Stay Out of Court
Fortunately for small businesses that lack dedicated legal counsel, most workplace disputes can be resolved without litigation. This saves everyone a lot of time, money, and energy they can spend elsewhere.
The Equal Employment Opportunity Commission (EEOC) reports that its mediation program has a 72% settlement rate. In nearly half of the cases, the settlement involved a non-monetary benefit. Employees often want intangible benefits, such as:
- reversal of adverse employment actions
- fair opportunities for employment or promotion
- sensitivity training for their supervisors and co-workers
- policy changes that protect others from similar discrimination
- reasonable accommodations (e.g., for disabilities, religious practice)
- apologies, acknowledgment, and respect
Facilitated communication continues to repair and improve relationships, even if employment ends. It also reveals underlying causes of poor performance, and it creates new opportunities for success.
Want to resolve your workplace dispute outside of court?
Worker Misclassification Can Be Costly
If you’re a small business that has gotten bad information about building it with independent contractors and unpaid interns, you will probably soon receive a penalty notice from the New York State (NYS) Workers Compensation Board (WCB). Because the penalties accrue at a rate of $2,000.00 for every 10-day period you lack workers compensation insurance, you’ll probably owe at least $12,000.00 before the notices catch up to you.
Ensure 1099-MISC Contractors Aren’t Employees
Not even the best-written contract will guarantee that your independent contractors are truly independent business owners, rather than employees. The NYS WCB and Department of Labor (DOL) have broad discretion to determine who is an employee and who must be provided various employee benefits. It doesn’t matter what your accountant told you or that the Internal Revenue Service (IRS) hasn’t penalized you. What matters is a very specific review of a 12-part test. If you misclassify your workers and fail to have WC insurance, you could be penalized $2,000.00 for every 10-day period you don’t have coverage. That’s how Pat’s penalties got to $20,000.00 so quickly, and his penalties were on the lower end of what I have seen. Scroll down to read Pat’s story.
Case Study: Pat’s Exploding Business
Pat was fearful at first. He had been working for top advertising agencies since he graduated from college, and he had visions of someday owning a portion of the agency that ultimately terminated his employment. Fortunately, a few former clients of that agency liked his work and sent him some projects. He exceeded their expectations, and a new business was formed.
It grew fast, and the projects kept getting bigger. How exciting!
Subcontracting to Individual Workers
Pat reached out to other colleagues who had lost their jobs during the workforce reduction. He developed the artistic vision for the projects and subcontracted work to those colleagues. Everyone was happy. The clients loved the results. His colleagues were thrilled to be working again and getting paid well. Life was good–until one of his subcontractors filed for unemployment insurance (UI) benefits.
Objecting to a Subcontractor’s UI Claim
He notified the Department of Labor (DOL) that the contractor was not an employee and was therefore not entitled to UI benefits. While that claim was pending, the New York State Workers Compensation Board (NYS WCB) sent an inquiry notice, asking for information on Pat’s workers’ compensation (WC) insurance policy. He knew he should respond, but he was busy the week the notice came, and he wasn’t sure he really needed WC insurance. The notice went in a pile of mail on his desk, with other topics he needed to research.
Triggering a Penalty Notice
Thirty days later, he received a notice of penalties exceeding $20,000.00!
Pat’s story is quite common. I represent a lot of domestic employers, freelancers, small business owners, and out-of-state employers who get the independent contractor classification wrong. If you get a penalty notice, I can usually help you:
- Stay open and get in compliance
- Reduce penalties for not providing disability (DB), Paid Family Leave (PFL), UI, and WC insurance
- Create a more peaceful and productive workplace
Resolve your penalties for failure to provide Workers Compensation, Disability, or Paid Family Leave insurance.
Combat Hostile Work Environments
A 2019 report by Paychex revealed what probably didn’t surprise many minority workers. “[H]iring bias against black and Hispanic employees hasn’t improved at all in over two decades.” A 2018 EEOC report indicates the Age Discrimination in Employment Act (ADEA) has also done little good over the past 50 years, and case statistics suggest the same regarding the Americans with Disabilities Act (ADA). Further, retaliation remains an issue in approximately 50% of all EEOC complaints.
It appears people haven’t developed the skills necessary to work with people who seem different from them. Rather than developing the necessary skills, they are actively or constructively terminating the people who speak up about inequities.
Rather than learn about your hostile work environment when you receive a claim from the EEOC, New York State Division of Human Rights, or the New York City Commission on Human Rights, you can start cultivating an environment today that invites employees to share and resolve concerns.
Prepare for the Most Diverse Generations
More Americans younger than 44 years old are members of minority groups, and they want workplaces where they feel welcome and respected. That’s what most workers want, but the ways we created that experience 40 years ago probably won’t be as effective going forward. Seventy-two percent of Baby Boomers are white, and many of the policies and procedures in place were implemented under implicit biases. It usually wasn’t intentional; implicit biases are hidden from us. Yet that’s no excuse for continuing to do things the way they have always been done. It might also negatively affect your bottom line and competitive advantage.
By embracing the diversity of your workforce and building skill in motivating employees from a variety of backgrounds, you can:
- Get ahead of your competitors
- Attract the best employees
- Develop and retain them
Dissolve Your Business Amicably
Just as there are collaborative matrimonial or conscious uncoupling processes to dissolve marriages, the Third Ear Conflict Resolution process can help you identify what is most important to each of the owners in closing, selling, or transforming your business. For more information, read this blog post and watch this video.
Testimonials
Nance at the core you are a healer too, and I’m so grateful to have met you. ~ J.Z., Business Owner, NY
I am so glad to be working with you and your style of “work/life” definitely inspire me…Getting even [the first result we got] feels like some form of vindication and puts me more at ease going forward…I know you are there in my corner and that helps.” ~ S.B., Business Owner, NY
Thank you again for your help – this could have gone a lot differently without your guidance!…You’re magical, Nance. You can quote me on that. ~ S.B., Business Owner, GA (with one employee in NY)
I wish all lawyers [had] the kindness, patience, humility and generosity you do. ~ S.A., Seasonal Business Owner, NY
WOW! [Y]ou are a miracle worker. Thank you so so much. ~ J.G., Business Owner, NY
You have been so easy to work with, I really appreciate it! ~ B.H., Business Owner, WA (with one employee in NY)
I am so, so incredibly relieved…Even if they hadn’t lifted the penalties, as I said before, it just feels better fighting for what you believe is right. Which is resonating even more at this time. ~ S.F., Business Owner, NY
We appreciate your help on this matter. No one likes these administrative hurdles in life. You helped us navigate this one with ease. It was great to meet you and thanks so much! ~ J.C., Business Owner, VA (with one employee temporarily living in NY)
Thank you so much Nance. I really appreciate [your follow up] so much…I get SO many emails that [the Settlement Offer] got lost in the bunch. ~ R.B., Business Owner, CA (with one employee in NY)