On September, the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) announced an effort to “end the business practice of misclassifying employees” as independent contractors or subcontractors in order to reduce labor costs. The collaboration also includes labor commissioners from 11 states: Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.
The IRS also announced the Voluntary Classification Settlement Program (VCSP.) This allows employers to voluntarily reclassify workers as employees for federal tax purposes. Through the VCSP, employers will be able to pay a reduced tax lability for the misclassification of employees as opposed to current law penalties of back taxes and interest. Employers will need to meet other requirements to be eligible for the program and it is likely they will see stepped up enforcement going forward.
To be eligible for the VCSP, an applicant must have treated the workers consistently in the past as nonemployees, have filed all required Forms 1099 for the workers for the previous three years and not be under audit by the IRS, the U.S. Department of Labor or a state agency concerning the classification of these workers.
Interested employers can apply for the program by filing Form 8952, “Application for Voluntary Classification Settlement Program,” at least 60 days before they wish to begin treating the workers as employees. Employers accepted into the program will pay an amount in effect equaling just over 1 percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years, according to the government.
Is anyone really surprised by this headline? Probably not…
In fiscall 2011 the EEOC received a record 99,947 claims and obtained $364.4 million in monetary benefits from these claims. On a good note, they only have 78,136 claims still pending…a nearly 10 percent decrease thanks to a very successful year of mediation. For all the details, go the this link http://www.eeoc.gov/eeoc/newsroom/release/11-15-11a.cfm
HR Professionals and business managers are reluctant to pry into employee’s personal lives. That being said, many company leaders agree that domestic violence is an important issue. A survey by the University of Arkansas four years ago indicates as many as 1 in 10 employees are being abused. Since the economic downturn, domestic violence appears to have only increased, at least locally. What can you do as an employer? The Corporate Alliance to End Partner Violence suggests creating a Domestic Violence Prevention Program. To do so follow these steps…
1- Organize a multidisciplinary team to oversee the process.
2- Develop a corporate policy for addressing intimate partner violence.
3- Provide training: recognize, respond, and refer.
4- Build awareness through workplace communication.
5- Enlist employees’ help to ensure a violence free workplace.
6- Broaden communication to include the community, important stakeholders in the company’s industry and other organizations.
According to the Small Business Administration 30% of applications include incorrect information. Also, “for every dollar invested in personel screening, the savings ranges from $5-$16 in reduced absenteeism, improved productivity, lower tuenover, safer working environments, reduced insurance costs and decreased employer liability.”
Sounds like a worthwhile investment to me!
In our post 9/11 world, background screening is more common than ever before. As employers, we are also faced with the responsibility to hire without discriminating against individuals who may have a criminal background that would not impede their performance with our organization. So what are the pros and cons of conducting background and/ or reference checks on potential new hires?
Litigation defense-what you don’t know can hurt you. If a potential hire recently harmed a previous employer, the employer’s employees or customers of a previous employer, you want to know this information. Otherwise you could be found liable for negligent hiring practices. In some cases, criminal background checks are mandated by the government.
Nearly half of 3,100 hiring managers interviewed by Careerbuilder admitted to finding out candidates were dishonest on their resume. Using due diligence in performing background and reference checking can help you determine if you are hiring an honest, productive employee, or a dud. This is especially the case now that there is increased competition out there for less jobs.
Timing- If you are looking to fill a position yesterday, the time it takes to conduct an accurate background check may be a big disappointment to you, since it can take up to 3 weeks to confirm.
Difficulty- Many employers these days are hesitant to give out information about previous employees for fear of being sued. To prevent this liabiability, they give out very little information to potential new employers and only with written premission from the potential new hire.
As a Human Resource Consultant, I highly recommend background and reference checks. I feel more confident I am hiring the best person for the job when conducting this due diligence. Yes, we need to be careful we are not illegally discriminating against anyone and it may take more time to get through the process, but I believe the pros strongly outweight the cons.