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1. FEATURE STORY:
EMPLOYEE OR INDEPENDENT CONTRACTOR?
YOU'D BETTER KNOW THE DIFFERENCE

Last week, New York Governor Eliot Spitzer announced a new Executive Order to address the problem of employee misclassification. Effective immediately, the Executive Order creates a Joint Enforcement Task Force that will work to strengthen enforcement and avoid duplication of efforts by sharing relevant information and coordinating investigations and enforcement actions. The Task Force will issue a report to the Governor annually on February 1, detailing its actions and suggesting potential legislative or regulatory changes in this area.

The Governor's press release cited a recent study by the School of Industrial and Labor Relations at Cornell University that estimates that approximately 10% of workers in New York are misclassified (15% in the construction industry).

All employers should be vigilant about the use of the independent contractor label. Misclassifying employees is detrimental to the employees, to other business, and also to the company itself. Businesses that are caught with misclassified workers may be held liable for damages.

Late last month, a Southern California company was ordered to pay over $4.5 million in back wages and damages to 385 current and former employees that it had misclassified as independent contractors. The federal Department of Labor had filed an FLSA lawsuit alleging that the misclassification resulted in minimum wage and overtime violations, and that the company failed to keep accurate records of the employees and the hours they worked.

Also last month, FedEx lost an appeal of a California trial court decision that ruled that its drivers were employees, rather than independent contractors. Total damages: Approximately $11 million. Working against the company: The work performed by the drivers was wholly integrated into FedEx's operations. The drivers had to use specific scanners and forms that were distributed by the company and had the company's logo on them. The drivers were required to work full-time on regular schedules and regular routes, and FedEx managers could unilaterally change drivers' routes without regard to the drivers' loss of income. The appeals court commented on the control FedEx had "over every exquisite detail of the drivers' performance," including sock color, hairstyle, and uniforms.

The amount of control employers exert over workers is just one factor that determines whether a worker is an FLSA-covered employee or a true independent contractor. To help ensure your workers have been classified correctly, AHI has created a checklist that you can use to conduct a self-audit of your workers' status. Click here to get your copy today.

2. CATHIE'S CORNER:
IF YOU COULD READ MY MIND…

Did you ever have one of those days where everything's going wrong, and on top of that, you're getting bombarded by a dozen annoying questions an hour? You reach the point where how you actually respond to those questions is not what you really want to say. Can you identify with this?

Question: "Karen says if I'm late one more time this month, she's going to dock me a whole hour even if I'm only five minutes late. You're not going to let her do that, are you?"

What I wanted to say: "There's an easy answer to this one. Don't come in late!"

What I did say: "I'm sure Karen didn't mean that. You won't be docked an hour for a five-minute tardy. But you do have to get your tardies and absences under control; you've already been written up once for that, and you could get written up again."

(And, of course, now it is necessary to explain wage and hour laws to Karen.)

Question: "Someone spilled coffee on the break room floor. Can you get someone to clean it up? I almost killed myself!"

What I wanted to say: "Good thing you didn't. I don't need the Workers' Comp claim."

What I did say: "I'm glad you weren't hurt. Since the cleaning staff doesn't come in until this afternoon, do you think you could just take a paper towel and wipe it up for me?"

(I'm not quite sure when HR became the break room supervisor.)

Question (from a branch office half a continent away): "Does a tank top with a blazer over it and a pair of skorts meet the dress code? Because that's what Vicki's wearing today."

What I wanted to say: "You're not fooling me. Ever since Vicki wrote you up last month, you've been determined to see her get in trouble, too."

What I did say: "Vicki is your boss; you are not hers. If she's wearing anything that's inappropriate, I'm sure Ron will let her know."

(And, once again, when did HR become the dress code police?)

Question: "Last year's company party was really boring. We're not going to the same place again, are we?"

What I wanted to say: "It wasn't really boring when we had to pour you into a cab at the end of the night."

What I did say: "No final decisions have been made yet. Eric is in charge; if you have any suggestions for an alternate venue, give them to him."

(That reminds me, I need to speak to Eric about having a cash bar this year — or better yet, no alcohol at all.)

Face it. Everyone has "one of those days" where we don't have the time or the patience to deal with what appear to be employees' minor issues. But keep in mind that, if it's important enough to the employee to go to you, then, as an employee relations move, it is important for you to take the time to pay attention. Keep the snarky comments to yourself — or share them with another HR professional who will understand.

Catherine Bannon is the President of HR by Request, Inc., in Marshfield, MA (catherine.bannon@gmail.com). Bannon worked for 10 years in HR management before starting her consulting firm.

HIRING AN HONEST APPLICANT? DON'T BE TOO SURE OF IT

It's not unusual for applicants to falsify or omit information on résumés or applications or to tell little white lies in interviews in the hope of getting a leg up on the competition. Global outplacement consultancy Challenger, Gray & Christmas (Chicago) reported that some experts estimate that 10-30% of all job applicants distort the truth...View the full story on our website.

Kick back, relax, and take a few minutes to check out the new HR Soapbox, "Time Wasted May Be Time Well Spent!," to learn why an editor advocates letting employees steal a few minutes here and there to tend to non-work matters on the company's dime.