Before & After the Hire: Finding, Keeping & Tax Reporting

Before & After the Hire: Before & After the Hire: Finding, Keeping & Tax Finding, Keeping & Tax

Reporting Reporting

Topics

New Hire Planning Finding Prospective Employees Interviewing Orientation Employee Files Worker Classification Federal and State Identification Numbers Withholding, Depositing and Tax Reporting Performance Appraisals Termination of Employment

Over 400 federal laws pertaining to employee rights and selection

States may also have laws that parallel the federal legislation

Laws can apply to employers based on different parameters

Number of employees Government contracts

HR Laws

Civil Rights Act of 1964 – cornerstone anti-discrimination legislation in the United States

Title VII of the Act pertains to labor and employment. Purpose is to prohibit barriers to employment which discriminate based on sex, race or religious beliefs

Equal Employment Opportunity Commission was created to enforce Title VII of the Civil Rights Act of 1964

HR Laws

Other related acts include Age Discrimination in Employment Act of 1967 (EEOC) Rehabilitation Act of 1973 (OFCCP) Executive Orders 11246 and 11375 (OFCCP) Pregnancy Discrimination Act of 1978 (EEOC) Fair Labor Standards Act as amended by Equal Pay Act

(EEOC) Americans with Disabilities Act of 1990 (EEOC) Civil Rights Act of 1991 (EEOC) Immigration Reform and Control Act of 1986 (United

States Citizenship and Immigration Services)

HR Laws

Planning for New Hires

Do you need the job?

What is the purpose of the job? Who is currently performing these tasks? Is there enough work for a full-time position? Is the added business the result of cycle or is the

pace permanent? Can another employee do this job along with

current responsibilities? How much will the position cost?

What are your options?

Project – clear understanding of when the project is over Contractor – area of expertise- hire an HR consultant for

Employee Handbook Temporary – less than 6 months Limited term – more than 6 months but not a regular

employee Regular employment – never say permanent – may be

eligible for benefits


Other considerations

How will I find candidates? What is the budget?

Running an ad Meals, Lodging, Gas

What is the hiring timeframe?



Job Description Job description

Job Title and location Required qualifications - employee must be able to

perform these functions Preferred qualifications – employee may be called upon

to perform if necessary Special skills required (operate special equipment) Special licenses or certificates Salary range

Finding Prospective Employees

Temporary Agency Employee Referrals Recruiter Job Fairs Newspaper Advertisement Internet Job Board High School Work Program Local Colleges or Technical Schools Department of Labor


Senior workers Stay at home moms returning to the workplace Former military personnel Career changers


Internet Job Boards - Pros Free if you post on company web site Recruiting is limitless – anyone with computer access can see the

advertisement Available 24/7 Provide more information about organization and opportunities

Internet Job Board - Cons Not everyone has access to the Internet Have to drive applicants to the web site May receive better response than anticipated Competition can see your job posting May not get the right results Takes time and research to determine the best site for your company


Internet Job Boards

Career Builder www.careerbuilder.com Flip Dog www.flipdog.com USA Jobs www.usajobs.com Indeed www.indeed.com

Hot Jobs www.hotjobs.com Regional websites www.midgeorgiahelpwanted.com

Interviewing

Who should you interview? Review resumes or applications Compare required job elements to the resume Look for results from previous job Look for gaps in work history Look for relevant experience Appearance Grammar or Spelling errors Applications should meet legal criteria

Interviewing

Prepare a list of interview questions Career goals Education Work experience General skills and aptitudes related to the job Ask open-ended questions Avoid age/race/sex questions

Tell me about yourself Why not to use this in an interview

Interviewing

Sample Interview Questions

Tell me about your experience working with a team. Tell me about a work situation that required excellent

communication skills. Have you ever been involved in a dispute with a coworker? What

was it about and how was it resolved? Tell me about a time when you handled an irate customer. What do you like about working in customer service? Tell me about a time when you failed to reach a goal. Describe the best manager you ever had.

Interviewing

Questions Not to Ask – even in casual conversation with the candidate

How old are you? Are you married? What does your spouse do for a living? How many children do you have? Ages? Are you planning to have

any children? What are your child care arrangements? Have you ever been divorced? Where were you born? Where were your parents born? Have you ever been arrested? What church do you belong to?

