Tag Archives: Interns

What’s An Employee? Incorrect Definitions Are Costly

images(Post by Rick Dacri, May 10, 2014)

Every morning I pour a cup of coffee, grab the newspaper, and turn directly to the sports page. It’s my way of relaxing before I have to think about work. Unfortunately, not lately.

Earlier this year, I read about harassment and bullying within the Miami Dolphin’s team; later that the NFL is grappling with how they’ll handle openly gay players; and now the NLRB has determined that the Northwestern University football players can unionize. It’s getting to the point that there is no escape from work. The sports page is becoming the new edition of LexisNexis.

I am not going to address any of these three issues directly today. But the NLRB’s decision implies that the players are “employees” and that’s a good segue to what I want to discuss with you: what is an employee? This sounds basic, but it isn’t, and incorrectly defining someone as NOT an employee can have significant consequences to you and your company. Let me explain.

First a definition: “An employee is a person who works in the service of another under express or implied contract for hire, under which the employer has the right to control details of work performance” (Black’s Law Dictionary). That’s clear until you understand there are some broad exceptions to that definition created by the U.S. Department of Labor. Independent contractors and student interns are not employees. Still with me? OK, here it comes.

Independent contractors are not employees and therefore, under the law, employers who engage them have no obligation to withhold taxes or offer benefits (workers comp, unemployment comp and the usual holidays, etc.). But where you can get into trouble is when the IRS, or the Department of Labor or the state views this Independent Contractor as an employee. Now you’re in trouble.

The general rule is that an individual is an independent contractor “if Continue reading

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Exempt Employees: Can You Dock Pay for Illness?

Posted by Rick Dacri, August 5, 2013

 This question came in from one of my HR HelpLine clients.

 Question: I have a salaried exempt employee who has lost time due to illness. Are deductions from pay allowed for absences due to sickness or disability?

 Advice: Yes. Under the federal Fair Labor Standards Act (FLSA) employers may deduct from pay for full-day absences due to sickness or disability, but only “in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability.” The same rule applies “if salary replacement benefits are provided under a state disability insurance law or under a state workers’ compensation law.” If there is no such plan or practice, employers cannot deduct for sickness absences. No pay is required for any workweek in which the employee performs no work. Employers also may deduct for full-day sick or disability-related absences for employees who are not yet eligible for the salary replacement plan or practice or who have exhausted their available leave.

If you would like to learn more about Dacri’s HR HelpLine service, where you can get all your workforce questions answered, click HR HelpLine.

 

Other posts you may want to read:

  1. Interns: Employers Obligation T0 Pay
  2. Off the Clock: Must I Pay?
  3. Employee Classifications: When Must you Pay Overtime?

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Filed under Compliance

6 New CEO Challenges Require Immediate Action

 

imagesPost Written by Rick Dacri, July 8, 2013

CEOs consistently tell me that the challenges of the business fill their plate and the ongoing people issues just make it worse. The last few weeks the Courts and government agencies have simply overwhelmed them. Let’s take a look at what has happened:

  1. DOMA: The Supreme Courts overturning the Defense of Marriage Act now extends to same sex couples, who were married and reside in the 12 states and the District of Columbia that recognize same sex marriage, all the federal benefits offered to heterosexual couples. That means employers must now make the changes to policies, benefits, and payroll taxes to comply with the changes. While this brings a consistency to the compliance between state and federal law, it leaves the question of what happens in the other 38 states.
  2. Independent Contractors: Both the federal and state government agencies (IRS and Labor) have both redefined their definition of an Independent Contractor and begin strict enforcement of the new standards forcing employers to change how they manage their workforce and quickly bring their company into compliance or face huge fines. For many companies, this will be s tremendous burden.
  3. Interns: Two high profile class-action lawsuits against NBC Universal and Fox Searchlight point to the perils of not paying summer interns. In both cases, the Court determined these companies violated the Fair Labor Standards Act for not paying their “workers” forcing employers nationally to rethink how they employ and compensate interns. These rulings will hurt valuable college internship programs.
  4. Affordable Care Act: The Obama administration gave small employers a welcome reprieve by extending the compliance deadline to 2014 for implementing the mandate for employers with 50 or more employees to provide insurance coverage. While on the surface this is good news, it brings further confusion to an already difficult implementation schedule.
  5. Immigration: As Congress wrestles with immigration reform, CEOs suffer with the inability to recruit badly needed skilled and unskilled foreign workers. With a growing skills gap and an aging workforce, foreign workers could fill the void. Without Congressional relief, CEOs must operate without essential workers.
  6. New Definition of Supervisor: The Supreme Court has clarified its definition of a “supervisor” and in doing so, provided employers with a bit of clarity in defending itself against claims of harassment. While this is a helpful decision, it still requires policy changes and education of managers to ensure compliance.

Running a business is always a challenge. The Courts and government made it a whole lot more complicated. Regardless, CEOs must begin to address the changes, make the adjustments to their policies and practices, and quickly get into full compliance, while continuing to lead their business.

If you want to know how I can help you with this, click Dacri & Associates.

If this has been valuable, you may also want to subscribe to our free electronic newsletter. Just Click The Dacri Report.

Other posts you may want to read:

  1. DOMA Overturned Means Changes for Business
  2. Independent Contractors in Labor’s Cross Hairs
  3. Interns: Employers Obligation to Pay or Not?
  4. Affordable Care Act: What Employers Need To Know
  5. Immigration: Tear Down Those Walls
  6. Harassment Claims: Courts New Definition of Supervisor

 

 

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Filed under Compliance, Management, Uncategorized