Hall of Shame: 10 Terrible Workplaces (Plus How Not to Suck)

Hall of Shame: 10 Terrible Workplaces (Plus How Not to Suck) 2560 1707 Alicia East

We talk a lot about what to do when you’re running a business–things like accurate worker classification, paying employees properly, and generally just doing right by your workers. What we don’t always address is what not to do.

10 terrible workplace violations and the lessons we can all learn from them

  1. A lesson from Packers Sanitation: There’s no place for having kids cleaning dangerous equipment.
  2. A lesson learned from Miami: If you don’t have the resources to ensure workplace safety, you have no business having a business.
  3. Lesson learned from this Virginia Home Care Provider: Overtime pay is not optional.
  4. Lesson learned from the saw mill: If OSHA tells you to fix something, just do it.
  5. Lesson learned from Dollar General: Repeat violations cost more than a dollar, in general.
  6. Lesson learned from this North Carolina home care operation: Misclassifying workers to “save money” turns out to be expensive!
  7. Lesson learned from Baltimore: Shortchanging your people on their retirement will end up costing you more than chump change.
  8. Lesson learned from Georgia: Suspend operations if your suspension operations aren’t safe.
  9. Lesson from Delaware: Retaliation against whistleblowers will come back to haunt you.
  10. And finally, three lessons learned from thousands of greasy pennies: Pay your employees up front, don’t call your employees weenies, and if you’re gonna pay them in greasy pennies, at least own it. You just end up looking worse when you say you “don’t really remember” your petty behavior.

The Bottom Line

It’s in your power to be a good employer. If you don’t have the in-house resources (i.e. a dedicated department that specializes in these matters) to ensure you’re in compliance with overtime rules, worker classification guidelines, and benefits eligibility, you can ensure you stay in good standing by engaging a partner! Contact us to chat about what solutions we can provide for your business.

🚩Looking to Engage a Payroll Partner? 3 Red Flags to Watch Out For 🚩

🚩Looking to Engage a Payroll Partner? 3 Red Flags to Watch Out For 🚩 2560 1920 Alicia East

Employers are busy working out their policies around labor laws and fair pay as the economy changes. In turn, worker classification challenges and employer missteps seem to be finding their way to the headlines more often. As we know, wherever money is on the line and laws are unclear, you’ll find controversy right behind. If you’re looking to engage an Employer of Record (EOR) or a partner for your compliance issues and freelancer management, watch out for these warning signs.

3 Red Flags That Should Send You Running

Promising to Find Legal Loopholes

This article points to a California politician who has called for an investigation into an employer of record company and accused it of “advising its clients on how to misclassify workers and avoid taxes.” Whether the allegations prove true or not, we know it’s common practice. Let’s just get this straight right away: trying to get around the law does you no favors in the long run. Even when those laws are a real pain.

It might be tempting to look for a way around the rules, but paying employees fairly and classifying them correctly needs to be an absolute baseline for doing business with an Employer of Record. What you should be looking for is a team that keeps up with ever-changing contractor / freelancer payment and compliance issues on your behalf. 

The most effective partners will adjust to changes on both the state and federal level and will be proactive about ensuring compliance. With the right partner, you won’t have to think about the frequent changes in policy around freelancer payment and compliance regulations because they’ll be thinking about it for you. Find a partner that you can be confident is in position to mitigate compliance risk and educate you on practices that could compromise you legally.

Lax or Nonexistent Payment Processes

You know how people care about their paychecks? You should, too. If your partner doesn’t have a standard, well-established set of processes to make sure employees are paid accurately and in a timely manner, run. Just get the heck out of there.

If they have their act together, your payroll company will offer online management for employees to log hours and supervisors to approve them, fast/accurate payments, and automated overtime tracking. They’ll also provide you with consultation for overtime and benefits policies that will keep you in good standing. Their automated systems will track changes in minimum wage and sick leave policies. Don’t settle for anything less. You’re worth it.

They’re a Mile Wide And an Inch Deep

You know those restaurants with Encyclopedia-length menus? They’re not usually known for good food. They’re known for being barely adequate in every way. Contrast that with the restaurants who do a few things well enough to develop a fandom of loyal consumers who will go out of their way for that crave-worthy item.

