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Recent Blog Posts
What are the Illinois Small Business Insurance Requirements?
Potential hazards and health risks are everywhere, even in industries that are seemingly safe. As a small business owner, you must protect your employees from dangers and unsafe environments. If an employee is injured, there are multiple insurance options available to them recover. Many new business owners have questions about which coverages are mandated by Illinois employment law.
Health Insurance Coverage
Employers pay hefty costs to offer health insurance, but is it necessary? Deductibles and premiums are higher than workers’ compensation insurance, but health insurance does cover a wide variety of injuries and illnesses, including those that did not occur at work.
Health insurance benefits are not required but can be an added perk to your employees. If you have a small business of fewer than ten employees, discuss the options with your employees. Some people would instead choose their own insurance rather than have the “cookie cutter” plan offered by group benefits, and they may be able to find a better price than is being provided by the group policy.
How to Properly Classify Workers as Independent Contractors or Employees
It can be easy to misclassify a worker, especially when it comes to small businesses. There are a few different classifications that employees can fall under, such as employee or independent contractor, salaried or hourly and overtime exempt or non-exempt. Assigning the wrong status to a worker can bring costly consequences like liability for employment taxes, required payment of back wages, and other penalties. In order to avoid such trouble that will bring nothing but headaches, you should know exactly what constitutes certain designations and how to determine how you should classify a worker.
Independent Contractor vs. Employee
The first determination you should make is whether or not you technically have an independent contractor or an employee. The Internal Revenue Service (IRS) has developed a set of criteria to help employers make this designation. The IRS states that there are three areas where you should look to figure out if your worker is an employee or an independent contractor.
New Illinois Law Requires Reimbursement for Employee Expenses
Illinois recently passed a law that will soon require businesses to reimburse their employees for any business-related expenses paid for out of pocket. As of now, only seven other states (California, New Hampshire, North Dakota, South Dakota, Montana, Massachusetts and Iowa) and the District of Columbia have similar laws in place. The law is an amendment to the Illinois Wage Payment and Collection Act (IWPCA) and goes into effect January 1, 2019.
Amendment Closes Loophole in Act
Prior to this amendment, there was nothing in the IWPCA that specified expense reimbursement. Because of this, some employers would not reimburse workers since it was not covered under the act, and employees would then sue the employer for violation of contract. The employee would often end up incurring more expenses like attorneys fees, which would not be reimbursed.Employers Must Reimburse “Necessary Expenditures”
The new law states employers are required to reimburse “necessary expenditures or losses” which the employee incurs during any business activity directly related to the work they do for the employer. The law states necessary expenditures are all reasonable expenses the employee racks up while performing the duties of his or her job. It also states employers are not responsible for losses that are the employee’s own fault, due to normal wear or theft, unless the theft occurred because of employer negligence.Employees Must Comply With Employer Policies
Even though the new law states employers must reimburse their workers, employees must comply with any written reimbursement policies the employer has in place. The law specifically states employees are not entitled to reimbursement if there are official policies the employee did not follow. The law also says employers are not liable unless they authorized the expenditure the employee seeks reimbursement for, or if they violate their own reimbursement policy.
3 Ways to Keep Accurate Business Records
Everyone who owns a business, no matter how small or large, must diligently maintain their paperwork. It is important to keep track of items for tax purposes and much more. Decent record keeping can help you monitor the success of your business, keep track of your expenses and assets, and prepare financial statements.
While well-kept records can ensure your business remains healthy, bad record keeping can get you into trouble. Here are four ways you can make things easier for yourself and keep your records in good order:
1. Have a Good Accounting System in Place
Keeping good tax records is much easier when you implement a quality accounting system. If you want accurate tax records, you need proper accounting, and that all starts with the way your records are completed and organized. There is a plethora of accounting software out there that can make the process simple, but it may be a good idea to have an experienced accountant on the job instead.
Overtime Pay Issues and Avoiding Fair Labor Standards Act Litigation
The Fair Labor Standards Act (FLSA) is a federal law put in place in 1939 to protect the rights and well-being of American workers. While the act has changed since its inception 80 years ago, it still retains many of its original goals, such as the minimum wage, overtime pay requirements, record keeping, and child labor standards. The FLSA is an important part of the American workforce and protects the rights of most workers.
Are Employers Required to Pay Overtime?
According to the FLSA, if an employer permits or requires an employee to work overtime, that employer must pay the employee for those overtime hours. Overtime is defined as any hours worked after 40 hours in a single workweek. The FLSA also requires overtime pay be no less than the employee’s usual rate plus half.
