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Aug29

1099 Contractor

Is it the 1099 contractors responsibility to provide for his own workman’s compensation insurance? Or is it the responsibility of the company which pays him to cover him with workers compensation? In case of an accident who is responsible?

Independent contractors are generally not eligible for worker’s compensation coverage. It is the responsibility of the independent contractor to obtain his own liability insurance. In fact, many companies require their independent contractors to show proof of such insurance prior to any work being completed.

Unfortunately, it’s impossible to say for certain that the independent contractor would be solely responsible for any accident that occurs while he is performing services for a company/client. Liability would generally fall on the independent contractor; however, there are many circumstances that may warrant the company/client being held liable as well.

It’s worth mentioning that many independent contractors are misclassified as such. A worker’s title is irrelevant in determining his classification. Services controlled by the employer, work equipment provided by the employer, and compensation determined by the employer are all indicative of an employer-employee relationship. However, an individual who is self-employed, sets the parameters for the work being performed and provides his own equipment is usually an independent contractor.

August 29th, 2015, 8:58 PM |  Posted in: Labor Laws, Workplace Health & Safety |
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Aug29

PTO Laws for LA

My work was a traditional vacation time, sick time policy. It is thinking about converting to PTO. Are there any current laws regarding PTO? I was reading the blog wherein it stated that you can allot vacation time and sick time within the same PTO time. If someone is terminated, the employer only has to payout the vacation portion of the PTO, correct? Also, is it legal in Louisiana to have a use it or lose it PTO policy? Thank you for your reply.

Paid time off (PTO) policies can include vacation, sick and personal time off allotted to employees as one “bank” of time. There is case law in Louisiana that provides guidance on permissible PTO/vacation time policies.

Accrued but unused vacation time is considered earned wages in Louisiana; thus, it’s owed to employees upon separation from employment even if there is no company policy on the matter. There are mixed court rulings on whether or not employers can impose restrictions on the payout of vacation time upon separation. For example, it’s common to require employees to provide 2 weeks resignation notice or the employee forfeits the vacation payout. Since the courts have conflicting resolutions on this matter, it’s advisable not to implement any restrictions. Furthermore, employers cannot refuse to payout vacation time upon separation simply because an employee was terminated.

Usually the above regulations apply only to vacation time; however, depending upon the language used in the company policy any PTO may be included. A Louisiana court determined PTO is considered earned wages when such PTO is on an accrual basis; thus, meeting the definition of “vacation time” under the law and required to be paid out upon separation of employment.

Use-it-or-lose-it policies are permitted in Louisiana, as are accrual caps. HTH.

August 29th, 2015, 8:41 PM |  Posted in: Benefits |
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Aug29

Deductions from Salaried Employee’s Vacation Time

If a salaried employee is 10 minutes late to work can the employer deduct 10 minutes from their vacation time to compensate for the 10 minutes? Or is his salary paid for the normal 40 hours? We are talking about a salaried doctor.

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are either non-exempt or exempt. Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Conversely, exempt employees receive a fixed predetermined salary and are excluded from overtime pay provisions.

A salaried employee is often an exempt employee. However, it’s important to point out that salary and hourly paid are compensation terms. Though uncommon, it’s possible for a non-exempt employee to receive a salary.
Since Doctors are often exempt let’s assume you’re referring to an exempt employee as defined under the FLSA.

An exempt employee must receive his fixed predetermined salary for any workweek during which work is performed regardless of the quantity or quality of the work performed.

Since vacation time is not required by federal law, employers are generally free to adopt vacation policies of their choosing. Keep in mind, some states have adopted regulations regarding vacation time; thus, it’s important to know if your state has applicable legislation.

Absent state law or an employment contract stating otherwise, an employer can require an exempt employee to use vacation time in any increment as long as the employee receives in payment an amount equal to their guaranteed salary.

Though deducting from an exempt employee’s vacation accruals for only 10 minutes may be permissible, it’s not advisable. Consistent deductions from an exempt employee’s vacation accruals for such small increments could present a pattern that one could argue violates the salary basis test under the FLSA. Thus, doing so may jeopardize the employee’s exempt status and place the employer at risk for penalties.

