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Do you employ one or more full or part-time employees? If yes, you are mandated by most states to carry Workers' Compensation insurance. Workers' Compensation is regulated on a state level, usually by the department of insurance or labor commission.

Workers' Compensation provides employers with predictable costs for work-related injuries and illnesses and priceless protection from civil liability or suit from the injured worker due to such injury or illness (exclusive remedy). Failure to obtain Workers' Compensation coverage can result in stop-work orders and fines imposed as well as the temporary or permanent loss of certain licenses such as a contractors license. Obtaining Workers' Compensation insurance is the sole responsibility of the employer. No portion of it may be charged to the employee.

Exemptions are made for independent contractors that can prove they are free from the business' control and direction over how the service is performed and customarily engage in an independent trade or business related to the service being performed. Every independent (or sub) contractor used should have an active worker's compensation policy in place covering each of their employees working on a particular project; otherwise liability for injury to their employees may become the responsibility of the contractor.

All carriers generally determine premiums based on the business payroll, employer classification / type of work performed, and the experience record (number and severity of past claims). Employers are charged a rate per $100 of payroll. If the policy has more than $5000 in annual premium, that rate can be adjusted up or down by the company's experience modification, commonly called a “mod” or “e-mod”. This modifier is determined by the employer's claims history versus those of other companies in the same classification. Claims affect an employer's experience modifier over a several-year period. Thus, employers have realized a direct correlation between the overall expense of maintaining coverage and effective management of workplace injury claims.
 

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05

SUPREME COURT RULES AGAINST EMPLOYERS ON RETALIATION CLAIMS:
A new standard for retaliation claims was recently set by the United States Supreme Court. In Burlington Northern & Santa Fe Co. v. White (June 22, 2006), the Court interpreted the Anti-Retaliation Provision of Title VII clarifying its scope in two important respects. First, the Anti-Retaliation Provision is not limited to actions or harms that are related to employment or that occur at the workplace. Second, it protects employees from any conduct that is “materially adverse”. The Court took this stance to protect the employee's right to pursue legal resolution to discrimination without fear of repercussion from the employer. Therefore, to win a retaliation claim, an employee merely needs to prove that a “reasonable person” would not have taken any legal action because of the employer's conduct, whether or not that conduct was related to the workplace.

This case is a significant victory for employees and will require that employers take more care in dealing with persons who have been involved in discrimination complaints. Employer tips for dealing with this new retaliation standard include:

  1. Create and adopt an anti-retaliation policy.
  2. Train all employees on this policy; make sure it is properly enforced.
  3. Be very careful in dealing with employees that have been involved in any claims or compliance efforts within the Company.
  4. If there is any adverse action with these employees, ensure there is a strong, documented, business reason for it.

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05

Classifying a worker as an independent contractor can be a legitimate business choice, but employers must use caution when making this decision. The penalties for misclassification can be steep, and can include back taxes or premiums, civil fines, interest, and other retroactive damages.

The courts have considered many facts in deciding whether a worker is an independent contractor or an employee. These relevant facts fall into three main categories: behavioral control; financial control; and relationship of the parties. In each case, it is very important to consider all the facts - no single fact provides the answer.

BEHAVIORAL CONTROL
A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done - as long as the employer has the right to direct and control the work. A couple of key items to consider include Instructions and Training.

FINANCIAL CONTROL
There are several factors that show whether there is a right to direct or control the business part of the work, which help determine the appropriate worker classification. These include: Significant Investment, Expenses, and Opportunity for Profit or Loss.

RELATIONSHIP OF THE PARTIES
Factors that determine the relationship include Employee Benefits and Written Contracts. Business relationship intentions may be identified by how these two items are handled. Though the contract is used to determine relationship only if all other factors fail to do so.
For further information visit www.irs.gov or contact one of ESG's Human Resources Consultant by calling (888) 810-8187.

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05

The Federal Fair Labor Standards Act (FLSA) has set basic restrictions on work that minors can perform, a "minor" being any person under the age of 18.

Both federal and state laws dictate the type of work that minors can perform, separated by age group. For specific state regulations, please see your state regulations of youth rules. Federal regulations specify that youth age 13 or younger are able to deliver newspapers, baby sit, perform as an actor, or work for a company or farm solely owned or operated by their parents - with the exception of hazardous jobs. After teens turn 14 years old, they can also work at the grocery store, gas station, movie theater, office and clerical positions, retail, parks and recreation, and restaurants, among others. Sixteen year-olds can perform similar jobs with the addition of using motor vehicles, with proper licensing, and any work that has not been deemed hazardous by the US Secretary of Labor. There are some exemptions for student-learner/apprentice programs available for some occupations regarded as “hazardous” for youth of at least 16 years old.

Youth under 16 years old may work no more than 8 hours per day and not more than 40 hours per week in a non-school day period. Night work is prohibited beyond 7pm for such youth during the school year, and no later than 9pm from June 1 through Labor Day. On a school day/week, youth under 16 years old may only work 3 hours per day and not more than 18 hours a week. Again, state laws may differ in terms of the hours youth are able to work; please refer to your individual state regulations.
If an investigation discloses a violation of these laws, penalties may be assessed per violation, including administrative fines of up to $10,000 for multiple offenses. Any person, firm, corporation, agent, manager, superintendent or foreman who knowingly fails to comply with these provisions is guilty of a misdemeanor and can also be fined upon conviction. In addition to penalties assessed to the business personnel, legal guardians of the minors in question who knowingly permit a minor to be employed in violation of these laws can also face misdemeanor charges and fines.

Detailed information about the federal FLSA can be found at http://www.youthrules.dol.gov/jobs.htm. You can also contact an attorney who deals specifically with employment law or the Human Resources professionals at Employer Solutions Group.

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05

Immigration discussion is seemingly everywhere. Recently, hundreds of employees and managers of a nationwide pallet manufacturer were arrested by US Immigration and Customs Enforcement agents for violation of immigration laws. There have also been massive demonstrations in many cities by immigrants. President Vicente Fox has visited several Western States to discuss orderly migration. Additionally, the United States Congress and President Bush are on the verge of revamping immigration laws that have not changed significantly since 1986.

As a business owner, you are probably concerned about having a stable, reliable workforce while remaining compliant with federal and state employment laws. What are your options to accomplish this? How do you stay current on the rapidly changing immigration rules while running your growing business? The answer is ESG. Our trained human resource consultants keep you up to date on current and anticipated immigration laws. We also manage Social Security Administration mismatches and assist you temporary visa issues.

Our comprehensive human resource support system allows you to focus on your core competencies. If you are a current client, you understand the value of outsourcing human resource functions to ESG. If you are investigating our services, please complete the short information request under the Request for Information icon. One of Human Resources Consultants will contact you shortly.

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