2. Top 10 Finds in FGP HR Assessments
1. Employee Vs. Contractor
2. Fair Labor Standards Act (FLSA)
3. At-Will Doctrine
4. I-9/E-Verify
5. Terms of Employment
6. Personnel Files
7. Anti-Harassment
8. Employment/Recruiting
9. Terminations
10. Handbooks
3. 1. Employee Vs. Contractor
Behavioral: Does the company control or have the right to control what
the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the
payer? (these include things like how worker is paid, whether expenses
are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type
benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the
relationship continue and is the work performed a key aspect of the
business?
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-
Contractor-Self-Employed-or-Employee
4. 1. Employee Vs. Contractor
1. Work Instructions
2. Training
3. Integration of
Services
4. Services Rendered
Personally
5. Hiring Assistants
6. Continuing
Relationship
7. Set Hours of Work
8. Full Time Required
9. Work Done on
Premises
10. Order or Sequence Set
5. 1. Employee Vs. Contractor
11. Reports
12. Payment Method
13. Expenses
14. Tools and Materials
15. Investment
16. Profit or Loss
17. Work for Multiple People
18. Services Available to
Public
19. Right to Fire
20. Right to Quit
6. 1. Employee Vs. Contractor
• Workers who believe they have been
improperly classified as independent
contractors by an employer can use Form
8919
• The
Voluntary Classification Settlement Program (VCSP)
is a new optional program that provides
taxpayers with an opportunity to reclassify
their workers as employees
7. 2. FLSA - Fair Labor Standards Act
• Minimum Wage – $7.25 per hour effective July 24, 2009
• Child Labor – be aware of different laws for different ages
• Exempt vs. Non-Exempt – determined by responsibilities,
not titles
• Overtime
• Record Keeping Requirements – requirements in
personnel file (demographics, workweek, hours worked each day
and each week, deductions, regular wages, overtime wages, time
and day of week workweek begins, etc.)
• Very Costly
http://www.dol.gov/elaws/esa/flsa/scope/screen9.asp
8. 2. FLSA - Fair Labor Standards Act – Exempt vs. Non-Exempt
• Exempt employees are NOT eligible for overtime payment for hours worked
over 40/week.
• Non-Exempt employees ARE eligible for overtime payment for hours worked
over 40/week.
• To qualify for exempt status, employees generally must meet certain tests
regarding their job duties and be paid on a salary basis but not less than $455
per week.
• Executive Exemption
• Administrative Exemption
• Professional Exemption
• Computer Exemption
• Outside Sales Exemption
• Highly Compensated Employees
• Job duties determine exempt status, not job titles.
9. 2. FLSA - Fair Labor Standards Act
Administrative Exemption
•The employee must be compensated on a salary or fee
basis (as defined in the regulations) at a rate not less than
$455 per week:
•The employee’s primary duty must be the performance of
office or non-manual work directly related to the
management or general business operations of the
employer or the employer’s customers; and
•The employee’s primary duty includes the exercise of
discretion and independent judgment with respect to
matters of significance.
10. 2. FLSA - Fair Labor Standards Act
Administrative Exemption – “Independent Judgment”
•whether the employee has authority to formulate, affect, interpret, or
implement management policies or operating practices
•whether the employee carries out major assignments in conducting
the operations of the business
•whether the employee performs work that affects business
operations to a substantial degree
•whether the employee has authority to commit the employer in
matters that have significant financial impact
•whether the employee has authority to waive or deviate from
established policies and procedures without prior approval, and
other factors set forth in the regulation.
11. 2. FLSA - Fair Labor Standards Act
Unpaid Internships DOL has 6 standards
1. Internship is similar training to that provided in an
educational setting
2. The internship experience is for the benefit of the intern
not the company
3. The intern does not replace existing workers
4. Employer does not gain any immediate advantage from
the intern and at times may even be impeded
5. Intern is not necessarily entitled to a job at the end of the
assignment
6.Both parties understand that there are no wages
12. 3. At-Will Doctrine
• Most states view employment as “at-will” – no fixed
period of time and either party free to terminate at
any time with or without reason
• Probationary period?
