Hiring Immigrants Part 1

Posted on October 30, 2008 by admin

Immigration and illegal workers is a controversial issue all across this country as employers take advantage of the cheap labor available. Lax local and state laws(or enforcement) combined with the inability to get citizens to do hard labor for low wages, has led to the creation of day-laborers. Its a familiar scene played out everyday in many towns throughout the country; Workers lining outside local Dunkin’ Donuts or McDonalds waiting for employers to pull up in trucks looking for painters, roofers, construction workers, and more. The workers are picked up, taken to the site for the day, worked for long hours, and paid cash at the end. The next day it gets repeated all over again. In this instance employers are liable for not paying payroll taxes, as well as breaking federal immigration laws.

Growing up in Connecticut where migrant workers can be found at most labor sites, I have been accustomed to this illegal practice as friends whose parents own construction and painting businesses complain about the lack of a dependable, legal workforce to draw from. Personally, I find it hard to argue with small business owners using these workers to fill in the gaps and allow them both to put food on the table for their families as long as they are not mistreating, underpaying the workers and skipping over available legal workers to utilize cheaper labor. I have also become accustomed to a much more serious offense taking place in factories and franchises in which owners advertise positions in other countries, promising green cards and profitable work in the United States. Upon arrival these illegal workers are forced into positions with long hours and low pay with no chance at receiving a legal green card.

Recently in my hometown, it was discovered that the owner of a profitable Dunkin Donuts franchise in Connecticut was doing just this. Recruiting workers from Portugal and falsifying documents to provide cheap and controllable labor for their stores. In a 2005 investigation by Channel 8 news, an undercover reporter, in response to a questions regarding the need for a valid green card was told “between me and you, you do, but ah just give me any number you want. “You do,” he says “but just give me any number you want.” After this investigation, two managers(also illegal immigrants) complained to the Dunkin’ Donuts Corporation. “these illegal workers claim they were ordered not to hire Americans at their stores. “He told me not to hire American citizens because they were lazy,” says Man 1. Man 2 says, “People illegal can work a lot of hours, no pay overtime.” In this case, the owner was sentenced to 10 months in prison and charged a $1 million fine. His daughter, who heped in the hiring, was placed in home confinement for one month and ordered to do 250 hours of community service. This case represents a blatant disregard for both the laws and well being of the workers.

The previous cases represent two ends of the spectrum when dealing with illegal immigrants. So what happens to the majority of managers and business owners who are somewhere in between, often times without even realizing the worker is not legally allowed to work? How can you protect your organization? These are tricky questions that requires an understanding of the types of visas and permits as well as proper documentation. With the federal government cracking down on these employment practices, it is necessary for organizations to take a proactive role in ensuring the legitimacy of of their workforce.

To learn more about the visas available, as well as the laws and documentation(customizable samples included) required, access your HRSentry account today.

Last Chance to Signup for Tomorrows Webinar: “Payroll – Taxation of Fringe Benefits

Posted on October 27, 2008 by admin

With year end around the corner and W2s being thought about – its time to make sure you are taxing your fringe benefits correctly. Do you offer tuition reimbursement? Do you have a relocation program? Do you offer health insurance to domestic partners or civil union/same sex marriage partners? Do employees use company cars for personal use? There are many areas that need your attention – come learn how to calculate these correctly.

This webinar, titled “Payroll – Taxation of Fringe Benefits” will walk you through the rules of taxation on fringe benefits. Do you offer health insurance to domestic partners? Civil union partners? Do you have a tuition reimbursement program? What about relocation?

Tuesday, October 28th from 2:00 – 3:00PM, presented by HRSentry’s Director of Operations, Brenda JM Sabin,CBP.

For attending this webinar you will receive a free white paper titled “Payroll -Taxation of Fringe Benefits”.

Employee Termination Resources Added to HRSentry’s “Getting Started Kit”

Posted on October 24, 2008 by admin

As many of you probably have noticed, there have been a great deal of changes and additions to services available through HRSentry over the past several months. In addition to the training programs and audit now available, several resource packages have been created to help make navigating HR compliance easier. Our latest addition has been the creation of a “termination kit”.

As of this week, HRSentry users will have access to a set of termination resources located within the “Getting Started Kit” to help with one of the trickier aspects of employee relations compliance. These resources include 12 forms to help with documentation, as well as policies, best practices, and regulations. Learn more about the specific resources available in the “Termination Kit” here.

In addition to the addition of the termination resources, we have also made our HRSentry sample employee handbook available through the “Getting Started Kit”. This allows for access to both of these resources for a low fee of $19.99, improve your organizations compliance today to reduce your risk of costly fines and lawsuits!

