Employee Guidelines

This was an odd week for employee issues. Another Pro called me about her client who was facing Labor Board hearings because of an employee who bullied him, then quit.

OK, the extent of the employee nastiness is unusual. However, the overall situation is not - so, I'm going to alert you to the problem so you can avoid it.

Whenever you hire someone, INSIST that they fill in and sign the Form W-4 and the I-9 BEFORE they start doing any work at all. Make a photocopy of their drivers license and the second identification they use for the I-9.

Advise them before they come to their first day of work that they must bring these documents with them. If they don't have the docs, send them home immediately, do not let them start working. Period. No discussion.

Do not relent and let them start working, with the promise that they'll do it later. Often, they never will.

If anyone insists on being cash - NO! Never.

If it's a hardship for them to cash checks, because more and more banks are starting to charge $5 or more for YOUR employees to cash checks on your account... you may cash their checks for them.

However - have them first sign the back of their paychecks and endorse them over to your company. If possible, re-deposit the paychecks to cover the cash you gave them - and so you have an audit trail to support your payroll records.

NEVER, EVER just give them cash. If they refuse to be on payroll and insist on being paid as an independent contractor in a position that is obviously an employee position - SEND THEM AWAY - fast!

Do not hire them at all.

Ignore the sob stories.

These people are pros. They know how to work the system. If you don't follow the guidelines above, you're also likely to find yourself before the Labor Board or the state employment people, paying big fines and penalties...and wages to people who are rip-off artists.

While I've rarely heard of cases as intense as the one brought to me this week, I have seen poor, helpless, pathetic workers work this con on employers all too often.

And you, the employer, will rarely get off with less than a $5,000 hit - non-deductible to you, because penalties are not deductible. While they get off with free money - because the penalties are not taxable to them.


SMALL BUSINESS TAXES MADE EASY - How to Increase Your Deductions, Reduce What You Owe, and Boost Your Profits

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