Both articles point to society’s gains from diversity; as a microcosm of society at large, the workplace benefits likewise.  After all, how many of us, as HR professionals, have witnessed (or committed) the classic mistake of hiring or promoting employees who are “just like us” rather than surrounding ourselves with the complementary skills and diverse viewpoints needed to bring the department or organization to the next level?  The result can be stagnation, stifled ideas and missed opportunities.   Conversely, a well-managed, diverse team can lead to synergy and high performance when diverse approaches, ideas and vantage points are encouraged and valued.

Raising awareness about these variations in personality types and styles can help employees, supervisors, and managers become more effective in the workplace.  For instance, if you know your boss prefers short summaries, don’t engage in meandering explanations or tangents, even if that’s your preferred communication style.  On the other hand, if you need information from a co-worker whom you know values strong interpersonal connections, ask him about his weekend and family first; he’ll go the extra mile knowing you are interested in him as a whole person.

One way for HR to help managers and employees understand and capitalize on each other’s differences is to use a formal personality assessment instrument.  Possibly the most well known is the Myers Briggs Type Indicator® which is based on four categories of preferences:  Extrovert or Introvert; Sensing or iNtuition; Thinking or Feeling; Judging or Perceiving.  The combinations yield sixteen different personality types denoted by the upper case letter in each of the categories such as ESTJ, ISTJ, ENTP, etc.   One criticism is that sixteen profiles may be hard to remember and use.

There are other assessments that yield fewer profile types and thus may be easier to remember and act upon.  This is not to advocate for or against any type of assessment or even whether to use one at all.  Do the research and let your judgment and budget be your guide if you think a formal tool might be helpful for your organization.  My observation has been that, formal tool or not, it’s good to raise awareness among staff and managers that many differences in style are not necessarily better nor worse, just different.

For starters, it helps to know about four main temperaments, with the understanding that we are a mixture of all to varying degrees.  Although the names are old fashioned, the categories themselves have stood the test of time:

1.  Choleric people are energetic, ambitious and passionate. They tend to be doers and, as leaders, are dynamic and goal oriented.  They are confident, outspoken and not easily discouraged; they tend to be good decision makers but can also be compulsive.  Other downsides are a tendency to be controlling,  become impatient, be quick to anger. Highly results orientated, cholerics may be impatient with meetings, processes and other staff members and they may be unaware of the effect they have on others.

2. Sanguine people are cheerful, talkative and entertaining.  Fun-loving and enthusiastic, they have good people-skills and a confident and spontaneous style. They are emotional and communicative by nature, but can also tend towards arrogance and self-indulgence.  They may be artistic.  At work they provide a positive atmosphere and often volunteer to help out. However they can also be day dreamers who struggle to complete work, starting too many tasks.  Their creative and enthusiastic energy can inspire others, but they may lose focus when the novelty of the project or task wears off.

3.  Phlegmatic people are relaxed and easy going. They remain calm and quiet and are usually considered reliable and capable. Although generally slow to anger, if pushed too far they can be explosive. At work they are steady and have a good sense of processes and timing. They are good mediators who work well under pressure and tend to need deadlines to work towards. They sometimes find it hard to speak up in the workplace so their ideas may get overlooked.  They have a tendency to avoid conflict.

4. Melancholic people are thoughtful and sensitive towards the needs of others. They are often deep, philosophical, self-sacrificing and conscientious.  While principled and idealistic, they may also be self-critical and prone to depression.  At work they are organized and goal-oriented and maintain high standards through being persistent and thorough.  They may ask difficult questions.  They can find creative solutions but may also fear the worst. They can be resistant to change unless there is a good precedent.

Being aware of temperamental differences can help you anticipate, prepare for and interact well with others for the best results.  The key is not to pigeon hole people.  I once had a colleague who, I suppose, had me pegged as someone who would be unsettled by change.  (It’s true that I have “melancholic” tendencies.)  He thought I would react if he sat in the chair that I happened to have sat in at several prior meetings in that room.  I entered the room and sat in another chair, unaware of his thought process and unconcerned about which chair I sat in.  He promptly burst out laughing.  The joke, he admitted, was on him.

