Terminations cost money, and while layoffs are intended to save the company money, the expenses associated with a layoff can add up quickly. While there are some instances in which layoffs are unavoidable, they should typically be considered as a last resort.

Before making a layoff decision, consider some of these cost-saving strategies:

Restrict overtime. You are required to pay all non-exempt employees overtime for all hours worked in excess of 40 in a given week. Overtime is payable at one and half times an employee’s regular hourly rate (and in some states, and under some circumstances, it’s two times an employee’s regular hourly rate). The extra expense of paying overtime can add up very quickly if you’re not keeping tabs on employee hours. Require your non-exempt employees to receive written authorization from their manager before working any overtime hours and instruct managers that overtime should be authorized only when absolutely necessary.

Limit un-necessaries. Take time to evaluate the areas in which you may be spending money unnecessarily. For example, do all of your employees need company-issued cell phones, laptops, or other similar equipment? Determine which employees would benefit the most from these types of resources before making blanket purchases.

Shorter workweeks & telecommuting. Consider flexible work arrangements, such as compressed workweeks or work from home programs, to reduce overhead costs. When more employees work offsite it means your facility can save money in energy costs, phone bills, and workspaces.

Cut hours. Rather than having your full-time employees work 40 hours per week, consider making full-time status 35 hours per week. Those working 35 hours per week would still be entitled to the benefits you already offer full-timers, but you’d save big. Let’s say you have 10 full-time employees, all making $10 per hour. Reducing the amount of time they work per week by 5 hours could easily save $500 a week! Although cutting hours is a great cost-saving solution, be sure to comply with FLSA regulations, especially if you are considering a reduction in hours for exempt employees.

Salary freezes. Consider foregoing any sort of pay raises for awhile. If you do choose to implement a salary freeze, be sure to do so in a consistent manner. Giving your managers and upper level staff members a raise, but not your other employees, will not be well received. If merit increases aren’t possible this year, let employees know the reason why and that you hope it gives the company an opportunity to offer raises next year.

Hiring freezes. Hold off hiring any additional staff members if at all possible. Cross-train existing employees to take on different responsibilities, rather than creating new positions. If you do need to bring on the extra help, use cost-effective recruiting methods, such as employee referrals and network contacts.

Increase premiums. If you offer group health insurance consider increasing your employees’ share of the premiums. Most companies pay 50%, but there is currently no requirement for employers to pay anything. Employees may not like the additional expense, but if it means that they’ll have some added job security, they may be open to the idea. You may also want to consider cutting employer contributions to retirement plans and other similar benefits.

Pay cuts. Pay cuts are another option, though they probably won’t be well received and should be considered after all other alternatives have been exhausted. If you plan to implement a pay cut, be sure to do so in a consistent manner and make sure that you comply with FLSA requirements, especially if you plan to reduce the pay of exempt employees.

Negotiate with vendors. We’re all having a tough time financially right now, your vendors included. You may find that now is an ideal time to re-negotiate vendor contracts. They don’t want to lose your business and they may be willing to lower their rates. Even if they can’t lower their prices they may be willing to throw in some additional services. It can’t hurt to ask!

Improve efficiency. Make sure you are getting the most “bang for your buck” by ensuring employees are as productive as they can be. Spend time developing employees’ skills, setting performance goals and working with employees to reach specific targets. And when employees meet those goals, don’t forget to recognize their achievements. Employees who are recognized for their hard work are often more satisfied and productive.
Before jumping into a layoff decision, consider some of the above-mentioned options to help your business cut costs. While there may be some instances in which a layoff is necessary, these cost-saving strategies may help to avoid the aggravation of having to make a layoff decision. If you ultimately determine that a layoff is the right decision for your company, be sure to review and comply with all federal and state laws regarding reductions in force, which vary depending upon the size of your company and the number of effected employees.

Cell phones have become a ubiquitous part of life, both for personal and business use. In the business setting, cell phones allow for employee access in and out of the office. However, such use can create wage and hour concerns if non-exempt employees are attending to work-related matters outside of their regular work hours. Cell phones within the workplace also raise privacy and security concerns and they can create the potential for increased distractions.

