While many companies still think of the term “employment relationship” as defined by strictly traditional roles and classifications, emerging technologies and federal regulations have created a new economic and business model. This “sharing economy” where software connectivity is used to bridge and share resources has blurred the lines so that it is no longer a simple matter for an employer to categorize workforce staff as either employees or independent contractors.
Ride share operators Uber and Lyft were both hit with class action lawsuits on behalf of their drivers who contend that their employment relationship extends beyond that of a traditional independent contractor, and that they are in fact employees who are entitled to reimbursement for expenses and other benefits.
Uber has consistently represented itself as a “technology company,” not a transportation company, and considers its software merely a “lead generation platform” that connects passengers with drivers. The driver’s contract with Uber specifically states that the driver will "expressly agree that this Agreement is not an employment agreement or employment relationship."
From a traditional point of view, this lawsuit should never make it to court. Yet in a move that surprised traditional corporations and emerging startups alike, the United States District Court for the Northern District of California denied both Uber and Lyft’s motions to dismiss the suit. The order clearly validates the Plaintiffs claims, and clears the path for the lawsuit to be heard before the court.
Upon examining the Order (Case No. 13-cv-03826-EMC and 13-cv-04065-VC) it is apparent that merely having a hiree sign a document stating that they are an independent contractor does not technically classify them as such. The court considers many factors when determining the employment relationship status:
- Whether the one performing services is engaged in a distinct occupation or business;
- The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
- The skill required in the particular occupation;
- Whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
- The length of time for which the services are to be performed;
- The method of payment, whether by the time or by the job;
- Whether or not the work is a part of the regular business of the principal; and
- Whether or not the parties believe they are creating the relationship of employer-employee.
While much of this falls under “California’s Test Of Employment” and subsequent regulations, "the test the California courts have developed over the 20th century for classifying workers isn’t very helpful in addressing this 21st century problem,” Judge Chhabria stated in his order dismissing the Lyft motion. The outcome of these lawsuits will set a major precedent and likely set in place new definitions that further refine how employees and contractors are defined, and what benefits they are entitled to.
REFERENCES O-Conner v. Uber Technologies, Inc. - Court Order 13-cv-03826-EMC http://www.cand.uscourts.gov/filelibrary/1576/Order%20Denying%20Defendants%20Motion%20for%20Summary%20Judgment--Doc%20251--3.11.2015.pdf
Cotter v. Lyft, Inc – Court Order 13-cv-04065-VC http://www.cand.uscourts.gov/filelibrary/1575/Order%20Denying%20Motions%20for%20Summary%20Judgment%203.11.2015.pdf
Organizations face many challenges when it comes to effectively and efficiently operating their business including mitigating potential costly risks. One risk that resides at the top of the list, is claims of illegal termination due to undocumented performance-based terminations. This risk is increased if the terminations are the result of a reduction in the workforce as the result can inadvertently create a disparate impact on a protected class of individuals.
It is important to remember that employees terminated for poor performance without the presence of documented discussions regarding their performance issues are liable to seek legal advice. There are many law firms that are ready and willing to represent employees under these circumstances as they know it will be a challenge for the employer to defend a claim of illegal termination due to their lack of appropriate documentation of the poor performance. The common outcome of this circumstance is an out of court settlement of an average of $40,000.00. If the claim ends up in a lawsuit being filed, it can cost the employer a much higher amount.
In addition to the potential monetary costs, there are other risks including the negative impact on employee morale and irreparable damage to the organization’s reputation. Anytime an organization terminates an employee it has an impact on the remaining workforce. This is especially true in small organizations where employees feel that they are part of a family. They have an expectation that they will be treated fairly. This includes an opportunity to correct deficiencies prior to losing their job. When terminations are conducted without evidence that the employee was informed of the performance issue it can result in the remaining employees losing trust in their supervisor, as well as the organization.
The good news is, reducing the risk is possible by implementing a policy that requires supervisors to address performance issues early and often providing the employees with the opportunity to improve. This practice will demonstrate the employer took reasonable efforts to help the employee improve and provide the organization with documentation to substantiate their termination actions.
In today's competitive business environment, your employees represent one of your organization's most valuable assets. Which means your company's productivity—and ultimately, its profitability—depend on making sure every person in your organization is working up to his or her full potential.
Do you conduct regular performance reviews with your employees? Do you monitor and discuss poor performance with your employees? If you have any questions about performance reviews, or need help getting started don’t hesitate to reach out to our HR professionals. We can help!
What is COBRA? COBRA stands for Consolidated Omnibus Budget Reconciliation Act of 1985. In short, it is a federal law that ensures that employees can maintain Healthcare coverage that they might otherwise lose after something like resigning from a job or filing for unemployment.
COBRA guarantees employees the right to keep their group health care coverage for up to 18 months after leaving their job. Unless they were fired for “gross misconduct,” it generally covers any employees who were terminated.
While employees are guaranteed the option of continuing on with their previous health care coverage, they have to pay for it themselves. The employer does not have to subsidize any of the payments, so employees should understand that the cost can be expensive.
In order to secure COBRA coverage, employees should contact their HR department and HR is required to take the necessary steps to offer COBRA coverage. If an employer elects to take COBRA coverage, the payments will be made through either your company or through their healthcare provider.
Your HR Shield Advisor can offer assistance in setting up insurance plans and managing COBRA coverage. Contact us today for more information.
What is HIPAA?
You may have heard the term “HIPAA Compliant” but aren’t really sure what HIPAA is or what exactly that term means.
