National Labor Relations Board Ruling on Joint Employers

The National Labor Relations Board (NLRB) issued a ruling on August 27, 2015 regarding the definition of a “joint employer” for purposes of the application of federal law to a particular dispute concerning collective bargaining. In general, it appears that a company, BFI, had a recycling facility where it contracted with another company, Leadpoint, to provide part of the workforce. BFI’s employees worked outside the facility and the Leadpoint employees worked inside.

The BFI employees were already represented by the Union […]

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When is a Worker an Independent Contractor for Unemployment Insurance Purposes?

I’ve previously written about what constitutes an independent contractor versus an employee in April 2013 when I wrote: “Independent Contractors: Navigating the Legal and Regulatory Framework.” There, I highlighted some differences between IRS regulations, Workers Compensation, and Unemployment Insurance rules that are used in Colorado to determine whether a worker is an independent contractor or employee for whichever topic is at issue. In short, there are sort of two standards, and in either case, the question is fact-specific. In short, […]

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Use of Nonqualified Deferred Compensation for Exit or Succession Planning-Part 2

As an owner recognizes these issues, a nonqualified deferred compensation plan provides the owner with a tool he or she can use to advance the goals.

First, the owner can work to put in place a plan which provides certain key employees with significant benefits for growing the business to the size it needs to be to meet the needs. The owner can promise the key employees a portion of the growth of the company over and beyond its existing […]

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Use of Nonqualified Deferred Compensation for Exit or Succession Planning-Part 1

One possible use of nonqualified deferred compensation plans comes up in the context of exit or succession planning. As a business owner begins to contemplate his or her retirement from a business, several issues become apparent. One is that they need to make sure the business has sufficient value that it can be transferred for the value the owner needs upon retirement. Another is that the business’s value to a successor is dependent on its ability to operate without the […]

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Advantages and Disadvantages of Nonqualified Deferred Compensation

Deferring compensation to an employee allows the compensation to be taxed at the time it is paid. Funded qualified plans allow the employer to deduct the payments made to the plan, but the employee does not have to pay taxes on it until it is actually received. For the employee, the funded qualified plan is advantageous because it means the plan is both funded and the tax is deferred. In addition, the deferred compensation is not subject to employment taxes […]

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Deferred Compensation Plans–Funded vs Unfunded

Usually, nonqualified deferred compensation plans are unfunded because the act of funding the plan will generally result in the imposition of a tax on the compensation. If compensation is set aside for an employee at the time it is earned, it is treated as being income to the employee and taxed at that time, even if the employee has no right to receive that compensation at that time. Furthermore, if an employee has a right to compensation they are deemed […]

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Deferred Compensation Plans

Deferred Compensation is generally compensation to an employee that is paid at a later date. One use of deferred compensation is incentive pay arrangements. The most common form of such incentive payments is discretionary cash bonuses. However, a company can develop a plan to pay compensation based on performance or benchmarks.

Internal Revenue Code (IRC) § 409A covers the taxation of nonqualified deferred compensation plans. In contrast, qualified deferred compensation plans are plans which meet certain requirements under law […]

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Employer Can Terminate Employee for Medical Marijuana Use and Application of the Lawful Activity Statute, C.R.S. 24-34-402.5

The Lawful Activities Statute, C.R.S. 24-34-402.5

One of the exceptions to the general rule that an employer can terminate an at-will employee at any time for any reason as mentioned in an earlier post, Employees and Independent Contractors: The Basic Framework, is the statutory protection of an employee’s legal off-duty activities.  Under the Lawful Activities Statute, C.R.S. 24-34-402.5, with certain specific exception to the exception, an employee who is terminated due to the employee engaging in any lawful activity off the […]

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Independent Contractors: Navigating the Legal and Regulatory Framework

According to a Wall Street Journal article from March 13, 2013: Payroll Audits Put Small Employers on Edge, which cited statistics from SurePayroll, the number of independent contractors has doubled over the past six years since 2007.  The article also cites a Michigan State University study that estimates independent contractors can save a businesses as much as 40% of their labor costs. 

In the current economic environment, many businesses are looking to cut costs and increase their flexibility.  Taking on […]

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Employees: The Number One Rule—Pay Them

While there are many issues that need to be, can be, or should be addressed when managing employees, I suggest that the number one rule for employers is this: Pay Your Employees.

Employees and independent contractors are treated differently when it comes to payment.  While independent contractors get paid according to the terms and conditions of the contract, an employee’s compensation is subject to state and federal law and regulations.  Employers are subject to laws and regulations concerning minimum wage, hourly […]

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