In Honor of our Veterans

On Memorial Day we honor our veterans who throughout history have served our great country. Memorial Day is commemorated on the last Monday of May and for most people it is just a three-day holiday weekend celebration. But for military families, the idea of celebrating Memorial Day can be painful and difficult. Let us be reminded and thankful for those who died serving in the US military and fighting for the freedoms we get to enjoy each day.

Employee or Independent Contractor: Choose Wisely

Attorney Kathleen Misturak Gingrich

Businesses are regularly faced with the question: “Who rightfully qualifies as an independent contractor as compared to an employee?”. In the words of Indiana Jones, “Choose wisely”. While the answer is not always readily apparent, deciding that question incorrectly can have potentially significant and adverse consequences to the Business.

You may ask, “Why does it matter”? The answer to that question is much easier. An employer must withhold income taxes and pay Social Security, Medicare Taxes and Unemployment Taxes on wages paid to the employee, but not to compensation paid to the independent contractor. Rather, independent contractors must, themselves, pay these types of taxes as “self-employment taxes” on compensation earned from the work/services performed for the business.

Therefore, while it may appear at first blush to be fiscally prudent (as it the benefits the businesses’ bottom line to classify workers as independent contractors, rather than employees, so as to save on employer funded employment taxes and fringe benefits), that line of reasoning is both dangerous and ill-advised. Quite simply, just because a business labels a worker as an independent contractor does not make them an independent contractor under the law.

Generally, an individual is an independent contractor if the business has the right to control or direct only the result of the work, not what is to be done or how. Close (and honest) factual examination of the nature of the relationship between the business and the provider of the work/services, based upon three categories (behavorial control, financial control and relationship) helps a business to make an informed decision about proper worker classification under the law. The IRS has provided the guidance below for each category:

“Behavioral Control: A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. Behavioral control categories are:

Type of instructions given, such as when and where to work, what tools to use or where to purchase supplies and services. Receiving the types of instructions in these examples may indicate a worker is an employee.
Degree of instruction, more detailed instructions may indicate that the worker is an employee. Less detailed instructions reflects [sic] less control, indicating that the worker is more likely an independent contractor.
Evaluation systems to measure the details of how the work is done points to an employee. Evaluation systems measuring just the end result point to either an independent contractor or an employee.
Training a worker on how to do the job -- or periodic or on-going training about procedures and methods -- is strong evidence that the worker is an employee. Independent contractors ordinarily use their own methods.

Financial Control: Does the business have a right to direct or control the financial and business aspects of the worker's job? Consider:

Significant investment in the equipment the worker uses in working for someone else.
Unreimbursed expenses, independent contractors are more likely to incur unreimbursed expenses than employees.
Opportunity for profit or loss is often an indicator of an independent contractor.
Services available to the market. Independent contractors are generally free to seek out business opportunities.
Method of payment. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time even when supplemented by a commission. However, independent contractors are most often paid for the job by a flat fee.

Relationship: The type of relationship depends upon how the worker and business perceive their interaction with one another. This includes:

Written contracts which describe the relationship the parties intend to create. Although a contract stating the worker is an employee or an independent contractor is not sufficient to determine the worker’s status.
Benefits. Businesses providing employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay have employees. Businesses generally do not grant these benefits to independent contractors.
The permanency of the relationship is important. An expectation that the relationship will continue indefinitely, rather than for a specific project or period, is generally seen as evidence that the intent was to create an employer-employee relationship.
Services provided which are a key activity of the business. The extent to which services performed by the worker are seen as a key aspect of the regular business of the company”.

Each potential relationship requires an honest fact-intensive analysis of the above factors. Misclassification can be costly. Besides potentially owing back taxes to the federal government, a business may also owe state unemployment taxes and unpaid workers' compensation premiums, as well as unpaid overtime or minimum wages, medical benefits and unpaid vacation, sick pay and other fringe benefits. The government can also assess interest, penalties and fines, if the agency determines that the classification as an independent contractor was intentional, rather than inadvertent.

Before taking a risk and inadvertently misclassifying a worker as an independent contractor, who under the factors should rightfully be an employee, consult with knowledgeable counsel, who can help you to “choose wisely”.

For more information, contact Kathleen-Misturak Gingrich, Esquire at 717.591.1755 or kgingrich@pjrlaw.com

We are seeking guest writers...

We are seeking guest writers to contribute to our email newsletter which reaches more than 2000 people per month. If you would like to consider a joint article (for example: How COVID has impacted on the wedding industry and the legal recourse you might have), we would be glad to work on something with you. For more information, please contact Ashley Malcolm via email amalcolm@pjrlaw.com or call 717-610-1639.

Risk and Human Resources

Recently, I was asked for a soundbite or quote on “How to Be an Effective HR Professional.” It’s very difficult for me to narrow down this BIG topic to a soundbite, but I did. That means you get the background behind the soundbite!

