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more on ADT sues sales rep / Training Certificate March 31, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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more on ADT sues sales rep / Training Certificate
March 31, 2018
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more on ADT sues sales rep from March 28, 2018 article
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Ken
    On March 28, 2018  Anonymous (this guy sure gets into a lot of trouble) described his compensation arrangement for his sales team.
    "I have a sales team that is paid full commission.  We have pay structure based on monthly activated security accounts.  To reach their goal, I have set smaller goals such as number of phone calls, emails, and appointments.  If the rep does not send enough emails, I set a required, recurring, scheduled work session to complete the email work, however it is not paid except with the end goal in mind (ie no hourly wage for the time spent).  Is this a problem?"
    Your advice to him was spot on, but it wouldn’t surprise me if our friend was treating these salespeople as independent contractors.  If so the IRS may weigh in on this.  If Anon is truly paying his salespeople based upon closed sales, and they are producing, he is paying them based upon output and he may be OK.  If Anon is “setting smaller goals” he is controlling their method and they are sounding a lot like employees. 
    The IRS is concerned about employers who treat their employees as “contractors.”  The IRS believes that over 60% of contractors are actually employees.  If the IRS catches you treating employees as contractors they can force you to pay the employment taxes, plus penalties of as much as 100%.  Ken is correct when he advises Anon to have them sign the proper Employment or Contractor agreement.  Just make sure that it is the correct agreement. 
Mitch Reitman
Reitman Consulting Group
Fort Worth, TX 76133
817-698-9999
http://www.reitman.us
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Ken

     If they are an "independent " sales person, and you schedule time they must work, isn't that the same as breaking the bubble when you dictate hours to a subcontractor that the contractor becomes an employee?
Bart Didden

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Response
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    Independent, a 1099 salesperson, means they are independent, but that doesn't mean they don't have to adhere to certain rules you impose.  It's often a fine line and there are several factors besides how often they work or how.   Either way, you have to use the 
Employment Agreement or Independant Sales Affiliate Agreement.  Do not employ sales people without a written contract.
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Training Certificate
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Ken
    Great idea and very nice of Tena to share her training certificate.  
Dave Febbraio
Structured Home Solutions, LLC
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Ken
    Regarding the newsletter publication of: Subscriber Training Certificate - sample form on March 24, 2018,  It states:
    "_____  I will immediately notify the main office of Alarm Company 555-5555 of any false alarms and I agree that until service is rendered the zone(s) causing false alarms will be put “on test” and/or     bypassed until service is completed."
    My thoughts:
    I would rather the subscriber get a false alarm a couple times a day and make a decision with the monitoring company regarding police dispatch. One of those "false" signals might be a real alarm.
    My legal question:
    This is the kind of form we make the customer sign usually at gun point (LOL).
If they suffer a loss, can they claim against me because I directed (forced) them through this form to lower their security standards?
    Will my "All-in-One" protect me through this?
Bob
Anderson Security
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another comment on the Training Certificate
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Ken
    We modified your 
Completion Certificate to include an acknowledgment that the subscriber was trained to use the alarm system.  Your Completion Certificate is the best deal in town.  I see that the price for the form hasn't changed in 30 years.
Wayne W
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Response
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    The price hasn't changed and neither did the form, until now.  We have updated the 
Completion Certificate to include the training acknowledgment.  This form is worth using on all jobs.  It should be signed upon completion of the installation and after every service call.
    Regarding the agreement to put the system on "test" if it false alarms, I don't include that in our 
Standard Completion Certificate.  Why?  The Completion Certificate is not intended to modify the All in One Agreement.  The All in One covers false alarms and everything else you need to be concerned about.  The Completion Certificate is an acknowledgment that you completed your installation, or service, and the system is working.  Adding the training is a good idea because that's not something that can be acknowledged in the All in One, which is ALWAYS signed before any work is commenced.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com