Author: janareserva

Posted on

Are DEI programs at risk? What the new executive orders mean for businesses

Within his first few days back in office, President Trump issued executive orders halting DEI programs in federal agencies. On January 20, the first executive order directed the shutdown of federal DEI programs. Federal DEI staff were also put on leave, and federal grantees had to discontinue DEI practices deemed discriminatory or preferential.

The next day, the White House published another executive order emphasizing merit-based opportunities, individual initiative, and hard work. It also instructed the Attorney General to recommend strategies for enforcing civil rights laws and ways to “encourage businesses to end illegal discrimination and preferences, including DEI.”

While the definition of “illegal DEI” remains unclear, these executive actions and the Supreme Court ruling on affirmative action in college admissions have prompted some private sector companies to rethink their DEI policies.

How businesses are responding

While the executive orders primarily target federal agencies, grantees, and contractors, their impact was also felt across the private sector as companies reassess their DEI commitments.

Even before these orders, some major corporations had begun scaling back DEI initiatives. Last year, Walmart discontinued its DEI training and chose not to renew its racial equity center, instead shifting its language to emphasize “belonging“. Similarly, Target ended its three-year DEI goals and will no longer participate in diversity-focused surveys, including HRC’s Corporate Quality Index. McDonald’s announced restructuring its DEI efforts, transitioning its diversity team into a broader Global Inclusion Team, and will conclude its Supply Chain’s Mutual Commitment to DEI pledge.

However, some businesses are standing firm. Costco shareholders turned down a proposal to evaluate their current DEI practices. Cosmetics brand e.l.f. also has a similar stance and reaffirmed its commitment, maintaining its policies despite broader industry pullbacks.

What does it mean for your business?

Should you roll back your DEI programs? While recent executive orders may create pressure to scale back, it would be best to evaluate your policies before making any drastic changes. 

Workplace fairness should always be a priority whether you have formal DEI initiatives or not. If you manage an hourly team, here are some ways to practice fairness and equality across your organization. 

Hire without bias. If your hiring process includes explicit demographic quotas, it may be legally risky under the new executive orders. Instead, focus on qualifications, skills, and experience rather than factors like race, age, or gender. Use structured hiring practices that prioritize job-related qualifications. Workforce.com’s HR platform allows hiring teams to set preliminary screening questions on job listings, helping filter candidates based on essential qualifications, not personal demographics.

Distribute work hours fairly. Shift assignments should be fair and consistent to avoid unintentional favoritism. Use a scheduling system that allows you to distribute work hours and overtime evenly among team members. Workforce.com’s scheduling software enables managers to allocate work hours based on demand, availability, maximum hours allowed, and other compliance requirements.

Audit your current policies. While there’s still no definitive list of practices or policies deemed “illegal” under the executive orders, it’s wise to assess your current policies for anything that could be interpreted as preferential treatment. Review existing DEI programs to ensure they focus on merit, skills, and equal opportunity rather than demographic-based preferences. In addition, if your company receives federal grants or is a federal contractor, ensure that your policies align with the latest executive directives to avoid compliance risks.

Do businesses need to abandon DEI practices? Not necessarily, but they have to do it smarter. Focus on fairness, merit, and equal opportunity so that policies can remain compliant, maintain an inclusive work environment, and stay pace with evolving federal regulations. 

Posted on

HR Trends for Hourly Workforces in 2025

Summary

  • 2025 will be filled with new and familiar trends, and business leaders must devise strategies specific to hourly teams to maintain employee retention and remain competitive. 
  • This year, there would be increased emphasis on employee experience, continuous AI adoption, and a potentially bigger labor gap with tighter immigration rules. 
  • An all-in-one HR technology can help hourly teams stay ahead of the trends and overcome staffing challenges.

This year, hourly workforces will face a mix of old and new challenges, from labor shortages to technological advancements and a maze of shifting compliance rules. HR leaders and managers must step up in 2025 to retain top talent and stay competitive, or risk widening the labor gap and losing their team to competitors.

So, what’s coming up on the horizon? Check out these top HR trends you’ll want to watch when managing your hourly workforce this year.

1. Staffing and hiring challenges with stricter immigration laws

With stricter immigration laws and ongoing labor shortages, hourly workforces face a greater challenge in attracting and retaining talent.

According to the Bureau of Labor Statistics, foreign-born workers account for 18.6% of the U.S. civilian labor force. With stricter immigration laws, a bigger labor shortage challenge could be looming.

While the crackdown targets undocumented migrants, even legal, documented workers may struggle to stay in the U.S. when mass deportation separates them from their families. This uncertainty can push them to leave, creating vacancies in industries that heavily depend on hourly workers.  Worse, some immigrants may not aspire to come to the U.S. for work at all. 

For instance, in Nebraska, one of the top meat producers in the U.S., businesses are already grappling with a massive labor shortage. For every 100 jobs, there are only 39 workers to fill them, and Nebraskans fear that the gap will only get bigger. 

So, what does this mean for employers? They must fight hard to not only hire and attract talent but also maintain employee satisfaction.Another key area is tightening the vetting process. While undocumented workers have rights, knowingly hiring them is illegal for employers. This creates an added challenge for HR professionals to ensure their vetting procedures are foolproof, preventing penalties or complications from accidentally hiring ineligible individuals.

How to stay ahead:

HR departments need a system that streamlines talent acquisition, quickly assesses qualifications, and ensures new hires and existing staff stick around. 

Workforce.com’s HR system can augment recruitment by allowing you to post job openings across your business locations. You can even generate QR codes for job postings, making it easy for interested applicants to scan, read job descriptions, and start their application process. 

Set custom questions to quickly qualify candidates, like their experience, available hours, and whether they have the qualifications and documentation to work in the U.S. 

Plus, Workforce.com helps your managers retain current staff by offering flexibility with shift swapping and advanced scheduling. It also tracks people analytics such as performance, highlighting areas for training, upskilling, and development.

2. AI adoption in HR processes will continue

Artificial intelligence will continue to play a role in HR this year. While we have seen its adoption in the previous years, the trend will continue in 2025. More and more organizations will adopt AI in human resources to eliminate admin tasks, repetitive processes, and paperwork. 

However, AI can be a double-edged sword in workplaces. Sure, it can make things easier and faster, but questions remain about its impact on work quality, particularly with the rise of generative AI tools. Some even call for regulatory rules, prompting organizations to develop policies governing how employees use AI at work. 

How to stay ahead:

Focusing on how AI can bring the most value is key to making the most of it. For hourly teams, labor forecasting is key. Workforce.com has long used AI to help organizations anticipate demand and avoid overstaffing or understaffing. 

Workforce.com labor forecasting system utilizes AI to analyze sales, booked appointments, historical foot traffic, seasonal trends, weather, and other business-specific indicators. For example, hospitals can factor in ICU bed availability, while hotels can account for bookings and reservations. Considering these variables, the platform accurately forecasts staffing needs for each shift, helping you curb overstaffing, reduce overtime costs, and improve decision-making around schedules.

3. Shifting labor laws pose new challenges to HR

As if labor compliance was not complicated enough, a new administration in place in 2025 could throw even more curveballs.