Because of these factors, many employers adopt rules governing the use of cell phones during and, in some limited cases, after work hours. The following are ten points to consider when developing cell phone use policies:

Define cell phone use. First and foremost, a cell phone policy should define exactly what constitutes cell phone use. Without a clear definition, some employees may not understand the breadth of the policy. Your definition should not only include placing and receiving phone calls, but also activities such as text messaging, emailing, using video or camera features, playing games, and surfing the internet.

Use of personal phones at work. Next, determine whether or not you will permit the personal use of cell phones while at work. Because cell phones can pose a distraction, both to the user and to co-workers, many employers choose to restrict them entirely. Others limit the use of cell phones to emergency situations or to certain areas of the workplace, such as private offices or breakrooms. When developing your policy consider the potential effects on productivity as well as employee morale.

Personal use of company-provided phones. If you permit personal use of company-provided cell phones, consider polices that limit your exposure of incurring additional costs. For example, where permitted by state or local law, employers may want to consider requiring employees that exceed their allotted minutes due to personal use to pay their portion of the phone bill.

The FLSA. The Fair Labor Standards Act requires that non-exempt employees must be paid for all hours worked. If, for example, a non-exempt employee checks work email from home using a company cell phone, the time must be counted as hours worked. If you provide cell phones to your employees, it’s important to have mechanisms in place that account for all hours worked.

Privacy expectations. If you provide cell phones to employees, it’s a good practice to indicate within your policy that the cell phones are the property of the company and, where permitted by state or local law, that there’s no expectation of privacy with regards to their use.

Use of cell phones while driving. Several states prohibit drivers from using handheld mobile phones while operating a motor vehicle. Even if your state has no such ban, prohibiting employees from using company cell phones while driving may be a good safety precaution. Remind employees that business calls can wait until they reach their destination, or if a call must be made or received, encourage employees to safely pull over to the side of the road before using their phone.

Protecting workplace privacy and security. A growing number of mobile phones come equipped with cameras and a large amount of memory, which could pose a risk to workplace privacy and security. As such, it’s important to determine what restrictions you want to establish in order to protect the company’s privacy as well as the privacy of your employees. Some restrictions that can help to limit security and privacy breaches include banning the use of cell phones in restrooms and prohibiting employees from connecting their personal cell phones to USB ports on their computers.

Lost or damaged cell phones. You may choose to include within your policy whether and when employees are responsible for lost or damaged company-provided phones. Before doing so, make sure that you are familiar with applicable federal and state laws governing pay deductions as federal law restricts, and many state laws prohibit, an employer from making pay deductions for lost or damaged equipment.

Return of cell phones. Include company expectations with regard to how and when employees are to return company-provided cell phones. Like with lost or damaged equipment, federal law restricts, and many state laws prohibit, making pay deductions for failing to return company property. As such, it’s best to take the phone back and cancel service well before the employee’s separation.

Other policy considerations. Consider whether changes are necessary to other policies to reflect the presence of cell phones inside, and outside, of the workplace. For example, you may want to review your anti-harassment policy to prohibit the use of company-provided cell phones to threaten or coerce others. Your policy on electronic monitoring may also need to be updated if you would like to reserve the right to monitor employees’ cell phone use, where permitted by law.

The performance appraisal meeting is a time in which managers are asked to evaluate and communicate employee success and shortcomings throughout the review period. When ratings are anything less than stellar, the performance review meeting can be uncomfortable for a manager. That’s why some rush the process, gloss over important incidents, and even inflate ratings – all to avoid the discomfort that can sometimes come with delivering an honest evaluation of an employee’s performance.

While performance appraisal meetings can be difficult for some managers, they are an important part of the performance management process. The meetings serve as an interactive way for managers and employees to discuss past performance and identify goals for the next review period; goals that align with the overall goals of the company.

Below are 10 steps managers can take to help facilitate an effective performance appraisal meeting:

Plan and prepare. Encourage both managers and employees to prepare well in advance of the performance appraisal meeting. This will give both parties the time necessary to reflect on past performance and think about their goals for the next review period.

Take your time. To foster commitment, the employee should feel as though the proper time and consideration are given and that their manager is truly invested in their professional development. Plan the meeting for a date and time in which both parties are available. To circumvent the propensity to rush, try to avoid scheduling the meeting before an important deadline.

Confirm expectations. To put the employee at ease, start the meeting off by stating the goals and objectives of the appraisal meeting. Goals should focus on the exchange of performance feedback, the clarification of expectations, and the joint development of performance action plans. Employees should also be aware that the purpose of the review is to improve performance and foster professional growth.

