Friday, July 26, 2013

Ariana Vanegas joins NovationHR’s team of experts

NovationHR is pleased to announce the addition of Ariana Vanegas to its team of HR experts.

Ariana is a results-driven Human Resources professional with extensive knowledge in Employee Relations, Recruitment and Compensation, Risk Management, and Employee Training and Development.

Her experience includes the successful restructuring of HR departments by partnering with executive teams to align HR practices with current and future business needs. She has worked closely partner in implementing initiatives related to attracting, developing, and retaining a talented and committed workforce.

Ariana is a member of local and national HR organizations and has been a guest speaker for non-profit organizations such as ‘el Instituto Del Progreso Latino’ providing career counseling. Her passion is working at all levels of an organization to create a safe and high-performance work environment where all employees feel appreciated. 

to contact NovationHR, please visit our website

Monday, July 22, 2013

When Sales Take a Dip

3 basic HR tips for today’s CEO


If revenues have decreased recently, you, as CEO, have had to tighten the belt in a number of areas including asking your team to do more, while keeping wages the same or even reducing hours.

No one is certain as to when and how the ship will right itself, but it’s critical that business owners and CEOs be proactive when it comes to the way they manage internal people issues during this period.

The tendency is for companies to hunker down and wait out the storm (“At least the employees have their jobs (for now), and when things get better we can look at doing something to improve their lot in life.”). While that kind of attitude may be prevalent, it is short sighted in that CEOs can’t assume that employees will even be able to maintain the current level of output indefinitely. Experiments on laboratory animals have proven that stress alone is enough to kill most animals, let alone the employees of your typical company. What can be done? Let’s look at some suggestions to de-escalate the stress levels at your company.

Communicate, Communicate, Communicate

In times of elevated pressure, rumors run rampant. News is always interpreted in the worst possible light, and employees can become sullen and uncommunicative amongst themselves and with customers. What is the state of your current communication with employees? Are you having regular meetings, sending out a newsletter, posting goals and objectives, and rewarding even modest achievements? Enthusiasm is infectious, and so is depression. Which one is spreading fastest at your company?

Show Appreciation

What has the company done to recognize the "above and beyond" contributions of the workforce? Employees that step up and pick up the slack created by reduced headcount and reduced budgets will respond to recognition for their efforts. Fostering a teamwork attitude with something as simple as lunch or gift cards can go a long way to bring employees together. Have your employees vote on an "Employee of the Year" and recognize the winner in a newsletter and with a prime parking space and an extra week of vacation. It doesn’t have to be expensive to be effective.

Lead With a Positive Attitude

Remember when your mother told you to smile and try to get along with people? That was great advice that applies to CEO leadership even today. The attitude from top management carries over into many parts of the company whether we want it to or not. Are your managers yelling and screaming to get things done? When upper management walks the aisles, is the atmosphere casual and relaxed or do employees know that someone is going to suffer when the walk around is over? Make sure that your employees know that everyone is in it together, and that the company will eventually prevail.

It's easy to focus on the day to day struggle and lose sight of how important the people that can make or break your business are. Until business normalizes and growth continues again, companies must find ways to keep employees engaged or they risk losing excessive time and money in a business environment that is as competitive as ever.

To contact NovationHR, please visit our website.

Thursday, July 18, 2013

Small Business Regulatory Nightmare:

the IRS & DOL's focus on Independent Contractors

As an HR outsourcing and management firm, one of the liabilities we uncover most often relates to the use of 1099 Independent Contractors (ICs).

If you have relationships with vendors you consider ICs whom are later determined to be employees, you may be liable for back taxes, wages, benefits, penalties and interest. Additionally, an audit by the Department of Labor for IC issues may spill over to include an audit of Exempt/Non-Exempt Overtime practices, making an existing problem even worse. Let’s take a look at the issues, and also what gets employers into trouble.

Multiple Definitions Cause Confusion

Some of the confusing things about the law are the number of exceptions and lack of a clearly defined standard or reference that employers can turn to. Also, the Internal Revenue Service defines an Independent Contractor slightly differently than the Department of Labor.

From the Internal Revenue Service:

“The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.”

However, in Fact Sheet #13 from the US Department of Labor Wage and Hour Division we are told:

“The U.S. Supreme Court has on a number of occasions indicated that there is no single rule or test for determining whether an individual is an independent contractor or an employee for purposes of the FLSA. The Court has held that it is the total activity or situation which controls. Among the factors which the Court has considered significant are:

  1. The extent to which the services rendered are an integral part of the principal's business.
  2. The permanency of the relationship.
  3. The amount of the alleged contractor's investment in facilities and equipment.
  4. The nature and degree of control by the principal.
  5. The alleged contractor's opportunities for profit and loss.
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
  7. The degree of independent business organization and operation.

Further, the court has held that there are certain factors which are immaterial in determining whether there is an employment relationship. Such facts as the place where work is performed, the absence of a formal employment agreement, or whether an alleged IC is licensed by State/local government are not considered to have a bearing on determinations as to whether there is an employment relationship. Additionally, the Supreme Court has held that the time or mode of pay does not control the determination of employee status.”

Practical Concerns

In our experience, there is a large percentage of ICs that would likely be considered employees under the various Federal Labor laws.

Most employers fail the test under both standards with regard to the way they manage their ICs. Too many times, ICs are directed daily by Managers as to the specific aspects of their job such as work hours, work location, and other specific aspects that allow the supposed Independent Contractors little or no “independent” decision making or control.

It is also interesting that in the majority of cases, the reason that the problematic Independent Contractor situations occur is because the employer was trying to avoid providing a specific position or person benefits and/or paying the related payroll taxes associated with a full time employee, usually due to budgetary constraints.

If you are trying to avoid such expenses, creating an “Independent Contractor” position that may subsequently be challenged by the government is probably not the best solution.

Alternative Solutions

The alternative to an Independent Contractor in most cases is a full time employee.

However, we have also been able to provide satisfactory solutions in certain cases by using leased or temporary employees. In this case the payroll taxes and in some cases benefits are being paid, but under the Tax ID number of the Leasing or Staffing Firm, not the employer.

We strongly suggest that you review any Independent Contractors you have, especially if you are issuing a related 1099 using the seven DOL factors and the IRS definition mentioned above. The issues can be confusing, but the cost of non-compliance is high.

To contact NovationHR, please visit our website.