If you’re looking for a prospective partner for your freelancer management, it serves you well to find one that can do the important aspects really well. You need experts. Like those mediocre restaurants, if they’re trying to fill every need, they likely won’t be great at any of them. Their classification processes will be thinly justified or they’ll have a one-size-fits all approach. They won’t have the resources or practices in place to audit business entities or certificates of insurance.

If they’re not able to dedicate the resources to doing the important aspects well, they’re also not  in position to take on many of the risks associated with freelancer management, which means they’ll offer weak or nonexistent indemnification. If a company’s offerings look too good to be true, dig a little deeper. Otherwise, you risk finding out they’ve cut corners only after there’s a problem.

Bottom Line

If You Have Anyone on Payroll, You Cannot Afford to Ignore This

If You Have Anyone on Payroll, You Cannot Afford to Ignore This 2560 1707 Alicia East

Anytime you’re dealing with payroll, there is risk involved. Workers understandably care a lot about it because their livelihoods are involved and the government cares because they have rules and regulations in place both to get the taxes they are due and also to protect workers. The two most important factors of a successful payroll program are accurate/on-time payments and compliance with federal, state, and local regulations. 

What Makes Compliance Challenging?

States and localities are constantly introducing new legislation, and with each change, payroll procedures change, too. Mistakes in income tax withholding rates, unemployment tax rates, minimum wage and labor laws can lead to costly penalties. The more states a business operates in, the more risky the compliance aspect becomes because the rules vary from place to place.

As the employment landscape has changed and many workers have shifted to more of a hybrid or remote situation, it has only complicated the matter further. If an employer doesn’t have an established entity to pay employees appropriately in a given state, they aren’t in position to have employees there at all. 

What Can Employers do to Prevent Problems?

We all know that prevention is the best policy, but some companies are quick to start auditing their process and procedures only after they see a problem. The businesses with the smoothest processes have proactive auditing measures in place to stay on top of changes, identify and solve gaps in their processes, etc. 

Manually managing all of these complex details is impossible. Businesses should take compliance very seriously to reduce their risks. If their internal team doesn’t have the bandwidth or tools to manage it accurately, they should engage a partner with the tools, methods and processes to help. They should also be in position to address the concerns that come up when employees have questions about their paychecks. If you’re wondering if a partner would help with your situation, let’s chat. This is our speciality. 

Do You Think it Might be Time to Hire an Employer of Record (EOR)?

Do You Think it Might be Time to Hire an Employer of Record (EOR)? 2560 1703 Alicia East

Staying on top of compliance concerns can be tedious and time-consuming. Plus, with possible fines, legal fees, and damage to a company’s reputation on the line, the stakes are high. Many companies find that having an in-house team dedicated to keeping up with the laws as they change (and then change again) is unsustainable. Handling all of the details around onboarding, classifying, and paying workers correctly requires a specific, highly-specialized skill set. Whether you hire a payroll service or build a team to do the job, they need to be fully in position to walk the legal line. 

Benefits of Hiring an Employer of Record (EOR)

1. They Diffuse Legal Landmines 

Contractor/freelancer payment and compliance regulations are ever-changing. An EOR allows you to hedge your bets on the legal front by mitigating compliance risks. They handle worker classification issues and track benefits eligibility and changes in minimum wage or sick leave policies. They can educate you on best practices and can serve as a sounding board for questions. 

2. They handle payroll. 

Compliance and payroll are some of the most important aspects of business to get right. Having those issues handled correctly keeps you off the radar with governmental agencies and keeps your workers happy, too. An EOR with online management for employees and managers, fast payment, automated overtime tracking/benefits eligibility ensure is an especially valuable partner. 

3. They adapt to changes on your behalf. 

The most effective teams have checks and blanches in place to stay on top of payroll regulations and legal changes  as they happen. They take the necessary steps to adjust policies and navigate the increasingly-complicated waters of payroll services. Their job is to make sure you’re following all regulations, rules, and federal and state laws. Whether you hire a partner for it or not, somebody on your team needs to be fully-versed in these issues. 

The Bottom Line

Labor laws and fair pay standard practices constantly change. Worker classification issues are top-of-mind topics for the government, employers, and employees alike. Pick an EOR  that is in position to stay ahead of the curve so you never even have to think about payroll services and compliance. If you’re ready to make compliance and payroll the easiest part of your day, contact us anytime.