Here’s a summary: “Be daring in your approach. Find a way through the risk that works for everyone. When you demonstrate your ability to do that, you will be priceless to your organization!”

Business decisions involve risk, and that’s where I started to craft my soundbite. Risk is everywhere in business. Most organizations would not have even started if someone had not taken a huge risk and said, “What about this idea?” HR peeps are not fans of risk; our job is to minimize risk for an organization. In fact, there’s an entire specialty in the field called Risk Management.

The next thing that needs to be considered as an effective HR professional (besides all the tactical “stuff” we get to do) is an in-depth understanding of how a business operates. This, unfortunately, is an area that may hold an HR professional back from becoming a true, trusted advisor within an organization. Some days we are so busy minimizing risk and keeping people out of trouble that we can’t see the forest for the trees.

If all you are seeing is risk, you will not be in the best position to find an alternative path that may very well accomplish the exact same thing. I well remember a career-ending move from long ago. I told a VP that he couldn’t fire a salesperson. Yep, I said “No” to a VP, and it was a resounding NO. Why? The only thing I heard/saw was the risk to the organization. A wiser, sager, HR professional might say, “Help me understand why it must be done today? What are his sales numbers? What’s his activity been? Why now?” Then, and only then, should I have given recommendations. Turns out, it didn’t have to be in that moment, so the risk wasn’t nearly as bad as I was assuming! That moment made me a significantly better leader and manager—after I learned my lesson!

Unless and until you understand the business operation, you will not be able to gain the trust of the operational leadership and teams, nor will you be able to develop an effective HR approach to help—not hinder—the operation. The goal as an HR professional is to be a trusted advisor—understand your “customer’s” pain, help them find a way through the pain that is compliant but accomplishes what they need to accomplish, and help the overall organization be successful.

See? Too much for a soundbite!

Karen Young is the author of “Stop Knocking on My Door: Drama-Free HR to Help Grow Your Business” and the self-proclaimed Queen of #DramaFreeHR. To learn more about her and HR Resolutions, visit www.hrresolutions.com.

What You Need to Know About Benefits for Divorced Military Spouses

Military spouses are not exempt from the troubles of marriage. Just because regular married couple are those who usually fight about financial problems and other economic factors, military members also are troubled with the stress of having to endure weeks or months without a partner who happens to be on military duty.

Once divorce is considered for military spouses, several complications could occur primarily because one of the spouses is in the military.

The law in Pennsylvania applies to several legal areas such as child support and child custody. If you happen to be a spouse of a service member, you are entitled to certain benefits.

The following are some of divorced military spouses’ benefits:

Medical Benefits

Health care is one of the most important issues that need to be addressed with a military divorce. When the divorce is finalized, the former spouse will be entitled to the Continued Health Care Benefit Program. This will continue while the former spouse remains unmarried.

Disability benefits

This applies to veterans. The Veterans Administration Disability Payment may however be garnished to pay for child or spousal support.

Post 9/11 Bill Benefits

This benefit is under the premise that divorce in the military does not terminate GI Bill beneficiary status. It covers payment for tuition, housing allowance, and book stipend.

Get Moving to Feel Good

Physical movement is inherently intertwined with good mental health. Getting out and active isn’t something we should perceive as a ‘nice to do’ — it’s a must.

With the shift back to the office, workers will need to find a new routine for physical exercise without the luxury of access to the home gym.

There are so many ways people can get active at work. Look for opportunities throughout the day such as walking up to grab a hot drink or taking a stroll around the block at lunch. Connecting with nature has a dual effect so local parks are a great destination to reset and refocus the mind.

12 Tips For Choosing Nutritious Foods and Snacks

Eating for health and wellbeing is about choosing foods from the Five Food Groups every day, while limiting foods that are not essential to our health.

1. Stock up on basic nutritious foods like wholegrain cereals and other grain foods, reduced fat milk, lentils or other legumes, eggs, and frozen or canned foods without added sugars or added salt – this way you can eat at home more often and cook meals yourself by adding fresh ingredients.

2. Choose a variety of types and colors of fresh vegetables and fruits that are in season.

3. Try new ways of cooking with vegetables like roasting, baking, barbequing, and stir-frying. Add extra vegetables and legumes to your recipes.

4. Use fruit for snacks and desserts.

5. Lean red meats are important, but a maximum of 455g a week is recommended.

6. Include at least 1 or 2 meat-free meals each week – include eggs, legumes such as beans and tofu, and nuts and seeds.

7. Choose reduced-fat varieties of milk, yogurt, and cheese.

8. Include small amounts of foods rich in unsaturated fats such as oils, spreads, nut butters/pastes and avocado.

9. Drink plenty of water instead of drinks with added sugars or alcohol.

10. Choose carefully when eating out- limit creamy, commercially baked, or fried foods.

11. Store unused cooked food in the fridge.

12. Older people who have trouble with their teeth, may prefer softer textured or cooked vegetables and fruit, finely milled wholegrain cereal foods and dishes like soups, casseroles or stews.