For example, a retail worker normally makes $12 per hour. This week, they worked a total of 48 hours, meaning they have eight hours of overtime they must be compensated for. Their overtime rate would be $12 + $6, for a grand total of $18 for every hour worked over 40 hours in a week. This means the worker should receive a paycheck of $720, $576 for the first 40 hours worked, and $144 for the eight hours of overtime.
Complying With Employee Recordkeeping Requirements
Being a business owner can be extremely rewarding and stressful at the same time. You have the benefit of knowing you are running a successful company, but with owning a business comes numerous responsibilities. One of the things you must pay attention to when you own a business is how you keep records, specifically, your employees' records. There are numerous laws and regulations you must follow when you own a business, and there are laws about employee recordkeeping. It is important you comply with these regulations so you do not find yourself in trouble with the government.
Maintaining Personnel Files
A personnel file is one maintained for every employee’s personal information. Items that should be kept and updated in a personnel file include:
- Employee’s name and personal information;
Family and Medical Leave Act Eligibility and Compliance
Sometimes there are situations in which an employee is unable to work because of personal health issues or those of a family member. Many people worry that taking extensive time off from work will cause them to lose their job or face repercussions when they get back to work. Fortunately, the United States government has enacted what is called the Family and Medical Leave Act (FMLA). This act helps millions of Americans get the time off they need without having to worry about unfair treatment from their employers.
What is the Family and Medical Leave Act?
Enacted in 1993, the Family and Medical Leave Act allows certain employees of covered employers to take unpaid leave for specific family and medical reasons. Under the FMLA, it is illegal for employers to retaliate or to demote a person for taking leave covered under the act. Under certain situations, employers are permitted to require their employees to use accrued paid leave, such as sick leave or vacation.
Intern or Employee? Fair Labor Standards Act Compliance
For many high school and college students, unpaid internships are almost a necessity. According to a survey conducted by the National Association of Colleges and Employers, around 61 percent of graduating college seniors had an internship, although nearly half of all internships in the United States were unpaid. Unpaid internships are highly contentious among some because many involve students doing work that actual employees would do. In 2018, the U.S. Department of Labor gave unpaid internships its blessing, with a few requirements. Business owners should be aware of these requirements to avoid violating the Fair Labor Standards Act (FLSA).
The Primary Beneficiary Test
The primary beneficiary test is used by courts to help determine whether an intern or student is actually an employee who must be compensated for their work. The following seven factors are the criteria that courts use to make the determination:
Common Problems in the Retail Industry Under the Fair Labor Standards Act
According to the Bureau of Labor Statistics, there are currently an estimated 16.6 million retail workers over the age of 16 in the United States. Jobs in the retail industry are popular among younger Americans such as high school and college students because of the flexible hours and minimum education requirements. Retail establishments can include gas stations, restaurants, department stores, and much more. Retail employees are covered by the Fair Labor Standards Act (FLSA) as long as the establishment has an annual sales volume of at least $500,000, or if employees are engaged in interstate commerce activities.
As an employer, it is important that you avoid FLSA violations to achieve full compliance.
Hours Worked Violations
Employers are required by law to pay for all hours worked by employees. Sometimes retail establishments will only allow workers to be “on the clock” if there is a need for them. If they are scheduled to work, but there is no demand for more staff, the employee will often be told they are not needed. Unless an employer immediately informs an employee of this, fully relieves them of duty, and gives them a specific time to check in, the time between their scheduled shift and the check-in time does not have to be counted as work time. If the employee is not given a specific time that is long enough to use for their own benefit, all of the waiting time should be counted as hours worked.
Are You Required to Accommodate Nursing Mothers in Your Illinois Workplace?
Today, there are more mothers in the workforce than ever before. According to the latest statistics from the U.S. Department of Labor, approximately 70 percent of all mothers with children under the age of 18 participated in the workforce in 2013, compared with only 47 percent in 1975. Typically, the older the children are, the more likely the mother is to have a job, because taking care of a young child is much more involved than taking care of a school-aged child. One of the issues that working mothers of young children face is breastfeeding. Prior to 2010, working mothers who nursed their children did not have many (if any) protections for expressing their breast milk during work hours. Now, employers must follow certain rules set by the Fair Labor Standards Act (FLSA) concerning nursing mothers in the workplace.
Recent Blog Posts
- Tips to Avoid Employee Lawsuits as a Small Business Owner
- Accusations of Wrongful Termination in Illinois
- New Illinois Paid Leave Law Now in Effect
- DOL Issues Final Rule on Employee vs. Independent Contractor Status
- How to Protect Your Company from Employee Lawsuits
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