Things To Consider When Hiring a Temporary Worker

Things To Consider When Hiring a Temporary Worker

Business.

Does your business get busier in the fall and are you considering hiring temporary staff to help with the workload?  If so, keep in mind there are some things to consider.

The first is whether they can be a 1099 contractor or if they need to be hired as an employee.  For more information on this, see my blog post here which gives information on how to determine which classification to use based on IRS guidelines.

The second thing to consider are all the costs associated with a regular employee that must be paid for the temporary worker.  What are these expenses? Continue reading “Things To Consider When Hiring a Temporary Worker”

Reasons to Consider Applying for an EIN as a Sole Proprietor

Reasons to Consider Applying for an EIN as a Sole Proprietor

1642247An EIN (Employment Identification Number) is assigned by the IRS for businesses that have registered as any type of entity (corporation, partnership, trust).  It is the number used to identify the business for tax purposes, and to allow the business to open financial accounts with the business name.

As a sole proprietor without any employees, you would never have to register for an EIN.  However, I recommend that you do register for this identification number.  You are probably wondering why I recommend this to you if there is no requirement to do so.  My response is for your protection. Continue reading “Reasons to Consider Applying for an EIN as a Sole Proprietor”

Why It’s Important to Have Worker’s Compensation Insurance

Why It’s Important to Have Worker’s Compensation Insurance

males-1002779_1280Worker’s Compensation is insurance that covers an employee in case of injury on the job.  Employers are often looking for ways to cut costs and consider skipping having worker’s compensation insurance as it is often quite expensive, especially in industries such as construction, trucking, and other industries with a greater risk of injury.  This is not only unwise, it is illegal in most states.  The following rules apply in California:

1.  It’s a Crime:
Failing to have workers’ compensation coverage is a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers.

2. Stop Order:
If the state labor commissioner determines an employer is operating without workers’ compensation coverage, a stop order will be issued. This order prohibits the use of employee labor until coverage is obtained, and failure to observe it is a misdemeanor punishable by imprisonment in the county jail for up to 60 days, or by a fine of up to $10,000, or both. The Division of Labor Standards Enforcement will also assess a penalty of $1,000 per employee on the payroll at the time the stop order is issued and served, up to $100,000 (Labor Code section 3722(a)). Continue reading “Why It’s Important to Have Worker’s Compensation Insurance”

Is Your Worker an Employee or Freelance Contractor?

Is Your Worker an Employee or Freelance Contractor?

office-625893_1280Many businesses have looked at the cost of hiring an employee versus a freelance worker and have decided to classify them as a 1099 worker to save money.  Unless the worker actually qualifies under IRS and state guidelines, I don’t recommend you do this.

The IRS began auditing businesses looking for misclassifications, and the penalties and interest you’ll have to pay will be much higher than any cost savings you will gain by classifying the worker as an outside contractor.

The guidelines the IRS uses when determining if a worker is an employee or contractor fall into three categories: behavioral control, financial control, and relationship of the parties.  Let’s look at these in more detail. Continue reading “Is Your Worker an Employee or Freelance Contractor?”

Protect Your Company Against Résumé & Identity Fraud

Protect Your Company Against Résumé & Identity Fraud

woman-214785_1280In the last post I wrote about finding the right employee for your business. Today, I wanted to share information on resume fraud and how to best avoid it.

The first step is to analyze your hiring practices. Do you depend solely on the interview and reference checks? If so, you may want to consider exploring additional options. Here are a few steps you can take in order to make sure you are hiring the person you believe to be hiring.

The Background Check


When performing a background check, it is important to do so legally in accordance to the U.S. Fair Credit Reporting Act. Make sure your hiring process includes using a licensed consumer reporting agency or employment screening service in order to ensure the candidate’s information is protected and that potential claims are subject to dispute resolution. As specified in the Fair Labor Standards Act (FLSA), employers are not allowed to disqualify a candidate based solely on the information retrieved from a background check. Note that rules concerning background checks vary based on federal, state, local, and job-specific laws.

Employment Eligibility

Once offered employment, an applicant must complete an I9 form in order to verify their identity and eligibility to work in the United States. You can use e-verify to check the documents, but note you must use for all future employees once you check an applicant’s information. The benefit to using this site is that it shows the photo registered to the person’s name helping to avoid the illegal use of someone else’s documentation. Continue reading “Protect Your Company Against Résumé & Identity Fraud”

Workplace Relationships: Finding the Right Employee

Workplace Relationships: Finding the Right Employee

business-1137362_1920If your work life is like mine, you spend a lot of  time in your office (whether home or office building).  Do you have employees (or do you want to hire) to help with the tasks that need to be accomplished?

Workplace relationships impact the productivity of your staff. Are your employees stressed out? Do they set goals to accomplish daily tasks? Are your employees communicating with each other and with you? Are they the right fit? Here are a few things to consider when looking for the right employee.

Staffing

Many employers become short-handed without much (if any) notice and often make a hasty decision to fill the opening with what appears to be a good candidate. But rushing to fill an empty position can end up costing more than taking the time to find the right person. It’s important to strike a balance between your and the candidates’ needs. It can be especially difficult when the interviewee asks how long before they find out if they’ve been selected for the position. You don’t want to feel pressured to make a quick decision, but you don’t want to be unfair to the candidate either.

Continue reading “Workplace Relationships: Finding the Right Employee”

Exempt VS Non-Exempt: What You Need to Know

Exempt VS Non-Exempt: What You Need to Know

Time Money ClockAs discussed in the last two posts, federal overtime rules regulate who must be paid overtime rates and when those rates apply. With few exceptions, to be exempt an employee must be paid at least $23,600 per year ($455 per week), and be paid on a salary basis, and also perform exempt job duties. (The Department of Labor is considering raising this minimum rate to $970 per week and the high salary test to $122,148.)

Employees are usually non-exempt (meaning overtime must be paid) unless they fall into one of these categories:

Salary level: Employees who are paid less than $23,600 per year ($455 per week) are nonexempt, while employees who earn more than $100,000 per year are almost certainly exempt.

Continue reading “Exempt VS Non-Exempt: What You Need to Know”

Verify Worker Eligibility with the I-9 Form

Verify Worker Eligibility with the I-9 Form

Business Man Giving Folder To TeammateWhen hiring a new employee, you are required to have Form I-9 Employment Eligibility Verification completed and maintained in your employment files.  The purpose of the form is to document that each new employee is authorized to work in the United States.

Section 1 needs to be filled out by the employee no later than the actual beginning of employment.  The employer is responsible for making sure it is completed timely.  Employers should note the work authorization expiration date (if applicable).  For employees who list an expiration date, employers are required to re-verify employment authorization before the date shown.

Continue reading “Verify Worker Eligibility with the I-9 Form”

Employee Reimbursements & Advances

Employee Reimbursements & Advances

PaymentMany times employees incur expenses in the course of business that are for the benefit of their employer and are reimbursed for such transactions.  These reimbursements may or may not be considered wages subject to payroll taxes.  A reimbursement or other expense allowance is a system that an employer uses to pay for employee business expenses. Arrangements include per diem and car allowances.  A per diem allowance is a fixed amount of daily reimbursement the employer gives for lodging, meals, and incidental expenses when the employee is away from home on business.  A car allowance is an amount the employer gives for the business use of the employee’s car.

Continue reading “Employee Reimbursements & Advances”