Do your employees work in teams?
Just because you use the word team to describe a group of people who perform similar jobs, like our service team, our sales team or our customer service team, doesn't mean your workers really work in teams. I'm referring to situations where workers collaborate. Where they work together to solve problems or deliver service to customers.
The nature of work is changing. And it's incorporating team work cultures more than it ever has. When I was in college, I was only required to participate in 3 or 4 team projects during my entire degree program. Now, students are assigned 3 or 4 team projects each semester. Does this mean young people are better at it than we were? Well, they've had more practice, but it doesn't necessarily mean they're better. Some people of all ages are more naturally individualistic while others more naturally gravitate to teams.
America has historically been a land of individualists - meaning most of us think people should be self-sufficient. We tend to put loyalty to ourselves before that of others, including our team and our company. But it's not all or nothing. Even the most individualistic of us will commit to a team if we perceive it to be in our best interest. Likewise, individuals who don't see any benefit to contributing to the team will physically or emotionally disengage from that team.
Some of the greatest success stories in team sports are linked to coaches or team leaders who convince superstar athletes to sacrifice individual goals for team goals. Hey, star, would you rather score 36 points and lose or score 18 points and win? We've also witnessed the team member who contributes very little, but expects to benefit from team rewards - like the character, Wally, in the Dilbert cartoon.
How can we know before we hire someone whether they naturally tend to be individualistic or to be more team-oriented? Fortunately, one assessment instrument offered by The Davidson Group does measure the degree to which someone's individualism is a motivator for their behavior. The more naturally team-oriented a candidate is, the less they'll have to adapt or modify their behavior to support team goals.
This assessment can be extremely helpful as a pre-employment tool. Let's say I'm hiring a hunter salesperson. I would probably prefer someone with a high degree of individualism. But if I'm hiring a customer service representative who's going to be part of a team that services customers collectively, I might prefer someone with lower levels of individualism. If I'm investing in either of these important roles, I'd want to know as much about what behaviors I'm likely to observe from my top candidates and what motivates their behaviors as I can before I extend a job offer.
Sunday, October 4, 2015
Top Two HR Compliance Risks
If I owned a small business that employs people, I'd make sure that I am getting the following two things right. The risks associated with mistakes in these areas are greater than the benefits derived from being non-compliant.
1. I'd make sure that each employee is properly classified per the Fair Labor Standards Act and I am paying overtime to whom I am supposed to be paying overtime.
Even if you had this right in 2014, you may not have it right in 2016. The Department of Labor proposed some important changes to overtime laws last summer and closed its comment period on those proposed changes in September. The new rules are expected to become law in the first quarter of 2016. The most significant change is increasing the salary test for exempt workers from just under $24,000 per year to potentially over $50,000 per year. That means any manager or supervisor in your company that makes between $24 and $50k is likely to no longer be exempt from overtime pay if they work more than 40 hours in a work week, no matter what their duties are.
Now is a great time to conduct a wage and hour audit to see if you have any potential risks, and to conduct contingency workforce planning to determine how you are going to handle those positions that may no longer be exempt. The penalties if the Department of Labor finds the problems before you do include payment of back wages and liquidated damages to any affected employees as well as fines.
2. I'd make sure that any relationships I have where I am paying a worker by 1099 are legitimate subcontractor relationships and properly documented as such.
Utilizing 1099 workers to supplement your core workforce can be a legitimate and legal strategy. The key is to look at it the way the Department of Labor and the Department of Revenue look at it, not the way many small business owners look at it.
Both the IRS and the DOL consider the use of 1099 a highly abused practice. So the DOL published a guidance in July 2015 to clarify the rules. Before, you might have been able to make a reasonable case that your 1099 workers could work for your competitors if they wanted to - it's not your fault they choose not to. Now, they're looking at the economics - are your 1099 workers performing similar work for other companies besides yours? If the answer is no, and they are working for your company pretty much exclusively, then the IRS and the DOL are going to conclude that those workers should be classified as employees and you should be deducting and submitting payroll taxes, even if you have a signed subcontractor agreement in place. And that's what they want - employers to be withholding and submitting taxes every payday.
The consequences of being ruled against can be quite severe, ranging from payment of back taxes they feel should have been withheld all the way to jail time in extreme cases. As a part of my risk management plan I would look at each relationship in my company and determine, not whether I think it's legitimate, but whether the DOL is likely to consider it to be legitimate. I'd make sure I have an executed contractor agreement with the legitimate ones and I'd go ahead and hire the questionable ones.
An attorney or an HR business partner can help you decide if you're not sure.
1. I'd make sure that each employee is properly classified per the Fair Labor Standards Act and I am paying overtime to whom I am supposed to be paying overtime.
Even if you had this right in 2014, you may not have it right in 2016. The Department of Labor proposed some important changes to overtime laws last summer and closed its comment period on those proposed changes in September. The new rules are expected to become law in the first quarter of 2016. The most significant change is increasing the salary test for exempt workers from just under $24,000 per year to potentially over $50,000 per year. That means any manager or supervisor in your company that makes between $24 and $50k is likely to no longer be exempt from overtime pay if they work more than 40 hours in a work week, no matter what their duties are.
Now is a great time to conduct a wage and hour audit to see if you have any potential risks, and to conduct contingency workforce planning to determine how you are going to handle those positions that may no longer be exempt. The penalties if the Department of Labor finds the problems before you do include payment of back wages and liquidated damages to any affected employees as well as fines.
2. I'd make sure that any relationships I have where I am paying a worker by 1099 are legitimate subcontractor relationships and properly documented as such.
Utilizing 1099 workers to supplement your core workforce can be a legitimate and legal strategy. The key is to look at it the way the Department of Labor and the Department of Revenue look at it, not the way many small business owners look at it.
Both the IRS and the DOL consider the use of 1099 a highly abused practice. So the DOL published a guidance in July 2015 to clarify the rules. Before, you might have been able to make a reasonable case that your 1099 workers could work for your competitors if they wanted to - it's not your fault they choose not to. Now, they're looking at the economics - are your 1099 workers performing similar work for other companies besides yours? If the answer is no, and they are working for your company pretty much exclusively, then the IRS and the DOL are going to conclude that those workers should be classified as employees and you should be deducting and submitting payroll taxes, even if you have a signed subcontractor agreement in place. And that's what they want - employers to be withholding and submitting taxes every payday.
The consequences of being ruled against can be quite severe, ranging from payment of back taxes they feel should have been withheld all the way to jail time in extreme cases. As a part of my risk management plan I would look at each relationship in my company and determine, not whether I think it's legitimate, but whether the DOL is likely to consider it to be legitimate. I'd make sure I have an executed contractor agreement with the legitimate ones and I'd go ahead and hire the questionable ones.
An attorney or an HR business partner can help you decide if you're not sure.
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