Hiring Employees with I-9 Compliance

Our most recent hire worked for almost a full week before it was discovered that she failed to meet I-9 eligibility criteria.  How are we supposed to pay her?

It is a challenge to pay someone for work performed when there is no proper documentation, but she must be paid, period.

The Department of Labor’s (DOL) states “work not requested but suffered or permitted to be performed is work time that must be paid for by the employer…The reason is immaterial. The hours are work time and are compensable.”

And, regardless of her I-9 status, the Internal Revenue Service (IRS) expects you to withhold payroll taxes.

There's really only one way to avoid this type of situation and that is by planning carefully.  Here are some tips to follow in order to ensure there is no violation of the Fair Labor Standards Act or IRS rules:

• Pay the employee to ensure you fulfill the requirements of DOL and IRS.  You may pay the wages owed the employee in cash or by check (via the company's payroll system) minus the amount deducted for taxes.
• When hiring, be sure to require work authorization PRIOR to the commencement of work
• Obtain and complete ALL paperwork on new employees BEFORE any work is performed, which of course includes the I-9.  And, be sure Payroll has a copy of the employee's Social Security card on file

For more comprehensive guidance, contact HR Knowledge, Inc. at Sales@hrknowledge.com or call at 508-339-1300.

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

How do you incentivize sales people and compensate them correctly?

Compensating your Sales people correctly can be a great challenge to the average business manager/owner.  If you don’t compensate them correctly or adequately, your sales people's production may suffer, which will directly affect business growth and profit.  If you do incentivize them correctly but pay them too much, it could create future problems related to growth and or profitability of your business.

Below are 7 key points to building a strong sales team:

1. Consider a Compensation Model prior to targeting and hiring sales people.  It helps to have a good understanding of what makes some people "tick", yet not others.  Maslow’s Hierarchy of Needs states that there are a number of aspects that generate needs for any person, some of which may be of more interest to one person and less interest to another.  Once you understand which aspect(s) motivate people, you can create a better environment to help create greater success.  According to Malsow, people are motivated by need, from the most basic biological/ physical needs (food, shelter, sleep, etc.) and safety needs (security, protection, stability) to the more emotional needs of belongingness (relationships, work group) and esteem needs (achievement and reputation) to self-actualization needs (personal growth and fulfillment).  For example, someone who is unemployed would be motivated through the fulfillment of the more basic physical and safety needs, whereas a person who already has job security, would be more motivated through promised fulfillment of esteem or self-actualization needs.

2. Hire the right team of sales people.  Before hiring, understand the type of sales person you need and then target them.  Are you looking for an “order taker”? This is a person who can call on existing accounts and build great relationship with the client.  Are you looking for a sales person who can “make it rain”?  This person has the ability to create and generate business.  If they are able to "find" business then they are the “hunter”. Understand what type of sales person you need and then target them in recruiting.

3. Adhere to the "Three A's" when hiring.  Once you understand the type of sales person you are looking for, remember the "Three A’s" when hiring for a sales position in your company.  The first and most important "A" is Attitude. The right attitude is everything when hiring people.  If they have the right attitude they will go through the wall for you to close business and follow the direction of the company.  Attitude is vital and without it, you have the wrong person on your team. The second "A" is Aptitude.  Ask yourself if s/he has the aptitude for the position of the company. Webster Dictionary defines aptitude as “capability; ability; innate or acquired capacity for something; talent".  If they don’t have the aptitude or capability or ability to take the sales position, then s/he is the wrong person for the company as well.  The final "A" is Altitude, meaning, how high can they go? How high do you need them to go? Will they plateau at a certain point and coast?

4. Beware of complacency.  The next concern when hiring sales people and thus managing them is complacency.  Most sales people will reach a point of complacency and then coast in the job.  Less work and more play becomes their mantra. The key challenge for management is to do all you can do to prevent complacency by your sales people.  Most people become satisfied (and have obtained fulfillment of Maslow's higher level of emotional needs) once they attain job satisfaction or reach a particular level of income or status.  With sales people, the challenge is to prevent this from happening.

5. Utilize your Compensation Model.  It is vital to keep sales people motivated and “in the game”.  From a managerial standpoint, it is far easier to compensate sales people and steer them in the direction the company wants them to go than it is to create compensation models to drive operations people, where you have to rely on coaching and management techniques.  Sales people are experts in understanding compensation models and how they can maximize their income in the quickest time frame.  They are usually very highly motivated and understand how the game works. This being the case, it is imperative that you find a compensation model to drive the sales team to do what you want them to do.

