In case you missed it, USA Today recently reported on the rise in litigation associated with misclassified workers. The number of worker class-action lawsuits claiming that employers misclassified employees as independent contractors rose 50% this year. That's an increase to a record 300+ cases.
Let's talk about the financial impact. The Department of Labor forced employers to pay $6.5 million in back wages to over 5,000 employees in fiscal 2010. That's a sharp increase from the $2.6 million owed to over 2,000 employees last year.
Companies increasingly use contractors to meet peaks in demand and complete short-term projects. According to Barry Asin, president of Staffing Industry Analysis, the portion of contingent workers in the labor force is up to about 10% from 8% five years ago. Using contingent workers usually cuts labor costs (unemployment taxes, workers' compensation, health care and other benefits) by about 30%. However, when you look at the number of lawsuits and related penalties, misclassification is a serious issue.
Whatever title used, the issue at hand is whether a worker is an employee or an independent contractor. The answer is determined by the level of control the employer has over the activities of the individual.
Texas Workforce Commission offers an Independent Contractor Test based upon the IRS "Twenty Factor" test. The test determines the amount of control the employer has over the individual. An independent contractor is self-employed, bears the responsibility for his or her own taxes and expenses and is not subject to an employer's direction and control. The IRS has recently attempted to simplify and refine the Twenty Factor test. The test has been reduced to eleven main tests and organized into three groups; behavioral control, financial control and type of relationship.
If you have difficulty in determining the status of an individual, always consult a knowledgeable labor and employment law attorney.
Wednesday, December 22, 2010
Wednesday, December 8, 2010
The Quicker You Let Go Of Old Cheese, The Sooner You Find New Cheese
In 1998, an amazing little book was published. Titled “Who Moved My Cheese?” the book was a business fable that dealt with four typical reactions to change in work and life. Whether you are a “Sniff” who anticipates change early, or a “Scurry” who scurries into action and adapts, change impacts us all.
The American Institute of Stress estimates that stress in the workplace costs U.S. corporations over $300 billion annually, or more than ten times the cost of all strikes combined. That’s significant.
Change becomes a major stressor for employees no matter what form it takes. It could be reorganization, takeover, merger or downsizing. If there is a change in structure, or in the management, the change threatens the emotional security of the employees. The less control an employee has over his/her situation, the greater his/her stress.
But why is stress a result of change? Well, most people are resistant to change. Be honest; when change happens, people prefer to stay in their happy little comfort zones. One of the reasons that change is often viewed as a stressor is that people tend to view change negatively. People, naturally, have a tendency to prefer stability and security. We are afraid of the unknown and oftentimes the response to change is visceral. “I don’t want to deal with this change, so where’s the closest exit?”
The Global Business and Economic Roundtable on Addiction and Mental Health released a survey on work-related stress. Two of the top ten items causing employees stress are lack of communication and lack of control. As stated above, the less control an employee has over his/her situation, the greater his/her stress. Yes, I repeated myself.
What can we do to lessen the negative impact of change? As an employer, make the employees part of the change and allow them to assume some ownership within the change process.
• As a manager, you need to communicate – to create understanding of the change. However you decide to communicate, communicate that you are committed to the change and seeing it through.
• Convey the message that you are confident the “team” will make it through the changes and that you need their input to make it work.
• Recognize, and admit, that the change may negatively impact some people.
• Understand the various personalities of the people involved as different people react differently to change.
• Provide information that will reduce uncertainty and ambiguity about the change. Change needs to be understood and managed in a way that people can cope effectively with it. Help the employees focus on the big picture.
• Allow the employees to communicate their reactions and concerns to you. Request their input, utilize their suggestions. Involve the employees and lead them through the change.
It is often said that “the only constant is change.” So, prepare yourself.
Dedicated to Gary Toche.
Your leadership will be missed. Bon Voyage
The American Institute of Stress estimates that stress in the workplace costs U.S. corporations over $300 billion annually, or more than ten times the cost of all strikes combined. That’s significant.
Change becomes a major stressor for employees no matter what form it takes. It could be reorganization, takeover, merger or downsizing. If there is a change in structure, or in the management, the change threatens the emotional security of the employees. The less control an employee has over his/her situation, the greater his/her stress.
But why is stress a result of change? Well, most people are resistant to change. Be honest; when change happens, people prefer to stay in their happy little comfort zones. One of the reasons that change is often viewed as a stressor is that people tend to view change negatively. People, naturally, have a tendency to prefer stability and security. We are afraid of the unknown and oftentimes the response to change is visceral. “I don’t want to deal with this change, so where’s the closest exit?”
The Global Business and Economic Roundtable on Addiction and Mental Health released a survey on work-related stress. Two of the top ten items causing employees stress are lack of communication and lack of control. As stated above, the less control an employee has over his/her situation, the greater his/her stress. Yes, I repeated myself.
What can we do to lessen the negative impact of change? As an employer, make the employees part of the change and allow them to assume some ownership within the change process.
• As a manager, you need to communicate – to create understanding of the change. However you decide to communicate, communicate that you are committed to the change and seeing it through.
• Convey the message that you are confident the “team” will make it through the changes and that you need their input to make it work.
• Recognize, and admit, that the change may negatively impact some people.
• Understand the various personalities of the people involved as different people react differently to change.
• Provide information that will reduce uncertainty and ambiguity about the change. Change needs to be understood and managed in a way that people can cope effectively with it. Help the employees focus on the big picture.
• Allow the employees to communicate their reactions and concerns to you. Request their input, utilize their suggestions. Involve the employees and lead them through the change.
It is often said that “the only constant is change.” So, prepare yourself.
Dedicated to Gary Toche.
Your leadership will be missed. Bon Voyage
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