While there are many great places to work, ultimately a manager will be faced with having to impose some type of disciplinary action on a worker so it is important to understand the best practices. On occasion, an employee may violate a policy or workplace standard, display poor performance or misconduct. It could be worse, and some form of discrimination, harassment, retaliation, safety violation, or gross negligence and/or misconduct could have occurred. Unfortunately, disciplining employees is part of what supervisors and managers sometimes have to do. So, should there be steps? We said in the beginning that disciplinary action was a means to correct behavior or performance; to inform the employee of the minimal expectations for improvement so he/she has a chance to save his/her job. If we want to give chances, it seems logical to inform an employee this is his/her first strike; and sometimes second chances are warranted. However, some managers loosely say three strikes and you’re out; even going so far as to broadcast and put in written policies that an employee will first receive a verbal warning, then a written warning, and after three written warnings, they will be fired.

Having steps in the disciplinary action process is not a good idea because it takes away the employer’s authority to take appropriate action at its sole discretion, given the offense. How? Very simply, if an employer’s policies state an employee must receive three warnings before being fired, and some type of gross misconduct occurs, it will be more risky for the employer to fire that employee. It is much better for an Employee Discipline Policy to state the employer can take whatever disciplinary action it deems appropriate given the infraction. The types of disciplinary action include: verbal warning, written warning, suspension (paid or not paid) and termination but in no particular order. Implementing disciplinary action in this way, the employer can reduce liability associated with wrongful termination claims. It is then important to train managers on these practices and company policies.

If you hire a landscape company to maintain the perimeter of your facilities, usually they are incorporated, have workers they pay and provide benefits, including workers’ compensation insurance (by the way, you should always obtain a certificate of this insurance), perform their services for other employers, and your arrangement with them is centered on the project results. In other words, you are not giving them details of how to do the work. If you hired an individual to perform this same service, the relationship could change…

The relationship between the company and the individual worker is central to determine if the person is an employee or independent contractor. Generally, if the company controls what will be done and how it will be done, the worker is an employee. Independent contractors have greater control over their work. Usually the work is project based with emphasis on a particular trade or subject matter that individual is specialized in.

The IRS has identified 3 categories to assist employers in the relationship analysis: behavioral control, financial control, and type of relationship.

Behavioral considerations (an individual is subject to the employer’s instructions):

• When, where, and how to work (must they adhere to the employer’s set schedule?)
• What tools or equipment to use (does the employer provide the tools?)
• What workers to hire or to assist with the work (does the employer dictate this?)
• Where to purchase supplies and services (does the employer or worker supply materials?)
• What work must be performed by a specified individual (who is supervising delegated tasks?)
• What order or sequence to follow (does the employer provide instructions?)

Financial considerations (right to control the business aspects of a worker’s job):

• The extent to which the worker has unreimbursed expenses (are there fixed, on-going costs for the worker?)
• The extent of the worker’s investment (is the worker responsible for their own supplies and labor costs?)
• The extent to which the worker makes services available to the relevant market (does the worker promote/contract his/her skills/services to other employers?)
• How the business pays the worker (Is the pay on a project basis? Hourly basis?)
• The extent to which the worker can realize a profit or loss (does the individual have the ability to make a profit or loss?)

Type of relationship (define the relationship between the employer and worker):

• Written contracts describing the relationship the parties intended to create (does a contract agreement exist between the parties?)
• Whether the worker is provided with employee-type benefits (is the worker provided access to benefits otherwise reserved for employees such has health insurance, retirement, etc.?)
• The permanency of the relationship (is the work performed indefinitely rather than a specific period?)
• How integral the services are to the principal activity (are the services performed an integral part of the business?)

In addition, the IRS developed its 20-Factor Test to assist employers in determining classification. While no one factor is more indicative of status than another, a high number of “yes” answers could indicate an employment relationship.

IRS 20-Factors (Circle YES or NO for each)

1. Instructions: Is the worker required to comply with employer’s instructions about when, where, and how to work? YES NO

2. Training: Is training required? Does the worker receive training from or at the direction of the employer, includes attending meetings and working with experienced employees? YES NO

3. Integration: Are the worker’s services integrated with activities of the company? Does the success of the employer’s business significantly depend upon the performance of services that the worker provides? YES NO

4. Services Rendered Personally: Is the worker required to perform the work personally? YES NO

5. Authority to hire, supervise and pay assistants: Does the worker have the ability to hire, supervise and pay assistants for the employer? YES NO

6. Continuing Relationship: Does the worker have a continuing relationship with the employer? YES NO

7. Set Hours of Work: Is the worker required to follow set hours of work? YES NO

8. Full-time Work Required: Does the worker work full-time for the employer? YES NO

9. Place of Work: Does the worker perform work on the employer’s premises and use the company’s office equipment? YES NO

10. Sequence of Work: Does the worker perform work in a sequence set by the employer? Does the worker follow a set schedule? YES NO

