5pg- Employment Law

Thisassignmentrequiresyoutoanalyzeasetof hypotheticalfactsunderasetof legalrulesandreachaconclusionthatyoucandefend.Theexerciseaimsto presentyouwithasetof factsthatyoumightreasonably encounteras anHRprofessional,anditsobjectiveis to helpyoudevelopthe abilitytocriticallyanalyzethesefactsandpersuadeareasonableobserverthat youhavereachedthecorrectconclusion.

TheFacts

Make-a-Bedis afurnituremanufactureranddistributor withplantsin Maryland,PennsylvaniaandDelaware.Thecompany’s presidentbelievedthe companycouldsavemoney bystreamliningthemanufacturingprocessand consolidatingfacilities.Toaccomplishthis,thecompanyadvertisedthrough regularwantadsforaconsultant/industrialengineerto overseethisprocess.

JohnEngineerappliedforthejob;hisresumeindicatedthatheranhisown consultingfirmas asolopractitionerandhadconsultedonthistypeof project before.

Thepresidentdecidedthatitwould bebetterto hireJohnas anindependent contractorthanas anemployee,as originallyplanned,becauseJohnwas wrappingupsomeprojectsforotherclientsandcouldn’tbeginfull-timework rightaway.

Johnwastoldthathewould beexpectedtostudytheemployerbusinessand makerecommendationsas to howtoaccomplishtheconsolidationwithinone year.  Hewasrequiredtoreportregularlytothepresidentonhiswork(every month),butwasresponsibleforscheduling hisownmeetingsandtravel.It was agreedthatJohnwouldbudgetapproximately20hoursof histimeeveryweekto theprojectandwould bepaidonanhourly basis,uponsubmissionofaninvoice eachmonth.

John’s otherbusinessdriedupandafterafewmonths, hewasdevotingallhis timetoMake-a-Bed,thoughhecontinuedto billonly20hoursaweek.  John travelledfrequentlytothethreefactories,butwasnotreimbursedforhistravel expenses.

Afteroneyearhadpassed,Johnhadnotmadeanyformalrecommendations abouthowtoaccomplishtheconsolidationprojectwantedbythebusinessand wasreplacedbyanoutsideprofessionalconsultingagency.

JohnfiledaclaimforunemploymentbenefitsshowingMake-a-Bedas thelast employer.Thecompanysupplieda1099formtotheunemploymentoffice

showingthatJohnhadbeenpaidas acontractor,notanemployee.Theclaimwas denied,butJohnappealedandahearingwasheld.

TheHearing

Atthehearing,thecompany’snewHRdirectorpresentedthepresident’s written statementalongwithhishandwrittennotes(butnocontract)regardingtheterms oftheagreement withJohntoactas anindependentcontractor.

Johntestifiedthatthetermspresentedinthehandwrittennoteswerenotfamiliar to himandhedidnotrecallthisdiscussionwiththecompanypresident.Through testimony,it wasshownthatJohnwasonlyabletocompleteworkduringnormal businesshoursdueto needingaccesstothebusinesscomputersystemand technicalmanuals.

Johntestifiedthathewasalsoexpectedto notifyHRwhenhewouldnotbeinfor anyreasonandif hewasgoingtoarrivelateor leaveearly.Johnhadanofficeat thecompany,butalsoworkedfromhomeoccasionally.Whileit wastruethat Johnsubmittedmonthlybillsforservices,thebillsweresometimeslate,buta checkwasstillissuedonanormalpayrollcyclefromthebusinesspayroll account.

The HR RepexplainedthatJohnwasonlyallowedto performservicesduringnormal businesshoursforsecurityreasonsandthatthethreefactorieswereonlyopen certainhours.Therewasnoexternalwayforanypersontoaccessthebusiness computersystem,sonoemployee“tele-commuted”andeveryonecameintothe officeeveryday.

The HR Rep alsoexplainedthataclerkhadsetuppaymentstotheclaimantintheemployer payrollsysteminerror.Thepayrollsystemwasprogrammedtoissueacheckon certainintervalsunless overridden.Nooneat thebusinesshadbeenawareofthis untilthehearing.

The HR Reptestifiedthathedidn’tthinkJohnhadbeenrequiredtonotifyHRabout takingtimeoffandthatHRmerelythoughtthatJohnwasbeingcourteousby notifyingthemoftimeoff, buthadnotexpectedor requiredit.Healsoinformed thehearingjudgethatJohndidnotreceiveanybenefitssuchas vacationpay,or health or retirement benefits.

ImaginethatyouaretheUnemploymentClaimsHearingOfficeandthatyou mustdecide whetherJohnshould becharacterizedas anindependentcontractoror anemployee.Draftanopinionstatingyourconclusion,andyourreasoningfor reachingthisconclusion.

In formulatingyourOpinion:

1)      Summary:Providea1-2paragraphsummaryofthefactsofthecase.

2)      Analysis:FindIRSPublication15AontheInternet,reviewSectionTwoofthat PublicationandutilizetheIRS(common-law)testinconductingyour analysis. Through the use of additional outside sources, it is important to address each factor in the test and discuss the factor in detail and whether or not the factor can be applied to this set of facts and why/why not.

3)      Conclusion:StatewhetherJohnis anindependentcontractoror anemployeeand thereasonsforyourconclusion.

4)      AdditionalSection/Further Discussion:

Whatwouldyoudo,as aHumanResourcesDirector,to makesurethatthistype ofsituationdoesnothappenagain?Identifyat leastthreestepsthatyouwould take,orpoliciesthatyouwouldimplement. Use outside sources to give credibility to the feasibility of your suggestions.