Employment Law Tips Part 5

Employment Law Tips Part 5

By: Neil L. Wojtal

V.   OTHER ISSUES

A.  Classification of Employees as Independent Contractors: the Wisconsin Statutes, Sec. 102.07(8), requires an employer to meet all nine tests listed in the statute before the employer can classify an employee as an independent contractor. The tests are:

1. Maintain a separate business
2. Obtain a Federal Employer Identification number from the Federal Internal Revenue Service (IRS) or have filed business or self-employment income tax returns with the IRS based on work or service in the previous year.
3. Operate under specific contracts
4. Be responsible for operating expenses under the contracts
5. Be responsible for satisfactory performance of the work under the contracts
6. Be paid per contract, per job, by commission or by competitive bid
7. Be subject to profit or loss in performing the work under the contracts
8. Have recurring business liabilities and obligations
9. Be in a position to exceed or fail if business expenses exceed income

In the event an employer misclassifies an employee as an independent contractor, the employer can be subject to several issues such as tax liability, unemployment compensation issues and workers' compensation issues to name a few.

Information on this issue can be found on the DWD website at:

http://dwd.wisconsin.gov/wc/employers/independent_contractors.htm

B.  Termination of Employment: Every employer should review their termination process, not only for compliance with federal and state laws such as discrimination, but also to prevent lawsuits arising out of the process. Foe example, no employee issue should be discussed publicly with an employee. Any employee who is subject to disciplinary action should be taken to a private room for the discussion. Any termination should be squarely based upon rule violations or business considerations. If an employer has a written disciplinary procedure, it must be followed uniformly for each employee. In addition, any disciplinary action taken by the employer must be documented in the employee's personnel file. If an employee wishes to comment on the action, those comments should be kept in the employee's personnel file as well. Any decision to terminate should have documentation in the employee's personnel file that supports the business reasons for the termination. If an employer is unsure that the business reasons justify a termination, the employer should consult with an attorney prior to terminating the employee.

I hope that the information provided will be of help to all employers seeking to improve their employment processes.

The information contained in this document is intended for the sole purpose of providing general legal information and is not intended as legal advice of any kind.

This information may not apply to your specific issue, therefore, do not act upon this information without consulting Zimmerman & Steber Legal Group, SC or another qualified attorney.

This blog is designed for general information purposes only and should not be construed to be formal legal advice. You should consult an attorney for advice regarding your own situation. Although great care has been taken to ensure the accuracy and utility of the information contained in this blog, no warranty is made, express or implied, and Zimmerman & Steber Legal Group, LLC assumes no liability in connection with any use or result from use of the information contained herein.