Shop Talk: Personnel
Personnel
- Providing
benefits
- Are you
afraid to fire?
- Independent
contractors vs. employees
- How do I
treat a part-timer fairly?
- How
do I find, and keep, good employees?
Providing Benefits
Many states have mandatory
programs such as worker's compensation insurance and
disability insurance, and require payment of time off for
reasons such as jury duty, but the only federal requirement is
minimum wage. However, many businesses offer holiday and/or
vacation pay, various types of insurance, retirement plans and
other incentive programs as additional enticements to
employees.
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Afraid to fire an employee?
Q: I have an
employee who just isn't working out, but I'm concerned that if
I fire him I'll end up getting sued. How can I get rid of this
person?
A: You're right to be concerned about this
situation, but don't be so scared that you allow a bad
employee to cost you money and disrupt your business.
First, contact your state wage
and hour board and find out if you live in a
"right-to-work state." If so, you can fire an
employee for any reason so long as it isn't discriminatory and
doesn't break a federal or state regulation. As an example, in
a right-to-work state you can fire an employee if you don't
like the way she dresses ... but you can't fire her because
she is female (or pregnant). In a right-to-work state you can
fire someone if he's too slow on the job ... but you can't
fire him because he files a workers' comp. claim against you.
If you don't live in a right-to-work state, you need to be
more cautious in firing someone.
Without proper cause or
substantiation, an ex-employee could sue you for wrongful
termination. Don't get me wrong -- you can still fire a bad
employee, or lay someone off because of a business slowdown,
but you have to be able to show cause for the separation. This
means building your case and getting all your ducks in a row
before you let the ax fall.
Regardless of whether your
business is in a right-to-work state or not, you need to be
familiar with state and federal employment regulations. First,
contact your state employment agency, state wage and hour
board, equal employment opportunity commission, OSHA, and your
state workers' compensation board. Ask each of these agencies
to send you information concerning regulations for
small-business employers ... then make sure you take the time
to read and understand it!
Employee suits are becoming
more common. Employers usually come out on the short end when
they are unfamiliar with basic regulations or act hastily and
don't take time to build a case. No employer should have to
keep a bad employee. There are very few situations in which
you can't get rid of a bad seed if you do it right with a
little planning, foresight and knowledge of the laws. Return
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Independent Contractors vs.
Employees
The IRS defines independent
contractors as people who follow an independent trade,
business or profession in which they offer their services to
the general public such as lawyers, contractors, auctioneers,
etc. However, just because a business or individual agreed to
independent contractor status, it may not meet IRS
requirements and you could be held liable for penalties.
Contact your financial or legal counsel and read IRS
Publication 537, Employment Taxes for answers to
specific questions.
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How do you treat a part-time
employee fairly?
Q: I have a
part-time employee who has the impression he gets the same
holiday pay and vacation time as full-time employees do. I'm
afraid this person -- who has a disability -- will cause
problems if I don't give in. What can I do?
A: Your first problem, you obviously don't
have a clearly defined and written employee policy that spells
out what benefits are provided and to whom they are provided.
Rectify this immediately!
Establish a written company
policy concerning benefits for employees. If you aren't
familiar with how to set up policy statements for a business,
check your local library for books about the topic. Or contact
your state employment office, chamber of commerce or another
small-business organization. These organizations generally
have information about writing a company policy manual. There
are also software programs that address this topic.
There are no federal or state
regulations that require you to offer any holiday or vacation
benefits. You have the right to establish your own policies.
It's common to offer full-time employees (generally those
working 30 or more hours per week) different benefits than
those offered to part-time employees. Some companies don't
provide any benefits for part-time employees while others give
half benefits. For example, you may give eight hours holiday
pay to full-time employees and only four hours to part-time
employees.
You can change your policy any
time you wish. Just remember, if you do change and an employee
had benefits coming under the old policy (such as vacation
time earned but not yet taken), you may still owe that
employee in accord with the old benefits policy.
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Finding Good Employees
Q. I'm having a
difficult time finding good employees. I hire and fire three
or four people before I fine one who's good. How can I stop
this merry-go-round?
A. Finding and keeping good employees is a
challenge for any business owner -- and it doesn't matter
whether yours is a micro-business with one person or a major
conglomerate with hundreds of employees. One of the most
common clauses for the employment merry-go-round is not having
a good hiring plan in the first place.
Start with a good outline for
the position you need to fill, including a job description for
just what you want that person to do.
If you already have employees,
start your search with them. You may already have someone who
would be great in the position, or you may be able to skip
hiring and distribute the workload to existing employees.
If you do need to add to your
staff, be sure to give yourself enough time to find the right
person. Too often, when you're rushed, there's a tendency to
hire the best of several bad candidates!
Ask your better employees to be
on the lookout. You might even offer a reward if they refer
someone you hire. Don't overlook your competition and other
people you know in business. They may have had someone apply
who would have been great, but they didn't have an opening at
the time.
Another growing source of new
employees in temporary agencies. Here you get a chance to
"try before you buy." If someone doesn't look like
he or she is going to work out, just tell the temp agency to
send someone different. This might sound more expensive on the
surface, but when you add up the costs of newspaper
advertising or having to rehire, the real cost of finding a
good employee could end up being much less.
Once you have a candidate,
conduct a thorough background check. While it's getting harder
to get references from past employers, if a person has done a
good job employers will usually not have a problem letting you
know. It's the less desirable people that employers are afraid
to give references on.
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