11. Reporting Obligations: Does the worker submit regular written or oral reports to the employer? YES NO

12. Method of Payment: How does the worker receive payments? Are there payments of regular amounts at set intervals? YES NO

13. Payment of Business and Travel Expenses: Does the worker receive payment for business and travel expenses? YES NO

14. Furnishing of tools and materials: Does the worker rely on the employer for tools and materials? YES NO

15. Investment: Has the worker made an investment in the facilities or equipment used to perform services? YES NO

16. Risk of Loss: Is the payment made to the worker on a fixed basis regardless of profitability or loss? YES NO

17. Working for more than one company at a time: Does the worker only work for one employer at a time? YES NO

18. Availability of services to the general public: Are the services offered to the employer unavailable to the general public? YES NO

19. Right to discharge: Can the worker be fired by the employer? YES NO

20. Right to quit: Can the worker quit work at any time without liability? YES NO

The IRS has announced it will be conducting thousands of random audits over the next 3 years. Therefore, it is important to be proactive and perform the above self-audits per individual case; then make internal corrections where necessary and remember, err on the side of caution when uncertain. Click here for more information.

1. Decide if the company is (was) officially open or closed for business.

2. If officially open, that means employees are expected to be at work for their regularly scheduled time. If an employee does not come to work, that employee should use available vacation or sick time, providing the company has such policies; otherwise the time will be unpaid.

a. Exempt employees (those not eligible for overtime compensation) should be deducted in full-day increments. If they work any part of the day, however, they must be paid for the full day. Otherwise, you will be in jeopardy of losing the exempt status for that employee.

b. Non-exempt employees should be deducted for the amount of time actually missed from their regularly scheduled workshift. If they work any part of the day, they should be compensated for only those hours actually worked.

3. If officially closed, that means most employees are not expected to arrive at work. I say "most" because some employees go to work anyway, especially if they live close by, have a key to the building and there are no other restrictions placed upon them from working - usually these will be key employees or exempt employees and it also depends on the industry, type of work, security measures, etc. If work is performed by an employee, the above rules apply.

4. Where officially closed, and no work is performed, a company may advise employees they will have to use available vacation or sick leave if available. Where no benefit is available, employers may not deduct the pay of exempt employees but may deduct the pay of non-exempt employees for the actual time missed.

5. That said, here are best practices for when the office is officially closed and no work is performed by either exempt or non-exempt employees:

a. Exempt employees should be paid for the full day.

b. Non-exempt employees should be paid for the actual shift hours they missed due to the company officially closing its doors.

You may wonder why not make them use available vacation and sick leave; after all no production occured while the office was closed yet we have this payroll expense and nothing to offset it. That is a fair question when considered at face value. However, consider also the employee did not request this time off; consider the inclement weather was not within anyone's control; consider the office being officially closed was a decision made by the employer for safety concerns and to make an employee use available vacation and sick leave on top of that seems like a form of punishment; consider the morale of your workforce and the workplace standards your company strives to uphold and the extent to which you rely on your employees to do their part in this effort. The benefits of paying your employees far outweigh not paying them when considering these factors.

It is safe to say an employee who believes a company, no matter its size, takes their welfare into consideration is an employee who, more times than not, can be retained.

I hope everyone was as safe and snug as possible during this recent snowstorm. More information can be found at www.dol.gov.

The Act regulating I-9s is the Immigration Reform and Control Act of 1986 (IRCA). In a nutshell, it prohibits the employment of individuals who are not legally authorized to work in the United States. It also prohibits discrimination in employment related matters on the basis of national origin or citizenship. You cannot fail to hire someone because he/she is NOT a citizen. IRCA requires employers to certify the identity and eligibility to work within 3 business days of employment using the I-9 form.

The I-9 does a good job of giving instruction on how to complete it. I think several employers simply do not take the time. This is a good first step. Read the instructions on the form itself. Be sure that you are using the correct form with the latest document number and expiration date. As of now, that date is “OMB No. 1615-0047; Expires 08/31/12”.

I have provided 10 steps for you to use as a cheat sheet. Keep this in your desk to refer to:

1. All employees must complete an I-9. They cannot complete it until AFTER they have received a conditional offer of employment. Use an Offer Letter to document this was the case.

2. The I-9 must be completed AND dated within 3 business days after the employee’s hire date. If an employer wants an employee to complete hiring forms PRIOR to their start date, this is okay AS LONG AS a conditional Offer Letter has been extended and accepted by the employee.

3. The employer must examine the original documents, not photo copies, to ascertain if they are genuine.

4. The employer cannot TELL the employee WHAT documents to bring for examination. A list of documents is provided on the I-9. Give this list to the employee so they can choose what documents they have that satisfy the requirements.