Case in point: President Trump’s move to end “illegal” discrimination in DEI programs. In a recent executive order, he ordered DEI programs within federal agencies. While it does not directly ban DEI programs in the private sector, the order imposes requirements on federal contractors and grant recipients, potentially increasing scrutiny of DEI policies. This could create pressure for private companies to adapt to the shifting political and regulatory landscape.  

In addition, there are changes slated to happen this year, such as increases in minimum wage laws in some states and the enactment of paid leave laws in some cities.  

How to stay ahead:

Employers should carefully balance compliance with federal directives and maintaining fair practices to support their teams and prevent long-term workforce challenges. For hourly workers, this can be as simple as being mindful of how shifts and overtime are distributed. Workforce.com makes this easier by giving managers a clear, real-time view of how many hours each team member works. This helps ensure everyone gets the right amount of hours or shifts.

Labor compliance is tricky, but automation can simplify the process. HR teams can stay on top of labor regulation developments through systems with a compliance engine, such as Workforce.com.

Workforce.com ensures compliance for hourly teams at every stage of HR management—covering employee classification, wage and overtime calculations, adherence to allowable work hours, and compliance with break time rules. From hiring and onboarding to scheduling and payroll, managers can trust they’re operating within state and federal laws every step of the way. 

4. A new emphasis on employee experience

For white-collar and salaried workers, a good employee experience often means hybrid work setups, the freedom to do remote work, and opportunities for long-term career development. But hourly workers, who are typically onsite and part of operations that may run around the clock, have quite different needs. So, what does a positive employee experience mean for them? 

Hourly workers desire work-life balance, too, but in a different way. For frontline teams, it’s about knowing their schedules in advance, allowing them to plan for childcare, a second job, or personal time off. Flexibility also means having options for how they work, like swapping shifts with coworkers or picking up extra shifts without a lengthy approval process.

Employee well-being will also be a focus in HR strategies in 2025. It’s about offering programs such as counseling services, mental health programs, and wellness initiatives tailored to the needs of hourly workers. This could mean offering flexible work options, encouraging regular breaks, and ensuring that workers have a safe space to express concerns without fear of stigma.

HR teams should also consider upskilling, reskilling, and defining career paths for hourly staff. Consider offering certification programs or opportunities to learn new technical skills. It’s also time to define growth paths for these teams. Can they move into higher-paying roles? Is there a path to salaried positions? Answering these questions can make a big difference in retaining and engaging hourly employees as well as addressing any skill gap in your business.

How to stay ahead:

Much of the employee experience for hourly employees involves admin processes, which can be easily streamlined with the right technology. Workforce.com simplifies scheduling with its labor forecasting and scheduling software. Create demand-based shifts in minutes and notify staff weeks in advance. If you’re in a city or state with predictive scheduling or Fair Workweek laws, this tool also helps ensure compliance.

Shift swapping or shift replacements is another area where Workforce.com can make it easy for managers. The system eliminates long approval processes and back-and-forth communication. Managers can quickly offer vacant shifts to qualified employees, who can pick them up with a single click using the employee app.Since most of this admin work is done, HR leaders and managers now have time to optimize hiring practices, spend more time coaching their teams, devise career trajectories, determine appropriate training for their employees, which they can also track using Workforce.com’s performance management module.

5. Prioritizing constant feedback and review process

Another continuing trend into 2025 is focusing on more dynamic feedback and breaking free from rigid timelines like annual reviews. This is especially important for hourly workforces, where the fast-paced environment calls for real-time input and adjustments.

How to stay ahead: 

Operational issues can’t wait until the next performance review. Managers need a system that enables them to give and receive feedback in real-time. Workforce.com can prompt employees to rate their shifts at the end of the day. Using this feedback, managers can see what’s working and what needs improvement. This approach helps maintain a good work environment, resolve issues early and keep them from escalating over time.

6.  Access to wages and pay transparency

Businesses will maximize payroll technology to offer more flexibility and options to employees. This year, the focus will continue on giving employees the option to access their wages before payday. This can serve as a great middle ground for companies that can’t yet increase salaries or augment benefits.

Transparency around wages and payslips will remain a key priority. Employees expect an easy way to view their payslips and understand how their wages are calculated, especially for hourly staff.

How to stay ahead:

It’s all about having an efficient payroll platform, one that’s housed in the same ecosystem as HRIS and time and attendance tracking. Payroll is not just about processing paychecks. It’s about ensuring that all the data used to calculate employee pay is accurate, starting with employee qualifications and time logs. Workforce.com streamlines this process, making it easy for you and your employees to access accurate pay information, including payslips.

7. Integration between HR, workforce management, and payroll will be a top priority.

With all the changes and disruptions this year, organizations need a system that will allow them to streamline their recruitment, create worthwhile onboarding processes, track employee time accurately, schedule employees according to classifications and preferences, and pay them accurately. It is all about breaking down silos between these processes, and businesses would likely seek a system that streamlines all of these.

How to stay ahead:

Innovative businesses would stay ahead by ensuring their systems operate well together. Even better, they opt for a platform where everything is housed in a single system.

Workforce.com eliminates silos between HR, workforce management, and payroll. All processes operate within one ecosystem, ensuring a single source of truth and smooth coordination across the board. With a unified platform, managers have less digital upkeep, as they only need to log in once to manage everything—no switching between multiple applications.

Staying ahead with Workforce.com

Organizations that work hard will lead the pack, especially with everything happening in the business, technology, and labor landscape. They must focus on creating strategies to attract new workers, retain their current teams, and ensure profitability and maintain a good workplace culture simultaneously. 

Workforce.com handles the admin side, so you can focus on the big picture. It adapts to market shifts, labor law changes, and trends, streamlining every step of the employee journey.

Ready to see how Workforce.com can help your business? Book a call today.

Posted on

7 HR Tactics for Handling the Retail Holiday Surge

Summary

  • Retail businesses are expected to add 520,000 seasonal jobs in the last quarter of 2024. While this number is slightly lower than last year’s, the race to hire seasonal workers remains tight.
  • Labor forecasting is vital for retailers to determine the ideal staffing levels they need in time for the holiday shopping peak season. On top of that, they must speed up hiring and onboarding for seasonal roles.
  • Workforce.com can help retailers stay ahead with smart labor forecasting, easy hiring and onboarding, and streamlined workforce management.

The holiday shopping season is fast approaching, and retail businesses must be ready for surging foot traffic and online sales. But it’s not just how you manage inventory or come up with marketing strategies to attract shoppers. It’s about having the right staffing strategies in place to provide the best customer experience whether in-store or online. And the onus is on HR and managers to recruit and onboard seasonal workers, manage unpredictable schedules, and avoid burnout during a very busy time of year. 

Typically, retail businesses hire seasonal workers such as sales assistants, warehouse staff, stockroom workers, delivery drivers, and customer service representatives to handle the surge in demand and ensure a smooth shopping experience.

According to the National Retail Federation (NRF), 200.4 million people shopped from Thanksgiving, Black Friday through Cyber Monday in 2023. Both online and brick-and-mortar stores felt the rush, with 121.4 million people making in-store purchases and 134.2 million buyers online.