Interviewing

Things to avoid

Treating interviewees differently – same panel, same test, same questions, same environment

Asking questions that may violate Title VII laws Reading the resume back to the applicant Using company acronyms Talking about yourself instead of allowing the applicant time

to speak.

Interviewing

How to conclude the interview

Make sure all of your questions have been answered

Ask the candidate if they have any questions

Tell the candidate when they can expect to hear from you

Thank them for coming and escort them out of the building

Screening

References Verbal reference check

No comment policy - dates of employment, title and salary

Written letters of reference

Official transcripts Background investigations Credit checks

Advisable for positions with financial responsibilities Applicant must give permission in writing

Use a service that screens candidates

Job Offer

Determine which candidate Make the offer verbally

Title, start date and compensation Will you negotiate?

Know the terms before beginning this process Do your homework – research salaries and compensation in

the area Don’t try to wing it through this process – have a list and

stick to it Follow up in writing but do not imply permanence

State salary in terms of pay (weekly, biweekly, etc) This letter does not constitute a specific term of employment

Prior to First Day On the Job

Create a training plan New Hires do not hit the ground running They don’t know the business They don’t know your expectations They need to be acclimated to the environment

Determine how employee’s progress will be monitored Set timeframes to monitor progress Prompt feedback will be appreciated

Choose a mentor

Have a work space ready (desk/phone/computer)

Orientation

First Day on the Job Orientation Offer Letter Required paperwork Employee Handbook Introduce the Mentor Review and discuss the Training Program Provide Lunch Check on new hire at end of day one

Orientation

Employee Handbook Convenient source of information for employees Disclaimer that handbook is not a contract of employment Disclaimer that practices and procedures may change without

notice At Will Employment Statement Avoid statements with company “guarantees or promises” Signed acknowledgement that employee has received the

handbook

Orientation

Employee Handbook Introduction

EEO Statement Non-Discrimination/Harassment Policy Americans with Disabilities Act Policy Statement Confidentiality Agreement

Compensation Performance Evaluation Schedule Payment of Salary Overtime Pay Employee Referral Program

Orientation

Employee Handbook Time Off Policies

Vacation Personal Time Sick Leave Holidays Jury Duty Military Leave Family Medical Leave Act (FMLA)

Employee Benefits Insurance (Medical, Dental, Life) Short Term or Long Term Disability Plan Workers’ Compensation Benefits Retirement Plan

Orientation

Employee Handbook On the Job Policies

Attendance Drug and Alcohol Abuse Employee Assistance Program Violence in the Workplace Open Door Policy Use of Company Equipment Accidents and Emergencies Voice Mail Policy Email and Internet Policy Cell Phone Policy Tuition Reimbursement Policy

Leaving the Company Resignation Dismissals Other Termination Procedures

Start an Employee File Employment Application Resume Federal and State Withholding Allowance Certificates Other Employee Benefit Forms

Medical insurance Life insurance

Acknowledgement of Receipt of Employee handbook Confidentiality Statement Non Harassment Statement

Disciplinary Action Performance Appraisals

Employee FilesEmployee Files

Medical Information should be kept in a separate file

Information gathered during the interview process should be kept in a separate file

I-9 Forms should be kept in a separate file. Forms can be audited by the U. S. Citizenship and Immigration

Services. Do you want them to have access to personnel files? New I-9 Form link below:

http://www.uscis.gov/files/form/i-9.pdf

EmployeeEmployee FilesFiles

Worker Classification

Independent Contractors Common-Law Employees Statutory Employees Statutory Nonemployees

Independent Contractors

Right to control ONLY the result of the work Consider Common-Law Rules

Behavioral control Financial control Type of relationship to the parties

Substance of relationship governs worker’s status – not label

Independent Contractors

Examples Roofing company performing work for a general

contractor Electrician contracting for wiring an apartment

complex Trucking company that operates its own fleet and

contracts with companies for deliveries. Drivers are paid for by the trucking company.

Common Law Employees

Right to control what will be done and how it will be done

Common Law Rules Corporate officers are generally employees

Common Law Employees

Examples Truck driver that operates a company owed truck,

even if he has the option of which deliveries to make.

