WORKER CLASSIFICATION

3 reasons you can’t afford to ignore worker classification rules

3 reasons you can’t afford to ignore worker classification rules 768 951 Heidi McLean

With its settlement just this week, General Assembly is the latest to make news on the worker classification issue. Companies aren’t the only ones paying attention. The Internal Revenue Service (IRS) and Department of Labor (DOL) have enough skin in the game to keep a close eye on the subject, too. When those two pay close attention to something, it behooves all companies to do the same or risk costly, damaging, and time-consuming consequences.

Here are 3 reasons you can’t ignore worker classification rules:

1.   The government isn’t

For years, the IRS and DOL had bigger fish to fry. Lax regulations essentially led to a jaywalker’s attitude among businesses. The thought being that it’s okay to ignore the unnecessarily-restrictive law as long as you look both ways. As the economic landscape shifts and independent contractors rise in prevalence, the financial stakes and potential for missed revenue get higher. In response, government agencies have been ramping up their focus on the subject and the debate on how to define an employee rages on.

The IRS and DOL are not alone. States are joining the fray, attempting to crack down on misclassification, too.

2.   Consequences are expensive

There’s big money at stake. In addition to potential for paying back pay and benefits,you’re looking at a per employee fine and potential legal fees, too. General Assembly’s one million dollar settlement is small potatoes. Look a little further back and you’ll find that FedEx shelled out $228 million in a misclassification case. Then there’s well-known Microsoft example, in which $97 million was paid out plus millions in legal fees in a benefits dispute with its long-term temps. And of course there’s Uber which lost a dispute over whether drivers were independent contractors (as Uber said) or employees (as the law determined).

Just when you thought government scrutiny was driving you crazy enough, here come the lawyers. Where the money goes, they follow. There’s big money in class action lawsuits seeking unpaid benefits, expenses and overtime for workers who can make a case they should’ve been treated as employees.

3.   “We didn’t mean to” doesn’t hold up in court

When you knowingly misclassify employees as independent contractors, it’s called wage theft. When you do it accidentally, it’s called wage theft.

Yes, the rules are confusing. Like many things government, oh what a tangled web the federal and state laws weave. Some laws are interpreted differently from state to state and some tests used to determine status are subjective. But the rules, straight from the horse’s mouth, is a good place to start.

Bottom line

In addition to the financial burdens and time-sucking nature of it all, your credibility is on the line. Getting audited is a PR nightmare and depending on the industry or nature of the company’s business, the press would love to expose a company’s misclassification and actual or perceived abuse of labor laws.

Getting the government, lawyers, and media on your case is a guaranteed trifecta of pain. It can be overwhelming, but even the DOL and IRS recognize independent contractors can be a legitimate part of a business plan and are an important part of our economy. The best way to stay in the clear is to stay in the know. So get smart and there’s no need to burn your W9s and run for the hills.

Need more?

Take our five-minute classification self-audit and review our compliance best practices.

About PayReel:

At PayReel, we minimize the time and effort it takes to get you ready for your project. Rely on PayReel to assume all of the risk associated with worker classification and get back to the business at hand. We make sure you get paid quick and easy, and have Client Relationship Managers on call around the clock to answer your questions. All you have to do is call 303-526-4900 or email us. The PayReel team makes event payroll easier, faster, and seamless.

worker classification

Worker classification confusion, no more

Worker classification confusion, no more 6875 3958 Heidi McLean

If you manage a contingent workforce, you’ve thought a lot about worker classification, compliance, and risk. If you haven’t, but you do manage freelancers, then you are likely either willfully ignoring it, hoping it will go away (it won’t) or drinking too much. First, we’ll talk about why you should care about the subject. Then we’ll get to the good stuff: how to turn those overwhelmed-tears into tears-of- relief because you’ve found a solution and thereby saved your liver.

One of the most important and expensive reasons to pay close attention is because the IRS and DOL are, too. The independent workforce’s rapid growth means heightened scrutiny on accurate worker classification. Your risk of facing an audit has never been greater. At the same time, IRS guidelines are more complicated than ever.