While spending may slightly cool down this year, retail businesses still need to prepare for higher demand than other quarters. And prices and offers aren’t the only areas where competition is fierce. Retail businesses should also step up to strengthen staffing and recruitment strategies.

The race to attract seasonal workers

Although slightly lower than last year, market projections show that the retail industry is still expected to add 520,000 seasonal jobs in the last quarter of 2024, down from 564,200 seasonal jobs in 2023. That said, the competition for seasonal workers remains tight, and retailers must act fast to fill staffing gaps before the shopping rush hits.  Big retailers are not holding back. They rolled out aggressive tactics like nationwide hiring events and on-the-spot interviews. They know that while consumer spending may dip, shoppers will still spend—just more carefully. If you have a solid client base and strong customer loyalty, you need to be prepared for your demand to soar. Here are seven practical tips to help you prepare:

1. Identify your unique staffing needs.

Labor forecasting software integrates with your point-of-sale system, using its historical sales data to predict upcoming labor needs. You can also manually upload other kinds of demand data like appointments, foot traffic, and more – just use whatever makes the most sense for your business. A machine learning algorithm combines all of this data with economic trends, weather forecasts, and staff availability to let you know exactly how many workers you need for each shift; this makes your scheduling and hiring decisions much easier. Plus, it’ll help you determine whether you need more seasonal hires or if adding extra hours and overtime will do the trick.

2. Strengthen your hiring strategy.

As you gear up for the shopping season, a robust hiring system is vital to attracting top talent without getting buried in admin tasks. 

Job boards are great for spreading the word, but why stop there? An applicant tracking system (ATS) like Workforce.com lets you generate QR codes for your job openings, print them, and place them in your retail stores. Interested applicants simply scan the code and submit their application. 

To save time, you can set up pre-qualifying questions about availability, experience, and credentials. This way, only the best candidates move forward to interviews, and you only spend time with those who meet your criteria. 

Workforce.com’s ATS helps you track applications, spot roadblocks, and identify what’s causing delays. This will ensure that you lock in the workers you need for the season.

3. Fast-track onboarding and training for seasonal hires.

The thing with the shopping season is that you need to onboard seasonal workers fast. Unlike regular hires, you don’t have the luxury of 30-60-90 day milestones to fully integrate them. Seasonal workers need to be onboarded and be up and running right away. A good onboarding system will let you do just that. 

Start by streamlining the paperwork. Workforce.com captures all the necessary new hire information—personal details, bank information, W-4s, and more—all without the hassle of paperwork. Newly hired seasonal workers can log into the system and input their information directly, eliminating manual data entry. 

While seasonal employees might have fairly straightforward jobs, they still need training. Even experienced sales associates need orientation about popular items, store layout, and return policies.

Even if you’re running an e-commerce platform, seasonal workers still need to learn how to navigate the online store, order queues, waybill processing, inventory management, and checkout process.

To get seasonal workers up to speed, consider implementing a buddy system where you pair them with full-time employees so they can learn the ropes faster and be ready to perform their best.

4. Streamline how you delegate tasks.

Operations during the peak holiday season will only be as smooth as how you communicate tasks and expectations. When working with seasonal workers, you must assign responsibilities clearly and precisely.

Workforce.com’s task management system allows you to delegate responsibilities and send out to-do lists. Seasonal workers are instantly notified of their tasks, can check off completed items, and even provide proof of completion, all in real-time, through the Workforce.com app. It’s a simple way to ensure everything gets done right when needed.

5. Optimize schedules based on demand.

Understaffing can be a disaster, but overstaffing isn’t cost-effective either. To remain profitable, you need to schedule shifts based on demand. 

While you can’t predict demand perfectly, there are plenty of indicators to guide your scheduling decisions. Looking at historical data is a great start (as we covered earlier), but scheduling isn’t a “set it and forget it” task. You’ll need to keep optimizing as the season unfolds. 

When the season is in full swing, you must monitor your wage cost metrics and see where to optimize. How much foot traffic are you getting? Is there a weather forecast that can affect that? Do you need to add more workers? Cut back on hours? Or maybe just shuffle your workers to balance overstaffed and understaffed areas? 

At the same time, you can also tap your team for feedback. Workers are on the front lines and can give you valuable insights on what’s happening on the ground. Have them rate their shifts and share where improvements are needed and what’s working well. Their feedback can provide information to fine-tune your schedules and operations.

Workforce.com’s scheduling system allows you to do just that. You can compare scheduled wage costs with sales data in real-time, seeing where to optimize labor levels. It also has a shift rating system where your team can provide feedback about things like communication, management, and more.

6. Ensure complete oversight of your workforce.

The holiday rush can get hectic, and managers need a streamlined way to oversee their teams. With orders to fulfill, shipments to send out, and a store to run, it can take time to juggle staff scheduling, time tracking, and attendance issues. 

That’s where Workforce.com can step in and make things easier. The app lets managers see who’s clocked in and who’s running late. In case of no-shows or last-minute absences, you can automatically offer vacant shifts to available, qualified staff. Filling the gaps only takes a few clicks, whether via desktop or mobile app. Need to send a quick message to the team? The app has that covered, too. 

Workforce.com also notifies managers if an employee is about to go into overtime. Before they clock in the extra hours, you can decide whether it’s worth extending their hours or if their tasks can wait until the next day.

7. Know what labor laws apply to seasonal employees.

Hiring seasonal employees allows you to scale your team during busy periods. However, you must also be aware of any labor laws that apply to seasonal workers to ensure they are paid correctly and treated fairly, safeguarding you from legal issues.

According to the FLSA, non-exempt seasonal workers should receive minimum wage and overtime pay if they work more than 40 hours a week.

If hiring students or teens for seasonal work, you must also be mindful of child labor laws to ensure they’re only scheduled for the appropriate number of hours and times of day.

Also read: Child Labor Laws by State + Federal (2024)

What about taxes? Per IRS rules, the same tax withholding rules apply to seasonal employees as that of other employees. 

Plus, depending on specific criteria, seasonal employees may be entitled to benefits such as unemployment insurance, workers’ compensation, healthcare, retirement benefits, and paid sick leave.

The holiday shopping season is a massive opportunity for retailers to boost sales, increase brand recognition, and gain new customers. To make the most of it, you need a solid plan and an efficient system to help you stay agile and organized. Workforce.com is the perfect system for this busy time of year, giving you the right tools to optimize your staffing levels as the season unfolds.

Discover how Workforce.com can help you stay ahead not just this holiday shopping season but all year round. Book a demo today.

Posted on

10 Tips for Designing a Better Hiring Process

Summary

  • The hiring process is an employer’s first chance to make a good impression. It needs to be seamless to attract the best candidates.
  • 86% of HR professionals say that recruitment is becoming more like marketing. And in today’s competitive labor market, it’s easy to see why.
  • Applicant experience is crucial for keeping top candidates engaged and maintaining a good employer brand. Streamlining recruitment using technology can transform a good hiring experience into a great one.

In a tight labor market, hiring can make or break your chances of capturing quality new hires. It is often the first touchpoint between a company and potential new employees, and an excellent first impression is everything. A clunky approach to hiring will not only slow things down but also deter quality people from applying.

If you’re looking to attract qualified candidates fast while keeping things efficient, it might be time to rethink the hiring process. In this post, we’ll dive into 10 practical tips to improve your recruitment strategy.

1. Focus on setting clear hiring goals.

All of your recruitment initiatives will stem from your hiring goals. They act as your jumping point; if you’re unclear about these, you risk wasting resources and missing out on filling the company’s staffing needs. 

When determining what your hiring efforts should aim for, here are questions you need to ask yourself:

  • What are the staffing gaps, operational needs, or business needs you must address? Is it filling roles for a new business location, or is it to replace team members who left? 
  • What are the specific roles needed to fill the gap? 
  • What are the characteristics of an ideal candidate? 
  • What are the specific skills or experience candidates must have? 
  • What soft skills must they possess? Consider your company culture and define what characteristics would make a hire fit to work with the team. 
  • How fast should you be able to hire?

Talent acquisition requires significant effort, and you should focus your energy on defining hiring goals that drive business results.

2. Create clear job ads. 

“What’s in it for me?” – This is the question your job descriptions should answer for potential candidates. 

Try to frame your job listings through the applicant’s POV. First, the listing should cover the basics of the job role, which includes what’s expected in terms of tasks and responsibilities. Second, it should paint a picture of how an ideal candidate would fit in the organization, which can allude to the type of working environment you offer. 

Let’s discuss wording. Avoid overly technical jargon and internal corporate speak. Potential candidates won’t care much for those. Instead, keep your wording concise and direct and language neutral.

Here are crucial elements that your job descriptions should cover:

  • Job title
  • Duties and responsibilities
  • Required skills, competencies, and qualifications 
  • Preferred qualifications or nice-to-haves
  • Working location
  • Benefits
  • Salary range

In addition to the basics, you can include more information about the team they will be part of and brief details about the organization. 

Writing job descriptions can be time-consuming. We’ve curated a list of job description templates to give you a headstart. Feel free to download them and customize them according to your specific requirements. 

3. Be smart with advertising open positions. 

Generally, hiring teams utilize job boards and social media sites like LinkedIn to reach as many candidates as possible. While those are great, there are other opportunities to get the word out. 

Consider placing job postings in your place of business. Of course, no one has time to read a job description if they are just passing by your cafe or retail store, so why not simply print out a QR code that leads to the details of your job opening?  

Workforce.com’s Applicant Tracking System (ATS) lets you print customized QR codes that link to online job applications. Any interested applicant can simply scan the code and apply straight from their mobile devices, and you will be alerted when submissions come in. 

But before you go broadcasting an open position to the public, think about the roles you’re trying to fill. Consider hiring from within to reduce the time and resources it takes to onboard a new employee.

What about referrals? Nothing beats word-of-mouth advertising. Your current employees can be your best ambassadors since they have first-hand experience. They can share insight into company culture far better than any job posting you publish.

4. Get serious about employer branding.

Better branding attracts better candidates. In fact, 86% of HR professionals agree that recruitment is becoming more like marketing, according to a study. And with today’s challenging labor market, it’s easy to see why. Like marketing, you need to understand your target audience—your ideal candidates—and find ways to stand out.  

To get leadership on board, here’s a compelling stat: a strong employer brand can reduce the cost-per-hire by up to 50%. Plus, half of job seekers won’t consider working for a company with a bad reputation. In short, employer branding isn’t just nice to have; it’s crucial for staying competitive. 

Start by improving the hiring experience. Use data to track candidate experience and satisfaction, communication frequency, and key metrics like time-to-hire. Streamlining these processes with applicant tracking technology enhances efficiency and leaves a positive impression on candidates. Remember, every interaction counts, and a smooth hiring process can make all the difference. 

Keep in mind that negative stories spread fast these days, whether it’s a poor recruitment experience or a toxic work environment. With social media and online forums, you don’t want to be trending for the wrong reasons.

So, how do you build a strong employer brand? It starts with your core: a healthy company culture. Today’s candidates can spot inauthenticity a mile away, so your efforts need to be genuine. Once you establish strong values, they’ll naturally shape how you hire and manage talent on a daily basis.

5. Use technology to streamline the process.

There’s a lot of work that goes into hiring. Without the right tools to help you stay organized, you run the risk of mishandling important information, wasting time, and hiring the wrong people. Consider using an HR platform or an applicant tracking system (ATS) to streamline your hiring process. 

Workforce.com is a prime example of one such system. Its HR suite significantly reduces time spent sifting through resumes and onboarding new hires. Here’s how it improves your recruitment efforts: 

  • It helps you get more applicants. Every time you create a new job posting, you can generate a QR code associated with the listing and post it in your business to make access to applications easier. Workforce.com also collates all previous applications and the positions a person is interested in. When you post new job listings that match a previous applicant’s interests, the system notifies this talent pool, automatically getting you more traction from the moment you post the new job.
  • It helps you with the selection process and pre-qualifies applicants quickly by setting up role-specific questions about availability, experience, and requirements. This enables you to screen candidates before scheduling interviews, weeding out those who don’t meet your criteria upfront.
  • It reduces data reentry by using one user profile across hiring, HR, and payroll. Since the whole employee lifecycle is synced in Workfore.com, applicant information from the hiring stage is automatically brought into a new hire’s payroll and HR profile. This means that once someone fills out an application, they have essentially already filled out about 80% of their employee profile. If you decide to hire them, all of this information is used—there’s no need to create multiple profiles with repeat information. 
  • It helps you onboard new hires right away. Within minutes, your new hires can fill out onboarding forms, provide their personal information, and submit their W-4s and I-9s. No lengthy paperwork and manual entry is needed.
  • It helps you track recruitment metrics. It gives you an overview of hiring progress, spotting delays, and identifying roadblocks. Plus, it covers all your locations, so you can see who needs extra recruitment support.

An ATS is great for hiring, but one that’s housed in the same HR system as onboarding and payroll is a game-changer and can save a significant amount of time. It streamlines the entire journey—from recruitment to onboarding to that first paycheck. 

6. Eliminate unconscious bias.

We’re human, and we’re naturally wired to have biases. However, if these biases are left unchecked during the hiring process, they can lead to poor decisions. Take steps to eliminate anything clouding your judgment from focusing on what a candidate truly offers. 

Reduce unconscious bias by focusing solely on an applicant’s technical skill sets instead of their demographic details such as gender, race, and age. Furthermore, you can view job applications with redacted names or personal information so their skills and experiences are front and center.

7. Improve how you interview. 

The interview stage is crucial for applicants and the company to get to know each other better. It’s an opportunity to assess technical skills and values, making it the ideal time to evaluate cultural fit alongside qualifications. And you do that by asking the right questions. 

Whether you utilize structured questions or free-flowing discussions is your prerogative. But regardless of what route you choose, make sure that it helps you evaluate applicants objectively.

Structured interview questions help you gauge how applicants fare against each other. This interview style makes it easy to compare and judge applicants based on their answers to a series of important and relevant questions.

