Comment on employment law issue from May 22, 2013
I just read Judge Kraft's opinion on the lack of protection an employee's signature on a policy provides for the employer. First of all, that employee sounds like he is a marginal employee at best, and I would start documenting everything that he or she does in the lead up to dismissing that person. This is my 35th year in the business, and some of the biggest jobs that I have ever done, have been sealed on a handshake. I have had discussions with you and your own words, were "make sure that you get signed contracts." Well now we are doing all of that, you can have a trouble maker employee say that he didn't know what he was signing and it holds water in a court of law? I have always gone on the premise that ignorance of the law is not an affirmative defense. That guy needs to be terminated pronto. I wonder if that defense would be even allowable in the Dominican Republic?
John from NJ
Do you know of any employee handbooks or guidelines for our industry? Something we can use as a base and then build upon. Maybe covering issues that were raised below and use of company vehicles, dress codes, etc, etc.
You can get a handbook and all the employment and labor advice you need by contacting the Employment and Labor Dept at Kirschenbaum & Kirschenbaum. contact Jennifer Kirschenbaum x 516 747 6700 x 302 or Judge Ruth Kraft at 516 747 6700 x 326, or email them. Jennifer@Kirschenbaumesq.com / rkraft@Kirschenbaumesq.com
Comment on misclassifying your employees as independent contractors from May 18, 2013 article
I would like to share some information with your e-mail newsletter regarding independent contractors and an employer/ employee relationship. As I would not want to see any company go through what we did.
Back in early 2011 we decide it was in the best interest of our image not to accept any contracts from one of our independent dependent contractors. This contractor had previous experience working for another company which required him to meetings and phone sessions in their office. When we told him we would not be buying any more of his contracts, he decided to contact the state to collect unemployment benefits. He told them he was an employee and was required for meetings and phone sessions.
Our fighting this unemployment was long and tedious. The examiner decided to take this contractors side with a lot of lying involved by the contractor. We wrote any checks out to the contractors business name, not the individual and we had a subcontractors agreement which stated he was not an employee entitled to benefits. At this point we also had the state open a fraud investigation because the contractor was selling home improvement and collecting. After this an audit was triggered. The auditor went through 5 years of our general leger wanting to see invoices on everything, employee time cards, payroll. We had to fill out questionnaire forms on every sub. It really sucked. The only thing that saved us was the fact that we did not require our subs to only sell our products and services. They could sell their contracts to anyone if they chose.
It is of vital importance to also know, If you tell your sub-contractors how to do something( such a fill you’re your contract a certain way or how you want it filled out) it is a form of direction and control.
If you do sales and you hire independent contractors to sell for you? They are performing services for you and not someone else, they are an important part of your business and not separate- not matter how you spin it?
If faced with an audit like this, you need a good attorney, don’t try to go it alone. If you are currently using any types of sub-contractors contact Ken’s office to make sure you have your bases covered.
I certainly wish I set-up myself up, as to not have to go through that upset. I full year of agony. Here are some questions they ask
1. Describe your firms business?
2. Describe the work done by the worker and provide worker’s job title?
3. How did the worker obtain the job?
4. Who recruits & screen the worker at the firm?
5. What actions are taken by the firm to accomplish the worker screening?
6. Did the work perform similar services for others during the time period entered above?
y/n/ please explain.
7. Explain why you believe the worker is an independent contractor?
8. Explain why you think the worker is not your employee?
9. Is the work done under agreement between the firm and the worker?
10. If the agreement is not in writing, describe the terms and conditions of the work arrangement.
11. What specific training and/or instructions is the worker given by the frim?
12. How does the worker receive work assignments?
13. Who determines the methods by which the assignments are performed?
14. Is the worker required to contact firm, if problems or complaints arise in the course of the work to be performed and who is responsible for their resolution?
15. What types of reports are required by the worker? Please attach examples
16. Describe the worker’s daily routine such as his or her schedule?
17. How many hours per day does the the worker perform services for the firm?
18. At what location does the worker perform services (for example, firm’s premises, own shop or office, home, customer’s location)? Indicate the appropriate % of the time the worker spends at each location, if more than one?
19. How does the firm represent the worker to customers? ( for example, firm’s partner, representative, or contractor)
20. Describe any meetings the worker is required to attend and any penalties for not attending) for example: sales meetings, monthly meetings, staff meetings)
21. Is the worker required to provide the services personally?
a. If substitutes or helpers are needed, who hires them?
b. If the worker hires the substitute’s or helpers, is approval required by your firm?
22. Is the worker reimbursed if the worker pays the helpers?
If yes, by whom?
23. List the equipment, supplies,materals,and property provided by each:
24. What expenses are incurred by the worker in the performance of services for the firm?
25. Does the firm reimburse the worker for any expenses? y/n please explain:
26. Type of pay the work receives: Salary, Commissions, hourly wages, piece work, lump sum, other: please explain.
27. What agreement was made with the worker about how payments would be made? Ex: weekly,bi-weekly,monthly,lump sum,at the end of the job
28. does the firm guarantee a minimum amount of pay to the worker?
29. Does the firm deduct social security tax from the amount paid to the worker?
30. Does the firm deuct fed income tax from…?
31. Was a 1099 misc form issued?
---If not why?
32. Is worker allowed a drawing acct for advances? y/n/na
---If yes, how often?
33. Whom does the customer pay for the services? Firm of worker
34. What economic loss or financial risk, if any, can the worker incur beyond the normal loss of salary?
35. Can the relationship be terminated by either party without incurring liability or penalty?
---y/n if no- please explain
36. Does the worker establish the level of payment for the services provided or the products sold? y/n if no who does?
37. Did the worker provide services to the firm either prior or subsequent to the audit year?
38. Are the 1099 workers registered with the secretary of state?
39. Do the 1099 workers have an FEIN number?
---What is it?
40. Do the 1099 workers have an EAN number?
---What is it?
41. Do the 1099 workers have business cards?
42. Are CORI checks completed for the 1099 workers?
43. Does the worker have the right to refuse assignments?
44. Is there any penalty for refusing assignments?
Be careful with your classifications and using what you consider to be independent contractors. You have a few choices how you handle this complex employment issue: a) learn all of the above; b) call your relative or long time friend attorney and hope that he/she knows all of the above; c) call Judge Ruth Kraft or Jennifer Kirschenbaum.
Here is the answer to the above multiple choice: