Labor Department statistics have shown that unemployment has steadily risen over the past 12 months. Though we could have very well bottomed out, 2011 will still have a respectable percentage of American workers seeking unemployment benefits.
For the family owned business, this could mean an increased number of disputes and hearings with your state workforce commission. The following are three tips for minimizing the pain and potential chargebacks associated with this aspect of being an employer.
#1 Clear Delineation of Contractors vs. Employees
The easiest way to ensure that you don’t face disputes with contractors seeking unemployment benefits is to have a contractor agreement that clarifies the role. Though you should consult with an attorney who understands employment laws in the various states you operate, this agreement should have specific sections specifying the contractor:
- is a contractor and that even as a contractor there has been no promise of future permanent employment.
- is free to work for other clients and that your relationship does not place any restrictions on them unless these restrictions violate terms in a separate confidentiality agreement.
Other issues worthy of clarification are the work location of the contractor and payment. Paying an individual by the project and allowing them flexibility as to where they work are two small details that support the fact the contractor is not under your direct control and that your reason for contracting them is for a specific deliverable versus their ongoing time.
#2 Organize Documentation Related to Employees and Contractors
Though straight forward, an unemployment benefits hearing generally requires an employer to submit “all documentation” relavant to a hearing within a certain timeframe before the hearing. If you are organized as a private business owner, this could take 15 minutes. If you are not, this could take hours. Organizing employee and contractor documentation by individual, entity, and year can result in significant time savings.
# 3 Digitize Employee and Contractor Documentation
In the modern technology era, industrial strength scanners cost a few hundred dollars, and online digital document storage services (e.g. FilesAnywhere) cost a few hundred dollars per year. Having documents digitized can facilitate storing, organizing, and delivering information during an unemployment benefits dispute. With an online service such as FilesAnywhere, faxed delivery with confirmation could be as quick as 15 minutes. More traditional methods such as the US Postal Service could cost you 30-60 minutes alone waiting in line at the post office.
In a family owned business, time is money. Thus, having clear delineation between contractors and, organizing both contractor and employee documentation, and utilizing commodity technology can save you substantial time and provide cost savings during inquiries from workforce commissions and other government employment related services.
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