HERE ARE FOUR TIPS TO TAKE THE STRESS OUT OF WORKER CLASSIFICATION:

1. Take a compliance crash course to determine whether your independent workers are truly independent

Independent Contractors (ICs) are self-employed, hired to do a specific job and paid specifically for that job. Unlike a regular employee, they pick their jobs and regularly move from client to client, business to business. Also referred to as freelancers, consultants and “1099’s”, they report the payments received as business income and pay self-employment taxes.

If the following statements are true for your independent contractors, you’re on the right track.

  • Your contractor has an established business entity, with a business name and EIN to which invoice payment is made
  • Your contractor provides services to other businesses outside your firm
  • Your IC provides certificates of insurance, including at the least, coverage for general liability insurance and workers’ comp insurance
  • You have a signed per project Agreement for Services between your company and the contractor

Check out our self-audit tool and learn about keeping your company within the confines of right and wrong.

2. Take preventative security measures to mitigate risk

Vendors to large corporations must be held accountable to any client security program that helps to protect the company from threats. PayReel has installed, and pays close attention to, strict security measures and the demands of our client security environments such as:

  • Expanded insurance policy packages necessary to manage various risks involved in working with contingent workers
  • HIPAA-based technology and operational security to protect your company’s and your workers’ information at the highest level
  • The ability to adapt to client security requirements and processes
  • Ongoing system testing to detect vulnerabilities, unauthorized access or malicious activity
  • Closed network and storage that maintains and protects data integrity
  • Employee management and awareness of employers’ physical goods such as laptops and key cards to limit unnecessary access to company information by contractors

3. Engage strategic partners

You don’t have to understand all the ins and outs of worker compliance, but someone making decisions does. A strategic partner helps ensure all your freelance contractors are properly classified by vetting the work, the worker’s role, evaluating the risk and making a classification decision. In the context of contingent workforce regulations, PayReel pays close attention to all employer obligations at the federal, state and local levels, including wage & hour rules, per diem, ACA tracking, and sick leave mandates. PayReel also covers the following:

  • Stay up to date with the Affordable Care Act (ACA) and closely manage all health benefits for its employees
  • Track and keep accurate records of all employees’ hours accrued, time used and sick leave available in order to maintain compliance with legislation in locales where sick leave is mandatory
  • Regularly monitor changing wage and hour laws, and stay ahead of the compliance curve related to minimum wage and overtime eligibility
  • Remember that an independent contractor’s classification might change depending on his or her engagement or project, and monitor the ongoing work environment to maintain compliance with classification regulations

The bottom line

This stuff matters and will bite you in the butt if you don’t get on top of it. But there is hope. If you don’t want to or don’t have time to learn all the ins and outs, we’ve already done that for our clients and can do it for your business. Talk to our team today to learn how you can avoid the risk of an audit.

About PayReel

At PayReel, we minimize the time and effort it takes to get you ready for your project, make sure you get paid quick and easy and have Client Relationship Managers on call around the clock to answer your questions. All you have to do is call 303-526-4900 or email us. The PayReel team makes event payroll easier, faster, and seamless.

The next time you work an event or a production, tell your supervisor you love working with the PayReel team.

sick leave

February 2018: Month in review

February 2018: Month in review 5808 3876 Heidi McLean

January took forever and February flew. Just like that, the second month of 2018 is over. Below are a few of the topics in employment and politics that made news in the shortest month of the year.

 

The FMLA turned 25…and had a quarter life crisis 

On Feb. 5th, 1993 the Family and Medical Leave Act, which gave employees job protection to care for sick family members, was enacted. Some of the questions coming up around its birthday are:

  1. Should that time off should be paid? It’s up for debate, but at least two Trumps and a Rubio say yes.
  2. Who qualifies as a family member? Austin’s guidelines leave room for interpretation.
  3. Does it go far enough to protect everyone, including low wage workers? And what about parents?
  4. Will the Koch brothers and cronies be able to win the fight against the aforementioned FMLA expansions?