There are many parties interested in proper worker classification ranging from the IRS to the U.S. Department of Labor (DOL) to state governments to workers themselves.  It’s much cheaper for employers to use independent contractors over employees because they avoid paying the following: employer portion of payroll taxes, workers’ compensation and unemployment insurance premiums, overtime payments and the expensive benefits that often go along with hiring employees.

On the flip side, there’s a growing risk if you misclassify employees as independent contractors, especially if you do so willfully.  In addition to the possibility of owing back pay (if minimum wage requirements haven’t been met) and overtime, you could also face paying: back taxes, including the employee portion; penalties and interest; fines; retroactive employee benefits; costs of staff time and effort; and possible legal fees if faced with going to court.  Additional costs, less quantifiable but important nonetheless, include negative publicity for your organization and possible employee morale issues.

Even inadvertent misclassification can be expensive but imposed fines and penalties grow increasingly severe the more willful the nature of the violation.  Both state and federal governments are paying greater attention to this issue than in years past. The IRS and DOL have even teamed up with eleven states (thus far) to share information and resources in a joint effort to uncover violations.  So there’s strong incentive these days for employers to do their best to get it right.

The IRS makes is clear that there is no magic formula or simple test as to whether or not a worker is an independent contractor.  They emphasize that each case is fact specific.  In general, however, the best place to start is to consider whether you, the employer, have the right to control, not just the outcome but also how the worker performs the work.  Whether or not you actually exercise this right is irrelevant to the worker’s status.  There are many times, for instance with highly experienced employees, when organizations provide little guidance or oversight.  The real question is whether or not you have the right to do so.

How does the IRS decide upon the degree of control an employer has over how the work is performed? It comes down to looking at a number of factors that comprise three main categories:  Behavioral Control, Financial Control, Type of Relationship.  Remember, no one factor is decisive as circumstances differ; the totality of the situation must be evaluated.  IRS guidance is abundant on their web site.

You should also take a look at the DOL’s Economic Reality Test.  This test relates to whether the Fair Labor Standards Act (FLSA) applies.   The seven factors it contains overlap those that the IRS looks at and likewise consider whether or not the worker has a bona fide business that does not provide services integral to yours.  Be sure to familiarize yourself with all seven factors of this test in addition to IRS guidance.

So how do you prove that someone is indeed an independent contractor and not your employee? The best documentation shows that the person has a bona fide business quite separate from yours; that control over how the person does the work resides with the worker; that the work being contracted is not an integral part of what your business provides and the worker is free to make a profit or loss and be hired by others.  Keep a vendor file for each independent contractor just as you would for any other vendor or supplier, such as the folks who deliver your coffee supplies or service your copier machines.  Here are some important items that should be kept in that file:

• A written contract—Always a good idea, the contract should outline the nature of the relationship, although saying the person is an independent contractor doesn’t make it so.  Indicate the project’s expected results, the fee and date(s) of completion.  Note that you don’t control how the results are achieved; the worker uses his/her own equipment/tools; is free to hire others without your approval and that the person provides liability insurance to his/her workers, and is not eligible for benefits with your company.    Note that the person has their own business and tax I.D. number.  Make sure it is signed by both parties and create a new contract if the worker takes on a new project for you.  Each project should have a separate contract.
• Proof of a real and separate business—Keep any letters on business stationery, business cards, brochures, or newspaper advertisements.  With so much done electronically these days, print off a copy of an appropriate page of the worker’s web site, online advertisement of services or copies of emails detailing services offered.
• Invoices—Every payment to an independent contractor should be based on an invoice.  The worker should never submit expense reports to you as that would point toward the person being an employee.  The worker’s mileage or purchase of equipment or supplies should be part of their own business expenses, not yours.  Keep every invoice and make sure it ties in with the Form 1099 you issue to the person for that calendar year.
• Form W-9—Obtain this form when hiring an  independent contractor and make sure it is filled out properly.  If the person does not check the box exempting him- or herself from tax withholding, you are legally obligated to withhold taxes at 28%.  An independent contractor should check the box file their own self-employment taxes on their own.