On the other hand, a less structured approach can better reveal a person’s values, personality, and soft skills, helping you assess their cultural fit. Unstructured interviews can also make applicants feel more comfortable during interviews. 

Ultimately, the goal is to find the best fit for the role. Whether you prefer a structured or flexible interview style or a mix of both, ensure it leads to a fair and informed hiring decision.

8. Understand who you’re hiring. 

Not all hiring processes are the same, especially when it comes to salaried versus hourly roles. Your recruitment approach should adapt to each, from sourcing, screening, onboarding, and compliance. 

For instance, recruiting a line cook for one of your restaurants is a much different process than hiring a finance manager for an insurance agency. Hourly roles often require a faster and leaner process to meet urgent staffing needs. Having a system that lets candidates apply easily and keeps unnecessary data and timelines to a minimum is ideal.

In contrast, hiring for salaried positions usually involves multiple interview stages and a more thorough vetting process. For these hires, it’s crucial to have a comprehensive applicant tracking system that monitors each stage efficiently and keeps candidates engaged throughout the process.

Ultimately, hiring for hourly positions prioritizes speed, volume, and efficiency, while salaried roles focus on depth, fit, and long-term alignment. Understanding these nuances allows you to tailor your hiring processes and shapes how you manage time tracking, shift scheduling, and payroll for each type of hire.

9. Always communicate with applicants.

You don’t want to be labeled as an employer who ghosts applicants, do you? 

While you will undoubtedly need to prioritize some applicants over others, you should never leave unqualified candidates hanging. Keep candidates informed every step of the way —from confirming their application to updating them on the next steps, whether they qualify for an offer or not.  

Additionally, offer a channel for applicants to reach out when they want to follow up or ask a question. This will help them feel at ease and keep strong candidates engaged in the process.

10. Regularly evaluate your hiring process.

As new technologies and trends emerge, your hiring process can quickly become outdated. Conduct regular assessments of your hiring process and practices. Identify what works, spot areas for improvement, and tackle any roadblocks. A flexible, evolving hiring process keeps you aligned with market shifts, maintains efficiency, and positions you to attract top talent.

Fill roles faster and simplify your recruitment process with applicant tracking software

Workforce.com hiring app

Hiring hourly employees? Workforce.com’s online hiring system can help you find the best talent to fill your staffing needs.

Workforce.com is end-to-end HR, scheduling, and payroll software for hourly teams.

The cloud-based platform features an applicant tracking system that streamlines hiring—from posting job advertisements to pre-qualifying candidates, interviewing them, and eventually onboarding them—all without lengthy paperwork or double entry.

Discover how Workforce.com can help you with hiring and more. Book a demo today. 

Posted on

How to Manage Compliance for Contractors

Summary

  • Managing contracted employees (1099s) fundamentally differs from managing typical W-2 staff.
  • Employers are legally responsible for correctly classifying workers according to the FLSA, IRS, and any applicable state-based rules. However, the line between employees and contractors can easily get blurred.
  • Workforce.com helps streamline contractor compliance management by ensuring workers are treated according to their classifications.

Suppose you are considering hiring independent contractors for a specific job. Or maybe you already employ a few. Have you done all of your research to handle them compliantly? If not, this guide is for you.

Strict labor standards govern how to properly classify and manage independent contractors, otherwise known as 1099 workers. Let’s examine how to stay on top of these rules and safeguard your business from legal risks.  

Why hire an independent contractor?

Hiring independent contractors offers flexibility, especially when you need help for short-term projects. Unlike full-time employees, contractors usually come in with the expertise required to start working right away, meaning less time spent on training and onboarding. 

Another advantage is cost-effectiveness. Contractors are not entitled to overtime pay, employee benefits like health insurance or retirement plans, or perks like paid vacations and promotions. You also avoid expenses like unemployment insurance and tax contributions that generally come with traditional employment. 

While engaging independent contractors gives you flexibility, there are risks involved. Misclassification is the biggest one. Since contractors are not entitled to the many lucrative benefits of regular employment mentioned above, misclassifying an employee as a contractor can result in serious legal trouble, fines, back taxes, and even lawsuits. Because of this, it is vitally important to understand what qualifies someone as a contractor. 

Key legal guidelines for managing independent contractors

Employee Classifications

Correctly classifying a worker as a contractor is the first step to staying compliant. At the federal level, the Fair Labor Standards Act (FLSA) uses a six-factor test that evaluates the “totality of circumstances” around the working relationship. With this assessment, businesses can determine the correct classification while considering crucial aspects such as control, independence, and the nature of work. These factors are:

  • Opportunity for profit or loss depending on managerial skill
  • Investments by the worker and the potential employer
  • Degree of permanence of the work relationship
  • Nature and degree of control
  • Extent to which the work performed is an integral part of the potential employer’s business
  • Skill and initiative

It’s important to note that the FLSA doesn’t assign a rule defining whether someone should be a contractor or an employee. Instead, it evaluates the facts of each situation to determine the working relationship and whether the worker is truly independent and doesn’t rely on the business like an employee would. 

Aside from federal rules, businesses must also check if there are state rules that govern how they should differentiate contractors from employees. In California, for instance, a worker is classified by default as a standard W-2 employee unless all of the following conditions are met: 

  • The worker is free from the control and direction of the hiring entity in connection with the performance of the work
  • The worker performs work that is outside the usual course of the hiring entity’s business
  • The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. 

In essence, a worker in California can only be classified as an independent contractor if they have autonomy over how and when they perform their tasks, as long as they complete their responsibilities. Also, the work must be fundamentally different from what the business does; For instance, a hospital commissioning people to construct a new building wing. Lastly, the worker must be independently engaged in an established trade and offer services to multiple clients.

Understanding the difference between independent contractors shapes how you manage payroll and benefits. Full-time employees are protected by wage and hour laws, ensuring they’re paid at least minimum wage and receive overtime pay. Full-time employees are also protected under meal break rules depending on the state. On the other hand, 1099 workers aren’t generally covered by these rules. Independent contractors are paid according to their contracts. In addition, they are not entitled to certain benefits, such as health insurance and workers’ compensation.

IRS Rules

Employers must also look at IRS guidelines because these will define how active their role is when handling taxes for their workers. It will also dictate how they report workers’ compensation, the types of forms to submit, and whether or not they would be legally liable to withhold taxes.

Employers withhold and deposit income taxes, social security taxes, and Medicare taxes from employee wages. On top of that, they also match contributions to SSS and Medicare taxes. But it’s a different situation for contractors. Employers generally don’t deduct income taxes from the contractor’s payment and don’t need to match contributions. 

So, under IRS rules, what factors will help you gauge whether a worker should be classified as an employee or contractor?

  • Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  • Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how a worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  • Type of relationship: Are there written contracts or employee type benefits (that is, pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Like California’s ABC Test, the IRS guidelines also consider the level of autonomy workers have over their jobs. Employers typically have less control over how contractors fulfill their tasks and don’t dictate the methods and tools workers use. 

The IRS also considers how financially dependent workers are on their employers. Contractors typically cover their own costs, such as transportation and equipment, whereas employees rely on their employers for those provisions. 