 

People got sick…or at least sick of work

Thirty-precent of prison guards called in sick for Super Bowl Sunday. And it happens every year. But it turns out, the real problem may be that Americans don’t take enough sick leave. Meanwhile, Airlines sued Washington State over sick leave laws and Maryland’s sick leave laws got delayed in Senate.

Interns and ballers said “Show me the money!”

As Vogue took criticism for unpaid internships, Carmelo Anthony and others called the NCAA corrupt. It all brings up the bigger question: is it time to classify internships and treat college athletes like employees?

It was quite a month in employment. What stories caught your eye?

About PayReel

Producing multimedia content and executing live events can be chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

January 2018: The Month of Many Mondays

January 2018: The Month of Many Mondays 150 150 Heidi McLean

January 2018 is over (finally?) and it’s official: this year is already a doozy. It’s not that it’s all been bad, it’s just been…a lot. Below are a few (really, these are only a few) of the topics in employment, politics, and entertainment that made news in the first 31 days of 2018.

In employment

January 2nd ― A woman in Sydney wins a worker’s comp claim against Woolworths for a “savage bird attack.” Might sound crazy until you find out that the bird is responsible for injuries requiring treatment for at least 10 others.

January 12th ― Maryland passes the Maryland Healthy Working Families Act (“The Act”) and now requires paid sick and safe leave for companies with fewer than 15 employees. Maryland is the 9th state in the country to hop on the paid sick leave bandwagon.  

January 24thStarbucks announced, in addition to giving all domestic employees a raise, it’s giving baristas paid sick leave, stock grants, and parental leave (including for the parent who didn’t give birth).

In politics

January 13th ― Hawaii accidentally (debatable) sends a false ballistic missile alert, sending residents and visitors (i.e. anyone with a cell phone) into a panic.

38 minutes later ―Hawaii issues correction, sending said cell phone owners into false near-death induced soul-searching.

January 20th – The government shuts down.

January 22nd – The government reopens.

January 30th – The State of the Uniom…err Union address. Trump gets the introduction of a WWF fighter (see Fox’s highlight reel) and Democrats hold their applause (see CNN’s highlight reel).

In entertainment

January 28th – The Grammy’s: Where Bruno Mars and Kendrick Lamar cleaned house, James Corden brought down the house, and Hillary Clinton took yet another jab at the White House. And in a reminder that our culture still has a lot of work to do to get our proverbial house in order, Kesha offered a sharp rebuke to the tune of “Prayin’ and Janelle Monáe said, #Timesup.

January 31st – Super blue blood moon. A beautiful overachievement, 150 years in the making. Just like the month of January, the moon decides to pack all sorts of events into a short timeframe.

January 31st – The nation takes a deep breath, and a nap…before heading into month two. To which February said, “Hellooooo, Super Bowl!”

These are just some of the headlining moments of January. We can only guess what’s next. What makes your list of notable January headlines? Share in the comments below.

 

About PayReel

Producing multimedia content and executing live events can be chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

contingent workforce

Questions we’re asking about the contingent workforce in 2018

Questions we’re asking about the contingent workforce in 2018 4412 2941 Heidi McLean

The relationship between workers, employers, and government regulations is a balancing act. Each affects the others as inter-connectedly as any of nature’s most delicate symbiotic relationships. The contingent workforce is changing the employer/employee landscape everywhere. Similarly, government changes in healthcare and tax codes are sending a ripple effect through the system. Here’s just a taste of what 2017 has us thinking about as we move into the New Year.

