July 2024 TogetHR Times
Harassment or Hostile Work Environment or Both?
by Kim Keene
Harassment is a form of employment discrimination that violates Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, (ADEA), and the Americans with Disabilities Act of 1990, (ADA).
Harassment is unwelcome conduct that is based on race, color, religion, sex (including sexual orientation, gender identity, or pregnancy), national origin, older age (beginning at age 40), disability, or genetic information (including family medical history). Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive. Anti-discrimination laws also prohibit harassment against individuals in retaliation for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or lawsuit under these laws; or opposing employment practices that they reasonably believe discriminate against individuals, in violation of these laws.
Petty slights, annoyances, and isolated incidents (unless extremely serious) will not rise to the level of illegality. To be unlawful, the conduct must create a work environment that would be intimidating, hostile, or offensive to reasonable people.
Offensive conduct may include, but is not limited to, offensive jokes, slurs, epithets or name calling, physical assaults or threats, intimidation, ridicule or mockery, insults or put-downs, offensive objects or pictures, and interference with work performance. Harassment can occur in a variety of circumstances, including, but not limited to, the following:
The harasser can be the victim's supervisor, a supervisor in another area, an agent of the employer, a co-worker, or a non-employee.
The victim does not have to be the person harassed, but can be anyone affected by the offensive conduct.
Unlawful harassment may occur without economic injury to, or discharge of, the victim.
Prevention is the best tool to eliminate harassment in the workplace. Employers are encouraged to take appropriate steps to prevent and correct unlawful harassment. They should clearly communicate to employees that unwelcome harassing conduct will not be tolerated. They can do this by establishing an effective complaint or grievance process, providing anti-harassment training to their managers and employees, and taking immediate and appropriate action when an employee complains. Employers should strive to create an environment in which employees feel free to raise concerns and are confident that those concerns will be addressed.
Employees are encouraged to inform the harasser directly that the conduct is unwelcome and must stop. Employees should also report harassment to management at an early stage to prevent its escalation.
Are you, the employer, liable for the behavior?
The employer is automatically liable for harassment by a supervisor that results in a negative employment action such as termination, failure to promote or hire, and loss of wages. If the supervisor's harassment results in a hostile work environment, the employer can avoid liability only if it can prove that: 1) it reasonably tried to prevent and promptly correct the harassing behavior; and 2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.
The employer will be liable for harassment by non-supervisory employees or non-employees over whom it has control (e.g., independent contractors or customers on the premises), if it knew, or should have known about the harassment and failed to take prompt and appropriate corrective action.
When investigating allegations of harassment, the EEOC looks at the entire record: including the nature of the conduct, and the context in which the alleged incidents occurred. A determination of whether harassment is severe or pervasive enough to be illegal is made on a case-by-case basis.
How should employers handle claims of hostile work environment?
Follow your own policy.
Ensure that you have a procedure for investigating harassment claims.
Investigate all claims.
If the claim is frivolous or not based on protected characteristics, it can be handled quickly. If the claim is truly hostile work environment, employers must take action. If an employee is not satisfied with the outcome of the investigation, they may file a claim with the EEOC within 180 days.
Sources
US Equal Employment Opportunity Commission: www.eeoc.gov/harassment
Society for Human Resource Management: www.shrm.org
Do you Know what the Difference is Between Hiring an Employee and Hiring an Independent Contractor?
by Christine Muller
There are definite differences in classifying between the two.
On January 10, 2024, the U.S. Department of Labor published a final rule, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). This final rule rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule), that was published on January 7, 2021 and replaces it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent.
The misclassification of employees as independent contractors may deny workers minimum wage, overtime pay, and other protections. This final rule will reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves.
The general rule is that an individual is an independent contractor if the payor (employer) has the right to control or direct only the result of the work and not what will be done and how it will be done.
If you hire an independent contractor, that individual is actually self-employed as the earnings of a person who is working as an independent contractor are subject to self-employment tax.
It is not an independent contractor if they perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
Common Law Rules
Facts that provide evidence of the degree of control and independence fall into three categories:
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of relationship: Are there written contracts or employee type benefits (that is, pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.
The keys are to look at the entire relationship and consider the extent of the right to direct and control the worker. Finally, document each of the factors used in coming up with the determination.
Consequences of treating an employee as an independent contractor
If you classify an employee as an independent contractor and you have no reasonable basis for doing so, then you may be held liable for employment taxes for that worker.
Rule of Thumb for hiring Independent Contractors:
Develop a written agreement with an assigned specific scope of work for a specific duration.
Require contractor to provide his or her own tools.
Establish invoicing and payment dates.
Don’t pay independent contractors through payroll account
Do not allow independent contractors to enroll in company sponsored benefit programs.
Do not have independent contractors perform similar work of employees or perform routine work.
Require documentation demonstrating an independent contractor relationship – such as a copy of a business or professional license or copy of insurance certificates.
Is it a Good Idea to Front-load 401(k) & HSA?
by Rhonda Anderson
401(k) Front-loading:
If your plan allows it, front-loading can be a smart investment strategy because the markets generally appreciate in value over time. So, the earlier you contribute to a retirement plan, the more time those funds are in the market, thus creating the possibility of greater returns in the long run.
Those who front-load their contributions tend to enjoy greater long-term returns. However, front-loading can backfire in dramatic fashion if your employer matches contributions based on your compensation each pay period rather than your annual salary.
Front-loading is fine for an IRA or 401(k) without a match. But if your 401(k) has a match, you may miss out on it for the rest of the year. That is why plans with a match encourage you to contribute throughout the year by only matching a small amount each period.
Example: The maximum 401(k) employee contribution for 2024 is $23,000 of your earnings ($30,500 if you are 50 or older). Your employer matches your contribution up to 3% of your $100,000 salary. If you are paid bi-weekly at $3846.15, your employer match at 3% = $115.38 per pay period or $3,000 per year. In this example the employee front-loads $23,000 in the first 6 months of 2024, they are losing $1500 in employer matching contributions.
HSA Front-loading:
In 2024, the maximum HSA contribution is $4,150 for self-only coverage and $8,300 for family coverage, plus an additional $1,000 if you are 55 or older. Employer contributions count toward the annual limit, so you should subtract any employer contributions from the maximum when calculating how much you can contribute.
When front-loading your employee contributions, it is very important to limit your employee contributions to receive your maximum employer contribution or lose out on potential tax-free money.
Example: Your employer contributes $1,000 per year over 26 pay periods to your HSA. If you front-load your HSA at the beginning of the year with the maximum $4,150 for self-only contributors, you will not receive the employer match, losing out on $1,000 in that year.
Here is a HSA Calculator provided by HealthEquity , one of our preferred HSA Plan Administrators.