6. Understand what your company’s objectives are and then create the compensation model to attain those objectives.  For example, if your interest is to expand and grow your client base, then the compensation model needs to reward your sales team for new business and retention. You can create additional incentives to ensure that a large portion of their pay will be derived from new business acquisition.  If it is imperative that your sales team be involved in the retention of clients, then you need to find a compensation model which will reward them for retaining and maintaining great relationships with clients. If they lose clientele, you must ensure that this will affect their compensation. This is a delicate area because if your operations team is not equally committed to retaining clients and the service or product you are delivering is not up to standard, then the sales team has no chance to retain the business no matter how great their relationship is with that client.

7. Do all that you can to ensure that the product or service you deliver is “remarkable!"  Make sure that your company is setting the tone and the barometer in the marketplace for what you do. This will allow your sales people to confidently and comfortably sell your product or service. Without this, no sales person of any quality can survive and thrive in today’s business environment.  Make sure that your operations team are as committed and passionate about clients as your sales team.

For more information about compensation, HR and or benefits please feel free to contact Jeff Garr, CEO at HR Knowledge or 508-339-1300 www.hrknowledge.com

 

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Top Reasons Companies are Struggling with Staffing

How are companies going to handle the increased demand for qualified candidates when so many companies are struggling with staffing now?  Why are these companies struggling?  Here are the top reasons:

Feast.  With the economic downturn, employers have been faced with a deluge of job applicants and the vast majority of these applicants are not suited to those job positions. 

Famine.  Skilled people are still hard to find, even in this economy. Many positions go unfilled simply for a lack of qualified candidates, particularly in many skilled trades.

Fewer “job changers”.  Many people are risk averse in today’s economy and would rather play it safe and stay with a current employer than risk a job move.

Benefits costs are soaring.  An increasing number of employers are deciding to put off hiring or rely on temporary workers to avoid such uncertainty.

Reluctance to fill vacant positions causing increased employee stress.  With companies reluctant to hire, the workload of existing employees, with regard to the scope of responsibilities and total number of hours worked, is increasing noticeably. 

Increase in litigation by the unemployed.  When faced with the loss of employment and income, people are much more apt to seek legal redress than when jobs are plentiful. 

Low levels of employee commitment and productivity.  Studies suggest that employee loyalty is at an all time low, due largely in part to the prevalance of downsizing.   Such feelings generally result in decreased productivity; reduced attention to the quality of work and increased risk for customer dissatisfaction.

Perhaps the answer to the staffing challenges of feast or famine lies in retained searches.  These days, retained searches are typically conducted for only the highest levels of staff, namely the CEO, CIO and CTO.  There seems to be a reluctance to use retained searches for non-senior staff.  The argument being that qualified applicants may be found by employee referral or via Craigslist and similar mediums. 

Or, maybe less technology, more “hands on” is the answer.  Could it be that the candidate selection process depends too much on technology and companies are inadvertently eliminating qualified candidates solely on the basis of not having enough “key terms” listed in their electronically submitted resumés?

Thankfully, a few of the staffing problems we mentioned should resolve on their own in time as the economy improves.  We should start to see an improvement in employee productivity and loyalty; people who are more willing to change jobs and a decrease in employee stress as vacancies are filled and the workload is redistributed.

By Jeff Garr, CEO and Frank Zych, Director of HR Services, HR Knowledge, Inc.

To read more, visit http://www.busex.com/article/operations-human-resources.HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Health, Disability, Life, Dental, Vision Insurance: paying too much?

Do you know if you are overpaying for your company sponsored Health, Dental, Life & Disability plans?

One question we frequently hear from potential clients is - "Is there is any way to tell if our sponsored group benefit plan rates are set correctly by the insurance companies?"  The answer is "yes".  And, there's also a way to find out how much profit your insurance company yields from your company premiums.

At HR Knowledge, we consistently reduce premiums of group benefit plans through our proprietary algorithm which can accurately determine the profitability of your group plans with the carriers.

Here are a couple of examples of companies we have helped:

A major health insurance company assessed that for the $3 million that Company A received in premiums, the insurance company had paid out $3.3 million in claims and associated expenses. The health insurer was requiring an annual

premium increase of $385,000. After running the plan financial data through our proprietary algorithm, we were able to leverage the results to secure a reduction off Company A’s renewal of $400,000, which actually resulted in a rate reduction for the client.