HIPAA is the Health Insurance Portability and Accountability Act of 1996, which is about health insurance and the importance of privacy when it comes to medical information online. Privacy laws tend to make businesses anxious because it creates anxiety about the dangers of non-compliance. But HIPAA just exists to make personal medical information more private and inaccessible online, which is ultimately a good thing.
So who has to comply with HIPAA standards? The Privacy Rule applies to anyone who is involved with these medical records to have certain administrative, physical and technical safeguards in place that meet the standards of the U.S. Department of Health and Human Services. If you work in the health care industry, you most likely need to adhere to HIPAA standards, particularly if you store health information or medical records online.
Basically, what this means is that your company has to be able to prove that this information is secure in a variety of ways, including:
• Workstations and servers having up-to-date antivirus software • Encrypted emailing • Screen lock password for phones and tablets that access sensitive email accounts • Complete migration from Windows XP • ..and other security measures.
If you have any questions about meeting these compliances, don’t hesitate to reach out to our HR professionals. We can help you implement changes to ensure that your business stays HIPAA compliant.
If you own a small business, you’re already aware of how the Affordable Care Act has changed the healthcare landscape in America. But what exactly do you need to know about what you need to tell your employees about Affordable Care?
If you or your employees choose to forego insurance, you might have to pay a penalty tax to the IRS. In 2014, the penalty was $95 per adult and $47.50 per child but in 2015 it will be raised to $325 per adult and $162.50 per child.
Enrollment in the Affordable Care Act lasts from November 15, 2014 to February 15, 2015. You must enroll by December 15, 2014 if you would like your coverage to start on January 1, 2015. If you don’t sign up for a health plan by February 15, 2015, you will not be able to qualify for enrollment unless you meet the restrictions, such as having moved out of state recently or having a qualifying life event such as having a child or losing a job.
You can preview the available plans and rates before you apply to get better acquainted with what your options will be or contact your HR Advisor at HR Shield to see what your best options are.
It’s important to keep your employees advised of changes to their healthcare plans and options. If you need assistance with managing your healthcare plans and other HR needs, do not hesitate to contact your HR Professional today!
HSA Enrollment is Increasing An HSA is a Health Savings Account, and more and more people are signing up for them as of late. Before now, many people weren’t signing up for HSAs because they can be confusing on top of already confusing insurance policies, but HSA enrollment has been increasing because they are a great way to get tax savings on medical expenses.
HSAs are savings accounts that cover your medical expenses. You can contribute to them throughout the year in order to have excess money to cover any planned or unforeseen medical bills. You can deduct HSA expenses from your taxes or else employer’s take contributions directly from employee’s paychecks.
For example, if you contribute $3,000/year to and HSA and have fairly average tax rates in your state, you could save up to $750 per year on your taxes. You can also earn interest on the money you put into an HSA and you can take it with you when you change jobs so you never have to worry about losing money. Employers can also make contributions on their employees’ behalf.
However, in order to contribute to an HSA, you have to be on a specific type of insurance plan which involves a High Deductible. This is usually at least $1,200 for individuals and $2,400 for families. This scares people away sometimes, but the good news is that with an HSA the money continues to earn interest and act as a savings account which you can have set aside for medical expenses when you’re older.
If you have any questions about setting up insurance plans for your employees, contact one of our HR agents. We have years of experience with HR needs such as this and can help your company deal with HSAs and other insurance-related issues.
Small businesses should never have to settle for anything but the best when it comes to recruiting new hires. But competition can be tough and on top of that; it’s not always easy to know exactly where to find the best talent. Here are some sites that can help you navigate the recruiting landscape and come out on top.
LinkedIn LinkedIn is quickly becoming one of the top hiring sites. It connects over 330 million professionals and allows you to easily search through jobs, post jobs and check out the backgrounds of prospective hires.
Simply Hired Simply Hired is one of the world’s largest search engines for jobs and is a great place for employers to post openings and conduct performance based advertising for open positions. Businesses can reach millions of job seekers on the web as well as social media networks.
Glassdoor Glassdoor is a trusted site for companies seeking talented new employees. Job seekers can see if they have any Inside Connections at your company and also read reviews about your company, see office photos, etc. You can check out the profiles of job seekers and access public information about their employment history.
CareerBuilder CareerBuilder is one of the top recruiting boards. It allows users to post their resumes for employers to view and also to access job listings and search through jobs relevant to their background.
When you need additional help to ensure you are recruiting the best prospects, give a quick call to your HR Advisor! Our team of licensed experts each have a minimum of ten years HR experience. Need help? Contact us!
Many small businesses face challenges when it comes to recruiting new talent. The job market has changed drastically and in order to keep up with it, you have to do things a little differently. There are now many creative ways of recruiting great hires that are proving to be more effective than previous methods. On behalf of HR Shield, here are some of the best new recruitment strategies.
Self-Selection In order to get to the employees that are really interested in the job, give them an opportunity to prove their interest in between sending in a resume and showing up for the interview. You could invite them to an open house for prospective employees and see who shows up. This will help reduce the applicant pool to the ones who actually take the first step.
Avoid Job Fairs Job fairs often turn out to be huge crowds of people that don’t quite fit the role you’re looking to fill. Instead of attending events like these, look for other types of events where talent might be gathering. Even if these events aren’t necessarily recruitment events, you can still network and potentially find people that are qualified for roles in your company. Platforms like Meetup are a great place to start.
Look Back at Past Candidates There’s a reason why former candidates made it through the first round or two of interviews. If you passed on a good candidate in the past but it was a close race, they could be a good person to get in touch with now to see if the timing might be better suited for you both.
If you don’t have an in-house HR department, an HR Shield Advisor can offer assistance in recruiting talented new hires. Contact us today!