Workers' Compensation Costs Drivers

By David S Caldwell

As companies struggle to keep their profits stable in poor economic conditions, they may attempt to cut back on funds going to workers' compensation claims. While the state often decides more specific details of compensation, employers and any related compensation insurance providers may deny claims more readily in order to reduce their costs. Concerning compensation, there

are several cost drivers that can may the process expensive for employers and may be background problems used to reject a worker's claim. It is important to note that these are not means to reject a claim, but are instead reasons a company may be more likely to become increasingly stringent with claim success.

Perhaps a primary concern for any employer regarding workers' compensation, claims fraud is a serious problem. Outside whistleblower actions or evidence leaked by an employee via email or through social media, compensation fraud is almost impossible to track in the early stages of an injury. Eventually, check-ups from physicians may be able to qualify a worker to return to their job. However, until it becomes reasonable to ask to an employee to return, that person may continue to collect benefits.

As compensation claims may cover the recovery and treatment process if necessary, employers may lose substantial funds in these transactions. With rising medical costs, claims may be initially denied in order to avoid these charges put against a company's profits.

In addition to medical costs, insurance costs can be incurred by compensation claims. If an employer decides to work through a compensation insurance company, this relationship can prove to be convenient, although expensive.

In part because of the frequency claims denials, workers' compensation can be a source of frustration for those trying to protect their financial stability despite their injury. To learn more about the process involved in filing a more successful claim, contact a workers' compensation attorney.

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The Employee Benefits Security Administration

By David S Caldwell

In the 1970s, the federal government chose to address growing concerns about workers' rights and the standards corporations used to decide retirement and compensation benefits. As a result, Congress passed the Employee Retirement Income Security Act in 1974, which established a number of important guidelines. Among these, the law officially broke the workers'

compensation and grievance process away from the common courts. Instead, as the system works now, complaints go through compensation administrative courts, working with their own standards for evidence and judgment. In order to facilitate this law and its subsequent additions and amendments, the Employee Benefits Security Administration was created.

The organization works under the United States Department of Labor. As a result, the head of this administration, known as the Assistant Secretary of Labor for Employee Benefits, is appointed by the President and confirmed through the United States Senate.

The Employee Benefits Security Administration is responsible for the process of educating the public about their legal rights concerning retirement, health programs, and compensation complaints. According to the EBSA, over $5 trillion are involved in employee welfare programs across the country, making the task of this department an extremely influential and important service to the country.

As the Employee Retirement Income Security Act, or ERISA, requires employers to prove clear information concerning benefit packages and retirement plans, employers and their human services partners should be offering direct and comprehensible explanations of coverage plans to their employees. The EBSA hopes to fill in the gaps, or to help in moments when employees need more individual guidance concerning legal problems that may encounter.

One of the most important things an employee can do to legally protect themselves against benefits abuses from employers is to stay informed. If you would like to learn more about the compensation process, the litigation process, and how a lawyer can help, contact a workers' compensation attorney.

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The Five Most Common Legal Mistakes Made by Families Hiring a Household Employee

By Tom Breedlove

Mistake #1: Misclassifying the worker as an independent contractor.
If you hire someone to work in your home, the IRS considers that person to be your employee. Classifying the worker as an independent contractor (by using Form 1099) is considered tax evasion. Beware: the IRS recently announced a major enforcement initiative targeting several key industries, including household employment.

Mistake #2: Failure to properly address overtime.
Nannies and other household employees are considered non-exempt workers under the Fair Labor Standards Act. That means their employer is required to pay overtime for all hours over 40 in a 7-day work week (live-in nannies are generally an exception to this rule, although a few states require live-ins to be paid overtime as well). Overtime hours must be paid at a rate that is at least 1.5 times the regular rate of pay.

Many families try to side-step overtime by offering a salary. In their minds, jobs that pay a salary -- instead of hourly -- are legally able to pay a fixed amount of wages regardless of how many hours the employee works. This is true in most "white-collar," "highly-compensated" professions because workers in these types of jobs are not prone to abuse. In the case of household workers, however, employers must make sure to properly address overtime pay.

