When an employer hires a new employee, he is not just bringing a new member of the workforce aboard; he is also starting a new relationship. Because employers and employees often work in close quarters, they necessarily develop relationships. Managing these relationships is vital to business success, as strong relationships can lead to greater employee happiness and even increased productivity. To reap these benefits, keep the dynamics of your employer-employee relationship in mind.
TYPES OF EMPLOYMENT RELATIONSHIPS
Common law employee rules include several factors to determine whether an employer-employee relationship exits. They include, but are not limited to:
* Control: Does the employer have the right to control the manner and means of performing the work?
* Mode of Payment: How is the worker paid on a regular basis, hourly, bi-weekly?
* Does the employer withhold taxes and provide fringe benefits?
* Materials and tools: Does the employee provide his or her own tools?
* Control of the premises: Does the hiring entity own or control the premises where the work is performed?
* Right of discharge: Does the employer have the ability to discharge the worker?
None of these factors alone will determine whether an employment relationship exists. The most important factor is the hiring entity’s right to control the manner and means of the work.
A worker may not be an employee under common law rules, but may be a statutory employee for certain purposes including payment or withholding of FICA, federal and state unemployment compensation taxes, fair labor standards act compliance, and occupational safety and health requirements. A federal or state statute may exempt certain employers or employees from its application.
People who follow an independent trade, business or profession offering their services to the general public are usually considered independent contractors. In general, the individual will be considered an independent contractor if the business entity obtaining the person’s services has the legal right to control the result of the work, but does not have the legal right to control the manner and means of accomplishing the result.
Both state and federal statutes may define employees covered by their own laws. See IRS Publication 937. It includes a discussion on whether an individual is an employee. Contact both federal and state sources to determine the employment relationship.
**Treat your employees how you would like to be treated as an employee!
OTHER EMPLOYMENT ISSUES
Minimum Wage Requirements
Federal law requires a minimum wage per hour for workers. Some employees are excluded under narrowly defined specific exemptions provided in law. Employers should check with the U.S. Department of Labor and Industry.
Your state may have additional minimum wage requirements. Check with your state labor department.
Some communities have “Living Wage” ordinances that require specified wage minimums. Check with your city offices.
Overtime Pay Requirements
Federal law requires overtime pay at a specified rate under a variety of conditions. Overtime requirements may vary in different industries.
Your state may require different overtime pay strategies.
For more information contact the U.S. Department of Labor and your state labor department.
Workers’ Compensation is insurance. Worker’s Compensation provides compensation to employees who have a work-related injury or disease. Compensation may include partial wage replacement and full payment of medical and rehabilitation costs.
Generally, all employers are required to have Worker’s Compensation insurance and display the name of their carrier in a conspicuous place.
You can contact your insurance company or your state labor department – Worker’s Compensation Division, for information on this insurance. Contact several providers of Worker’s Compensation to determine the lowest costs. All policies provide coverage mandated by law; only prices vary! Other factors to consider may include claims servicing, safety counseling, and the carrier’s reputation.
Occupational Safety and Health (OSHA)
Contact the Occupational Safety and Health Division of your state labor department to learn about your state Occupational Safety and Health (OSHA) issues and requirements.
OSHA applies to all places of employment in your state with the exception of those covered exclusively by the federal government.
Learn more about what your choices and responsibilities will be concerning:
- * Jury duty
- * Independent contractor (you hiring them)
- * Independent contractor (you being hired as one)
- * Holidays – paid or unpaid
- * Military Leave
- * American’s with Disabilities Act (ADA)
- * Vacations – paid or unpaid
- * Family Leave Act