A major health insurance company received $1.9 million in premium and paid $2.275 million in claims, a loss of $375,000. They were requiring an increase from Company B of $271,000.  After running the group’s plan data through our proprietary algorithm, we discovered that the losses were not as high as the insurance company had represented.  The renewal increase was subsequently reduced to $100,000.

How we can help your company?

• We can review your benefit costs, provide a detailed analysis utilizing the proprietary algorithm to accurately determine the profitability of your group plans with the carriers.  Then we'll determine more equitable pricing of these benefits. 

• This analysis helps HR Knowledge negotiate your benefit group plan rates with compelling indisputable data, that the carrier underwriters clearly understand and adopt to ensure more AFFORDABLE pricing on your benefits

We impact 80% of the companies we analyze, yielding substantial savings on benefit plans.  To receive a no obligation quote or “second opinion” on your group benefit plans, contact HR Knowledge at 508-339-1300

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Defined Benefit Pension Plans Are They Still Viable?

Defined Benefit Pension Plans Making a Comeback

 

Remember your father's pension plan?  Before the days of restrictive government regulation, many companies offered one basic variety of pension plans—the defined benefit plan.  With these plans, employers were responsible for pension plan contributions and employees could count on a fixed retirement income.

Enter the 1980s.  Government began to strangle defined benefit plans, while defined contribution plans, such as 401(k)’s, exploded onto the retirement benefits scene.  They were simpler to understand, slightly less expensive to administer and employee driven.  And, unlike with defined benefit plans, the onus on saving for retirement fell on employees' shoulders.  Defined benefit plans were terminated at a record pace.

Now, three factors are renewing interest in defined benefit plans: Less-than-expected retirement benefits, a higher tax rate structure and an increasingly older population.

Recent studies show that Americans, particularly higher income workers and business owners, may face a retirement income shortfall.  Higher taxes on Social Security benefits, more active retirement lifestyles (and resulting expenses) and a lack of savings discipline are a few of the factors that may contribute to this shortfall.

The latter may be exacerbated by defined contribution plans.  When employees lack the discipline to save or the savvy to make their investment choices pay, it is their retirement savings that suffer.  With 401(k) plans, the onus on saving can fall squarely on employees.  Contrast how this differs from defined benefit plans, using the help of a theoretical bucket.

With some defined contributions such as 401(k) plans, employees have individual buckets with their names on them.  Each employee contributes—or doesn't contribute—to his or her bucket and, depending on the performance of the investment, the employee takes from that individual bucket at retirement.

With defined benefit plans, everybody's share comes from the same bucket.  The plan has a built-in discipline and a benefit—typically 60 to 75 percent of the average of an employee's last three years' salary—that are dependable.  This bucket is filled as needed to cover retirement liabilities.  Defined benefit plans are fully paid by the employer.

While defined benefit plans may be attractive to employees who have a hard time saving on their own, they are also more attractive to employers these days.  First, contributions to the plan and administrative expenses are tax-deductible.  Secondly, defined benefit plans offer advantages for older owners and key employees.

Annual contributions to a defined contribution plan are limited by law to $49,000 (2011 limits).  Not so with defined benefit plans—you can pay what is needed for retirement.  For older owners and employees, this element is key because they've had less time to save than younger individuals.  This also is particularly effective for higher paid individuals, who can occupy an effective tax rate tier as high as 50 percent during their working years.  If these people expect a lower tax rate during retirement, today's tax-sheltered savings can equal added retirement dollars tomorrow.

Remember, defined benefit plans aren't for everyone.  Candidates typically are companies with owners at least in their 40s, with a good stable profit history and the capability of meeting plan contributions that can vary from year to year. Additionally, these plans' restrictions and regulations still exist.  Overfunding and termination of these plans present special challenges, but a retirement plan advisor can suggest flexible options in these instances—more flexible than you might think.

And, contrary to popular belief, defined benefit plans are not only for the largest companies.  When business owners need to contribute more to a pension than defined contribution plans allow, or they want another vehicle in which to lessen today's increased tax burden, defined benefit plans are an increasingly attractive alternative.

Bryan Nelson is the President of HR Knowledge’s Financial Services Division.  HR Knowledge has a strategic relationship with David Levine a Registered Representative and Investment Advisor Representative of Equity Services, Inc. Securities and Investment Advisory Services are offered solely by Equity Services, Inc.  Member FINRA/SIPC.