Employees typically have an ongoing relationship with an employer, while contractors typically work for a set period on specific tasks or projects and aren’t as involved in a company’s core operations. 

Classifying employees correctly is also a prerequisite for filing the correct forms and determining whether you must file a W-2 or 1099. Employers typically file W-2s for full-time and part-time employees, reporting all wages, compensation, and tax withholdings for the year.

On the other hand, form 1099 shows how much an employer pays an independent contractor in a tax year. You must file a 1099 if a contractor earns $600 or more annually. These 1099 forms will not include tax withholdings since contractors calculate and submit them to the IRS independently.

OSHA Regulations

The Occupational Safety and Health Administration (OSHA) requires employers, including those using contractors, to adhere to safety regulations and keep workplaces free from hazards to prevent injury or death.

OSHA has general safety regulations that apply to most workplaces, but specific guidelines exist for construction, maritime, and agriculture industries. If you’re in any of those sectors, it would be wise to know these regulations.

Typically, OSHA regulations cover the following areas: 

  • Safety training requirements include construction safety training, such as handling scaffolding, fall protection measures, and ladder safety.
  • Handling hazardous tasks, including hazard communication standards, proper labeling, data sheets, and training on handling hazardous substances.
  • Personal protective equipment (PPE) for specific working environments, including hard hats, gloves, goggles, or respirators, should meet OSHA standards.
  • Rules that must apply when multiple employers are present in a worksite, which is typical for big projects involving contractors and subcontractors. The company that hired them, the controlling employer, is responsible for following OSHA rules. This means that they must check for hazards, ensure safety standards are followed, especially with heavy equipment, and have a system to report and address safety concerns. 

Aside from training, employers are also responsible for communicating such rules and ensuring that contractors have the safety training needed for the job.

How to build an effective contractor compliance management policy

Employing third-party contractors differs from managing employees, but your legal obligations remain just as important. It’s crucial to have a dedicated compliance strategy for employing contractors to reduce risks and avoid violations. Here are some practical tips:

Establish rules and guidelines for classifying contractors.

A significant part of contractor compliance is classifying them correctly, so you must have a process for doing so.

Before hiring, vet potential workers carefully. Assess the task or job and how you plan to oversee it. From there, you can determine whether a part-time worker or a contractor is the right fit. Getting the classification right from the start ensures compliance with tax filings, payroll, and other regulations.

Create airtight contracts.

Contracts and agreements between you and contractors must clearly outline the scope of work, duties and responsibilities, and payment terms. Draft them with the regulations in mind. To avoid legal missteps, ensure these agreements comply with FLSA, IRS, and OSHA regulations.

Avoid scope creep. 

The law is very clear on factors that dictate whether a worker qualifies as an independent contractor. Remember that it all comes down to their financial and behavioral independence. Be careful not to overstep legal boundaries that could change their classification.

The key is consistency. Set clear rules for overseeing the job and adhere to the contract’s terms. Your treatment of contractors should remain uniform and standard throughout the project.

Provide necessary training. 

Safety training is a must for hiring contractors. Ensure they complete all required health and safety training before the project begins. 

It’s also in your best interest to train your managers on the legal principles governing contractors and employees. This can equip them during the vetting process and help them better manage projects in accordance with regulations. 

Set regular progress check-ins. 

See to it that the process stays on course. Establish regular check-ins where contractors submit performance reports detailing their deliverables, remaining tasks, and any challenges they face. This keeps you informed and allows for timely adjustments if needed.

At the same time, conduct routine assessments or audits from your end to track how the project is progressing. This helps ensure that contractors are set to meet deadlines and follow safety and health regulations. Regular check-ins keep the projects on track and minimize potential issues before they become bigger problems.

Stay abreast of relevant rules and regulations.

Labor laws can change at any time, so employers must stay up-to-date. Case in point: US Department of Labor’s final rule on worker classification. Previously, the law only looked at the economic dependence of workers on their employers. The more economically dependent a worker was on the employer, the more likely they were to be considered an employee. However, the changes take a broader approach and now consider the “totality of circumstances” when classifying workers. 

Streamline the process with technology. 

Contractor compliance can be complicated, requiring new administrative tasks and management processes for your managers and HR. However, technology can simplify some processes involved with working with contractors, such as onboarding, time tracking, payroll, and documentation.

Workforce.com simplifies contractor compliance

Managing employees is complicated enough, and adding contractors into the mix can come with its own set of challenges. But don’t let this discourage you from getting contractors for specialized projects, especially if they provide more flexibility. 

There’s a way to manage contractors in a more streamlined way. Here’s how Workforce.com can help. 

Onboarding 

Workforce.com’s onboarding system lets 1099 workers easily and independently submit all necessary paperwork, bank details, and contracts to employers. This self-service portal relieves the administrative burden from the employer and ensures all information is in place for contractors to get paid correctly.

Time tracking

Depending on the contract, contractors submit timesheets before they get paid, but you can simplify the process with Workforce.com’s time and attendance system. Instead of dealing with paperwork, contractors can log in and out through the time clock, automatically generating timesheets based on their time punches.

You can set up a Workforce.com on-site or you can allow contractors to clock in and out through their own device via the Workforce.com app. This ensures accurate time tracking across multiple locations, making recordkeeping more manageable and ensuring contractors are paid on time, especially if specific hours were agreed upon.

Scheduling & task management

Workforce.com also has a scheduling system that contractors can use to plan their work accordingly. They can build and assign shifts, create to-do lists, and communicate with other workers to more easily map out where and when work gets done.

PayrollWorkforce.com’s payroll system can simplify how you pay contractors. Along with your W-2 staff, the system will also automatically process payment for your 1099 workers based on hours worked and the terms of their contract. At the end of the year, Workforce.com will also provide you with all necessary 1099 forms, which your contractors will use to file their taxes.

Recordkeeping

Workforce.com keeps all contractor records organized in one place, helping you access everything in case of audits or compliance reviews. It stores contracts, timesheets, IRS forms, and other important documents related to each project, helping you stay on top of everything and remain compliant. 

Ready to improve how you manage contractor compliance? Book a demo and see how Workforce.com can help.

Posted on

California’s Meal and Rest Break Laws: What Employers Need to Know

Summary

  • California requires employers to provide their staff with a meal break and several rest breaks, depending on shift length.
  • Due to waiver conditions, industry-specific exceptions, and confusing legal jargon, complying with these rules is tricky.
  • Misunderstanding is no excuse for getting rest breaks wrong in California. Employers must equip themselves to schedule, track, and pay rest breaks correctly to avoid legal trouble.

Employee meal and rest break laws vary by state. Some lack regulations, while others have strict guidelines – the most stringent being California.

So, if you’re an employer in California, how do you know if you’re implementing meal and rest breaks correctly? Let’s break down what you need to know about these rules, what happens when you break them, and practical tips to ensure you remain compliant. 

What are California’s Meal and Rest Break Laws?

According to California’s Labor Commissioner’s Office, also known as the Division of Labor Standards Enforcement (DLSE), most non-exempt employees in California are entitled to distinct categories of breaks: a meal break and a rest break.