  1. Healthcare: The subject is one of the biggest debates of our time. In theory, the Affordable Care Act made working independently more feasible than ever. One question we face as the Trump Administration chips away at the ACA is whether contingent workers will need to return to employee status or stay in jobs they’d otherwise leave.
  2. Taxes: The theory behind the new tax code maintains that changes benefiting employers will make American businesses more competitive and give the US economy a boost. It remains to be seen how or if these benefits will translate to contingent workers’ wellbeing.
  3. Workers’ Rights and Employers’ rights: Uber and similar companies are going through the early rounds of redefining the legalities around the new landscape. Where do workers’ rights end and employers’ rights begin? It’s a question that will continue to be duked out in courtrooms in 2018.
  4. Natural disasters: 2017 was a record-breaking year for natural disasters. Hurricanes and immobilizing snowstorms can put independent workers out of work for a long time without the protection of an employer. Without some preventative planning, small businesses may be at risk for having to close doors altogether. 
  5. #MeToo: In a way that only social media can do, the #MeToo movement has given a loud voice to a quiet, but longstanding complaint. What was formally a pervasive problem across all industries is now the stuff of crumbling careers and sweeping policy change. In the wake of the attention, many big companies adjusted their events, including prohibiting booze, at their 2017 holiday parties in an effort to prevent any bad behavior.
  6. Paw-ternity leave? With the woman who was granted two days’ sick pay to care for ailing dog, 2017 has us wondering if paw-ternity leave will be yesterday’s headline and tomorrow’s standard practice.

These are some of the issues that made news in 2017 and will continue to shape the economic landscape. We can only guess what’s next, but there’s no doubt it’s a time of great change in the country and economy. What’s on your radar for the coming year?

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

 

 

 

 

This Worker Classification Myth is Hurting Your Business

This Worker Classification Myth is Hurting Your Business

This Worker Classification Myth is Hurting Your Business 2000 2000 Heidi McLean

Sorry, y’all: The five-second rule is bogus. Germs don’t offer a grace period before jumping on your food. Not even your last bite of the really delicious stuff. But that one about metal objects dissolving in a glass of Coke? Still up for debate. And we won’t be testing it to find out.

Myths can be dangerous, silly, or in the case of worker classification—bad for business.

There is a fine line between an employee and an independent contractor and laws surrounding worker classification are confusing. We’ve seen companies go to great lengths to comply with nonexistent rules, so we were compelled to bust one of the most damaging worker classification myths we’ve seen.

 

The Myth About Worker Classification

After a certain amount of time working for you, an independent contractor must be reclassified as an employee.

We think this myth likely comes from one-time best practices that were interpreted as hard and fast rules. Wherever the myth comes from, we’ve seen clients build all sorts of policies to get around the supposed law. We’ve seen them hire workers for six months, drop them for a period of time, and then rehire them, for example. Some companies even refuse to rehire independent contractors after working with them for a certain amount of time because they’re afraid they’ll have to provide all of the benefits associated with hiring an employee. Not only are these policies time consuming, they can hurt businesses that rely on trustworthy freelancers.

 

The Truth About Worker Classification

We think it’s time for everyone to bust the myth and bust free from self-imposed restrictions.

Here’s the liberating truth: If you find a good contractor and want to use them over and over, you can. There are rules, which vary by location, but there are also legal ways to keep your best people working for you.

If you’re confused by compliance laws and fear your workers are misclassified, PayReel can help. Reach out to our team of experts on all things freelance. Get away from the burden of onboarding, payrolling and classifying your workers and focus on what you love.

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave the details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

contract work payreel

Contract work: It ain’t your father’s career track!

Contract work: It ain’t your father’s career track! 1000 750 PayReel

The workforce is evolving. There are fewer full-time positions and more project-oriented, “we’ll call you when we need you” jobs. Funny thing is many young, culturally diverse people coming into the workforce don’t necessarily want to be anchored to a single employer. They certainly aren’t looking for the stable but inflexible gigs their parents coveted. These workers, in some circles referred to as “millennials,” are not looking to belong to one company. They are looking for contract work – something that allows them to explore and thrive.