The views and information herein have been prepared independently of the presenting Representative and are for informational purposes only.

 

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Federal Health Care Reform Update

Court challenges to the law: Federal district courts in Virginia and Florida ruled as unconstitutional the individual mandate contained in the health care reform. In their opinion, Congress did not have power under the Constitution to require citizens to purchase health insurance. Both of those cases have been appealed by the Obama administration to the U.S. Courts of Appeals covering those states. It’s anticipated the U.S. Supreme Court may ultimately decide this issue. In the meantime, the administration continues to implement and enforce the law.

Repeal of requirement for employers to provide “free-choice vouchers” to certain employees beginning in 2014: As part of the budget bill for the 2011 budget year, Congress repealed the requirement in the health care reform legislation requiring employers provide “free-choice vouchers” to certain employees beginning in 2014, when the health insurance exchanges are established. This would have required employers who paid any portion of the cost of health insurance for their employees to give “qualified employees” a voucher for the amount the employer would pay. The employee could then use that voucher to purchase health coverage from the exchange. For purposes of this requirement, a qualified employee was one whose required contribution for the employer-sponsored coverage was between 8 and 9.8 percent of the employee’s household income for the tax year. Employers were concerned this requirement would cause healthy employees to leave the employer plan to purchase less expensive coverage through the exchange.

For More Information Contact Us At:  www.hrknowledge.com

 

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Background checks: How far can you go?

Background checks: How far can you go? - Jun. 13, 2011

Issue: Your company is opening a new branch office and getting ready to hire workers. You would like to conduct background checks to get more information on the candidates in order to make informed decisions. What is permitted when checking applicants’ background and work history?

Answer: Employers do not have unlimited rights to investigate applicants’ backgrounds and personal lives. If individuals’ privacy rights are violated, they can take legal action against you. The following list summarizes the types of information that employers often consult as part of a pre-employment check and the laws governing access and use for making hiring decisions.

• Credit reports. Under the Fair Credit Reporting Act(FCRA), employers must obtain an employee's written consent before seeking an employee's credit report. If you decide not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA. Be aware that some states have more stringent rules limiting the use of credit reports.
• Criminal records.To what extent a private employer may consider an applicant's criminal history in making hiring decisions varies from state to state. Because of this variation, you should consult with a lawyer or do further legal research on the laws of your state before probing into whether or not an applicant has a criminal past.
• Lie detector tests. The Employee Polygraph Protection Actprohibits most private employers from using lie detector tests. The law includes a list of exceptions that apply to certain sensitive businesses that provide armored car services, alarm or guard services, or manufacture, distribute, or dispense pharmaceuticals.
• Medical records. Under the Americans with Disabilities Act,employers may inquire only about an applicant's ability to perform specific job duties and cannot request an employee's medical records.
• Bankruptcies. Bankruptcies are a matter of public record and may appear on an individual's credit report. The Federal Bankruptcy Actprohibits employers from discriminating against applicants because they have filed for bankruptcy.
• Military service.Military service records may be released only under limited circumstances, and consent is generally required. The military may, however, disclose name, rank, salary, duty assignments, awards, and duty status without the member's consent.
• School records. Under the Family Educational Rights and Privacy Actand similar state laws, educational records (such as transcripts, recommendations and financial information) are confidential and will not be released by the school without a student's consent.
• Workers' compensation records. Workers' compensation appeals are a matter of public record. Information from a workers' compensation appeal may be used in a hiring decision if the employer can show that the applicant's injury might interfere with his ability perform required duties.

Source: U.S. Small Business Administration; http://www.SBA.gov.

www.hrknowledge.com

508-339-1300 Call Today for More Information!

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

IRS Mileage Rate Increased for July 1, 2011

IRS Increases Standard Mileage Rate for Last Six Months of 2011

The IRS has increased the standard mileage rate to 55.5 cents per mile for business miles driven from July 1, 2011 through December 31, 2011. The standard mileage rate is an optional rate that taxpayers can use to calculate their deduction for the cost of using an automobile for business purposes. The IRS usually sets the standard mileage rate annually but decided to make this special adjustment for the second half of 2011 because of the recent increases in gasoline prices. The rate is 4.5 cents higher than the 51 cent rate that was in effect for the first six months of 2011.