5. All documents must be UNEXPIRED!

6. Section 1 is completed by the employee and signed and dated.

7. Section 2 is completed by the employer and signed and dated. This should be the SAME person who examined the original documents. Within the “Certification” paragraph, there is a blank line to insert the employee’s hire date. This is often left blank. Be sure to complete this and ensure it is the correct hire date that was used on the Offer Letter.

8. Section 3 is ONLY for RE-verification so this is left blank UNTIL it is time to RE-verify the employee’s documents. You should have some type of tickler/reminder system in place for I-9 re-verifications. Every document must maintain an unexpired date now, including Driver’s Licenses.

9. Store the I-9s separate from the Personnel Files. A binder is a good method. Use alphabetical dividers for organization. Keep the binders locked. Electronic storage and signatures are allowed.

10. The retention for I-9s is the duration of employment PLUS one year OR 3 years from the date of hire, whichever is longer. It is not necessary to keep I-9s beyond the retention period.

IRCA imposes fines for hiring illegal aliens ranging from $275-$11,000 per alien. There are also paperwork fines between $110-$1,100 per offense. Finally, employers can even face criminal penalties for repeated violations. These can include up to 6 months in prison and up to $3,000 per unauthorized alien! So, I tell you, the relative simplicity of maintaining the I-9 form is not worth facing any of these penalties! If you find errors on an I-9, these can be corrected by lining through the mistake and initialing the correction beside it. If the I-9 is really messed up, have the employee complete a new one with current dates but staple the incorrect I-9 to the back of this and store them together.

Once you get your system in place and train your staff, you will see the process is easy to maintain. More information, including a Handbook for Employers, can be found at www.uscis.gov.

There are several stories in today's papers on this issue:

Journal Record: Insurance verification system in place July 9, 2009

OKLAHOMA CITY - Oklahoma's new electronic verification system for vehicle insurance is now online and fully operational.

Oklahoma Tax Commission spokeswoman Paula Ross said validating insurance electronically gives immediate confirmation that a driver has a valid policy.

The system is designed to help law enforcement keep uninsured motorists off Oklahoma roads. It will be used by the Department of Public Safety, tag agents and the Tax Commission.

Motorists still will need to present an insurance verification card when renewing their vehicle registrations. Information on the card will be entered into an online database, which is then matched up to verify the policy is valid and current.

Ross says if the information is not current or cannot be confirmed in the database, then registration will not be issued.

Tulsa World: New system IDs auto insurance scofflaws

by: BARBARA HOBEROCK World Capitol Bureau Thursday, July 09, 2009

OKLAHOMA CITY - Law enforcement officers and tag agents are using an online verification system to crack down on drivers without insurance.

The system, which was created by a 2006 law, has been in testing since October, Oklahoma Tax Commission spokeswoman Paula Ross said.

Tag agents began using the system Wednesday to verify that people who are seeking to renew their tags and register vehicles have the required insurance, she said.

Ross said some people buy insurance to renew a vehicle tag and then cancel the insurance after they receive the security verification form.

People renewing a tag still will have to present insurance verification, Ross said. If the insurance coverage is not current, the tag will be denied.

Source: www.iiaok.com

If you have any questions, please feel free to contact me or you can get more information at the U.S. Department of Labor website: http://www.dol.gov/esa/whd/flsa/#assessmenttool

The new rules, which span 201 pages in the Federal Register, are the first revisions to the Family Medical Leave Act since its passage in 1993. They take effect on Jan. 16, 2009.

"The DOL has changed all of the forms associated with FMLA leave, including the medical certification form and employer response form, which is now split into two forms -- notice and designation," explains Ellen E. McLaughlin, an attorney with Seyfarth Shaw. "This will increase the administrative burden on employers, but the stated reason for this change is to provide the employee with more detailed information as to his/her right and obligations under the Act."

When DOL proposed the new rules last February, it disappointed employers who were hoping for clarification and relief from administrative burdens. The final regulations are substantially similar to those proposed, with a few notable exceptions, says McLaughlin.

"Two of the most significant changes from the prior regulations involve what medical information the employer can get to verify an employee or eligible family member's serious health condition and how an employer can get this information. Overall, the final regulations are a win for employers in this area. Employers are now able to get more detailed information regarding an employee's or eligible family member's serious health condition, and it is easier to get this information, as the employer -- not the employer's health care provider per the old rules -- can make contact with the employee's health care provider."

Another significant change is the employee is now required to provide notice to the employer of his/her need for leave the same day the employee knows of the need for leave or the next day. Under the old rules, employees were able to delay giving the employer notice of the need for leave, resulting in an employer having staffing problems due to the lack of notification of an employee's absence from work, McLaughlin says.

