Blog | Connect to HR | Strategic HR Advisors & Executive Coaching

The ABC Test – Defining Independent Contractor vs. Employee

I have been getting a lot of calls recently from clients asking for clarification about the distinction between an independent contractor and an employee.

Misclassification can be extremely costly for employers in legal fees, back wages and benefits, and penalties. In addition, you run the risk of having the IRS or Department of Labor audit your business. This can be extremely time consuming and costly.

Of course, you should always consult your employment attorney for questions about specific situations, but here are some guidelines.

Last year, based on a decision in Dynamex Operations West, Inc. v. Superior Court, the California Supreme Court adopted the “ABC Test” as a standard for determining whether workers in California should be classified as employees or independent contractors. In their decision, the Court held that workers are presumed to be employees and that it is up to the employer to prove that they should be classified as an independent contractor based on the ABC Test.

Under the ABC Test, in order to classify a worker as an independent contractor the hiring entity must establish that the worker meets EACH of the following three factors:

The worker is free from the control and direction of the hiring entity in the performance of the work, both under the contract for the performance of the work and in fact; AND
The worker performs work that is outside the usual course of the hiring entity’s business; AND
The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

One of the things I tell clients is that it’s essential to consider how you define your core business (B) and how does the worker assist you in that core business.

In light of this change in the way employees and independent contractors are determined, it’s a good (and timely!) idea to do an overall review of how you’ve classified your workers. Again, as a reminder, it’s important to consult with an employment attorney if you plan to audit your records and reclassify your contractors.

Please feel free to contact me at michelle@connecttohr.com if you need assistance.

Check Out Our New Connect to HR Website

As I shared in a previous blog- “Pardon Our Dust,” I have added executive coaching as a service offering in addition to the strategic HR Consulting work I have been doing with small and mid-sized companies since 2010.

I’m happy to announce the launch of my new website, which reflects the two areas of Connect to HR focus: Executive Coaching and HR Advisors.

Here are some of the areas we cover on the Executive Coaching side of the business:

Transition coaching
Career planning and role progression
Successful onboarding of executives
360-degree feedback
Development plans
Leadership development
Executive influence

On the HR Advisors side, we work with organizations in the areas of:

Workforce planning
Talent development
Recruitment and hiring
Employee relations
Terminations and outplacement support
HR compliance

My experience over the years has been that often when I engage with a client in an HR Advisor role, an issue is uncovered that requires some executive coaching. For example, an employee relations issue that indicates a need for one-on-one coaching with a leader around specific behaviors. The value I provide to clients in these instances is the continuity of knowledge about the organization and an established relationship.

The reverse can happen as well. Through a coaching relationship we may discover a need Connect to HR can address through an HR Advisor role. For example, a stressed-out leader who is struggling to find the right talent to take on some of his or her responsibilities.

As we move forward with my blog articles, I’ll be alternating between topics that relate to executives and those that apply to more general HR issues.

Please take some time to visit our new website, and contact me at michelle@connecttohr.com if you would like to schedule a consultation to discuss your needs.

Managers Increasingly Held to a Higher Standard

As I discussed in my last blog, recent legislation establishes that managers can now be held personally liable for not following the law, even if they do so unintentionally. Two key areas where this has played out in court are hostile work environments and wage and hour violations.

Managers are being held to a much higher standard.

This means that business owners and senior leaders must be sure they understand and follow the laws, and they must also ensure that their managers and supervisors understand and follow the laws. Some ways to accomplish this are through management training, effective communication, and/or one-on-one coaching.

In the wake of the #MeToo Movement and other workplace harassment situations, the threshold for acceptable behavior has been revised. In the past, plaintiffs had to show a pattern of behavior for a workplace to be deemed a hostile work environment. Today it can be considered as such based on one or two incidents. “But we’ve always had an informal, joking environment,” is not an acceptable excuse.

Managers need to pay attention to behaviors that may be offensive to some and stop them before they become part of the culture. If not, they could be held personally liable for creating a hostile environment. Encourage managers to periodically gauge team interactions and speak with individuals to proactively identify any issues and to promote a positive culture.

Also, senior leadership and all managers and supervisors should model the appropriate behavior they expect from others.