Self-employed people can deduct their business miles using the standard mileage rate or by calculating actual costs. To use the standard mileage rate, you must use that method the first year you use the vehicle in your business, and you can't have claimed accelerated depreciation deductions or have taken any Section 179 deductions for the vehicle.

Injured workers who are receiving workers' compensation benefits from the State of California also use the IRS mileage rate when they request reimbursement for miles driven to and from medical appointments, pharmacies, and the like.

Effective Date: July 01, 2011

For More Information contact HR Knowledge, Inc. at www.hrknowledge.com

or CALL

508-339-1300

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

What Employer Should do if an Employee Advises of a Medical Condition

Question:

What must HR do if an employee advises of a medical condition?

Answer:

Full Question: If an employee advises her supervisor/manager that she has been diagnosed with a medical condition (MS), but has not provided any documentation or advised that she is unable to perform her job, is there anything that HR must do? The supervisor did advise her that she may want to see HR if she has any questions, however, she has not done so. Also, she does not have any personal/vacation time remaining for the year and this condition. Answer: If the employee in question has merely disclosed her medical condition, but has not requested a reasonable accommodation, and if it is not obvious that she needs one, the employer should simply continue to treat her as it would any other employee, and as it would have treated her had she never made known her condition. Unless and until the employee requests a reasonable accommodation, or it becomes clear to the employer that she needs one to perform essential functions of her job, the best thing to do is to just ignore the fact that she has any disability at all. Treating the employee differently (better or worse) can create exposure to a disability discrimination claim and is ill advised. To the extent she subsequently seeks reasonable accommodation or the employer, based on objective evidence (and not rumor or speculation), reasonably believes that she may require one in order to perform essential functions or to prevent a direct threat, at that point the employer can and should explore with the employee what kind of accommodation she needs in order to be able to perform essential job functions, and whether such accommodation can be provided without undue hardship to the employer. The following guidance published by the EEOC may assist you in addressing reasonable accommodation and undue hardship, should it subsequently become an issue (it does not appear that it is now, based on the inquiry): http://www.eeoc.gov/policy/docs/accommodation.html. Also keep in mind that if the employee's performance slips or she engages in misconduct or a policy violation, the employer should not assume that her medical issue caused it, nor must the employer tolerate unsatisfactory performance or conduct merely because the employee has previously disclosed a medical condition. Indeed, while the fact of an employee's disability protects the employee against unfair treatment or discrimination in the workplace, it does not entitle the employee to any treatment that is better or more preferential. For specific guidance in managing performance and conduct of a disabled employee within the confines of the Americans with Disabilities Act, should this become an issue, please see: http://www.eeoc.gov/facts/performance-conduct.html. www.hrknowledge.com Call today for more questions 508-339-1300

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.

Personnel Files Are You Compliant?

EMPLOYER DOCUMENTATION GUIDELINES

Employers receive, generate, and accumulate substantial volumes of documents beginning with hiring documents, including job postings, employment applications, resumes, and reference checks and once a worker is employed, personnel files, wage and hour records, payroll records, and disciplinary files. At the conclusion of employment, there may be separation documents generated as well. Part of being a successful employer is properly generating, drafting, and retaining quality professional records, before, during and after the employment relationship.

Recommended Contents of Personnel Files

A. Employment

• Resume

• Online job inquiries (i.e., through monster.com, etc.)

• Original employment application

• Education verification

• Employment verification

• Other background verification

• Rejection letter, if any

• Employment offer letter, if any

• Employment agency agreement, if hired through an agency

• Employee Handbook acknowledgment form showing receipt of Handbook

• Checklist from new employee orientation showing subjects covered

• Transfer requests

• Relocation records

 

B. Payroll

• W-4 Form

• Weekly time records, i.e. timesheets or timecards

• Individual attendance record

• Pay advance request records

• Garnishment orders and records

 

C. Training and Development

• Training history records

• Training program applications/requests

• Skills questionnaire

• Training evaluation forms

 

D. Wage/Salary Administration

• Job description form

• Payroll authorization form

• Compensation history records

• Notification of wage and or salary increase/decrease

 

E. Employee Relations

• Report of discipline/counseling session

• Commendations

• Employee written warning notices

• Employee progress reports

• Performance appraisal forms

• Performance improvement program records

 CLICK HERE FOR MORE INFO

www.hrknowledge.com

 

HR Knowledge is a provider of integrated HR, payroll and benefits services.  Our offices are located in the Boston, MA metro area and we service companies throughout the United States.