The final regulations also address new military family leave entitlements included in amendments to the FMLA enacted as part of the National Defense Authorization Act.

The regulations were published in the Nov. 17 Federal Register.

Stu Dunkle
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Health care coverage would be available to Americans aged 55 to 64 through a Medicare buy-in, according to a summary. The plan also would begin to phase out the current two-year waiting period for Medicare coverage for individuals with disabilities.

In addition, Americans living below the poverty level would have access to Medicaid and all states would use the Children's Health Insurance Program to cover children at or below 250 percent of the federal poverty level.

"It is the duty of the next Congress to reform America's health care system," Baucus said. "The time is now," he added at a Capitol Hill press briefing. Baucus said his plan is similar to that of president-elect Barrack Obama's and contains a mix of private and public reforms, not a single-payer system. He added that he expects the Senate to support the plan overwhelmingly with possibly 80 votes.

Baucus' staff hasn't written legislation yet and many of the details still need to be worked out. "The devil is in the details," he said. He added that the plan would take two or three years to phase in and the savings would be reaped after that.

The Baucus plan would create a nationwide insurance pool called the "health insurance exchange," where Americans could compare and purchase health plans. Those who already have health coverage could keep what they have.

"Insurance works because policyholders pay into their plans when healthy, and have their medical bills paid when they are sick," said Baucus. "If a significant portion of Americans does not purchase coverage until sick, then premiums for all enrollees will increase to cover insurer outlays, and the problem of unaffordable coverage will persist," he said.

In addition, under the plan:

Private insurers offering coverage through the exchange would be precluded from discrimination based on pre-existing conditions.

The number of primary care physicians would increase as well as prevention and wellness efforts.

Premium subsidies would be available to qualifying families and small businesses.

Increased use of health information technology would give providers ready access to better evidence and other clinical decision-support tools.

The employer tax exclusion would be addressed to make the incentive more equitable and reduce spending. One option is to cap the amount of health care premiums that can be excluded from employee wages for income and payroll tax purposes possibly, Baucus said.

Once these reforms are in place and coverage is affordable and accessible to all, individuals would have a responsibility to have health coverage. Baucus said. "This step is necessary for insurance market reforms to function properly and to end the cost shifting that occurs within the system," he said.

Reaction. Senate Finance Committee ranking member Charles Grassley (R-Iowa) said he looks forward "to working through proposals and figuring out how to pay for reforms that will make the system more accessible, efficient and higher quality for everyone." But he cautioned that "dramatically expanding government spending and putting additional pressure on employers already struggling to create jobs would have repercussions that need to be carefully considered."

Chip Kahn, President of the Federation of American Hospitals, said Baucus' plan "recognizes the essential role of today's employer-based coverage system through which the vast majority of Americans under age 65 obtain coverage."

Karen Ignagni, CEO of America's Health Insurance Plans said the proposal "addresses the key health care challenges facing the nation."

Source: http://finance.senate.gov/healthreform2009/home.html
BenefitsNews HealthNews

While the pain of downsizing-related layoffs can’t be avoided entirely, it can be mitigated. Anticipating the duration and depth of an industry downturn, for example, can definitely help a manager prepare and deploy HR practices that will, in turn, help both employees and firms adjust to difficult times. This author discusses some responses that have been known to be effective.

Downsizing has been a pervasive managerial practice for the past three decades. Over the years, a firm’s standard response to finding itself in financial difficulty was to reduce its workforce. While there is ample evidence suggesting that downsizing activities rarely return the widely anticipated benefits, there is also a sobering understanding that downsized firms are forced to deal with the human, social, and societal aftereffects of downsizing, also known as secondary consequences. Research shows clearly that the human consequences of layoffs are costly and particularly devastating for individuals, their families, and entire communities. While workforce reductions cannot always be avoided, there are compelling reasons why downsizing-related layoffs must nonetheless be seen as a managerial tool of absolute last resort.

During an economic downturn a firm must carefully consider its options and assess the feasibility and applicability of cost-reduction alternatives before deciding on layoffs. While a considerable number of research articles that discuss alternatives to downsizing have been published, there is no conceptual understanding of downsizing-related layoffs as they relate to the actual cost-reduction stages of a firm. Indeed, it is critical for an organization to factor in the concept of cost-reduction and to recognize the specific cost-reduction stage that characterizes the firm’s current business position and environment. Thus, a firm needs to determine the expected duration of the business downturn. In order to do so successfully, the executive manager must know exactly where the firm is in its cost-cutting stage. A firm’s cost-reduction stage, by definition, refers to the timeframe the company requires to be able to reduce operational expenditures successfully.

Read full article: http://www.iveybusinessjournal.com/article.asp?intArticle_ID=768

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