Tile setter that uses his own tools at a construction site, but performs work according to the order and specifications of the contractor. The contractor also supplies all materials and makes frequent inspections, pays him on a piecework basis and provides worker’s compensation insurance.

Statutory Employees

Independent contractors under common law – treated as employees by statute for social security and Medicare taxes

Four categories – two are subject to unemployment taxes

Statutory Employees

Driver who distributes beverages (other than milk) or meat, vegetable, fruit or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.

Full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both for one life insurance company.

Statutory Employees

Individual who works at home on materials or goods that you supply and must be returned to you or a person you name, if you also furnish specifications for the work to be done.

Full-time salesperson who works on your behalf, turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments, the goods sold must be merchandise for resale or supplies used in the buyer’s operation and the work is the salesperson’s principal business activity.

Statutory Employees

Social Security and Medicare are withheld if: The service contract states or implies that

substantially all the services are to be performed personally by them,

They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities), and

The services are performed on a continuing basis for the same payer.

Statutory Employees

Statutory Employees are also subject to FUTA, except: Full-time life insurance sales agents and Individuals who work at home on materials or

goods that you supply.

Statutory Nonemployees

Treated as self-employed For federal income taxes For federal employment taxes

All payments for their services are based on output

Their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes


Direct sellers Engaged in selling consumer products in the home

or place of business other than a permanent retail establishment.

Engaged in selling consumer products to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis prescribed by regulations, for resale in the home or at a place of business other than in a permanent retail establishment.

Engaged in trade or business of delivering or distributing newspapers or shopping news.


Licensed real estate agents Licensed agents not paid by the hour Appraisers if they earn income based on sales or

other output.


Companion Sitters Furnish personal attendance, companionship or

household care services to children or to elderly or disabled individuals.

Must be paid directly by the person receiving the services or the guardian, not by an agency.

Determination of Classification

You can file form SS-8 IRS will determine classification based on

circumstances described You must then follow IRS determination

Obtain Necessary Federal and State Identification Numbers Federal Employer Identification Number

Form SS-4 www.irs.gov

State Withholding Number Department of Labor Account Number

Withholding Requirement

Payments subject to tax All compensation for services performed, whether

cash or other form Employees may be salary, hourly, piecework, tip or

commission based Federal income tax

Withhold based upon employee’s Form W-4 State income tax

Withhold based upon employee’s Form


Social Security Tax Employee and employer rate is 6.2% (Total 12.4%) 2010 wage base limit is $106,800

Medicare Tax Employee and employer rate is 1.45% (Total 2.9%) No wage base limit


Qualified insurance premiums are not subject to federal income tax, social security or Medicare tax

Qualified retirement contributions are not subject to federal income tax

Depositing and Reporting

Must deposit all withheld taxes (including employer’s portion)

Monthly and Semiweekly deposit schedules are determined based upon the total tax liability you reported during a four-quarter look back period

Look back period is most recent four-quarter period beginning July 1st and ending June 30th


Monthly Depositor Tax liability less than $50,000 in look back period New employers Deposits due by the 15th of the following month If the total liability for the quarter is less than

$2500, payment can be made with the 941 quarterly tax return


Semiweekly Depositor Tax liability more than $50,000 in look back

period For payments made on Wed., Thurs., or Fri.,

deposit must be made by the following Wednesday For payments made on Sat., Sun., Mon., or Tues.,

deposit must be made by the following Friday


Federal Taxes 941 Employer’s Quarterly Federal Tax Return

Federal Income Tax Withholdings Employee’s Social Security and Medicare Employer’s Matching Social Security and Medicare

8109-B Coupon for Monthly Deposits Quarterly Return


Federal Taxes 944 Federal Annual Tax Return IRS will notify if this is the form to file Deposit rules still apply If total liability for the year will be less than $1000,

you can pay with the filing of the annual return


• Federal Taxes– 940 Federal Unemployment Taxes

• If liability is less than $500, can pay with filing of the return

• Quarterly Payments are required when liability will be greater than $500. Use 8109-B Coupon

• Annual Return• Tax is .8% of the first $7000 in wages per employee

per year• This is the reduced rate for employers that also pay

state unemployment taxes


Deposit Penalties with the IRS Late deposits Deposits paid directly to the IRS or with a tax

return that is over $2500 Form 941, $1000 Form 944 and $500 Form 940

Deposits made to an unauthorized financial institution

Deposits required but not deposited using the Electronic Federal Tax Payment System (EFTPS) www.eftps.gov


State Withholding Taxes• Check with your local Department of Revenue

regarding state withholding depositing and reporting


Department of Labor Check with your local Department of Labor for

depositing and reporting requirements.

