should use the appropriate tax forms including the W-9 and 1099.
It’s probably not a good idea to hire former employees as independent contractors. This is especially relevant if you hire them to perform the same work. Unless they can meet most of the independent contractor requirements, your risk chances are high if you get caught.
Use independent contractors only for work that isn’t part of your core business. The reason for this gets threaded back to the IRS 11-factor test. One of the factors asks the question, are the services performed by the contractor a key aspect of the regular business of the company? If so, there’s a strong indication of an employer/employee relationship.
For any contractor that you use, they should have their own business in place such as a formal business name, business cards, an office, advertisement to the general public, and other customers. This is a strong indication that they are truly an independent contractor.
Independent contractors are not generally paid for their time but rather by the job to be done. Also, you shouldn’t pay a contractor benefits or reimburse specific expenses like you pay a regular employee. It’s up to the contractor to come up with a contract for their fees that include the compensation they need for their own business expenses.
An independent contractor has control of their time. If you require the contractor to report to your office for a set schedule, you have little chance that you will be successful to win a misclassification challenge.
An independent contractor has control and judgment over their work. In general, a contractor decides when, where and how to accomplish the task which they have been contracted for.

CONGRESS APPROVES PAYROLL TAX CUT THROUGH END OF 2012

hrm — Fri, 17 Feb 2012 20:37:35 +0000

On Friday, February 17, 2012, the U.S. Congress gave final approval to payroll tax cut legislation that extends a 2% payroll tax cut for 160 million U.S. wage earners until the end of 2012. President Obama is expected to quickly sign the legislation.

This past December, a short-term extension of the payroll tax cut was passed. However, Republicans at the time were demanding other spending cuts to pay for the continued payroll cut beyond the short-term extension. This week, however, the Republicans and Democrats compromised to produce the new legislation.

Under the measure signed by Congress, workers will continue to receive a two percentage point increase in their paychecks and people out of work for more than six months would keep jobless benefits averaging about $300 per week. It would also head off a steep cut in reimbursements for physicians who treat Medicare patients. The tax cuts go back to the Bush Administration.

Extending the 2% point cut in the 6.2% Social Security payroll tax would save around $80 monthly for someone earning $50,000 a year and give a maximum cut of $2,200 to high-end earners. 02.17.2012

FILING DEADLINE EXTENDED FOR EMPLOYERS CLAIMING CREDITS FOR HIRING VETERANS

hrm — Fri, 17 Feb 2012 20:35:38 +0000

Employers that hire qualifying veterans will have extra time to file the necessary certification forms for obtaining the Returning Heroes and Wounded Warriors Work Opportunity Tax Credits that were recently enacted as part of the VOW to Hire Heroes Act,
according to an IRS notice. For any veterans hired during the first six months of the program, which began Nov. 22, employers can submit certification forms by June 19, 2012 according to the IRS. Normally, employers must submit the required certification, Form 8850, no later than 28 days after the individual begins working. For further information, see coverage on “Work Opportunity Tax Credit Program” in chapter Federal Government Training Assistance. 02.17.2012

CHANGES COMING FOR H-2B TEMPORARY VISA PROGRAM

hrm — Fri, 17 Feb 2012 20:34:48 +0000

Under new regulations released on February 10, 2012, the H-2B temporary visa program will undergo changes that affect the employer application process and add protections for workers. The H-2B program, which allows up to 66,000 visas per year for nonagricultural guestworkers, “is designed to help businesses when there is a temporary shortage of U.S. workers,” according to Labor Secretary Hilda Solis. She said the final rule “will ensure that the program is used as intended by making these jobs more
accessible to U.S. workers and providing stronger protections for every worker.” 02.17.2012

PRESIDENTS DAY

hrm — Sun, 12 Feb 2012 21:29:51 +0000

Presidents Day, which is observed every third Monday in February to recognize all the U.S. Presidents, is coming upon us on Monday, February 20, 2012. It’s an interesting holiday in that it wasn’t originally meant as a day to recognize all U.S. Presidents. Originally, this holiday goes back to 1800 when it was recognized as George Washington’s birthday. Throughout the first half of the 19^th century, Washington’s Birthday became an established, though not official, national holiday. Americans would honor Washington by throwing lavish Balls and receptions attended by prominent socialites and public figures.

Things changed with the appearance of Abraham Lincoln during the second half of the 19^th century. Lincoln, whose birthday falls on the 12th of February, wasn’t really that well respected until his assassination in April 1865. However, with his assassination, he overnight became a beloved figure to the American people which he is through today. He was formally honored on his birthday in 1865, one year after his assassination. To commemorate his death, both houses of Congress gathered for a memorial address, on the day of his birth. Unfortunately for Lincoln, his birthday did not become a legitimate national holiday like Washington’s did, but it did become a legal holiday in several states. Washington’s Birthday became an official holiday in 1880, becoming the first
federal holiday to honor an American citizen. It was to be celebrated on February 22.

Moving forward to the late 1960’s, the Uniform Monday Holiday Act was put in place to simplify yearly calendars and begin a practice of having existing federal holidays observed on Mondays to give government workers a long weekend. The act went into effect in 1971 shifting the observation of Washington’s Birthday to the third Monday in February instead of on the 22nd. And although this holiday is still officially known as Washington’s Birthday, it has become popularly known as Presidents’ Day. This now makes the third Monday in February a day for honoring both Washington and Lincoln as well as for all U.S. presidents.

According to paid holiday surveys, between 30-34% of U.S. employers provide Presidents Day as a paid holiday. And for the record in case you think we’re misspelling it and it should be President’s Day, there is a variation in how it is rendered. Both Presidents Day and Presidents’ Day are common today, and both are considered correct by dictionaries and usage manuals. However, President’s Day is a misspelling when used with the intention of celebrating more than one individual President.

US EMPLOYERS URGED TO TAKE NOTICE OF TRANSGENDER BIAS

hrm — Sun, 12 Feb 2012 21:23:37 +0000

Even with no federal statute specifically banning discrimination in employment based on gender identity or expression, the issue of transgender bias is something that employers need to be aware of. Several states and localities have enacted laws specifically banning employment discrimination on the basis of a person’s gender identity. In addition, the U.S. Court of Appeals for the Eleventh Circuit recently joined two other circuits in concluding that bias against transgender employees is tantamount to discrimination based on sex stereotypes. 02.12.2012