Free Webinar from HRSentry: Payroll – Taxation of Fringe Benefits

Posted on October 22, 2008 by admin

This webinar will walk you through the rules of taxation on fringe benefits. Do you offer health insurance to domestic partners? Civil union partners? Do you have a tuition reimbursement program? What about relocation?

Tuesday, October 28th from 2:00 – 3:00PM, presented by HRSentry’s Director of Operations, Brenda JM Sabin,CBP.

For attending this webinar you will receive a free white paper titled “Payroll -Taxation of Fringe Benefits”.

REMINDER: Tomorrow October 21st from 2-3pm we are presenting Payroll – Getting Back to Basics. If you have not registered and wish to Click Here

Independent Contractor vs Employee

Posted on October 20, 2008 by admin

Over the past few years the IRS has been noticing a significant increase in the hiring of independent contractors. With looser tax and payment regulations over independent contractors, this can be seen as a cheaper alternative to hiring as an employee. Many of these cases put “independent contractors” in a position to essentially be employees, just called a contractor. These cases of misclassified workers lead to fines, payment of back taxes, and increased workplace monitoring.

A new bill slowly making its way through Congress would amend and modify the IRS rules relating to the treatment of individuals as independent contractors or employees, and for other purposes. In addition it would also direct 30% of all IRS resources to auditing the recent surge in hiring Independent Contractors vs employees as well as toughening the punishment for misclassified workers.

Taxpayer Responsibility, Accountability and Consistency Act of 2008: Amends the Internal Revenue Code to:

(1) require reporting to the Internal Revenue Service (IRS) of payments of $600 or more made to corporations.

(2) set forth criteria and rules relating to the treatment of workers as employees or independent contractors.

(3) increase penalties for failure to file correct tax return information or comply with other information reporting requirements.

It also Requires the Secretary of the Treasury to issue an annual report on worker misclassification. Read more about the Taxpayer Responsibility, Accountability and Consistency Act of 2008 here.

When you hire an independent contractor, keep documents to prove that the contractor really isn’t an employee.

If you hire an independent contractor (IC), you must be vigilant to ensure that government agencies never re-classify that IC as an employee — which could subject you to back taxes and penalties. That vigilance must begin even before the IC walks in the door. If you plan to hire an IC, here are two things you can do to make sure you get the relationship off to the right start.

Independent Contractor Questionnaire

When you meet with a prospective IC for the first time, you should have the IC complete an independent contractor questionnaire. You should design this questionnaire to elicit the sort of information that will establish that the IC is a separate business entity, not merely an employee in IC’s clothing. Here is some information you’ll want to know:
• whether the IC has a fictitious or assumed business name
• how the IC’s business is structured (for example, sole proprietorship, partnership, corporation, limited liability company)
• the IC’s business address and phone number
• the number of people employed by the IC, if any
• any professional or business licenses the IC holds
• contact information for other companies for whom the IC has worked as an independent contractor
• how the IC markets her business (for example, Yellow Pages, advertising)
• whether the IC has an office separate from his home
• a description of the business equipment and facilities that the IC owns
• whether the IC has his own business cards, professional stationery and invoice forms, and
• a list of all of the types of insurance that the IC carries.
None of the answers to these questions will provide conclusive evidence that a worker is
an employee or an IC. But taken together, this information will help you decide whether
the worker is an independent businessperson whom you can safely treat as an IC.

Note: Do not ask an IC to complete one of your standard employment applications.
Government agencies can use the mere fact that the IC filled out an “employment”
application as evidence that the IC is actually an employee.

Gather Documents

Before hiring an IC, make sure that the IC has the sort of documents that will enable you to establish that the IC is a separate business entity, should the government ever decide to audit you. Make copies of all such documents and keep them in your files along with the questionnaire described above.

The documents you should request include the following:

• copies of the IC’s business cards and stationery
• copies of any advertising that the IC has done, including advertising in the Yellow Pages
• a copy of the IC’s White Pages business listing, if there is one
• if the IC is operating under a fictitious or assumed business name, a copy of the fictitious or assumed business name statement or application
• copies of any business or professional licenses
• certificates showing that the IC has insurance, including general liability insurance and workers’ compensation insurance if the IC has employees
• a copy of the invoice form that the IC uses to bill for his services
• if the IC rents business space, a copy of the office lease
• if the IC has employees, a document containing the IC’s unemployment insurance number
• copies of IRS Form 1099-MISC that other hiring firms have issued to the IC, and
• if the IC is a sole proprietor and will agree to hand them over, copies of the IC’s tax returns for the previous two years showing that the IC has filed a Schedule C, Profit or Loss From a Business (which will show that the IC has been operating asan independent business).

Get more tips and resources including the 20 factor test for identifying an independent contractor at HRSentry.