In the past it was very rare for a manager to be named in a wage and hour dispute. Not so today. California’s Labor Code 558.1 states that “a company’s owners, directors, officers and even managing agents can be held personally liable for wage and hour violations.” It’s not enough to say that not following the law was unintentional, or a mere oversight.

If you need help ensuring that you are legally compliant, or in coaching managers around any of these issues, please contact me at michelle@connecttohr.com.

New Laws on Harassment, Wage and Hour Violations

In my work with organizations I have two focus areas – Executive Coaching and HR Consulting. Keeping clients abreast of new and changing legislation in the dynamic world of California labor law falls into the HR Consulting bucket, but is also important for the executives I coach.

Here’s an update on some key legislation affecting employers in 2019.

New Restrictions on Sexual Harassment Settlement Agreements

Two recently enacted laws will make it more difficult for employers to resolve workplace sexual harassment and discrimination disputes.

The Code of Civil Procedure Section 1001 prohibits settlement agreements that bar the disclosure of facts related to claims filed for:

Sexual assault
Sexual harassment
Workplace harassment or discrimination based on sex
Failure to prevent harassment or discrimination based on sex
Retaliation against a person for reporting harassment or discrimination based on sex

The law allows the identity of the claimant, and any facts that could lead to the discovery of that identity, to remain confidential if requested by the claimant. Employers are still allowed to enter into settlement agreements that prohibit the disclosure of the settlement amount.

Another new law, SB 1300, amends California’s Fair Employment and Housing Act (FEHA) by placing additional limits on settlement agreements. Employers are now prohibited from requiring an employee, as a condition of employment or in exchange for a bonus or raise, to sign a non-disparagement agreement that prevents the employee from disclosing information about unlawful acts in the workplace. The law also adopts a lower standard for liability, as such:

A plaintiff does not need to prove that tangible productivity has declined as a result of the harassment.
A single incident of harassing behavior may be enough to create a hostile work environment. Proof of a pattern of harassing behavior in the past is no longer required.
Harassing behavior is not acceptable based on historical norms, or industry or company custom.

As an employer you should review your harassment policies to ensure that they align with the recent changes in law. Also, take complaints seriously! Remember to always investigate claims using qualified, impartial investigators, and take corrective action. Create a culture that makes it very clear to leaders and employees that harassment of any kind will not be tolerated.

California has expanded mandatory anti-harassment training to smaller employers

Employers with at least five employees must conduct mandatory sexual harassment training by the end of this year to comply with SB 1343, passed in 2018. SB 1343 requires that training of both supervisors and non-supervisors be completed by January 1, 2020. Training for supervisors must be at least two hours, and training for non-supervisors must be at least one hour. Training must be repeated at least every two years. Remember to keep records of training received by employees and supervisors.

Managers may be personally liable for wage and hour violations

According to a recent decision by a California appellate court (Atempa v. Pedrazzani), an owner, officer or managing agent of a corporate employer can be held personally liable for civil penalties for unpaid wages or overtime.

The plaintiff in this case worked at a restaurant owned by Pama, Inc. He sued the company for unpaid overtime, meal period and rest break violations. When Pama, Inc. filed for bankruptcy, the plaintiff successfully pursued recovery from the restaurant owner, Paolo Pedrazzani.

What this means for you as an employer is that you need to be sure that you and your managers consistently follow wage and hour rules. Even unintentionally failing to comply with the law can create personal liability.

Other legal decisions of note

Caldera v. Department of Corrections and Rehabilitation. The plaintiff in this case sued for harassment on the basis of disability after being taunted by his coworkers about his stuttering over a period of two years. The employer argued that the company had an informal, “joking” culture and that the behavior was not severe. The plaintiff won a $500,000 settlement.

This goes back to what I said earlier about creating a culture that is non-tolerant of harassment in any form. Again, the threshold for harassment has been lowered and a pattern of behavior is no longer necessary to prove harassment. If one of your employees is offended by harassing conduct you face potential liability even if the majority of employees are not bothered by the behavior. Again, take complaints seriously and investigate claims right away.

Hurley v. Department of Parks and Recreation. In this case a manager had disclosed private information about a subordinate to a non-manager, violating the plaintiff’s right to privacy. This decision points up the fact that managers should only disclose information about subordinates on a need-to-know basis and never to non-managers. The manager in this case maintained a “drop file” on the plaintiff, containing work performance as well as private information. Private information about employees should only be stored in files maintained by human resources with proper confidentiality protections.

Important updates on the use of arbitration agreements in CA

Epic Systems v. Lewis. In this case the U.S. Supreme Court ruled that the National Labor Relations Act (NLRA) does not prevent employers from making mandatory arbitration agreements a condition of employment, even with a provision waiving the employee’s right to a class action claim.

Along these same lines, two other opinions favored employers with regard to arbitration agreements.

In Sonic Calabasas Al, Inc. v. Moreno, the court ruled that an employer may require an employee to resolve wage disputes through binding arbitration. In Iskanian v. CLS Transportation Los Angeles, LLC, the court rule that an employer may require an employee to pursue claims as an individual and not as part of a class action suit. If you have not implemented mandatory arbitration agreements, I suggest you seek legal advice about the pros and cons of implementing an agreement for your organization.

If you would like more information about any of these legal updates and how they apply to your organization, please contact me for a consultation. Michelle@connecttohr.com.

Looking for a New Opportunity? Start by Gaining Clarity!

One of the trends I’ve noticed so far this year is that people are on the move. With the unemployment rate still low, more people are feeling that the time is right to search for a new opportunity. And I’ve had a number of calls asking for my advice on how to start the search, as part of my executive coach offerings.

Searching for a new opportunity can be both exciting and overwhelming. To make it more of the former and less of the latter, you need to have clarity, focus, a compelling message and a strategic job search plan.

Start by gaining clarity. What do you want to do next? What are the skills, experience and competencies required in order to achieve that? What kind of work environment do you prefer? Big company? Small company? Structured? Start-up? What are the roles, type of leadership, work culture, and experiences from your career so far that brought you the most satisfaction?

Take inventory. What are the skills, behaviors and competencies that have helped you succeed in the past? Which of those map to what you want to do next? Where are the gaps? What are the beliefs and/or behaviors that may have held you back so far from getting to where you want to be? Do you have skills or knowledge that you haven’t been able to leverage so far in your career but want to?

Create focus by identifying a target. Based on what you want to do next and your inventory, select a couple of target organizations/roles that are a potential match. Focus is incredibly important in your search for a new opportunity. It’s tempting to just throw out a big net in search of “a job” but if you want to have a fulfilling career, focus on the companies/roles/experiences that will propel you toward your personal career “vision.”

Develop your personal marketing campaign. This includes a compelling message about the value you bring to the table, and will include your resume, LinkedIn profile, a personal “elevator pitch,” and a list of people in your network (and in their networks) who might connect you to an opportunity. An important note about resumes. Remember that the purpose of a resume is to pique the interest of a recruiter or hiring manager so they will contact you for an interview. Keep it clean, concise, achievement oriented, forward looking, and error-free. It should not be a job description, but rather an account of what you did that made a difference to your role, your team, the organization.

Design your search plan. Once you’ve developed these components, create the action plan that will put them to work for you. Commit to paper your target, your key message, and your daily activity goals for your search. Keep active. Do something related to your search every day. Small steps every day lead to big results.

And remember, working with a coach can help you create your plan and accelerate results. If you find that your search for a new opportunity is leaning more toward the overwhelming side of the equation, contact me at michelle@connecttohr.com.

A Coach Can Help You Take the Next Step in Your Career

Advancing in your career doesn’t have to mean finding a new job in a different company. Often there are opportunities to grow right within your own organization. And companies who provide those opportunities are more likely to engage and retain their top performers. One of the challenges that organizations face, however, is creating a clear path for employees to traverse toward that next step in their career.

Whether you are an organization looking to retain top performers, or an individual wanting to move up within your organization or at another company, a good career coach can help you meet your goal.

Here are some ways a good career coach can help.

Provide clarity. Before you even begin to look for your next opportunity, you need to gain clarity around your target. What do you really want to do? What do you definitely NOT want to do? A coach can help you filter through your skills and experience and map them toward opportunities that have the potential to be fulfilling next steps in your career versus “just a job.”