Direct Sourcing: How to Walk The Compliance Tight Rope

Direct Sourcing: How to Walk The Compliance Tight Rope 2560 1707 Alicia East

Direct sourcing allows businesses to place workers as needed and on a temporary basis. One of the biggest benefits is that they get to keep the best workers in the pipeline between projects and tap their pool of talent as needs arise. Direct sourcing is a great tool for managing a contingent workforce, but companies must remain vigilant to stay compliant.

Direct Sourcing And Risk & Compliance 

While direct sourcing is an incredible asset to companies, it’s important to keep risk, compliance, and payroll top of mind. Mitigating risk requires specialized skills, a great depth of knowledge, and a department with enough bandwidth to understand and follow rules on a state and federal level.

Errors can be incredibly costly. Companies can be subject to heavy fines when they classify workers incorrectly or make mistakes with payroll. In addition, companies can face damage to their reputation and end up directing resources (including time) that could otherwise be directed elsewhere. Worker classification and payroll rules vary from state to state and on a federal level as well.

Since regulations change all the time, hiring organizations must do due diligence to make sure they keep their practices compliant and their businesses in good standing. Any company using direct sourcing simply must also include effective worker classification and payrolling services as a part of its plan.

When is it Time to Engage a Partner?

For companies that use direct sourcing, engaging a partner for risk compliance, worker classification, and payroll can be an incredibly sound business move. A partner can fill in the gaps to fill payroll demands and other contingent workforce management. Companies without a specific department to fill these roles will be well served by engaging a partner with the bandwidth and skills to handle everything related to risk, compliance, worker classification, and payroll for a contingent workforce.

The best partner will be able to handle every type of worker a business employs. When direct sourcing talent, many businesses find an Employer of Record (EOR) that takes care of all the administrative details of managing a contingent workforce is an indispensable part of their team.

If you’re considering whether an EOR would be helpful to your business, let us know! This is our jam.  

Head Off Workers’ Compensation Risks at The Pass

Head Off Workers’ Compensation Risks at The Pass 2560 1829 Alicia East

Who needs workers’ compensation insurance? Anyone with workers, it turns out. When employees are injured in the course of employment, such insurance provides wage replacement and medical benefits to workers as well as protections for the employer. Just like any other insurance, you hope you’ll never need it. Still, if you do, it can be absolutely imperative to operations. Businesses that ensure worker safety and implement best practices before they need them are in the best position to protect employees, keep claims manageable, and maybe even keep premiums down.

Best Practices to Mitigate Workers’ Compensation Risks

1. Prevention

Chase prevention like you would chase the crisis or you’ll certainly end up chasing a crisis. Make regular safety trainings and ongoing education standard procedure (even if employees roll their eyes). If you don’t have the budget to implement every possible safety measure, you don’t have the budget for the project. The best workers’ comp claim is the one that never happens.

2. Refine your claims management process

If you’re scrambling to figure out how to handle a claim if it comes up, you’re already behind. Have a standard operating procedure on day one. Decide which role is responsible for talking to the adjuster and within what time frame. Train that person ahead of time. Lay out your processes while your brain isn’t in crisis mode and you’ll make sounder decisions. The added benefit is that it will reassure your adjuster that you’re engaged and motivated to reach a speedy resolution.

3. Implement a return to work program

Have a plan for injured workers who have been cleared for modified duty. These measures reassure insurance companies while demonstrating professionalism to employees.

4. Invest in accurate worker classification

An independent contractor filing a workers’ comp claim can easily land a well-intentioned company on IRS and DOL radar screens. This happens with surprising frequency despite the logical assumption that an independent contractor should understand the implications of a business-to-business relationship. One key aspect of a true B2B relationship is that a worker’s business activity exists independent of the employer. Preventing misclassification and communicating clearly with workers is a worthwhile preventative investment. Contact us at 303-526-4900 or by email for a free workers’ compensation risk analysis.

What’s Ahead

Workers’ compensation is always changing. Each political administration handles it differently and states have their own rules and approaches. Workers’ compensation carriers adjust costs and terms in the face of declining profits and escalating claims costs and operating expenses. Companies that address the subject proactively are in the best position to ensure minimal premium increases. Aside from cost, keeping employees safe is forever a worthwhile investment.