The changing landscape

Boredom is the true enemy of the emerging workforce who have spent a lifetime consuming quick-moving digital content. That means employers have their work cut out for them to keep these expressive, gifted, and demanding people engaged. Companies are responding with cereal rooms, napping pods, and mandatory time off / unlimited vacation (that’s Upworthy we’re talking about and yes, they’re hiring).

Why people choose contract work

Some people love the gig economy because they get to choose when and how to work. They can pick the jobs that appeal to them. They can decide whether to accept a job or hit the slopes. It has (at least in theory) restored the work / life balance that many millennials feel their parents’ generation lost.

Drawbacks of contract work

With all the benefits of contract work, it may seem like there isn’t really a place for brick and mortar offices and full-time positions anymore. And while their prominence in the workforce is decreasing, they still exist (and will for the foreseeable future). We still need them. For now. And besides, contract work still has its drawbacks, including less stability and fewer built-in benefits such as 401K matching, sick days, paid holidays, and healthcare. Having fewer workers on-site can also pose challenges for businesses because the office environment encourages team morale and facilitates communication, which in turn supports a unified brand identity. Being in one location also allows for in-person meetings and there simply isn’t an adequate substitute for that yet.

The bottom line

If you make your living job to job, PayReel’s real team of real people is here for you. We provide personal service to make sure employees get paid quickly and accurately. Go ahead, give us a shot!  You can call us anytime at 303.526.4900 or reach us by email at info@payreel.com.  We look forward to hearing from you.

 

About PayReel

At PayReel, we minimize the time and effort it takes to get you ready for your project, make sure you get paid quick and easy, and have customer service agents on call around the clock to answer your questions. The PayReel team makes event and corporate payroll easier, faster, and seamless.

The next time you work an event or a production, tell your supervisor you love working with the PayReel team!

contract work payreel misclassification

Misclassification in the news: What you need to know

Misclassification in the news: What you need to know 3000 2000 Heidi McLean

While the workforce has plenty of people legitimately doing contract work, when employees are misclassified as contractors, the worker and the government are both likely to miss out. The government loses potential tax dollars and workers lose out on benefits and more. Employers should care about it, too (and not just because the legal stakes are high). It’s about more than the bottom line.

Below are some recent headlines about the evolving workforce and its related consequences:

 

Misclassification in the news: The headlines

North Carolina Governor Signs Law Creating Division to Investigate and Prosecute Employee Misclassification Claims

Highlight: While the federal government has had employee misclassification in its sights for a while, states are now getting in on the game to add heat to errant companies.

March 2017 Independent Contractor Misclassification and Compliance News Update

Highlight: extensively covers recent and current misclassification lawsuits.

New Case Shows That “Uber-ization” of Workforce Could Lead to Misclassification Challenge Highlight: discusses the challenge of determining what an independent contractor is when gray areas in the gig-like aspects of their work exist.

Gig economy creates legal puzzles for the courts

Highlight: discusses what we know about the interests of all parties as well as possible reforms (including the possibility of adding a third worker definition). 

 

Enter PayReel

The way we work and manage businesses are both evolving as contract work increases with the gig economy. With that comes growing pains and litigation. Worker classification is an increasingly sticky subject (Gorilla Glue status, perhaps?) and one we’ve covered extensively (see more posts on the subject here).

If the topic of misclassification makes you sweat, give us a call and we’ll be happy to help. Partners who make your life easier are worth the investment. A payroll service may be right for those who don’t have the bandwidth or interest in digging into the legalese. PayReel manages payroll taxes and, as the employer of record, takes on all risk associated with a variable workforce. Think you might benefit from hiring a payroll service? Here’s a handy guide to find out more.

About PayReel

Producing multimedia content and executing live events is chaotic. When it comes to event payroll, payroll taxes, and so much more, PayReel makes your life easier. We make sure our clients are able to hire who they want, when they want and see that everyone is paid properly. Leave all payroll services and details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or email us.

Relax. We got it.

 

onboarding contractors payreel

How to simplify onboarding your freelancers

How to simplify onboarding your freelancers 5616 3744 PayReel

How much time are you spending setting up your freelancers?