Meal Breaks

  • Employees who work more than five hours in a day are entitled to a 30-minute unpaid lunch break.
  • Employers must provide an additional 30-minute unpaid meal break to employees working more than 12 hours in a day.

Several conditions must be met to satisfy the requirements for a reasonable meal break. Employees must be fully relieved of all their duties, the break must go uninterrupted, and the employer cannot discourage or prevent it. Employees must also be free to use the time as they see fit. Whether they eat lunch, leave the premises, or take a quick nap, it’s their prerogative.

Failing/refusing to give a meal break

If an employer fails to provide a reasonable meal period, they owe the employee one extra hour of pay at the regular rate for each day they do not receive a meal break. This is what is known as premium pay.

If an employee’s meal break is less than 30 minutes, and they never agreed to end their break early in writing, it is considered “interrupted” and must be paid, along with the one additional hour of premium pay for a missed break.

Employees who do not receive premium pay have the right to submit a wage claim to the Labor Commissioner’s Office.

Waiving meal breaks

Can meal break times be waived? Yes, but only under certain circumstances. Both employer and employee can agree to waive the meal break if a shift is 6 hours or less. At the same time, employees can skip the second 30-minute meal break, provided they took the first meal break and worked more than 10 but less than 12 hours. 

Waiving breaks should not be standard practice and should only be agreed to if a meal break will prevent an employee from completing an essential task. Employers should always properly document waived breaks in writing to protect themselves from unclaimed wage lawsuits.

On-duty meal breaks

There are cases when employees can’t be fully relieved of their duties during meal breaks or leave the premises while on break. If that’s the case, the rules for on-duty meal periods will apply, and these are the following: 

  • If an employee must remain at the work site or facility during the meal period, the meal period must be paid. 
  • On-duty meal periods are only allowed under certain conditions where the nature of the job makes it impossible for workers to be free of all of their duties while on break. Examples are sole employees in a coffee kiosk, night shift workers in a convenience store, or security guards stationed alone.
  • Both employer and employee must agree in writing. The document should state the terms of the on-duty meal period and explicitly state that the employee can cancel the agreement anytime if they no longer wish to have on-duty meal breaks.
  • On-site meal breaks should only happen for real, job-related reasons requiring employees to stay on the premises, not just because the employer and employee agree. The nature of the work should make it necessary for employees to remain at the job site, even during meal breaks.

Rest Breaks

  • Employers must provide a ten-minute paid rest period for every four hours worked or a significant fraction thereof.
  • As much as possible, the break should be taken around the middle of the work period.
  • The 10-minute rest break should start when an employee reaches a proper place to rest away from their work area. Employers must provide a suitable place for rest that’s separate from the restroom and available during work hours.
  • If a rest break is not provided, the employee is owed an additional hour of premium pay at their regular pay rate.

As with meal breaks, employees must be free from job responsibilities during their rest period. Furthermore, employees must not be on call during this time. Employees working at most three and a half hours are not entitled to rest breaks.

Employees can skip their rest breaks, but it must be their choice without any pressure or influence from the employer. It’s also wise to document every time a break is missed or skipped – an employer should have in writing why a break was skipped and if the employee agreed to it.

What makes compliance with California’s break time laws challenging

Due to the sheer complexity of California’s break laws, it can be difficult for employers to get everything right, even if they have the best intentions. Here are some of the most common roadblocks employers face regarding California meal and rest break laws:

Complying with industry-specific rules and exemptions

Aside from the basic rules around unpaid meal breaks and paid rest periods, California employers must also ensure that they follow applicable industry-specific regulations and exemptions. Here are some examples of such:

  • Employees in the motion picture industry must not work for more than 6 hours without taking at least a 30-minute break but not exceeding an hour. After that, employers must provide a second meal break no later than 6 hours after the previous one has ended. (IWC Order No. 12)
  • Hot meals and drinks must be provided for production employees working after 12 midnight.  (IWC Order No. 12)
  • Performers engaged in strenuous activities, such as swimmers, dancers, and skaters, shall have additional interim rest periods during shootings and rehearsals.  (IWC Order No. 12)
  • Rest breaks can be staggered in the construction, drilling, logging, and mining industries to prevent disruptions in operations. If a break is missed, it must be provided within the same workday; otherwise, the employer must pay a penalty for the missed break. (IWC Order No. 16)
  • Healthcare industry workers who work shifts longer than 8 hours may voluntarily waive their right to one of their two meal periods, provided that there’s a written agreement signed by the employer and employee. Employees can revoke the waiver with at least one day’s written notice. (IWC Order No. 4)
  • Employees who are directly responsible for the care of children under 18 years old or still in the foster system who need 24-hour care and employees who are working in 24-hour residential care facilities for the elderly, blind, and developmentally disabled individuals may be required to work on-duty meal periods without extra pay, especially if they must meet regulatory standards. This applies if:
    • The employee eats with the residents and is provided the same meal for free.
    • The employee is solely responsible for the residents, and a free meal is provided during the day shift.

Incorrect interpretations

Legal jargon is notoriously ambiguous and sometimes difficult to understand. Regardless, incorrectly interpreting California’s break laws can result in costly lawsuits—case in point: Bono Enterprises, Inc. vs. Bradshaw.

Bono Enterprises Inc., operating under the business name American Temporary Services (ATS), was a temporary work agency that supplied roughly 1,000 Californian employers with a workforce. One of their clients is a manufacturing plant in Modesto. ATS temp workers were not given security clearance in the plant, which resulted in them remaining in the plant premises during their 30-minute meal breaks.

Several employees filed complaints for not receiving paid wages for lunch periods when they had no choice but to stay on the premises. However, ATS argued that the wording of the rule is vague and unclear.

Furthermore, employees are relieved of all work duties during their meal breaks and can access an on-site cafeteria and relaxation areas. 

The commissioner ruled in favor of the employees, and the court agreed with their interpretation. The ruling emphasized that unpaid meal breaks must allow employees to spend their time as they choose, including leaving the premises. Being restricted on-site meant they could still be under the employer’s control, which violates the law.

This case clearly illustrates how easily the law can be misunderstood and reminds employers to tread carefully and err on the side of caution. It’s best to seek legal advice when in doubt or faced with unclear regulations. 

Tracking break times 

While it’s not the employer’s job to police how employees spend their break time, it is their duty to ensure that breaks are provided as required by the law. 

The challenge comes with determining which breaks are paid and unpaid and knowing when an employee qualifies for premium pay. Employers must also ensure the system isn’t misused to gain extra pay, such as manipulating break times to extend paid hours. And let’s not forget documentation and keeping track of waivers. These tasks add to the already heavy workload of HR workforce management.

Stay on top of California Labor Laws with Workforce.com

California meal and rest breaks are not only difficult to understand but also tricky to implement. Luckily, a payroll system like Workforce.com can help you automatically ensure employees receive what they are entitled to.

Here is how Workforce.com handles breaks in California:

Properly identifying paid and unpaid meal breaks

Workforce.com helps you identify which meal breaks are unpaid and when premium pay will apply. 

