You see, whether you can terminate someone depends upon the proactive nature of your disciplinary and performance review processes. The most critical piece of supporting termination is documentation, and usually if someone has been doing a good job at documenting poor performance issues then it is clear to all parties involved when that termination is going to take place. The action plan that you set forth, in your most recent conversation regarding the behavior, is what sets the deadline for termination. Your action plan should be specific and say something like: In 30 days if we do not see improvement we know we will part ways. The main problem I see in getting this question is that there usually has been no prior disciplinary or performance review process in place that limits the employer’s ability to terminate. You know when you can terminate someone based upon the expectations you have set along the way. You may be in a no-fault state, but no fault does not equal no potential for wrongful termination suits.
MYB: What about breaks and lunches? Does a small business owner have to pay for those, or provide them?
Perez: In short, the answer to this question is: It depends. Each state will confirm how many hours an employee must work before breaks and lunches must be provided, and it will also determine how long those breaks and lunches must be depending upon employee age. Typically, if you are providing breaks and lunches for an employee they are paid but, again, it just depends upon the employee status and what your state regulates. For instance, Ohio labor laws require employers to provide employees under the age of 18 a 30-minute uninterrupted break (unpaid) when working more than five consecutive hours. Ohio does not require employers to provide breaks, including lunch breaks, for workers 18 years of age or older.
MYB: What’s the best way to handle I-9 regulations?
Perez: Most employers during the course of hiring an employee collect an I-9 form to verify citizenship or authorization to work in the United States from a new hire. Without really knowing what to collect and what dates to use an employer can be putting themselves at risk based upon the time the I-9 form is collected, the date that the information is verified by the employer, and the signatures that are located on the documents as it relates to the hire date listed. It is critical that employers understand and know when they are collecting an I-9 form from an employee what could make the I-9 form invalid or require that the employer collect a new I-9 form once the old form expires. The I-9 form contains two major sections (sometimes three), with the employee needing to complete section 1 and the employer needing to verify and complete section 2. Section 3 is completed when an employer is rehiring a previous employee.
The biggest piece of missing information that employers don't realize is that section 2 must be completed and verified within three business days of the date of hire listed on the form; otherwise your form is incorrect. Employers must retain I-9s for the later of three years from the date of hire or one year after the date employment ends. From time to time, the federal government may examine your employment records. If you fail to produce I-9s, you can be subject to civil and/or criminal penalties.
MYB: Are 1099 contractors considered W-2 employees?
Perez: 1099 versus W-2 is really related to the tax classification of a subcontractor or employee of an organization. The status refers to whether an employer should be taking out and paying taxes on behalf of the employee. If you are a 1099 subcontractor, the answer is no, the employer will not withhold taxes nor match them and you will be responsible for paying taxes on your own. If you are a W-2 employee your employer will withhold taxes from your paycheck and pay their portion for your employment. It is estimated that a high percentage of 1099 contractors are misclassified on an annual basis. If this misclassification applies then the employer is subject to severe penalties when, and if, an audit is performed.
The best way to determine whether someone is a W-2 or a 1099 depends upon their treatment by the employer. With a W-2 certain things will be specific such as a schedule will be determined, training will be provided, equipment will be given, and expectations will be set (as well as other specifications). With a 1099 a project/task is usually contracted with very little to no direction, no training, and no equipment provided.
MYB: And now for some shameless self-promotion: How have COSE events helped your business grow?
Perez: I just love the organization and the opportunities. It’s chock-full of education. I make friendships with the networking events. And I also learn something every single time I attend an event or speak with someone because it’s full of small business owners just like myself going through the same stuff every single day. I make great friends, great clients and there are great networking opportunities, so I’d like to say thanks COSE!
Cheryl Perez is president and managing partner of BIG-HR, which focuses on HR consulting and outsourcing. You can learn more about the company by clicking here. And you can also learn more about the benefits of being a COSE Member by clicking here. Or, contact our Membership Team directly via email at firstname.lastname@example.org or by phone at 216-592-2355.