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.

As part of a wider crackdown on companies that violate worker protection laws, California Attorney General Edmund G. Brown Jr. filed a lawsuit alleging that a Los Angeles car wash, Auto Spa Express, failed to pay minimum wage and overtime to its employees and denied them workers’ compensation benefits.

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.

Although the New Jersey Law Against Discrimination (LAD) primarily has been applied to sexual harassment claims involving employers and employees, a new decision by a New Jersey appellate court recognizes that the LAD can also apply to a refusal to engage in business transactions if it is based upon the refusal to comply with requests for sex.

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).