Note about overtime: If the worker and employer agree to a salary based on a schedule that regularly includes more than 40 hours, the family should protect themselves by addressing overtime in an employment agreement that is signed by the employee. For example: Family and nanny agree to $450 per week based on a 45-hour work week. The employment agreement should specify that the weekly compensation was calculated based 40 hours at the regular rate of pay $9.47/hr plus 5 hours at the overtime rate of $14.21/hr. Additionally, it must be stated that any hours over 45 in a work week will be paid at the overtime rate of $14.21.

Overtime issues are particularly dangerous for employers because there is no statute of limitations. So former employees can file a wage dispute many years after the relationship has terminated. Back wages plus back taxes, penalties and interest can make this a very expensive mistake. The good news is a simple employment agreement makes all the worries go away.

Mistake #3: Putting a household employee on the company payroll.

Household employees are not considered direct contributors to the success of a business. And since businesses are entitled to tax deductions on payroll expense, it is an illegal tax deduction to include a domestic worker's payroll expense as part of the company payroll and tax reporting. Instead, it should be handled separately through the household employment reporting process. If the expense is childcare related, the family can take the tax breaks associated with those wages -- but it must be handled on the personal income tax return.

Based on this same logic, it is considered insurance fraud to put a household employee on the company's group health plan.

Mistake #4: Failing to properly withhold and report payroll taxes.

Household employers are required to administer the payroll tax withholding and reporting process:

1. Establish household employer tax IDs with the proper state and federal tax authorities;
2. File a New Hire Report with your state (usually within 14 days of the employee's start date although some states mandate the report be done within 7 days);
3. Calculate the proper tax withholdings each pay period and keep track of the totals (Social Security is 6.2%; Medicare is 1.45%; federal and state income taxes are based on the employee's Form W-4 selections; other employee taxes vary by state)
4. File quarterly tax returns with the state and remit the employee's state taxes along with your employer state taxes (i.e. unemployment)
5. File 1040-ES returns with the IRS and remit the employee's federal taxes along with your employer federal taxes (i.e. Social Security & Medicare match)
6. At the end of each tax year:
6a. Prepare Form W-2 for any and all employees who had wages during the year.
6b. File Form W-2 Copy A and Form W-3 with the Social Security Administration.
6c. Prepare Schedule H and include it with your personal federal income tax return.
7. Monitor ever-changing tax and labor law and respond to notices, alerts and inquiries from the state and federal tax agencies.

Mistake #5: Failure to secure workers' compensation insurance.

Workers' compensation insurance provides financial assistance with lost wages and medical costs in the event that your employee becomes injured or ill as a result of the workplace or job duty. It is not required for household employers in all states (check your state or our website for a listing of requirement thresholds by state). If you are required to carry a workers' compensation policy -- or if you elect to carry one -- check with your homeowner's insurance provider first. Many umbrella policies already include coverage for domestic workers.

Note about workers' compensation: A few states (i.e. New York, New Hampshire, and Ohio) require that policies be obtained through the state.

BONUS: When you successfully navigate these potentially-expensive problem areas, you are entitled to one or more significant tax breaks and your employee receives many critical benefits and protections.

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What is a Background Check? What Are Its Types

By Justin Sid

Background checking is the procedure which involves finding and collection of all kind of criminal, financial as well as commercial records of a person. Usually, these records are used for employment screening of any individual before hiring. Employers bring into play these checks to evaluate candidate's character, qualification and fitness as well. Criminal record

check of any individual is necessary to be evaluated if he is seeking for a job involving high security or trust like government, schools, airports etc. Mostly employers prefer to make search for criminal and driving records of a candidate who applied for a particular position in their organization/institute. They also made reference check as well as verify candidate's education through background search.

Following are some of the types of checking backgrounds

• Criminal history record
• Sex offender history
• Credit history record (bankruptcy)
• Character and identity check
• Employment history record
• Employment References
• Education Verifications
• Address (present/previous) verification

National crime files as well as state repositories also provide criminal record of any individual to authorized people only such as potential employers. But getting information through these sources is not free of cost. Reliable websites on internet are the best source for background check free. You can get anyone's arrest, imprisonment, criminal and sex offender records through instant background record searches. Instant background check searches are usually originated from state courts and law enforcement offices. Today, numerous websites are providing background check searches to facilitate the employers. Some of the sites are more accurate and trustworthy than the other ones.

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