Due to lots of bad practices that organizations got away with in the past, businesses may think they are classifying workers correctly when they are not.  Increasing scrutiny demands that the facts of each situation be reviewed.  Here are some common red flags to watch for:

• After an employee terminates, you hire the person back to do work that resembles their old job, even on a temporary, project basis;
• If an intern is doing actual work, not just shadowing or learning; be sure to check DOL Fact Sheet #71 for the six criteria related to interns.  In order to not pay interns minimum wage and overtime, all six criteria must be met.
• When you provide the equipment, supplies or office space the worker uses;
• If the worker replaces one of your employees or supervises any of your employees;
• If the worker receives any benefits or perks your employees receive, gets paid on a regular basis, or submits expense reports;
• If the relationship is ongoing and long-term;
• If a supervisor hires a worker and pays the person through Accounts Payable unbeknownst to human resources or payroll.

The last item happens more often than you might think, especially in larger organizations, but all organizations are vulnerable without proper communications and procedures in place.  If the person administering payroll also issues 1099s and is thus aware of all workers, misclassification can be avoided.  But if your organization is too large for that, make sure there are good channels of communication among payroll, accounts payable and human resources and train managers to get approvals from human resources when engaging any worker.

A final caveat is that state laws may differ from federal laws in important ways.  It’s possible for a worker to be classified as an independent contractor for IRS purposes, yet, by state definition, require workers’ compensation or unemployment insurance premiums paid on his or her behalf.  So be sure to check your state laws as well!  Subscribers to HRSentry may simply search on the term independent contractor to pull up helpful federal resources and relevant state resources as well.

Job descriptions serve important communication purposes and provide a strong foundation for key legal compliance.  Let’s take a more detailed look at the several functions of this invaluable employer tool:

Setting Out Expectations
Establish proper expectations from the start through job descriptions.  When recruiting, employment ads or social media posts are brief so you can point candidates to your web site and publish the full description there.  Some prefer to provide a hard copy when candidates come in to interview but candidates often request a copy before interviewing or even before applying  so why not just put it out there?  The job description conveys precisely what the opening entails and other relevant information such as to whom it reports and the education level, skills and experience required.  Unqualified candidates, or those scared off by hard work, may self-select themselves out of the process based on the description and that saves you valuable time.  Having a clearer understanding of the job also helps candidates ask better, more pointed questions.  Once hired, a new employee is better armed to understand what is expected of him or her from the outset.

Compliance with the Fair Labor Standards Act (FLSA)
A job description is key in determining and documenting whether a position is considered exempt or non-exempt under the FLSA.  In addition to salary considerations, the U.S. Department of Labor (DOL) sets out duties tests for its various exemptions from overtime and minimum pay requirements:  executive, administrative, professional, outside salesperson, and computer-related.   If a position is deemed exempt, the job duties and functions laid out in the description offer legal justification.  It’s a great idea to include the exempt/nonexempt status right in the job description along with which exemption category the job fits into.  This will provide enormous help in the event of an investigation.  I just attended a presentation by a federal investigator who was asked how he determines whether a position is exempt or nonexempt.  The first place he looks?  The job description.

Compliance with the Americans with Disabilities Act (ADA) and Amendments Act (ADAAA)
Job descriptions outline the essential functions of the position which are crucial to understand in order to comply with the ADA and ADAAA.  Especially since the passage of the latter, there is much less emphasis on whether or not an individual has a disability.  The category of what constitutes a disability is now so broad that the focus is more on this question:  Can the employee (or applicant) perform the essential functions of the job with or without reasonable accommodation?  So, when you provide job descriptions to applicants, you may not lawfully ask if they have a disability; but you may lawfully ask if they can perform the essential functions of the job with or without reasonable accommodation.  And the job description is key in defining those functions.  You don’t have to hire, nor retain, an individual who cannot perform the essential functions.  Of course, it is incumbent upon you to provide any necessary but reasonable accommodation to help the person do so.  But you do not have to provide any accommodation the person requests as it may not be reasonable.