Help you strategize. A good career coach will identify the skills and behaviors you need to move up within the organization, and help you create a plan to develop those skills and behaviors. They also know what works and doesn’t work in the job search process. So if you’re looking for a new job they can offer real world insight and ideas. Either way, they will help you put together a targeted, effective plan that will get you in front of the right people for the right opportunity.

Polish your pitch. A targeted, concise, compelling resume is your first opportunity to impress a hiring manager and differentiate yourself from other job seekers. Whether you are moving up within your organization or moving on, you should always have an up-to-date resume. A good coach will help you create a resume that gets results.

Keep you accountable. A good coach will keep you on track, encouraging you to make the regular small steps that will lead to the big result. They will celebrate your successes with you, and help you keep going when things don’t go as planned. They’ll help you tweak your strategy as necessary to achieve your goals.

Provide support. Your coach is there to help you succeed. They can be a sounding board if you get discouraged. They can connect you to resources within their network. Many will do mock interviews with you to help you prepare. They can give you objective feedback on your plan, your pitch and your approach.

Are you an organization looking to retain your top performers? Or an individual ready to take the next step in your career but don’t know how to get started? Do you know someone who is looking for a job but getting little or no results? I have worked with many senior leaders to help them develop and successfully implement an effective plan to get “unstuck” and take that all-important next step. Contact me at michelle@connecttohr.com

New Year New You? Start with a Plan!

January is the month of fresh starts. The month when we typically pack up the previous year and shift our attention to hopes and dreams for the 12 months ahead. Whatever your vision (or goal) is for a “new you” this year, it’s much more likely to become a reality if you make a plan. Remember, a goal without a plan is just a wish. Here are some guidelines to creating an effective plan.

Keep it simple. Make a list of what you want to accomplish or change this year, prioritize it, and then reduce your list to the 3-5 things you can realistically achieve.

Devote some time to it. Think it through. If you’ve been making the same goals/resolutions every year but not getting anywhere, you didn’t spend enough time making your plan. Research shows that 80% of New Year’s resolutions are abandoned by February. Why? Because they were too broad and didn’t include a plan.

Write it down. For each item on your list, add two or three specific actions you need to take to reach the goal. Give each item a reasonable due date. Remember to start with simple steps and one action at a time. Simple actions over time lead to big results.

Share it. Hearing your goals said out loud as you share them with someone else has a way of igniting your self-accountability. Sharing them makes them more real. Consider asking someone to be your accountability partner. Ask them to check in with you periodically to see how you are progressing.

Keep it visible. Post it in your workspace or keep it in your planner or whatever works for you in terms of keeping it visible. The more you see it the more likely you are to get it done. Use an app to help you keep track of your goal.

Be forgiving. Don’t beat yourself up if you get off track or miss a target date. Review your plan and see what adjustments you need to make to get back on track.

Celebrate! When you hit one of your goals, give yourself a pat on the back for a job well done!

In my work with individuals and organizations I’ve learned that the start of a new year is often when people begin seriously thinking about changing jobs or going after that promotion they’ve been wanting. Both of these efforts require a solid plan and can be facilitated by working with a coach. In my next blog I’ll share some tips on job searching or making a career change and how working with a coach can make the process shorter, easier, and more successful.

In the meantime, if you or anyone you know needs help in creating a plan for a job search or career change, please contact me at michelle@connecttohr.com.

Happy Holidays from Connect to HR

Season’s greetings! It’s hard to believe that another year is coming to an end. This has been a very busy and exciting year for Connect to HR. It’s been fun coaching, mentoring and guiding my clients as they implement new HR programs or deal with a lot of change in their organizations. Also, I have really enjoyed coaching senior executives and leaders. It’s been an honor to be a safe, confidential place for my clients to talk about what’s really going on in their organizations and to help them strategize a solution. I look forward to continuing this important work in the New Year.

I also want to express my deep gratitude to you, my loyal readers, for being part of the Connect to HR community. I hope that through my blog articles I’ve been able to keep you engaged and informed. I look forward to continuing the conversation in 2019!

All my best wishes for very Merry Holidays and a Happy, Healthy and Prosperous New Year!

