Tag: payroll

Employment Law Checkup

Quick Employment Law Checkup

If you have employees, you’re subject to an array of laws governing the workplace. Going from zero to even just one employee is a huge step. After that, the more employees you have, the more laws apply. And more employees and laws bring along increased risks of noncompliance. To tackle these issues, companies would ideally hire robust human resources departments and employment lawyers. But, that’s not practical for every business in every situation. So, in case you need somewhere to start, you can use this to conduct your own basic employment law checkup.

1. Are you paying workers enough?

I mean legally. Presumably, you’re paying them enough to work for you. And whether you pay enough to retain employees is another subject altogether. But I’m talking about minimum wage and overtime here.

With just one employee in the U.S., virtually all employers become subject to minimum wage and overtime laws. What laws apply to you and your employees? Are employees exempt from overtime? The exemptions are trickier than many understand, so double check this.

2. Are you paying payroll taxes?

For most employers, this is a no-brainer. Taxes are a way of life. But some employers try to avoid these obligations by either paying employees “under the table” or treating them as independent contractors. The first practice is simply illegal. The latter is more complicated.

Genuine independent contractors are responsible for their own taxes (and don’t have to receive minimum wage or overtime). But you can’t just avoid dealing with legal requirements by calling someone an independent contractor. The exact requirements vary, but generally, if a person is working only or primarily for you, they are probably your employee. Especially if they are performing tasks in line with your primary business. For example, a graphic designer “hired” for a one-off project creating a new company logo may be an independent contractor. But a graphic design company hiring the same person to create designs periodically for its customers looks more like an employment relationship.

3. Do you have an anti-harassment policy?

Various state and federal laws prohibit employment discrimination for all but the smallest employers. Even if you’re not subject to these laws, you can’t afford to tolerate workplace harassment. As a starting point, you should have a written anti-harassment policy that advises employees of prohibited behavior and provides a mechanism to report violations. Again, this is a bare minimum. So, after you institute or update your policy, consider providing training to employees. And, of course, take all complaints seriously and investigate promptly.

4. What do your personnel files look like?

If legal issues arise, the employee’s personnel file will come under scrutiny, so don’t be careless. Whether physical or electronic, you should have separate files for each employee. These should contain the “new hire” paperwork such as offer letters, I-9s, and tax withholding forms. They also include employee benefit documents, such as for insurance and retirement plans, if applicable. They would also include any formal disciplinary records. And if you receive medical information about an employee, that must go in a separate file.

5. How do you handle employee medical issues?

If you do have medical information, you’ve probably had to deal with employee medical issues. These can touch on a surprising number of employment laws. I regularly advise clients about single employee medical situations that potentially implicate 6-7 laws. For example, you may have to make reasonable accommodations to an employee with a disability. This might include time off, even if you don’t have a sick leave policy.

6. Will your employees go union?

Most employees have the right to join unions. As an employer, it’s not your choice. But that doesn’t mean your fate is sealed. Getting the above issues right, treating employees well, and listening to them will often keep unions out. But if your employees do unionize, then you’ll be playing by a new set of rules. You’ll have to negotiate with the union over many issues. You will enter the world of potential grievances and arbitrations. And employees will likely receive “just cause” job protection. Make sure you understand how this world works before you find yourself in it. (There are geographic and industry-based factors affecting the likelihood that your workforce will unionize, but it’s at least a possibility in nearly every company.)

Beyond this Employment Law Checkup

I’m only providing this quick employment law checkup as a starting point. I want employers to get these issues right. But that’s not always an easy task. Plus, there are many more employment laws beyond the subjects addressed here. The laws are complex. Often there are extensive regulations. Minor nuances can entirely change an employer’s responsibilities.

 

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New York Pay Frequency

New York Pay Frequency Laws

Do you know how often you must pay your employees? Federal law does not directly address this issue for most employers. But state laws often do. This post describes the most prevalent New York pay frequency requirements for private employers.

New York’s payday laws do not apply to most public (governmental) employers. Many public employees are in unions and have collective bargaining agreements that dictate their pay frequency. While private-sector collective bargaining agreements often also address wage payment issues, they rarely trump state law.

When New York employers must pay employees depends on the nature of the employee’s work. Let’s look at each of the categories.

Manual Workers

New York’s labor law says that employers must pay “manual workers” weekly. More specifically, not later than seven calendar days after the end of the week in which the employee earned the wages.

The law defines “manual worker” to mean “a mechanic, workingman, or laborer.”

There is an exception for all non-profit organizations, who must pay manual workers at least semi-monthly. The New York Commissioner of Labor can also authorize an exception in the case of for-profit companies with at least 1,000 employees in the state, permitting them to pay manual workers no less frequently than semi-monthly.

Commissioned Salespersons

Employers must have a written compensation plan for all “commissioned salesmen” in New York. Then an employer must pay each commissioned salesperson at least once per month, usually by the last day of the month following the month in which they were earned. If there are substantial recurring monthly wages, then the employer need not pay all forms of compensation on a monthly basis. Certain additional compensation can be paid less frequently than monthly, as set forth in the compensation plan.

The law defines “commission salesman” to mean “any employee whose principal activity is the selling of any goods, wares, merchandise, services, real estate, securities, insurance or any article or thing and whose earnings are based in whole or in part on commissions.” This does not include employees whose principal activity is supervisory, managerial, executive, or administrative in nature.

Other Workers

The labor law requires employers to pay “clerical and other workers” not less frequently than semi-monthly. The employer must pay these employees “in accordance with the agreed terms of employment.” It must also designate regular paydays in advance.

The law defines “clerical and other worker” to mean all employees not included as manual workers, commissioned salespersons, or railroad workers. It also does not include employees who work in an qualified executive, administrative or professional capacity who earn more than $900 per week.

There are also special rules for payment of “railroad workers”.

Final Pay Check

When an employee’s employment ends, the employer must pay all wages earned by the next regular payday for the pay period during which the employment ended.

Sometimes the employer cannot determine the final compensation by that time period. For example, commissions or bonuses may depend on ongoing projects. In these cases, the employer must determine when the compensation will be earned and then pay by the applicable payday.

Review Your Pay Practices

Now is a good time to make sure your company is complying with the New York pay frequency rules. While you’re at it, you should also review these related topics especially for New York employers:

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