Employees’ Return to Work
The essential functions of the job come into play when an employee is returning from work after serious illness or injury under the Family and Medical Leave Act, short- or long-term disability leave or workers’ compensation leave.  The employee’s release by a physician as able to perform the job is of course based on the job description.  And the job description is the perfect place to start when creating a temporary “modified duty” position to get the employee back to work after a workers’ comp injury.

Performance Evaluation
Finally, a good job description serves a key role, along with your goals and mission, in your performance evaluation system.  In order to know how well a person performs, both employer and employee need a strong understanding what the job contributes.  After all, you can’t judge a person on a responsibility they didn’t know they had.  The job description serves as a guide and road map.  The goals for each employee roll into the goals of the organization.  Of course, jobs and employees evolve.  Every six months or so, employees and supervisors should re-visit job descriptions and make appropriate updates.  Yes, get the employee’s input.  No one understands the job better than they do.  It’s one more communication opportunity so employees feel consulted and involved with their job and how it fits into the goals of the organization.

Here are the components of job descriptions:

1. Basic Information–Title; Department; Supervisor; Exempt vs. Nonexempt FLSA Status; if Exempt, which exemption applies
2. Job Purpose–The main role of this position; the reason it exists
3. Knowledge, Skills and Abilities Required or Helpful to Perform the Role
   a. Abilities refer to competence due to one’s training, skill or other qualifications
   b. Knowledge is factual or procedural information;
   c. Skills refer to mental, verbal or manual acuity;
4. Tools and Technology used in performing this role
5. Physical and Mental demands, e.g.  physical demands such as moving heavy objects or on-the-job travel; mental demands such as handling pressure and meeting deadlines
6. Working Conditions—what is the environment like?  Items such as lighting, temperature, noise level, office setting, warehouse setting, outdoors.
7. Approvals by the manager and HR; signature of employee  to acknowledge understanding.

Finally, follow these six tips to introduce job descriptions successfully at your organization:

1. Have job descriptions for every position, not just a few, so everyone understands the importance of job descriptions and so you are consistent with all levels and roles;
2. Solicit employee input or even have employees write the first draft;
3. Update completed job descriptions periodically so they remain current and useful;
4. Refer to the contents of job descriptions in your performance evaluation process;
5. Use ADA-compliant wording; for example, instead of saying “lift 50 lb. boxes,” say “move 50 lb. boxes” or instead of “sitting or standing ” say “remaining in a stationary position” to avoid excluding someone with a disability who could perform the function with equipment or other reasonable accommodation.
6. Find ways to make the process easier with electronic templates and tools such as HRSentry’s Job Descriptions Made Simple online job description creator.

• HR Audit—assess your weaknesses before someone else does and work to reduce your risk exposure in the most important areas first;
• Classification – make sure your workers are properly classified as employees or independent contractors;
• Policy and Handbook Review and Update – update policies as needed and make sure your handbook reflects all changes; communicate any changes to staff.
• Training — set up training for your managers (and employees as appropriate); important areas include your policies and procedures, documentation, recruiting practices, nondiscrimination, retaliation and harassment.
• Fair Labor Standards Act – evaluate the exempt vs. nonexempt status of all positions to make sure you’re in compliance.
• Performance Management – create a complete system, beginning with the job description and tying into your goals and mission, that occurs year round with continual feedback and no surprises;
• Job Descriptions – have employees and managers review and update all job descriptions; if you don’t have job descriptions, it’s a great time to create them.
• Wellness Program – institute one or improve the one you have to create a healthy workplace culture; conduct an employee survey to find out what’s working well and what could be better;
• New Employee Onboarding – enhance and improve your program for new employees so they acclimate and become productive team members sooner.

