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.

Federal employment laws can be terribly confusing, particularly because they often have different definitions for the size of a business that is exempt from the law. Use the following list to make sure you’re not spending time and money complying with laws that only apply to larger businesses.

Q. Our employees receive tips, and we take advantage of the tip credit toward the minimum wage. In the past, we have paid employees the full tip amount on credit card charges, even though we have to pay a percentage fee to the credit card company. It doesn’t seem fair that we should have to pay money that we don’t really receive. How may we resolve this fairly and legally?

The U.S. Department of Labor (DOL) is stepping up efforts to encourage and support certain types of wage-loss claims by low-income workers. Labor Secretary Hilda Solis announced in April that the department was rolling out its “We Can Help” campaign to address this issue. If you employ relatively low-wage workers, you need to be aware of this program.

Which of your workers are eligible for overtime pay? Which are independent contractors versus employees? It soon won’t be good enough to guess … get ready to document and show proof. The DOL issued a proposal last month that would require employers to prepare detailed records on every worker’s status under the FLSA. Then you’d have to keep that information on file and be prepared to show it to the DOL upon request.

Q. If, according to the revised Employee Misclassification Prevention Act, we’ve been improperly classifying certain employees, do we need to go back and reimburse them? At the time, we thought they were properly classified.
As we told you last month, the DOL and many state agencies are cracking down on employers that illegally fail to pay their interns. Now the DOL has published “Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act” that helps clarify employers’ obligations.
The immigration landscape keeps changing, and employers must keep up. And now you also have to worry about employees who claim you hired illegal workers as a way to cut labor costs and therefore put legal workers at a competitive disadvantage. Clever attorneys have begun filing RICO Act lawsuits, alleging that some employers are essentially running “mob” operations.
U.S. Sen. Sherrod Brown (D-Ohio) is joining the U.S. Department of Labor and the IRS in going after employers that improperly classify workers as independent contractors. Brown is tackling the issue from the legislative side, co-sponsoring the Employee Misclassification Prevention Act (EMPA).
Q. If an employee owes us money, can we collect it through deductions from his wages?
Independent contractors aren’t eligible for unemployment compensation, and their clients don’t have to pay into the unemployment compensation trust fund, as the following case shows.