Stay positive. Beginning the meeting with negative statements about the employee’s performance can lead to defensiveness. That’s why it’s important to start the meeting off on a positive note. Think of examples of when the employee impressed you and start with those before jumping into the areas that are in need of improvement.

Cite examples. When reviewing past performance, always refer to a specific situation or course of conduct to ensure the employee is aware of exactly what behavior is being praised or what behavior needs to be corrected. When citing examples, base it on a measurable job element. For example, a statement such as “three major projects were delivered two weeks before deadline” is more likely to strike a cord with the employee than “you did a great job turning around those three projects.”

Reinforce and motivate. The performance meeting should reinforce positive behavior and motivate employees to perform to their fullest potential. In doing so, managers should recognize employees for all of their hard work. Just remember that employees may be motivated by different things. For some, praise may be enough to motivate employees to achieve upcoming goals. For others, increased challenges, extra time off, or monetary rewards may be necessary. Before the meeting, think about individual motivators so that you can help to ensure motivation is sustained throughout the next preview period.

Develop an action plan for future performance. While it’s important to review past performance, the meeting should also focus on future performance and development. A forward thinking approach is often much more motivating than focusing on the past. To further cultivate motivation and commitment, managers should involve employees in developing a plan for the upcoming review period. In doing so, be clear about expectations and allow the employee to come up with their own solutions for meeting their goals. Also develop a contingency plan in case a problem arises. At the end of the meeting, the employee should be clear on the plan of action.

Give the employee time to speak. It’s important to give employees an opportunity to express their input regarding their own performance. Encourage employees to respond during the meeting by asking open-ended questions about their performance as well as their career development interests. If employees disagree with the evaluation, let them share their opinion and don’t get defensive.

Confirm understanding. At the conclusion of the meeting, confirm that the employee has fully understood what was discussed as well as the agreed upon plan for improvement. Recap the problems and solutions discussed and schedule a follow-up meeting to further assist the employee in reaching their goals.

Understand that the meeting is just the beginning. Performance appraisals are most effective when the manager follows up with the employee and makes the employee’s performance their priority. Check in with the employee regularly and provide feedback on a reoccurring basis.
Performance review meetings should never be one-sided. Managers should be encouraged to seek employee input regarding past performance and work with employees in setting future goals. Taking the time to plan the performance appraisal meeting and involving employees in the process can be an especially effective performance management tool.

A growing number of employers are participating in the E-Verify program to confirm the employment eligibility of newly hired employees. The web-based program checks whether the information on a new hire’s Form I-9 matches government records in Department of Homeland Security (DHS) and Social Security Administration (SSA) databases and whether the new hire is authorized to work in the United States.

Currently, more than 200,000 employers participate in the program, up from just 12,000 in 2006, according to the DHS. While some of these employers must do so because of federal contractor requirements or state- specific laws, many employers choose to participate voluntarily. However, employers that wish to participate in the program, even if voluntarily, may be subject to specific requirements. At least one state (Illinois) imposes certain notice, training, and privacy obligations on employers participating in the program.

While the Obama administration is encouraging more employers to register with E-Verify, employers should be aware of both the benefits and the responsibilities that come with participating in the program.

The following are 10 points to consider before enrolling in E-Verify:

1. The government’s case. DHS argues that E-verify is the best means available to determine the employment eligibility of new hires and the validity of their Social Security Numbers (SSNs). According to a recent report by Westat, a research firm under contract with DHS’s U.S. Citizenship and Immigration Services (USCIS), E-Verify queries result in an accurate verification status 96 percent of the time.  Only 0.7 percent of all E-Verify cases involve authorized workers who were initially found to be unauthorized, Westat found. The study also confirmed that the accuracy of the E-Verify program has improved significantly over the years.
2. Holes in the system. The reality is, however, that with regard to unauthorized workers, Westat found that about half receive an inaccurate finding of being work authorized, primarily because it is unlikely to catch instances involving identity theft. About 6 percent of all E-Verify cases involve unauthorized workers.
3. Enrollment process. To enroll in E-Verify, visit the E-Verify website, provide some basic information about your organization, and agree to follow the terms of the program. After your organization is enrolled, you can register yourself, and others within the company, to use the system.
4. Using E-Verify. The basic process to verify the employment eligibility of new hires begins by creating a case, which involves submitting information provided for Form I-9. Once E-Verify provides a final case result, the employer closes the case. If the system is unable to confirm the employee’s work authorization immediately, one of two responses will appear: “Verification in Process”, or “Tentative Non-confirmation” (TNC), which occurs when the I-9 information entered fails to match government records. There are specific requirements and procedures to follow when a TNC result is returned, as described in the next point.
    
