Upcoming Circuit Court Decision to Determine St. Louis City Minimum Wage Increase

April 27, 2017 | Leave a Comment

ladder safety month (5)

On April 26, the Missouri Supreme Court affirmed St. Louis City’s 2015 minimum wage increase, which has been on hold since October 2015 due to a Circuit Court injunction.

The Missouri Supreme Court declined to reconsider its February 2017 ruling, which essentially allows the wage increase to move forward.  This decision leaves only the Circuit Court’s injunction as the last remaining barrier, and the City expects the Circuit Court to lift its injunction within the next week. Once this occurs, the minimum wage increase will take effect immediately.

The increase will raise the minimum wage hourly rate for city employees from $7.70 to $10 immediately and raise it again to $11 effective January 1, 2018.  The tipped employee rate will also increase to $5 per hour and then raise again to $5.50 on January 1.

We recommend that, if you have not yet done so, you prepare for this increase as it will affect all employees conducting work within the St. Louis City limits.

Posted in Benefits, Blog, Human Resources, Legislative Alerts

Distracted Driving Awareness Month

April 21, 2017 | Leave a Comment

Distracted Driving Smartphone

Reports of motor vehicle accidents involving a distracted driver are a daily occurrence. Distracted driving includes any activity that takes our attention away from driving – including multitasking while driving.

Calls, texting, or updating social media are all activities that greatly increase the risk of a crash, and all involve the use of a cell phone.

Both the National Highway Traffic Safety Administration and the National Safety Council believe that the actual number of reported crashes involving cell phones is much higher than what’s being reported.

The reality is that these accidents are preventable.

Driving requires the use of our visual, manual and cognitive resources, and safe driving requires our full attention to these resources.

When we’re engaged in a phone conversation, even hands-free, our brains become highly distracted, switching between visual, manual and cognitive tasks. This leads to “inattentive blindness”, since we fail to see visual clues in our driving environment.

Implement a Distracted Driving Policy

There are two steps to promote safety for your employees and limit their risk of accident while driving:

1. Implement a distracted driving policy at your company

2. Enforce it

An effective policy will apply to any employee operating a company vehicle or using a company-issued cell phone while operating a personal vehicle.

Click here for an example of an effective policy.

For more information, visit the National Safety Council at www.nsc.org, or contact Cornerstone’s Loss Control Consultant Tom Scherrer at toms@cornerstoneinsurancegroup.com.

Posted in Blog, Commercial, Risk management, Safety | Tagged  ,

Explained: Worker Classifications

April 13, 2017 | Leave a Comment

Employee Independent Contractor Classifications

The relationship between an employer and a worker is not always straightforward, but despite the possible discrepancies, it is extremely important to properly classify your workers. Tax implications vary depending on the type of worker, and the penalties for misclassifying a worker can be huge.

Generally, the Internal Revenue Service states you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. However, a business owner is not responsible for any payroll taxes for independent contractors.

Many companies believe that they can choose whether to treat any given worker as an employee or independent contractor, but there are laws that determine whether a worker is an employee or an independent contractor.

Employee or Independent Contractor?

Before determining how to treat payments your company makes for services, you must categorize the business relationship that exists between your company and the person performing the services. The two largest categories of works are: employee or independent contractor.

Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done, even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed, such as when and where to do the work, what tools or equipment to use, where to purchase supplies and services, or what work must be performed by a specified individual.

In contrast, an independent contractor is an individual who performs services for you, but you control only the result of the work, not the means and methods of accomplishing the result.

People such as doctors, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers or auctioneers who are in an independent trade, business or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.

When determining if a worker is an employee or an independent contractor, a key factor to consider is whether the business retains the right to control the worker and the details of how the services are performed, regardless of whether the business actually exercises that right.

Here’s an example:

A plumber agrees to install plumbing in a new warehouse being built. Upon arriving at the warehouse, the plumber is given the building plans showing where the plumbing is to be installed, and advised that the plumbing must be completed within five days. This is direction of what is to be done, rather than how it is to be done and is consistent with independent contractor status.

Here’s another example that points more to an employee:

A plumber works out of the local plumbers’ union office. The warehouse general contractor tells the plumber what plumbing has to be done, gives specific instructions on installation, the tools to use, the type of pipe to use, and the order and sequence in which the plumbing is to be installed. These are specific instructions on how the work is to be performed and are consistent with employee status.