Meet Our New Compliance Specialist

Meet Our New Compliance Specialist 450 695 Alicia East

We are very happy to welcome Jamie Pavlunenko, our new Compliance Specialist, to the team! 

Jamie has owned her own Professional Branding and HR Consulting business for the last decade with a prior history in HR leadership roles. She leverages a strong attention to detail to guide businesses in crafting policies and programs that comply with local, state, and federal regulations. Additionally, she utilizes robust written and verbal communication skills to deliver HR-related communications that are clear, concise, and understandable for all stakeholders. She is passionate about helping individuals and businesses reach their maximum potential. Jamie resides in Summerville, SC with her husband, two teenagers, and three dogs. She loves reading, camping, rodeo (she let her baby grow up to be a cowboy), and softball (with her travel-baller). She holds an MBA in Organizational Development and the Certified Professional Resume Writer credential.

Something else: Jamie is a violinist and volunteer for a local coonhound rescue!

Do You Engage Independent Contractors in California? Be Afraid. Be Very Afraid.

Do You Engage Independent Contractors in California? Be Afraid. Be Very Afraid. 2560 1707 Alicia East

It truly is a tightrope walk doing business in California, especially if you engage independent contractors. Still, you don’t panic. Let’s talk about what makes California high risk (hint: worker classification tops the list), what’s at stake, and how businesses can protect themselves. 

Why is California Considered High Risk? 

California is considered the riskiest of the risky states for doing business. The Golden State is often the first to legislate an issue surrounding employment and other states often follow suit with similar laws. Whether you do business in the state or not, what happens there will affect you in one way or another. 

In addition to California’s worker classification rules (which are some of the most stringent in the country and where our focus will be today), California requires employers to walk a narrow path when it comes to sexual harassment training, privacy protections, meal wages, and more. 

Worker Classification

This is where California’s rules affect employers the most because it’s where it’s hardest for companies to classify workers as independent contractors. California’s approach to worker classification (among other topics) purportedly intend to protect workers and provide “the labor law protections to which they are entitled.” In addition to the federal legislation, states have free reign to make some of their own rules. True to form, California has some of the strictest requirements surrounding worker classification and it’s important for companies to pay attention because violators can expect to be subject to strict penalties such as fines, possible jail time, and damage to their reputations. 

What Makes Worker Classification Extra Tricky in California?

When California replaced the long-standing Borello test with the ABC test, it eliminated some of the gray area in deciding whether a worker is an employee or not. Workers can only be considered an independent contractor if all of the following apply:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

This is the narrowest definition of an independent contractor to date and puts more pressure on point “B” than ever before.

What’s at Stake For The Government?

Whenever a government agency legislates an issue, it’s reasonable to ask what the stakes are and how much attention they’ll give it. In this case, there is a ton of money on the line. To date, determining the differences and properly classifying workers have been highly complicated tasks, depending on factors such as the ability to hire or fire a worker, the kind of occupation, the method of payment, location and more. According to the court’s ruling in the Dynamex case, “the misclassification of workers as independent contractors rather than employees is a very serious problem, depriving federal and state governments of billions of dollars in tax revenue.”

The government’s concerns center around the fact that:

  • Independent contractors write off business expenses and may underreport income
  • Small businesses can avoid certain taxes with fewer W2 employees
  • ICs are more difficult to track and tax accurately than W2 employees

What Does it Mean For Business?

Some employers like this way of structuring worker classification because in theory, it gives workers more ownership in the company’s success. Others say it makes their business model unsustainable.

It’s point “B” of the ABC test that can be most challenging to the way many businesses operate. It states that a worker must perform “work that is outside the usual course of the hiring entity’s business” to be classified as an independent contractor. 

Some companies have restructured operations completely to avoid hiring more W2 employees (new laws have a way of precipitating new ways to get around said laws). Another way to avoid reclassifying is simply to operate business as usual and wait to be challenged. Smaller companies have been known to get away with this approach indefinitely.

What About The Workers?

Still, some independent contractors have been unhappy with the changes and expressed concern for their livelihood. Even if all the perks afforded an employee (healthcare, time off, etc.) bring them close to their original pay in practice, their paycheck may look a lot smaller on the surface. Many industries have been granted exemptions from the ruling, indicating that, as always, there is no simple cut and dry answer to an issue this complicated. 