If the answer is too much, then maybe it’s time to reconsider your methods. Let PayReel handle onboarding paperwork so you can spend your time and energy on the creative parts of your projects instead.

 

So what’s the problem?

Worker classification: One of the most difficult things about setting up your workforce is worker classification. That’s why we cover the topic extensively on our blog. While you may be able to answer who’s a strong worker and who might need a little bit of help, the worker classification discussion brings a lot more to the table than a black-and-white answer—especially now with the Department of Labor cracking down on worker classification errors. If the words exempt, non-exempt, W-2, and 1099 make your head spin, we can help with that.

Paying accurately: Another trick that comes into play when hiring your workforce is making sure you’re paying them accurately (we’re looking at you, minimum wage and overtime!) and in a timely manner. Did you know that some states have strict pay deadlines for specific types of employees? We know, and our team works hard to stay on top of the ever-changing wage laws at the federal, state, and local levels.

Payroll taxes: If taxes only cross your mind on or around April 15th, do the IRS (and yourself) a favor, and stop. Did you know that, along with differing wage laws, some states and localities require a different taxation method than the federal government does? It’s true. Here’s where we stress (and the only time we stress), we got it. Our team stays well versed in local, state, and ever-changing federal tax methods and laws to make sure the employee is happy, you’re happy, and of course, the IRS is happy.

 

Enter PayReel

If one, two, or all three of the points above make you sweat, give us a call and we’ll be happy to help manage your events, employees, and all the behind-the-scenes paperwork that comes with it.

About PayReel

Producing multimedia content and executing live events is chaotic. When it comes to event payroll, payroll taxes, and so much more, PayReel makes your life easier. We make sure our clients are able to hire who they want, when they want and see that everyone is paid properly. Leave all payroll services and details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or email us.

Relax. We got it.

About the author

Nat's notes

PayReel Customer Experience Manager Natalie “The Go Getter” McGinnis is an avid fan of sports and labor laws alike. Her experience in recruitment, customer service, and ongoing HR education give her the tools to provide laser-focused attention and assistance to the PayReel employees and clients who need it most. Click here to read more of Nat’s Notes then meet the rest of the PayReel team!

 

 

 

freelance payroll payreel

The gig economy is here to stay: Here’s what it means for businesses

The gig economy is here to stay: Here’s what it means for businesses 4256 2832 Heidi McLean

The gig economy now makes up 34% of the US workforce. Gone are the days when cubicles dominate workers’ worlds from 9 to 5 Mondays through Fridays. Independent contractors are more likely to do the bulk of their work from home or from Starbucks than from a cubicle or brick and mortar offices. Tax laws, employment laws, and freelance payroll are all evolving in response. Here are some of the main implications for businesses:

 

Smaller core staff

As independent contractors do more of the work for businesses, many companies are shifting towards smaller core staffs. While there are benefits to having workers under the same roof during the same hours, small businesses may benefit financially by being responsible for fewer full-time workers.

 

New legal considerations  

Freelance payroll is a different ballgame and one of its biggest considerations is worker classification. While it was once a fairly black and white issue, the subject grows more important and more challenging each day. This highly confusing topic also carries intense legal ramifications. The government is paying more attention than ever (see Uber and America’s pastime as prime examples) to making sure workers are classified correctly—and making someone pay when they aren’t.

 

The bottom line  

Subjects like payroll taxes, worker classification, and freelance payroll get more complicated by the day. Partners who help make sense of a tricky transition as big as this one are worth the investment. At PayReel, we manage all of the above and, as the employer of record, we even take on all risk associated with a variable workforce. Think you might benefit from hiring a payroll service? Here’s a handy guide to find out more.

 

About PayReel

Producing multimedia content and executing live events is chaotic. When it comes to event payroll, payroll taxes, and so much more, PayReel makes your life easier. We make sure our clients are able to hire who they want, when they want and that everyone is paid properly. Leave all payroll services and details up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.