5. TNC Results. In the event a TNC result is returned, the employer must notify the employee as soon as possible via the Notice to Employee of Tentative Non-confirmation. Sample TNC Notices and Referral Letters are available from DHS here. The employer must then review the notice with the employee in private, ask whether the employee contests the tentative result, note the employee’s decision on the notice, and ask the employee to sign and date the notice. The signed notice is to be retained with the employee’s I-9 with a copy to be given to the employee. If the employee contests the TNC, the employer must refer him or her to the SSA or DHS. Employers are prohibited from taking any adverse action against an employee who is contesting a TNC. Employers should check the E-Verify system periodically to see whether the SSA or DHS has provided a final case status. 
6. Restrictions. Before initiating an E-Verify query, employers must wait until the employee accepts a job offer and both parties have completed Form I-9. However, employers must make e-verification inquiries no later than the third business day after the new hire begins working for pay. Employers are prohibited from pre-screening applicants via E-Verify or delaying training or start dates based upon a TNC or a delay in the receipt of a confirmation of employment authorization. The use of E-verify is limited to new hires only.
7. All or none. Employers who participate in the program must use E-Verify for all new hires as long as they are enrolled in the program. Use of the system can never be done on a selective basis.
8. Recordkeeping. As all employers are required to do, those using E-Verify must also complete and retain Form I-9 for each employee. In addition to the standard I-9 requirements, employers using E-Verify must either record the E-Verify case number on the employee’s I-9 or print the case details and keep it on file with the employee’s I-9.
9. Notice requirements. Employers using E-Verify must post the English and Spanish versions of the E-Verify Participation Poster and the Right to Work Poster. These notices are available for download from our website here. Because these notices are intended to inform candidates that the employer participates in the E-Verify program, electronic notification is acceptable if posting the notice in a physical location wouldn’t be visible to prospective employees.
10. Leaving the program. An employer using the E-Verify system voluntarily may cancel their participation at any time. Employers can request to withdraw their participation via the E-Verify website.