HRSentry is the best place to learn about what you can do with all of these topics and all of the issues you face daily as an HR professional.  There’s even a mobile app for conducting an HR audit.  So begin the new year on the right foot with HRSentry resources at your fingertips!

Unless legal challenges dictate otherwise, most private sector employers will be required to post the 11-by-17-inch employee rights notice by the new April 30th deadline.  The notice may be downloaded for free from the NLRB through its website which provides additional information on posting requirements as well as on NLRB jurisdiction.

Specifically excluded from NLRB jurisdiction are:

• federal, state and local governments, including public schools, libraries, and parks, Federal Reserve banks, and wholly-owned government corporations;
• Employers who employ only agricultural laborers, those engaged in farming operations that cultivate or harvest agricultural commodities or prepare commodities for delivery;
• Employers subject to the Railway Labor Act, such as interstate railroads and airlines.

To download HRSentry’s “HR Audit” visit the Apple App Store or Android Market and search for “HR Audit”. In addition to the HR Audit, HRSentry’s first app “HR At Your Fingertips” for the iPhone and iPad, continues to rank as one of the top business apps in the Apple store.

About HRSentry:

Since being founded in 2003, HRSentry’s mission has been to create, deliver, and support services and training that empower the organization to be self-sufficient in administration of its Human Resource policies, practices, and procedures. HRSentry’s services enable the user to access Human Resource forms, policies, and procedures; link to federal and state laws, regulations, and resources and expand their knowledge of HR through state-of-the-art training mediums. For more information visit www.hrsentry.com.

The modern organization has changed – it is decentralized and increasingly, virtual. And yet, the need to remain connected to your organization continues to grow. Your employee handbook says you have an open door policy, but an open door policy is more metaphorical than factual. Employees are not seeking to enter a physical office to connect with you. They want to reach you via some communications channels you may be less than familiar with. Fortunately, even the busiest leaders can breathe some life into their open door policies by following a few rules of thumb.

Three Tips for Tweeting, Chatting, and Connecting

The rules are a bit different when you’re connecting with employees online. However, you may be surprised to find these new channels are a great (and oftentimes convenient) way to strengthen your employee relations. Novice and adepts users alike should keep these things in mind when reaching out:

Don’t be so serious. Informal check-ins are more comfortable for employees, and casual hello-how-are-yous offer a great opportunity for leaders to engage employees. A lot of companies use chat clients for quick communications. Though some of us are more familiar with this media, others struggle to communicate effectively via instant messengers. Not to fear. If you’re not comfortable with the LOLs, OMGs, and TTYLs, don’t use them. Just keep things short and respond quickly. The point here is that you’re making yourself both available and approachable.

Choose your words carefully. Regardless of how you intend a message, interpretation can vary – especially with emails and memos. It can be difficult to find words to convey exactly what you mean, and communication is all the more challenging when you are not sitting across the table from the other person. And when it comes to electronic communications, choosing the right medium is often just as important as what you’re trying to say. If you find yourself burning bridges via email, tools like ToneCheck can be really useful.

Get your people on board. The more people you have using the same tool to communicate, the easier it is to connect with them – and the greater potential to connect with others. So it is critical that you rally your team to a common communications and collaboration platform, and make sure they use it. Over time, the value of everyone working together on one system will make it a critical part of their routine.

Interaction with a good boss is critical to realizing your full potential as an employee. With the right tools, keeping tabs on your people and your organization can become a part of your regular workflow. At the end of the day, though, you know what works best for you – and for your organization. Feel free to dabble in a few different products until you find the right one, keeping in mind that many tools are free at their most basic level.

