Compensation and Benefits

Compensation and benefits topics – whether it’s minimum wage, workers’ compensation laws, or employee pay – if properly handled, can help you retain workers and recruit new ones.

Use our advice to craft independent contractor agreements that keep independent contractors – and your bosses – happy.

One more thing to worry about if you use independent contractors: If a contractor sues over unpaid wages and overtime, it’s unlikely a court will dismiss the lawsuit early.

Employers sometimes use independent contractors as a way to lower their benefits and other labor costs. But that kind of economizing can turn out to be quite expensive if a court decides that the independent contractor is really an employee. One of the deciding factors in such cases is how much independence a worker has to control his work. The greater the employer’s control, the greater the likelihood that the “independent contractor” is really an employee.

The U. S. Department of Labor, in conjunction with the IRS, has announced a “misclassification initiative” aimed at employers that misclassify employees as independent contractors. A 2009 Government Accountability Office report labeled misclassification a “significant problem” with “adverse consequences” for the government.

President Obama’s 2011 budget plan calls for the U.S. Department of Labor to hire 100 new enforcement personnel and gain $25 million in new funding to target employers that misclassify workers as independent contractors (ICs). This comes on the heels of a huge IRS audit program starting last month that randomly selects 6,000 employers for audits over IC and other employment tax issues. Here's a three-factor guideline on how to classify employee or Independent Contractor based off the IRS checklist:

When New York-based telephone directory-assistance provider kgb needed to hire part-timers who would work from their homes, it put the word out to the spouses of deployed military. The organization found them by partnering with the Army Spouse Employment Partnership, a program created in 2002 to help military spouses find jobs.

Q. We currently pay employees for time spent driving from the office to work sites. We pay minimum wage for that driving time, but we don’t count those hours toward “total hours” worked for the week. That keeps overtime down because their hours aren’t accumulating until they arrive at the job site. Is this OK?

The FLSA allows employers to round off an hourly employee’s arrival or departure time to the nearest five minutes, tenth of an hour or quarter of an hour. But your rounding practices can’t always favor the employer. Rounding must be neutral or it must favor the employee. That means if you round down, you must also round up. You have several ways to make rounding fair:

President Obama’s 2011 budget plan calls for the U.S. Department of Labor to hire 100 new enforcement personnel and gain $25 million in new funding to target employers that misclassify workers as independent contractors (ICs).

Don’t, under any circumstances, use co-worker resentment over disability accommodations as a reason to transfer or terminate the disabled employee. If you’re intent on getting rid of a disabled employee, you’d better have a better reason than that.

The Texas Payday Act allows employees to sue for commissions earned but unpaid after termination. But that doesn’t mean that employees are always owed such commissions. If they violated their fiduciary duty to their employers by disclosing confidential information to a competitor, it’s legitimate to withhold pay.