It would be interesting to know the reasoning behind deducting the 10 minutes of vacation accruals. Is it to “punish” the employee for being late? If so, remember exempt employees are considered professionals and must be treated as such. The administrative burden and risk for violations associated with these deductions must be considered while contemplating more efficient, less risky alternatives to solve the real problem.

August 29th, 2015, 7:27 PM |  Posted in: Benefits, Compensation, Labor Laws |
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Aug29

Fixed pay for flexible hours

We have some team members that are unhappy with current compensation policies that provide fixed pay for flexible hours. The business is seasonal, and has high fluctuations in business. Peak season can easily warrant 65 hours/week and the slow season is closer to 40 hours/week. Any support of this policy? We are on the verge of a compensation analysis and may be changing this policy, what is a better option?

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Any company/organization with annual dollar volume of sales or receipts of $500,000 or more is considered a covered enterprise under the FLSA.

Under the FLSA, employees are either non-exempt or exempt. Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Conversely, exempt employees receive a fixed predetermined salary and are excluded from overtime pay provisions.

It’s assumed that the employees in question are exempt; thus, being paid a fixed salary each workweek regardless of the quantity or quality of work performed. If I understand correctly, the employees receive a fixed salary and, depending upon business demands, employees can work between 40 and 65 hours per week. This scenario is very common and exempt employees, as professionals, are expected to work more hours as needed without additional compensation.

Some employers simply demand exempt employees to work the number of hours needed to accomplish their assignments; whereas, others may opt to provide additional compensation to exempt employees as a show of appreciation for work performed above and beyond their normal responsibilities or during periods of high business demands. Such additional compensation is often offered to retain good talent and encourage productivity amongst employees.

The additional compensation may be paid on any basis i.e. flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis. As long as the additional compensation is occasional and the employee otherwise meets the criteria for exempt status, the status will not be jeopardized.

Though additional compensation can be paid at an hourly rate, it’s often advised not to do so in an effort to limit the risk of a FLSA violation. Thus, it’s more common to pay an exempt employee a flat sum or bonus payment to reward them for their additional work.

Whether additional compensation is right for you really depends on if you can afford it. A competitive compensation package attracts and retains good talent. The better package you can provide the more competitive advantage you’ll have. So, if you can afford additional compensation and you feel your employees would appreciate the extra “thank you”, go for it. If not, consider other benefits that you can provide employees during busy seasons. Maybe extra paid time off during the off-season or free meals during busy days. You may consider taking a survey of affected employees to determine what benefits besides additional compensation would interest them. Even small gestures can let employees know they’re valued members of the team.

I hope this answers your question but if I misunderstood or further clarification is needed please feel free to post additional information in the comments section.

August 29th, 2015, 7:00 PM |  Posted in: Benefits, Compensation, Labor Laws |
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Aug29

Employee Privacy Rights: Surveillance Video

I work for a company in Wisconsin. An employee was suspected of theft, so a video surveillance camera was placed in the common work area – unbeknownst to the employee. The employee was seen on video surviellance stealing and we are in the process of investigating the situation further with the employee. We are now questioning whether or not it was appropriate to set up video surveillance without informing employee(s) that this was happening. Is this okay, or should we be cautious using this as part of evidence?

Employers can legally monitor employees in their workplaces as long as the reason for doing so is legitimate and business related. Monitoring can mean just about type of surveillance including video cameras, reading emails, listening to phone calls, and even GPS tracking on company vehicles.

The reason for employee surveillance must clearly be a business necessity. For example, video monitoring in bathrooms, locker rooms, and even break rooms is generally not permitted; whereas, such surveillance in parking garages to ensure employee safety or in workplaces to deter theft or observe employee productivity is acceptable.

There is no federal law that prohibits employers from video monitoring employees without their knowledge. However, some states have adopted such laws to protect employee privacy, most notably Connecticut. It’s important to know if any applicable state legislation exists. Feel free to comment on this question with the state listed and we can do the research for you.

It’s important to mention that employers are not permitted to monitor employees engaged in protected concerted activity set forth under the National Labor Relations Act (NLRA). Protected concerted activity includes, but is not limited to, union negotiations, union organization, or employees engaged in onsite union activities such as marches.

Based on the information provided, it appears you’re use of video monitoring to capture theft activity in the workplace is acceptable (of course, assuming there are no collective bargaining agreements or state legislation prohibiting such activity).

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