One sign of better economic times is when more people start finding jobs. Another is when they feel confident enough to quit them.
More people quit their jobs in the past three months than were laid off — a sharp reversal after 15 straight months in which layoffs exceeded voluntary departures. The trend suggests the job market is finally thawing.
Some of the quitters are leaving for new jobs. Others have no firm offers. But their newfound confidence about landing work is itself evidence of more hiring and a strengthening economy.
“There is a century’s worth of evidence that bears out this view that quits rise and layoffs fall as the job market improves,” said Steven Davis, an economist at the University of Chicago.
Still, the number of people quitting their jobs is nowhere near what it was before the recession. Economists expect the improvement in the job market to be fitful, rather than consistent. In May, for example, private employers added only 41,000 net jobs after adding 218,000 in April.
Yet the long-term trend points to an improving job market. The economy has created a net 982,000 jobs this year after a recession that wiped out more than 8 million of them.
The government said Tuesday that the number of people quitting rose in April to nearly 2 million. That was the most in more than a year and an increase of nearly 12 percent since January. That compares with 1.75 million people who were laid off in April, the fewest since January 2007, before the recession began.
During the depths of the recession, workers were hesitant to quit — and not only because jobs were scarce. Even if they found a new job, some feared that accepting it would leave them vulnerable to a layoff. At many companies, layoffs follow a simple formula: Last hired, first fired.
Many clung to their jobs out of fear, said David Adams, vice president of training at Adecco, a national staffing agency. When Adecco tried to recruit workers to fill open positions, it frequently ran into the same obstacle: Few workers felt like betting on a new job that might soon disappear.
Not so much any more. Adecco is seeing more employed workers seeking interviews, rather than laid off workers searching for a lifeline.
“The hangover is kind of over,” Adams said. “It’s really starting to move toward a market where the employee can have a lot more confidence making a move.”
That’s why Katie Charland just quit her job at a parenting magazine in Phoenix to take a position with a nonprofit that supplies children’s educational programs.
Charland, 27, says the position is a dream job. Still, it carries a cost: She’s abandoning seniority at her old job. But she thinks the economy is expanding enough that her company will be able to attract state and corporate funding.
“I don’t see leaving my current job to pursue this as a risk,” Charland says. “I do feel like the economy is getting better, and there’s more opportunity out there.”
Such optimism was rare in 2008 and 2009, when employers cut more than 8 million jobs, sending the unemployment rate to a 26-year high of 10.1 percent. The number of people who quit fell 40 percent to 1.72 million in September 2009. That was the fewest since the government began tracking the data in 2000. It was down from nearly 2.9 million in December 2007, when the recession began.
Studies have shown that worker morale fell during the recession. Productivity rose as companies squeezed more work out of their employees. That points to a reason quits may keep rising: Overworked employees could jump at the chance to switch jobs as new opportunities arise.
“There is going to be a mass exodus of the top performers as the economy starts to turn around,” predicts Razor Suleman, a consultant who helps companies retain their best workers.
About 25 percent of companies’ top performers said they plan to leave their current job within a year, according to a survey published in the May edition of the Harvard Business Review. By contrast, in 2006, just 10 percent planned to leave their jobs within a year. The survey questioned 20,000 workers who were identified by their employers as “high potential.”
Companies retained those workers during the recession but heaped more work on them, said Jean Martin, the study’s co-author and executive director of the Corporate Executive Board’s Corporate Leadership Council in Washington. At the same time, employers cut back on awards and bonuses, she said.
Now, top performers at some companies are heading for the exits as hiring picks up. It means companies will feel more pressure to retain them.
“These rising stars know what they’re worth,” Martin said. “They feel somewhat neglected.”
Phil Edelstein can attest to that. He spent two years on his first job at an advertising agency gaining more responsibility but no pay raises.
Edelstein, 25, worked for an agency in Philadelphia that was stretching its budget as clients cut back their spending. After researching clients’ brand names and marketing strategies, he moved on to directing study projects.
Bosses kept promising a pay raise commensurate with his workload. It never came.
“There’s this intense frustration that comes with that, because you basically feel like you have no control over how much money you’re making and how much work you do,” he said.
Edelstein hung tight through 2009 as the economy shed jobs. But this year he began sending out resumes to other ad agencies. Then a prospective client called. The CEO of a Colorado-based tea maker needed a marketing director. Edelstein didn’t need long to say yes.
“It felt good, because I was initiating the change,” he said.
More people are now taking a leap that few dared just a few months ago: Quitting without a new job waiting. The improving economy has given them confidence.
Robert Dixon is among them. He was consulting with companies doing business in China, helping them establish supply chains with factories there. But he tired of spending weeks at a time away from his wife in Massachusetts. So in May he quit — without a backup plan.
“Somebody the other day said to me I was the first person they’d met who quit a good-paying job without another one to go to,” Dixon said. “I know there are other companies out there. I just need to find them.”

An employee comes to you and says: “I’m having trouble getting to work on time because of medical treatments I’m undergoing.” What would you do? And, what would your supervisors do if an employee told them this?

The Equal Employment Opportunity Commission’s (EEOC) position, as it pertains to the example above, is that the employee has put you on notice that he or she is requesting a reasonable accommodation. An accommodation is any change in the work environment or in the way things are customarily done that enables an individual with a disability to perform the essential functions of the job and enjoy equal employment opportunities.

For example, in the scenario above, a reasonable accommodation may be to change the employee’s schedule so he she may arrive to work later, after treatment.

The Americans with Disabilities Act (ADA), as amended by the ADA Amendments Act (ADAAA), requires that employers with 15 or more employees provide a reasonable accommodation to a qualified applicant or employee with a “disability,” unless to do so would cause undue hardship.

Employers should follow certain guidelines when providing reasonable accommodations, as outlined below. The following is based on the EEOC’s enforcement guidance on reasonable accommodations:

Reasonable accommodation requests. A request for a reasonable accommodation does not need to reference the Americans with Disabilities Act and does not need to be in writing. The employee may use plain English, as in the example provided at the beginning of this article. Doing so puts the employer on notice. The request can be made at any time during the application process or at any point during the individual’s employment with the company.

Responding to a request. Once a reasonable accommodation has been requested, the employer should respond promptly. A best practice is for the employer to confirm, in writing, that a request has been made. Subsequently, the employer and employee should engage in an informal, interactive process to identify an appropriate reasonable accommodation.