Most Popular 2018 Topic for Connect to HR: Leadership

It’s hard to believe that another year is coming to an end. This has been a very busy and exciting year for Connect to HR. As I announced a few months ago, I’ve added a new service – Executive Adviser and Coach. It’s a role that I’ve already been performing for many of the senior executives and leaders I’ve worked with, and now I’ve made it official!

My typical clients are not new executives. They are well established in their careers – CEOs, Presidents of small to mid-size companies, and Managing Directors, Senior Directors, VPs, and Executive Directors of nonprofits. They’re facing challenges such as:

Effective communication – What they can say or not say, what they can do or not do – and they’re feeling unsettled, possibly for the first time in their career (and thus can benefit from an external adviser)
Being assigned a role that’s not what they’ve done before – with little to no mentorship
A restructuring that leaves them with more responsibilities than ever, without much guidance or room for error

I’m excited about adding this new offering to my list of HR consulting services and I look forward to working with leaders to help them navigate challenges and reach their full potential.

As I’ve been looking back over my blogs this year it’s clear that leadership has been a very popular topic. In case you missed them, here are a few of Connect to HR’s most popular blogs in 2018.

5 Key Characteristics of an Effective Leader
In the work I’ve done with leaders over the years in both corporate roles and as a consultant, I’ve identified five common characteristics among those whom I consider to be effective leaders. That is, whose employees are engaged and loyal, whose teams are high-functioning, and whose organizations are thriving. Read more

Successful Leaders Listen More, Talk Less
Successful business leaders know that to engage employees, meet customer needs, and stay ahead in the marketplace, they need to listen more than they talk. Read more

Top 3 Reasons to Hire an Executive Coach
There was a time when leadership coaching was reserved for those leaders who needed to “shape up” in a particular area before being shown the door. That’s not the case today. In fact, most senior leaders attribute at least part of their success to having worked with an effective executive coach. Read more

Empathy: An Essential Skill for Leaders
Empathy has been called THE skill for the 21^st century. Learning to understand others’ point of view – to figure out “where they’re coming from” – has myriad benefits in the workplace and in life in general. It improves interpersonal relationships, teamwork, negotiations, collaboration, sales, customer service, even parenting! Read more

Do you or another leader in your organization need help navigating challenges or developing in a specific leadership area? I can help! Please contact me at michelle@connecttohr to set up a free consultation.

Use It or Lose It

Still have dollars left to spend in your Human Resources budget this year? This is the perfect time to invest those dollars in the needs or challenges that are still on your TO DO list.

Do you need help with…

An experienced executive who is struggling as a leader and needs coaching and guidance?
A recently-promoted manager who needs support and guidance as they transition
to leadership?
Someone new to HR who needs to be quickly brought up to speed?
That innovative, highly impactful HR program you haven’t had time to implement?

Whatever the challenge, Connect to HR is here to help! We’ve achieved outstanding results for companies facing these same situations.

Contact Michelle at michelle@connecttohr.com TODAY to schedule a FREE consultation.

What Our Clients Are Saying About Connect to HR

“Michelle’s approach, ideas and fostering of my own insights pushed me forward as a boss, helped our organization and was quite meaningful to me.” – Jake L., CEO of Intact U.S.

“Michelle is a leadership development professional who looks at the total organization, the individuals and the current dynamics to align the best possible scenarios for the Executive, and for the vision of the governing board.” – Lisa C., Former Executive Director, SCA

“Before we started working with Michelle, we had looked at HR platforms, but Michelle was a live person with experience and knowledge, who could share examples with us, versus us interacting with a computer screen. She’s a great sounding board as different situations come up. Thanks to Michelle, I’ve gained confidence in what I’m doing and how I handle situations. I also know that as new issues come up I can reach out to her for advice. She’s accessible and easy to work with.” – Marci H., HR Manager of IDW Publishing

“As a trained chef and business owner with no HR experience, I had to learn HR on the job. Michelle was a great teacher in that she walked me through things step by step. She was thorough and comprehensive, yet kept it simple: here’s your issue, here are some scenarios, here are the rules. She didn’t throw a lot of legal language at me.” – Lourine W., Owner (Left Coast Catering)