Types of Employees

  • Statutory Employee: If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute (statutory employees) for certain employment tax purposes if they fall within any one of the following four categories and meet the three conditions described under Social Security and Medicare taxes, below.
    • A driver who distributes beverages (other than milk), meat, vegetable, fruit or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.
    • A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.
    • An individual who works at home on materials or goods that you supply and that must be returned to you or to a person of your name, if you also furnish specification for the work to be done.
    • A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, operators of hotels, restaurants or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer’s business operation. The work performed for you must be the salesperson’s principal business activity.
  • Social Security and Medicare taxes: Withhold Social Security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply:
    • The service contract states or implies that substantially all the services are to be performed personally by them.
    • They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities).
    • The services are performed on a continuing basis for the same payer.
  • Statutory Non-employee: There are generally two categories of statutory nonemployees: direct sellers and licensed real estate agents. They are treated as self-employed for all federal tax purposes, including income and employment taxes, if:
    • Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked; and
    • Their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes.
    • Part-time Workers: Businesses often need to hire workers on a seasonal or part-time basis. Whether you are getting paid or paying someone else, questions often arise over the tax treatment of payments for part-time and seasonal help. Part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees.

If you have misclassified workers,

In certain circumstances, the IRS can relieve businesses of certain tax liabilities resulting from worker misclassification, but the business must meet specific requirements under the law.

The business must meet the following three requirements to receive relief:

  • Reporting consistency: the business must treat all workers in a similar position the same.
  • Substantive consistency: the business must file all required federal tax returns on a consistent basis.
  • Reasonable basis: The business must also have a reasonable basis for not treating the workers as employees.

Because not every worker can be easily classified in one category, it is important to take the entire working relationship into account. Consider the extent of the right to direct and control the services of the worker. And after you’ve classified the worker, document each of the factors used to determine how you came to your classification decision. Remember, the financial impact of misclassifying a worker can be substantial.

If you are unsure of the status of your workers or your responsibilities as an employer, call Cornerstone’s Director of TotalHR Bethany Holliday, PHR, SHRM-CP, for more information.

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Posted in Blog, Human Resources

3 Ways to Seal the Deal With a Promising Candidate

April 06, 2017 | Leave a Comment

Avoid Rejected Job Offers

Rejected job offers happen. They’re almost inevitable in today’s competitive talent market.

However, if your team takes a closer look to analyze why your company is being rejected, you can implement best practices and minimize the risk of candidates joining another organization.

One of the key factors in preventing a job offer rejection is to determine why they are turned down in the first place.

Why are offers rejected?

According to a Careerbuilder survey of 400 professionals in the staffing industry, candidates decline a job offer most frequently because:

  • Candidate received another offer (39 percent).
  • Compensation and benefits are not in line with the candidate’s expectations (29 percent).
  • Candidate received a counteroffer from current company (10 percent).

A rejected offer for a key position could cost thousands of dollars in wasted time and expenses. To determine why your offers are being frequently rejected, consider the following best practices:

  • Ask new hires why they accepted.

On their first day on the job, ask new employees what elements of the offer were most compelling in their decision or almost caused them to reject the offer. Use their feedback to improve future offers.

  • Talk to applicants and new hires about your recruitment process.

The hiring process is the only aspect of a company that an applicant is exposed to prior to onboarding, so ensure you have a full understanding of her perception of the process and make adjustments when needed.

  • Take a critical look at your job offer letter.

Does the offer letter effectively describe the job and your company? Be sure to include all perks, benefits, differentiators, and incentives.

  • Send out post-reject surveys to applicants who declined a job offer.

Send out a survey to applicants who surprised you by declining your offer. Most candidates will initially mention salary as the reason for turning down your organization –but this may not be the case. Give it three to six months before reaching out. You should receive more truthful answers after a few months have passed.

Seal the Deal

Most applicants are concerned with open communication, growth and learning opportunities, flexibility, control of what they work on, control of who they work with, and when their work must take place.

While there are many variables that factor into an applicant’s decision to accept or reject an offer, there are also steps employers can take to ensure a candidate will accept an offer once it is presented:

  • Include the team in the interview

It makes sense for the direct supervisor to be one of the people interviewing a candidate. It gives both the manager and the candidate an opportunity to evaluate the potential relationship. Be sure to tell applicants what to expect in terms of the company culture and their role in a specific team or department.

  • Communicate frequently

Be timely when communicating with candidates. Even a quick email check-in with a potential employee will show professionalism, enthusiasm, and transparency in the hiring process and reflect well on your company. Lack of follow-up could show disinterest and cause a great candidate to move on.

  • Ask questions about the candidate’s wants and needs

Always assume the candidate has other offers on the table. The best way to ensure they weigh the offers in your favor is to be direct.

Throughout the interview process, ask questions that will uncover the individual’s wants and needs. Consider asking candidates to describe their dream jobs, in terms of location, culture, work environment, and communication styles. When you’ve made an offer, ask if there is anything your organization needs to change to ensure you’re the candidate’s first choice.

Though these suggestions are not fool-proof, they will help you limit the number of job offer rejections that come through your door. By gathering information and evaluating your current processes, you can improve your recruiting success and avoid rejected job offers.

Posted in Blog, Human Resources | Tagged  , , , ,