Choosing the accommodation. The employer may choose among reasonable accommodations as long as the chosen accommodation is effective in removing the workplace barrier that is impeding the individual with a disability. Therefore, the employer isn’t required to choose the reasonable accommodation that the employee wants if there is more than one suitable option. During the interactive process, the employer may offer alternative suggestions for reasonable accommodations.

Rules pertaining to employees. In general, the employee (or a representative) is responsible for informing the employer of a need for a reasonable accommodation. However, an employer should initiate the interactive reasonable accommodation process without being asked if the employer: (1) knows that the employee has a disability; (2) knows, or has reason to know, that the employee is experiencing workplace problems because of the disability; and (3) knows, or has reason to know, that the disability prevents the employee from requesting a reasonable accommodation.

Rules pertaining to applicants. Before a conditional offer is made, an employer generally is barred from asking applicants whether a reasonable accommodation is needed for the job. An exception to this rule is when the employer knows that an applicant has a disability — either because it is obvious or the applicant has voluntarily disclosed the information — and could reasonably believe that the applicant will need a reasonable accommodation to perform specific job functions.

Asking for documentation. If the disability and the need for reasonable accommodation are obvious, the employer may not ask for documentation. If the disability and the need for reasonable accommodation aren’t obvious, an employer may ask the individual for documentation regarding his/her disability and functional limitations. The employer may require only the documentation that is needed to establish that a person has a disability as defined by the ADA, and that the disability necessitates a reasonable accommodation.

Examples of reasonable accommodation. Some examples of reasonable accommodations include, but are not limited to: (1) job restructuring, such as: reallocating or redistributing non-essential job functions, or altering when and/or how a function, essential or non-essential, is performed; (2) modifying work schedules; (3) acquiring or modifying equipment: (4) having the employee perform light duty work; and (5) making facilities accessible to the disabled individual.

Utilize available resources. Employers are urged to utilize the resources that are at their disposable. The Job Accommodation Network, for example, provides free assistance to employers with regards to job accommodations. Employers can search an online database for impairments and possible accommodations and can also contact JAN via phone or email with specific questions.

Undue hardship exception. An employer does not have to provide a reasonable accommodation that would cause an “undue hardship”. An “undue hardship” claim must be based on an individualized assessment of current circumstances that show that a specific reasonable accommodation would cause significant difficulty or expense. An employer cannot claim undue hardship based on employees’ (or customers’) fears or prejudices toward the individual’s disability.

Keep in mind state law. Some states have more stringent requirements than the requirements of the federal ADA. Employers covered by state disability laws as well as the federal Americans with Disabilities Act must comply with the law that provides more protection to individuals with disabilities. Be sure to check the applicable law in your state.

Following the guidelines outlined above can help to ensure that qualified employees and applicants with disabilities are provided with reasonable accommodations and equal employment opportunities. To be implemented effectively, supervisors and other employees should be trained on the ADA, any applicable state law, and how to respond if an applicant or employee requests a reasonable accommodation.

Offering unpaid internships is a common practice in the summer months. However, there are certain rules and guidlines that must be followed if no compensation is offered to the Intern. The Department of Labor has recently announced that it will step up enforcemet efforts targeting employers who offer unpaid internships with the goal of cracking down on employers violating federal wage and hour laws by having interns who do not qualify as trainees work without compensation.

There are 6 factors to consider when evaluating trainee status. ALL factors must be met.

1.  Training must be closely tied to education. To be unpaid, the internship must be similar to the training which would be given in an educational environment. In general, the more an internship program is structured around a classroom experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the intern’s educational experience. Under these circumstances, the intern does not perform the routine work of the business on a regular and recurring basis and the business is not dependent upon the work of the intern.

Recommendation: The student and the employer should develop an individualized training plan structured around the student’s classroom experience. The plan should be strictly followed and records of the types of training the intern received should be kept on file.

3.  The relationship is for the benefit of the intern. The DOL also requires that to be considered a “trainee,” the internship experience must be for the benefit of the intern, not the employer. If the intern is engaged in work that furthers the operation of the business or is otherwise performing “productive work” he or she would be considered an employee, and would therefore be covered under the FLSA’s minimum wage and overtime requirements

Recommendation: Tailor the program to introduce the student to a broad range of experiences aimed at advancing their knowledge of the field and preparing them for real work experience, without benefiting the company.

