Employees Archives - People Processes

How to Resolve Employee Conflict Like a Pro?

Discover effective strategies to help employees who don’t get along, turning conflicts into catalysts for innovation and productivity. Join Rhamy as he outlines key points from early intervention to leveraging strengths and weaknesses, providing actionable insights for HR pros and team leaders.

Does the Trump Executive Order Mean I Can Stop Withholding Employee Tax Payments?

Today’s episode explains President Trump’s recent executive order to extend pandemic unemployment benefits, student loan payment deferrals, eviction protections, and payroll tax cuts in the wake of COVID-19. One of the new benefits allows for $400 per week into December, compared to the previous unemployment insurance of $600. President Trump explained that states will be covering 25% or $100 per week per individual. Another of the memorandums issued addresses student loan payment deferrals. Payments on federal loans were suspended through September, and Trump’s memorandum seeks to extend payments through the end of 2020. Lastly, Trump issued a memorandum deferring payroll tax obligations through 2020, advising the Treasury Department to allow employers to defer payments for the employee portions of specific payroll taxes. Generally, federal funding is controlled by Congress, leading to potential challenges for these executive actions. With regard to the payroll tax deferral, the Secretary of the Treasury is directed to use his authority to defer the withholding, deposit, and payment of the 6.2 percent Social Security tax on certain wages or compensation paid between September 1, 2020, and December 31, 2020. This withholding deferral only applies to employees with wages or compensation payable during a bi-weekly pay period that generally is less than $4,000, calculated on a pre-tax basis. The amounts deferred are to be without penalties, interest, or additions to the tax. Given that a comprehensive stimulus bill may be passed that will obviate the need for the Executive Order, the anticipated Treasury guidance, and the September 1 effective date, we do not recommend that employers take immediate action to implement the deferral, although they will need to review any implementing guidance issued by the Secretary of the Treasury and to evaluate the risks in implementing the deferral of the employee portion of the Social Security tax, which ultimately may need to be withheld from future employee wages or compensation. If you have questions or need assistance, please reach out to the People Processes Team with whom you regularly work. We will continue to review all relevant guidance and legislation and will provide updates as appropriate.

How Do You Determine Whether an Employee Qualifies for Exemption?

Today’s episode summarizes all we have discussed regarding the FLSA exemption and provides an assessment that we recommend you perform with every single one of your employees.

Even if the information you write down is not entirely accurate, simply having this information on paper for each of your employees makes a huge difference whenever a situation calls for you to recall these critical factors.

On each evaluation sheet, provide the following information:

Name
Job category/ID
Name and title of the evaluator
Company name and tax ID
Direct supervisor’s name (if applicable)
Date of evaluation

There are eight categories under which employees can qualify as exempt:

Administrative exemption
Learned professional exemption
Creative professional exemption
Computer employee exemption
Outside sales exemption
Highly-compensated employee exemption
Business owner exemption
Executive exemption

On your evaluation sheet, respond “yes” or “no” to each of the listed statements. A response of “yes” to every statement supports a determination of exempt status for that category; a response of “no” to one or more statements supports a determination of nonexempt status. Employees may fall under more than one of these categories.

Should the employee be determined to be exempt, select all of the categories they fall under, out of the eight. Otherwise, note down that the employee does not qualify for an exemption.

How Can You Tell Whether a Worker is an Employee or an Independent Contractor?

In Part 2 of this six-part series, we go into further discussion on employee classification with regards to independent contractors vs employees. We will start by covering the other two other tests which the NLRA uses to determine the employer-worker relationship: The Fair Labor Standards Act (FLSA) Economic Realities Test and the Discrimination Statutes Test. The FLSA Economic Realities Test may apply only to workers designated as employees, not independent contractors. Thus, the proper classification of workers is critical to determine the application of these laws. The employer-employee relationship under the FLSA is tested by economic reality rather than technical concepts. The test examines factors focused on the total activity or situation of the relationship.

An employee is one who is dependent upon the business to which the individual renders service
The amount of workers’ investment in facility and equipment
The nature of degree and control by the principal
The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor
The degree of independent business, organization, and operation

There are certain factors which are immaterial according to the FLSA:

The place where the work is performed
The absence of a formal employment agreement
Whether the alleged independent contractor is licensed

Additionally, the Supreme Court has held that the time or mode of pay does not control the determination of employee status. The Equal Employment Opportunity Commission (EEOC) Discrimination Statues Test is the most stringent of the three tests. It is often used in discrimination cases. The question of whether an employer-employee relationship exists is fact-specific and depends on whether the employer controls the means and manner of the worker’s performance. The factors indicating that a worker is in an employment relationship include:

The employer has the right to control when, where, and how the worker performs the job.
The worker does not require a high level of skill and expertise.
The employer furnishes the tools, materials, and equipment.
The work is performed on the employer’s premises.
There is a continuing relationship between the worker and the employer.
The employer has the right to assign additional projects to the worker.
The employer sets the hours of work and the duration of the job.
The worker is paid by the hour, week, or month rather than the agreed cost of performing a particular job.
The worker does not hire or pay assistants.
The work performed by the worker is part of the regular business of the employer.
The worker is not engaged in a personally owned distinct occupation or business.
The employer provides the worker with benefits such as insurance, leave, or workers’ compensation.
The worker is considered an employee of the employer for tax purposes.
The employer can discharge the worker.
The worker and the employer believe that they are creating an employer-employee relationship.

This list is not exhaustive. Other factors may affect the determination of whether or not the employer-employee relationship exists. To be considered an employee, not all or even a majority of the items on the list need to be met. Rather, the determination must be based on all the circumstances in the relationship between the parties, regardless of whether the parties refer to it as an employee or an independent contractor relationship. In Part 3, we will go into salary vs hourly choices.

How to Resolve Employee Conflict Like a Pro?

Does the Trump Executive Order Mean I Can Stop Withholding Employee Tax Payments?

How Do You Determine Whether an Employee Qualifies for Exemption?

How Can You Tell Whether a Worker is an Employee or an Independent Contractor?

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