• Can be altered by a contract of employment
• Does not allow employers free reign on how people
are treated
• All employment decisions must remain legal,
defensible and in good faith
13. 4. Form I-9
• New form effective March 2013 and expires March 2016
• Employee completes within 1 day of hire, Employer
complete within 3 days of hire
• No documentation by Day 3 = No employment
• Documentation – Copies or no copies, consistency
• Employer cannot prescribe documents to bring
• Filled out correctly
• Filed separately
• Prepared for an audit?
http://www.uscis.gov/sites/default/files/files/form/i-9.pdf
14. 4. Form I-9
• Sample language for an offer letter:
Under the Immigration Reform and Control Act (IRCA), our
company is required to verify the identity and work
authorization of all employees. Therefore, you will be required
to complete the I-9 form and supply acceptable forms of
supporting documentation by your first day of employment.
• Document Retention Rules – 1 year from termination
date or 3 years from hire date (after a term), whichever is later
15. 4. E-Verify
• All SC employers are required to participate
• Complete employee verification within 3 days of hire
• 4 posters requirement – 2 English/2 Spanish
• E-Verify Confirmations filed with I-9 or Case File
written on I-9 form
• Prepared for an audit?
http://www.uscis.gov/e-verify/publications/participation-posters/e-verify-participation-
posters
http://www.uscis.gov/e-verify
16. 5. Terms of Employment
• All SC employers are required to provide to new hire
on Day 1 of employment
• Offer letter with at-will disclaimer, contingencies, and
required terms of employment info
• Employee receives original, signed copy to HR File
• Indicates employee’s terms – pay rate, pay date, exemption
status, title, manager, shift, hours of work, work week, benefits, deductions,
• Changes to terms should be provided to employee 7
days prior to effective change- have employee sign
17. 6. Personnel Files
• Each employee should have 3 files – at a minimum
• File #1 – Personnel – demographics, evaluations, pay
changes, terms of employment, confidentiality agreements,
training documents, job descriptions, resume, background
check release, W-4, handbook receipts, orientation checklists
• File #2 – Confidential – benefits, insurance, wage
garnishments, enrollments/waivers, releases/authorizations,
results, doctor’s notes, management notes, workers
compensation, legal documents, background check results, exit
interviews etc.
• File #3 – I-9, E-Verify
18. 7. Anti-Harassment
• Policy
– Definition
– Complaint procedure
– Non-retaliation
– Timely and thorough investigation
• Training
– Inform all employees
– Morale
– Protects the company
– Protects Managers
Spirit of the law vs. letter of the law
19. 8. Employment/Recruiting
• Job Descriptions
• Testing – valid, reliable, consistent
• Drug Testing, Background, Credit Checks –
appropriate releases being utilized, when administered, where
are results maintained, consistent for position
• Interview Process
– Consistently applied
– Applications vs. Resumes
– Interview notes and retention
• Interviewers
– Trained
– Legally compliant questions
20. 8. Employment/Recruiting
Avoid questions regarding the following:
• National origin
• Religious or political beliefs
• Convictions
• Marital/Family status
• Age
• Race
• Gender
• Genetic information
• Disabilities
21. 8. Employment/Recruiting
INTERVIEWING PITFALLS – Biases based on:
Affinity (alumni)
Stereotypes (single parents…)
Nepotism (chip off the old block)
Ethnicity (why no eye contact?)
Gender (she won’t want to travel)
Dress (seems like a corporate type)
Body Type (obesity)
Habits (smoker)
Avoid cloning, create a good mix of skills, talents and
backgrounds to ensure a diverse talent pool.
22. 9. Exit Process
• Ensure consistency
• Termination letter
• Ensure solid documentation in place
• Have decisions reviewed by third party to ensure
minimal bias and cool heads prevail
• Prepare separation packet, ensure term checklist is
completed
• Have witness or third party present
• Remain respectful
23. 10. Handbook
• Review and update every 2 years
• Legal review
• Ensure equitable treatment among employees –
perception of inequity creates issues
• EEO (GINA language)
• At-will disclaimer
• Only include policies you enforce
• Train