Independent contractors set their own schedule and manage their own businesses. While independent contractors are still responsible for paying taxes, they can also take advantage of many write-offs. Along with the perks, they do have the responsibilities that come with owning their own business. They run their own books, pay quarterly taxes, advertise, purchase their own equipment, and deal with the seasonal nature of the biz. Independent contractors also don’t get paid time off and are responsible for purchasing their own health insurance.

Some workers prefer the stability and possibility for advancement that come with having a greater presence at the office and familiarity with the ins and outs of the company.

How Can Companies Mitigate Risk?

Unless a company is made up 100% of full-time employees, this subject is relevant. Mistakes could result in fines, back taxes, and even jail time. The first step is to stay well on top of worker classification rules. There are exemptions to the ABC test and they continue to evolve. Independent contractors fall outside the wage order’s protections so even some “employees” could still potentially qualify as independent contractors for all other purposes. Stay on top of classification news and how these changes play out in practice will continue to shake out in the courts and in the market going forward. Stay ahead of the game to see how these changes affect your business. California is embarking on the real-time evolution of the economy.

What Are The Stakes for Mistakes? 

Big companies like Uber make headlines for their missteps and pay equally big fines for their worker classification choices. Still, it can be a costly mistake to think it’s only the big companies that face consequences. By rescinding the Trump Administration’s “Worker Classification Rule,” the Biden administration made it easier for workers to argue for minimum wage and overtime protections/compensation. In addition to having to pay back 100% of the matching FICA taxes they would have paid had they classified the worker correctly up front, employers can end up subject to additional penalties such as the following:

  • $50 fine for each W-2 form they failed to file
  • A penalty equal to 1.5% of the employee’s wages 
  • $5,000 penalty for the first misclassified employee and up to $25,000 for each subsequent violation

Suffice to say, misclassifying workers does not save money in the long run. Perhaps scarier than the possibility of monetary damages, misclassification has landed some business leaders under house arrest

In addition, class-action lawsuits, failed audits, and negative headlines can damage a company’s reputation to the point where both workers and consumers are hesitant to engage with the company. It’s just not worth it!     

Bottom Line 

The most common mistakes when engaging contractors in California are misclassifying workers, (of course!), being lax about training requirements or privacy, and meal wage/overtime errors. 

As the economic landscape shifts and independent contractors rise in prevalence, the financial stakes and potential for missed revenue rise, too. In response, government agencies have been ramping up their focus on the subject. The IRS and DOL are not alone. States are joining the fray, attempting to crack down on misclassification while tightening the reins on training requirements, and payroll guidelines.

Where the money goes, lawyers follow. There’s big money in class action lawsuits and new cases are always being filed. While fear is never productive, you should be very, very conscientious when engaging independent contractors in California. Companies must be very vigilant to protect your business, stay compliant, and reduce the risk for fines and unpleasant attention from the IRS.

When is Engaging a Partner a Good Idea?

Examine your options: Working with an Employer of Record (EOR) or Professional Employer Organization (PEO) is standard best practice in this evolving freelancer economy. While both provide payroll and insurance services, the differentiating factor is that an EOR relieves employers of much of the regulatory risk involved in working with independent contractors while a PEO operates as a co-employer and does not assume the employment risk.

If you don’t have the in-house team to do it yourself, it’s worth considering working with a partner. The bottom line is that doing business in California is complicated and the consequences of errors can be immense. While the onus is on employers to classify workers correctly and stay in line with the state’s changing requirements, it’s possible to navigate a rocky landscape with relative ease.

In our world, accurate worker classification and top-notch risk management when it comes to overtime, meal wage, and other laws are always the priority. We are the first to be aware when change is in the air. We track rules in every state as well as on a federal level and offer services to help clients stay compliant. 

If you think a partner would help your business, contact us now. 

What to Know About 5 Hot Employment Topics (From Pay Transparency to New Minimum Wages)

What to Know About 5 Hot Employment Topics (From Pay Transparency to New Minimum Wages) 2560 1707 Alicia East

Below is a roundup of resources on the recent hot employment topics, including those touched on by President Biden in his State of the Union. While we know a possible recession and inflation is on people’s minds as well, these are the topics we’re hearing most about on the employment side of things.