For further reading, this article can be found in full on Kyle’s HR blog at: http://blog.softwareadvice.com/articles/hr/5-tips-for-keeping-an-open-door-in-a-virtual-workplace-1120111/

Newly increased focus by the IRS, in partnership with a number of state authorities, is making misclassification a riskier prospect than in years past.  So how can you be sure your organization is classifying workers correctly?  IRS guidance says to look at the worker/organization relationship and consider the amount of control the organization exerts vs. the amount of independence the worker has.  The following common law guidance comes from the IRS web site and provides links to factors you should consider under each category:

Facts that provide evidence of the degree of control and independence fall into three categories:

1.    Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2.    Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3.    Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

Keep in mind that there are other considerations as well such as the DOL viewpoint for purposes of the Fair Labor Standards Act (FLSA) and state legal standards for unemployment or workers’ compensation purposes.  But the IRS links above are a great place to start to help you feel confident about proper classification.

If you come to realize you are not in compliance, seriously consider taking advantage of the IRS’ new Voluntary Classification Settlement Program (VCSP.)  Details on the VCSP are forthcoming in Part 2 of this blog.

You’re probably already in the midst of myriad benefits and payroll changes and will soon be engaged in year end wrap up, preparing for numerous payroll entries in the new year and the testing of and preparation for W-2s.  On top of that, the upcoming holiday season may alter payroll, direct deposit and tax payment deadlines.   You can’t control everything, of course, but when you anticipate and deal with as much upfront as you can, you’ll have that much less stress throughout the year end process.  For example, one of the best things you can do at the beginning of the calendar year is set up payroll fields that have annual dollar limits with pre-set cutoff amounts so you’ll never have to worry about refunding overpayments.  Establishing payroll and HR checklists goes a long way to help you stay on task; if you need help starting a checklist, subscribers to HRSentry can access a helpful list by entering “year end” in the search box from the home page.

In that anticipatory vein, let your employees know what to expect as well.  The more they understand about their benefits, taxation and other items that affect them, the happier they’ll be and the less you’ll have to deal with complaints and disappointed staff members.  Here are a few tips to help your employees:

Remind folks of remaining paid holidays for the rest of this year as well as holidays for the coming year so they and their managers can plan ahead.  If you have a “use it or lose it” vacation policy, remind employees how much they have left to help them avoid disappointment.

If your employees receive taxable benefits, let them know upfront that they will be taxed so there are no surprises.  Remember that cash and cash equivalents such as gift cards are always taxable.  And if you provide benefits such as term life insurance greater than $50,000, adoption benefits or personal use of a company car, make sure you comply with and help your employees understand any tax implications.

If your organization has health flexible spending accounts (FSA) through a Section 125 Plan, remind employees that they must use their funds by December 31 (or a later date if your plan has a grace period) or forfeit them.  Also remind them of the date by which they must submit claims.  Let your employees know about 2012 IRS limits on HSA contributions and retirement plan contributions so they can make adjustments in their elections.   There’s excellent IRS guidance to help you find those 2012 retirement plan limits in one place.  For HSA contribution limits, click here.

We’re preparing  the HRSentry® monthly webinar schedule for 2012 to give subscribers timely online trainings they can really use.   If you can’t attend at a webinar’s scheduled time, we always upload the slides and a recording of the presentation into HRSentry®’s training libraries so you may view them at your convenience.  Our aim is to focus on topics that are the most helpful to as many of our subscribers as possible.

Here are some topics being considered for 2012, based on the resources subscribers seem most drawn to and on attendance at our 2011 webinar trainings:

The Basics of Human Resources
The Family and Medical Leave Act (FMLA)
The Fair Labor Standards Act (Overtime Regs)
How to Avoid Unlawful Termination Lawsuits,
The Whys and How-tos of Job Descriptions,
Understanding COBRA Administration
Ask the Pro (HR Legal Questions Answered in Real Time)
Creating An Employee Handbook
Organizing Personnel and Other HR Files—What to keep, how long and where?
Social Media in the Workplace
Sexual Harassment Awareness

What do you think?  Let us know your thoughts on these or feel free to suggest other HR topics.  We’d love to give you the online training programs that help you the most.  Please contact us at:  support@hrsentry.com.