Electronic Filing

Federal Electronic Filing and Paying of Taxes EFTPS – employer can make payments on line

after enrolling without any cost, visit www.eftps.gov

Returns will still have to be mailed On line registration available, but your PIN is

mailed to you within 15 days and you must obtain internet password before first log on

New Hire Reporting

Every state must report new hires and rehires This is to assist with child support and paternity

cases

You Are Responsible

Even if you have an employee designated for payroll and tax responsibilities, you as the owner, are ultimately responsible

Review payments and returns Never assume that the employee is making all

payments or that all payments are being made in a timely fashion

Review all notices from federal or state agencies

Now that you’ve hired them, how will you keep them?

Retaining Employees

Respect employees at all levels Empower talented employees who want more

responsibility Acknowledge outstanding performance and promote

from within when possible Ideas and innovation are important to talented

employees Salary and benefits must be competitive

Retaining Employees

Do your best to hire the right person for the job Communicate openly/honestly Listen – get suggestions Give immediate feedback and positive reinforcement Tell employees they are important to the business Provide opportunities for cross-training and career

progression

Retaining Employees

Make work fun Allow flexible starting times, core business hours and

flexible ending times Recognize and celebrate success Communicate goals, roles and responsibilities so

employees know what is expected Include employees in decisions that involve their job

Performance Appraisals

Why? Review performance Set new goals and objectives Identify training needs Enhance supervisor and employee relationship Employee learns more about his strengths and

weaknesses


Policy? Written form with standard set of objective criteria Keep job descriptions current Tie job performance comments to the job

description Give specific examples to support comments Allow the employee an opportunity for feedback Provide regular feedback


What if the news is bad? Have written documentation Document when you have spoken to employee

about performance Show examples of poor performance Prepare an action plan for employee with assigned

time frames FOLLOW UP

Not a time for surprises

Effective Discipline

Progressive discipline – process for dealing with job-related behavior that does not meet expected and communicated performance standards

Steps include Counsel the employee about performance and determine if he

understands the requirements Verbally reprimand the employee Written and verbal warning – signed by employee for file Suspension Termination – end the employment of individual who refuses to

improve

Document in writing (time, date, signature and description of situation and action taken)

There is no fixed period of time that the employment relationship must last.

Either party may terminate the relationship at any time with or without cause.

Employer can fire or employee can quit for any reason or no reason at all.

Employee can’t be fired due to a Title VII violation.

At Will Employment

Termination of employment

Voluntary termination – employee resigns from job of his or her own free will

Involuntary termination

Layoff – plan to rehire at some point

Reduction in force – no plan to rehire


Voluntary termination Exit interview

Conduct in private Prepared questions

Why are you leaving? Most and least satisfying aspects of job Would you recommend the company to others Improve workplace

Collect company property Provide required paperwork When will the final paycheck be available?


Involuntary termination Progressive discipline has failed Some actions may not warrant a chance

Stealing Falsifying records, applications, timesheets

Documentation is mandatory before proceeding with this step

Prepare for the termination meeting Schedule meeting with employee

Discuss reason for termination Provide employee with required paperwork Collect company property

Resources

State Department of Labor Required posters

Unemployment Insurance Employer Vacation Equal Pay for Equal Work

Resources for Hiring People with Disabilities Employment Laws and rules Forms and Publications

United States Department of Labor www.dol.gov

Contact Information

74

Lisa [email protected]

Michelle Wright [email protected]

University of Georgia SBDCwww.georgiasbdc.org

Documents

Before & After the Hire: Finding, Keeping & Tax Reporting