Roundup of 5 Buzzy Employment Topics

  1. Pay Transparency: This article gives an overview of each state’s laws and what they mean for employers.
  2. New State Minimum Wage: This article outlines which states have new minimum wages, what states will be changing rates in the coming years, and the history/implications of these rates.
  3. Pregnancy-Related Protections: This article gives a great overview of the PUMP Act, PWFA, and other pregnancy-related laws.
  4. State Family Leave: Colorado is among the states with new Paid Family and Medical Leave Insurance Obligations and this post covers other new developments in paid leave for 2023.
  5. Green Card Updates: President Biden addressed immigration reform in general, which is a broader topic, but knowing what to do with document updates is an immediate need.

The Bottom Line

Stay ahead of the game on changes to stay compliant and keep your company in good legal standing. If you don’t have an internal department in position to do this, it’s a smart business move to outsource to someone that does. If you think your business could benefit, let’s chat!



What to Know Before Engaging Independent Contractors in High Risk States

What to Know Before Engaging Independent Contractors in High Risk States 2560 1697 Alicia East

Hiring independent contractors can be a great way to advance your business goals without hiring additional employees for the long term. Often, contractors are the best bet for accomplishing specific, creative tasks like rebuilding a website. However, if you engage independent contractors in any of the high-risk states, it’s important to take extra care to protect your business from the associated liability. 

Which States Are Considered High Risk And Why?

Laws around documentation and classification are complicated and in certain states, it’s even more so. There are federal rules around engaging independent contractors and each state has its own regulations as well. What’s more, the rules change often and, in some cases, they even contradict each other. Even so, it’s still possible to guard against the major concerns that accompany engaging workers in these states. 

Some companies dedicate entire departments to the task, but those without an internal team/human resources department that is equipped to address those needs should partner with a company that specializes in handling them. The best partners will be aware of these risks and on top of the changes as they happen. 

The following states are considered high-risk for engaging independent contractors:

  • California
  • Washington
  • Oregon
  • Indiana
  • Illinois
  • Wisconsin
  • Maryland
  • Pennsylvania
  • New York
  • New Jersey
  • Massachusetts
  • Connecticut

What Risks Will Employers Encounter?


While we tend to hear only about the major lawsuits against the big players (like Instacart), many companies misclassify workers without even realizing it. Moreover, a standard, objective test to determine whether a worker should be classified as an independent contractor or an employee doesn’t exist. That’s in part because each state has the power to determine some of its own rules.  

As we know, claiming ignorance is not an adequate defense strategy. Misclassifying workers can lead to fines, liability for unpaid wages and overtime, liquidated damages equal to the amount owed in unpaid wages, treble damages, attorney’s fees, tax and benefits liabilities, and more.


Even if you come out on the other side of an audit clean, it will be incredibly inconvenient and will divert resources and attention away from your business. Employers can quickly get themselves on the government’s radar by misclassifying workers. Having airtight processes–from the up-front paperwork all the way through payroll–is a good way to ensure workers are correctly classified and that they receive the corresponding benefits and accurate pay. 

Additional Training Requirements

In some states, workers are required to have additional training, which can be part of what contributes to their status as high-risk states. For example, California, Connecticut, Delaware, Illinois, and Maine all require Sexual Harassment Training at various intervals and job levels. While these are among the states that require such training, other federal regulations and court decisions make it clear that best practice is for all employers to provide anti-harassment training. Legal decisions at the federal level have demonstrated that failing to provide harassment prevention training makes companies extra vulnerable when issues come up. Precedent shows that employers without training may lose their ability to raise an affirmative defense in a harassment lawsuit. 

Would Engaging a Partner Benefit Your Business?

Engaging a partner whose core business addresses compliance concerns related to engaging workers in high-risk states has many advantages. If you think your company would benefit from having access to workers who are outside of your nexus, eliminating headcount changes, and mitigating risks, it’s time to consider engaging a partner like PayReel. Our system has defined processes for worker classification, payroll, and more. The system takes into account federal, state, and agency rules and includes a checks and balances process to ensure a solid precedent. Bottom line: We take compliance seriously! Contact us to talk about how this might benefit your business.