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MSECMOUNTAIN STATES EMPLOYERS
COUNCILExiting Employee Issues
S. Lorrie Ray, Esq.
MSECIssues to Consider
Independent Contractor Status After Discharge
Layoff Considerations Unemployment Waivers and Releases Final Pay COBRA Employment References
MSEC
Independent Contractor Status After Discharge
Two agencies regulate Independent Contractors– IRS– State Unemployment Division
Fines and Taxes a reality if employees improperly classified. Red Flags:– Employee becomes an independent contractor– Work remains the same– Employer controls the work– Worker paid hourly– Worker only does jobs for one employer
MSECLayoff Considerations
Strategic View Alternatives Planning Selection Legal review – WARN? Administration Message and Behavior Managing Survivors
MSECUnemployment
Only 1 test:– Was the employee at fault– Fault of employer immaterial
Considerations:– Employee’s likely success– Employee’s likely suit
Consider helping employee to file:– If short time employee, sooner is better– Providing employee with income can ease
tension
MSECWaivers and Release
Advisability Necessary Elements
– Consideration– Release– Advice of Counsel
Tax Payments: wise to deduct for income tax
MSECWaivers and Release
Under 40– Give 7 days to reconsider to avoid coercion
Over 40– Give 21 days to consider
– Give 7 days to reconsider Group Release with persons in group over 40
– Give 45 days to consider
– Give 7 days to reconsider
MSECFinal Pay
In Colorado:– If employee quits – next payday– If employer terminates – immediately – Cannot deduct amounts if no written
employee permission, unless theft, then must prevail at criminal trial.
In Other States: laws are similar Cannot deduct below minimum wage
MSECCOBRA
Don’t overlook ARRA through 2009, maybe 2010– Employer pays 65% and deducts amount from
payroll taxes– Congress may extend this benefit – legislation is
being considered Qualified Beneficiaries Covered Coverage – 18, 29 or 36 months Election – 60 days Payment – 45 days
MSECEmployment References
Consider neutral or positive references References must be truthful Designate reference provider If employee engaged in violent or
unlawful behavior – do NOT provide positive reference; consider strongly providing documented job-related information to potential employers requesting it