Terminating
Employees
It
is generally legal to lay off an employee and replace him or her with a lower-paid employee
Exceptions:
• The employee were covered by a union contract
• The employee was covered by an individual employment agreement
California and most
other states assume that people are “at will” employees – they
can be terminated at any time for almost any reason
Exceptions:
• People with employment contracts
• People whose companies have given them the impression that they will
only be terminated for good cause
It is illegal to
fire people because of:
- Civil rights criteria Race
- Religion
- Gender
- Disability
- Age (if over
40)
- Sexual orientation
in some states including California
Generalization: most
companies can hire people at will and fire them at any time for any
legitimate reason
Generalization: The
employer has no obligation to tell you what the reason is; fire you
for no reason whatsoever; even have you train your replacement before
they fire you. This is always touchy. Read: Fire Wirh Caution
Generalization: Just
because the law allows it doesn't’t make it a good practice. To
hire and retain top notch people you need to assure them that they
will be treated fairly.
How
to fire someone:
Don’t fire them on the spot: review the situation, talk to your
attorney, don’t violate the law
- Have a company
procedure and follow in consistently
- Give one reason for
the termination and stick with it – make sure
they understand it
- Let the employee
hear the reason and vent frustrations and emotions; hear their complaints
and answer their questions
honestly
- Fulfill all required
paperwork
- Remind them not
to disclose trade secrets and invention assignment issues
- Discuss
how to handle references
- Give final paycheck
on the last day they discharged employee works
- Give other consideration,
severance, medical coverage, out-placement services
- Ask for the
employee to sign a attorney prepared “release and
waiver from liability” form and make it a condition of the
other consideration, but not the paycheck
- Collect anything
the company provided the employee – keys, tools,
etc
- Change computer
and alarm access codes and permissions
- Have a witness
observe these proceedings
- Don’t apologize
and limit discussions and explanations
- Give
time to gather belongings; monitor but don’t escort them
off the premises unless criminal acts are involved; conclude
with a handshake
Alternatives and
Preparation:
- Offer to let
them accept a pay cut
- Have written
documents
- Performance reviews & appraisals
- Written warnings
- All correspondence
with the employee; particularly related to job performance
- Use a Labor-Relations
specialist Attorney - avert the possibility of a wrongful termination
lawsuit
After the Fact:
- Review the job description and you hiring and matching process
- Review the exit procedure
- Review the Performance Review Process
- Keep details confidential and honor the terminated employee’s privacy
rights
- Let employees know the person has left the company
- Reassure
employees their jobs aren't in jeopardy
Will you
use Independent Contractors?
The IRS' 20 Questions
for Independent Contractors
Are you Really an Independent Contractor?
Independent contractors who don't know about — or who ignore — the
relevant aspects of current contractor tax law are endangering their own livelihood
and pose a significant threat to their client companies.
The IRS is currently
funding California's Employment Development Department (EDD) to conduct
twice as many independent contractor-related corporate tax audits as
they did last year. Such audits routinely last 18 months and the resources
required to prepare for them frequently put small and even mid-size
companies out of business. If your client loses its fight, the penalties
(for failure to withhold employment taxes and provide you with benefits,
etc.) can amount to 50 percent of the money it paid you.
Worst of all, when
EDD's done with your (by now, former) client, guess who's next? That's
right — the Franchise Tax Board and IRS come after you and, at
the very least, disallow your related business deductions.
They're complex,
arbitrary, and inconsistently applied, but knowing the rules can keep
you and your clients safe. So here they are, in a nutshell:
Under United States
common law, a worker is an employee if the person for whom he or she
works has the right to direct and control the way he or she works,
both as to the final result and as to the details of when, where, how,
and in which sequence the work is to be done. It is the IRS' view that
the employer need not actually exercise control. It is sufficient that
it has the right to do so.
In the absence of
laws that override the safe harbor provisions detailed in Section 530
of the Revenue Act of 1978, IRS has adopted 20 rules to determine whether
workers are employees. In brief, these rules are directed at the following
questions; the answers most favorable to contractors follow in parentheses.
The 20 Questions
1. Are you required
to comply with instructions about when, where, and how the work is
to be done? (No.)
2. Does your client provide you with training to enable you to perform a job
in a particular method or manner? (No.)
3. Are the services you provide integrated into your client's business operation?
(No.)
4. Must the services be rendered by you personally? (No.)
5. Do you have the capability to hire, supervise, or pay assistants to help
you in performing the services under contract? (Yes.)
6. Is the relationship between you and the person or company you perform services
for a continuing relationship? (No.)
7. Who sets the hours of work? (You do.)
8. Are you required to devote your full time to the person or company you perform
services for? (No.)
9. Is the work performed at the place of business of the potential employer?
(No.)
10. Who directs the order or sequence in which the work must be done? (You
do.)
11. Are you required to provide regular written or oral reports to your client?
(No.)
12. What is the method of payment — hourly, commission or by the job?
(Contigency- or project milestone-based payments are ideal.)
13. Are your business and/or traveling expenses reimbursed? (No.)
14. Who furnishes tools and materials used in providing services? (You do.)
15. Do you have a significant investment in facilities used to perform services?
(Yes. The more substantial your investment, the better.)
16. Can you realize both a profit or a loss? (Yes.)
17. Can you work for a number of firms at the same time? (Yes.)
18. Do you make your services available to the general public? (Yes. It's a
good idea to have a business listing in the phone book, for example.)
19. Are you subject to dismissal for reasons other than nonperformance of contract
specifications? (No. Also, your client should provide at least a week's notice.
At will termination makes you look like an employee.)
20. Can you terminate your relationship without incurring a liability for failure
to complete a job? (Yes, assuming you're working on a time-and-materials basis.
If you're working on a project, or milestone, basis, you are obligated to deliver
on your commitments if you wish to be paid for your efforts.)
Source:
Synergistech Communications
http://www.synergistech.com/20qs.htm |
