Jodie-Beth Galos answers your toughest questions. You’ll learn about independent contractors … how to integrate employees returning from active military duty … and the best time of day to give an employee a warning.
Question: I know the Department of Labor is all over employers for misclassifying employees as independent contractors — improperly applying the test for determining whether someone should be paid on a 1099 or a W-2. Assuming I get that part right and have correctly determined that someone is a contractor, what should I put into his or her written agreement to help the company in the event of a dispute later on?
Answer: You just used the magic words: written agreement. Before work begins, have a written and signed agreement with the contractor, stating, among other things:
1. The worker is an independent contractor, not an employee. The contractor is prohibited from representing him- or herself as an employee to others.
2. The contractor has both the right and the responsibility to control the project.
3. Payment will be made on a per-project basis (paying for the project, not the worker). Out-of-pocket expenses will be paid by the contractor or reimbursed using processes different from employee T&E.
4. The contractor will supply tools and equipment and, if feasible, the workplace.
5. Consequences of project termination by either side are clear and are different from those of regular employees.
6. The contractor is solely responsible for reporting all taxes and insurance (and may be obligated to provide periodic reports to the employer to verify that he or she is up-to-date).
7. The contractor is not eligible for employee benefits.
8. The contractor isn’t covered by a non-compete agreement; conversely, a confidentiality/proprietary information agreement is used.
9. If the arrangement is for ongoing services, there is fixed term for the relationship and a process for renewal.
As you said, there is no clear line in determining contractor status, but a carefully worded independent-worker contract is a critical safeguard.
Question: We have some employees returning from active military service — what can we do to make their transition back into the workplace easier?
Answer: Managers, business owners, and HR professionals can learn from military chaplains about what can be done to help soldiers returning from military duty readjust to the realities of the workplace. Suggestions include:
• If you sense that the employee wants to discuss his or her military experience, ask about the environment in which the person served.
• Respect the person’s privacy if you sense that he or she does not want to talk about the tour of duty, and advise others to do the same.
• Recognize that you don’t have to solve all the vet’s problems and you may not be able to do so.
• Believe the person. The stories the person may share may be unlike anything you have heard and likely won’t experience firsthand.
• Understand that people adjust on different schedules. Patience goes a long way.
The employee returning from military duty may need to speak with more than a friend or family member; he or she may benefit from professional help, such as an Employee Assistance Program (EAP). The good news for employers is that vets often return with leadership skills and a renewed vigor for their jobs.
Question: Is there a right time of day to give a warning to an employee?
Answer: If the problem is very serious, warn the employee as soon after the event as possible — judges and juries rule time and again that when a work problem is truly significant, a prudent employer takes quick action. A delayed discussion creates the appearance of duplicity — was the problem really significant or was the employer just grasping at straws to come up with a reason for disciplining or terminating an employee?
If the problem you need to warn the employee about is serious, but you learn about it on a delayed basis (for example, you’re not present when the event occurs and you only learn about it upon your return to the work site), take fast action and communicate to the employee that you’re taking immediate action upon learning of the problem (put this in writing!) — the delay isn’t reflective of the seriousness of the issue.
If the problem is important but not urgent (time sensitive), be selective about the day of the week and the time of day for the discussion. For example, you may not want an employee using a screw gun on the production floor after having a serious conversation with you. Equally, it would be imprudent to send an employee to meet with your biggest customer right after receiving a warning. Giving a warning before a holiday or a vacation may also appear heartless.
Timing is a matter of fitting a serious conversation into the overall context of what’s happening with your business as well as with this specific employee.
About Jodie-Beth Galos
Jodie-Beth practiced with two nationally known law firms before moving into corporate positions at Shearson Lehman/American Express and Saks Fifth Avenue. She holds a B.A. from Barnard College, Columbia University and a J.D. from Boston University School of Law. She is regularly featured on CNBC, CNN, and in Money magazine and The National Employment Business Weekly. Learn More