3.  The intern does not displace regular employees. The DOL also mandates that the intern not displace regular employees. Rather, the intern must work under close supervision of existing staff. If an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods, then the interns will be viewed as employees.

Recommendation: Provide job shadowing opportunities under the close and constant supervision of regular employees and consider assigning your interns a mentor.

4.  There is no immediate advantage for employer. The DOL also maintains that in order for the intern to be considered a trainee, the employer must derive no immediate advantage from the activities of the intern. In fact, on occasion, the employer’s operations may actually be impeded by the internship arrangement.

Recommendation: Any work done by the intern should be insubstantial in nature and secondary to the training process.

5.  The intern is not necessarily entitled to a job. The DOL also requires that the intern not necessarily be entitled to a job at the conclusion of the internship. Unpaid internships should not be used as “trial periods”. If an intern is placed with the employer for a trial period with the expectation that he or she will then be hired on a full-time basis, that individual would be considered an employee entitled to compensation.

Recommendation: Provide the intern, in writing, with the start and end dates of the internship. Also indicate, in writing, that employment at the conclusion of the internship is not to be expected.

6.   Both parties understand it is unpaid. Both the employer and the intern must understand that the intern is not entitled to wages for the time spent in the internship.

Recommendation: Clearly state, in writing, that payment for the intern’s services is neither intended nor expected. This is, of course, as long as all of the other factors listed above are met.

To be considered a trainee all of the above criteria must be satisfied. If any of these factors do not apply, then the intern is entitled to compensation under the FLSA. For employers with internship arrangements that meet the DOL’s 6-factor test, a regular evaluation of the internship relationship should be conducted. As interns gain experience and begin to perform meaningful work, their status as a trainee may change.

With today’s current financial situation, the IRS is stepping up their efforts to impose, inforce and collect payroll penalties like never before. Clients of payroll express never have to worry about payroll penalties because they are covered with the Payroll Express “Express Guarantee”.   See our website for details:  www.payrollexpress.com

The IRS reports that 45% of business’s are fined each year for filing payroll taxes late or incorrectly. These fines can be extreme. Today, one of the worst liens that are pursued by the IRS is payroll tax penalties. This is because the IRS tends to view a failure in depositing payroll taxes as theft! Falling into a payroll tax penalty is rather ugly and expensive as the tax code authorities permit the IRS to assess 100 PERCENT PENALTY against the respective parties. Without even considering the State penalty possibilities, a business can be penalized by the Federal government for:
a. Failure to file a payroll tax return.
b. Failure to pay a payroll tax.
c. Failure to withhold, deposit or pay payroll taxes.
d. Failure to file information returns.
e. Failure to furnish correct payee statements.
f. Failure to properly calculate tax liabilities.

Payroll is much more than calculating pay rates and tax deductions. Any simple computer program can accomplish this end. Many so called “Payroll Services”, do nothing more than to put another complicated payroll calculating software program in front of you. You have to not only figure out how to use the program, but in most cases, you are required to do all of the work! The payroll service then gets to press a button and collect your money! If you ever have to ask yourself “What is the payroll service doing for their money?”, chances are, they aren’t doing much.

To avoid this problem, be sure you know before hand exactly what the payroll service does, and what you are required to do. Make sure you have a specific, live person that you can talk to\. This person should have an intimate knowledge of your account. The payroll service should quite literally be your “Virtual Payroll Department”. This means that you can call them at any time with any type of question or concern. Otherwise, you might as well struggle through it yourself. See what actual Payroll Express clients have to say about customer service here:    http://www.payrollexpress.com/html/meet_our_clients.htm

The Internal Revenue Service (IRS) has just released Form W-11, the Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit. The purpose of the form is to confirm that an employee is a “qualified employee” under the HIRE Act. To benefit from the tax advantages under the HIRE Act, employers must obtain an affidavit from each qualified employee certifying that he or she has not worked more than 40 hours during the 60-day period ending on the date he or she began employment with the company.

Under the HIRE Act a “qualified employee” is one that meets the following criteria:

1.  Begins employment with you after February 3, 2010, and before January 1, 2011;
2.  Has not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment with you;
3.  Was not employed by you to replace another employee, unless the other employee separated from employment voluntarily or for cause; and
4.  Is not related to you.