Employees clock in and out for meal breaks on Workforce.com’s time clock app. If they return early, you can set up shift questions asking if they are coming back by choice. If so, the break remains unpaid. However, if they answered no and indicated their manager asked them to return early, it would be an interrupted, paid break. Managers are notified in these cases to verify the situation.

Automated timesheet attestations

When staff clock out of their shift, you can prompt them with a series of questions certifying the accuracy of their timesheets. If no meal or rest breaks were taken, Workforce.com will give the employee an option to sign a waiver indicating whether or not they agreed to take their break. Every attestation and break waiver is filed securely in your document library, which you can refer to in case of an external audit or lawsuit.

Ensuring breaks are properly scheduled

Managers can easily customize and schedule compliant breaks in Workforce.com’s scheduling system. These breaks can be configured to automatically apply to any shift that meets the minimum required length. These preventative workflows ensure correct breaks are always scheduled with minimal manual effort.

Notifications and alerts

With Workforce.com’s mobile employee app, employees get reminders to take their breaks and clock in and out for meal and rest periods. At the same time, managers can also receive notifications if any of their team members seem to have missed their breaks. This way, they can investigate and address any issues quickly. 

Automated premium payments

When an employee fails to receive or misses a break, Workforce.com’s payroll system automatically calculates the correct premium payment amount they are owed based on their time logs and pay rate. This additional pay is reflected on the timesheet and properly paid out on payday.

Learn more about how Workforce.com’s payroll and scheduling system can help you easily manage rest breaks in California. Book a demo today.

Posted on

Employees using cell phones for work? Here’s how California employers must pay up

Summary:

  • In California, reimbursing employees for work-related personal cell phone use is more than just a perk. It’s the law.
  • Compliance with cell phone reimbursement laws may be challenging as there are ambiguities about reasonable compensation amounts.
  • Employees can use software like Workforce.com on computers to perform administrative work duties, avoiding the need for cell phone reimbursements.
  • Compliance-specialized HR software like Workforce.com can also handle distributing reimbursements and stipends if needed.

The lines between personal and professional mobile phone use are becoming increasingly blurred. Many employees use their personal devices for work-related purposes, whether answering emails, calling clients and team members, coordinating projects, or accessing company portals. If this is the case, who should foot the bill?

California addresses this overlap with Labor Code 2802, a law that attempts to clarify who should cover the costs of using a personal cell phone for work purposes.

So what does this law entail, and how does it protect employers and employees? Let’s take a closer look to help you navigate this legal dilemma in the Golden State. 

What is California Labor Code 2802?

California Labor Code 2802 mandates that employers fully reimburse employees for any job-related expenses they may incur; this includes all costs related to using a personal cell phone for work duties. This law protects employees and ensures employers are not sidestepping operating expenses.

So, if your employees use their cell phones to call clients, communicate with suppliers, manage company platforms, or perform other job-related activities, they may be entitled to reimbursement – depending on your state.

Clearly, this is more than just a job perk. It’s the law, and employers in California must comply. But this is much easier said than done due to the ambiguous nature of the way the labor code was written. The critical question here is how to measure what qualifies as reasonable compensation. And how do you even begin to job-cost phone-related activities?

The Cochran vs. Schwan’s Home Services Case

If your employees have unlimited call minutes, do you still need to reimburse them for cell phone use? Yes, you should. The court decision for Cochran vs. Schwan’s Home Services case reiterates why this is the case. 

In this class action suit, the plaintiff claims that California Law 2802 is violated because they use their cell phones for work-related calls in their job duties for a food delivery business but are not reimbursed for such costs. However, the defendant argued about the appropriateness of the class certification. According to them, the employees have varying reimbursement claims. They also countered that some employees didn’t incur additional costs because they were on a plan with unlimited minutes or included in a family plan.

The California Court of Appeals ruled that employees are still entitled to reimbursement even if they’re on a mobile plan with unlimited minutes or a family plan. The issue is about properly reimbursing employees for using their personal cell phones to perform work duties and not about whether or not employees incur additional expenses on top of their plan for making work-related calls. Since the employer benefits from these calls, they should cover the expense as part of their business operations.

So, the next question is how much? The court didn’t mandate a specific amount by which employees must be reimbursed, making the ruling pivotal for this piece of California law and the employers that must comply. Such uncertainty makes it even more challenging for employers to determine how much they should reimburse employees for cell phone usage.

How do you calculate reasonable reimbursement?

Since the law doesn’t state an exact dollar amount or formula by which you should reimburse employees for cell phone use, how do you identify that sweet spot?
According to a study by Oxford Economics and Samsung, most company reimbursements for mobile expenses range between $30 to $50 per month. On average, the monthly amount is $40.20 per employee. In addition, 98% of companies surveyed provide full or partial stipends to cover employee mobile expenses.

The reasonable reimbursement or stipend amount depends on your operations and how crucial mobile devices are for your employees’ tasks. According to the same study, 53% of executives said employees need mobile phones to do their jobs well, and 57% said mobile devices are key to getting work done.

Figure out how much of your employee’s screen time is devoted to work. For instance, if 50% of their daily phone usage is spent on job-related activities, you can consider providing a stipend or reimbursement equal to half of their monthly plan.

On the other hand, you can opt for exact reimbursement based on their usage if they can highlight specific line items in their phone bill that are directly related to work. However, this can be challenging since most mobile plans are bundled or have unlimited call minutes or data.

The key to determining a reasonable reimbursement amount is to ensure that you’re reimbursing what employees are due while still not overpaying.

What are the methods for reimbursement?

As with the amount, the law lacks specificity regarding how employers should distribute reimbursements. At the end of the day, it is really up to the employer.

One way is to follow a standard reimbursement process through HR. Staff submit receipts and documentation so that the employer can compensate them based on what’s stated in their invoice. However, this can cause additional admin work for both the employer and employee. 

To simplify things, an employer ditch the reimbursement method in favor of a monthly stipend to cover cell phone-related expenses. But what happens if the cell phone expense exceeds the allotted stipend? In this case, it’s always good to have a backup reimbursement process in place. It is also worth noting that overspending is a very real risk with a stipend since expenses aren’t being explicitly tracked.  

In short, for simplicity and less headache, go for a stipend. To avoid the risk of overspending, choose a reimbursement process.

Of course, employers could avoid all of this hassle by simply giving employees work phones on a separate company phone plan. However, this is obviously expensive and requires additional IT and security support. This option should really only be considered for the most obvious use cases where cold calling is a routine part of the job.

When should employees receive the reimbursement?

This is also determined by the employer and usually weighed against factors such as how often cell phones are used for work. It can be distributed monthly, quarterly, or annually or along with payroll.

Are cell phone reimbursements taxable? 

Cell phone reimbursements are not considered income or an amount added to an employee’s wage, but they cover expenses for cell phone use for business purposes. So, technically, they are not part of an employee’s earnings. However, they are usually considered non-taxable as long as they are given for “substantial non-compensatory business reasons,” as stated by the IRS.

Again, the key here is to ensure that employees determine a reasonable amount to reimburse. For instance, if your employee’s monthly bill is $100 and you pay $105 as reimbursement for cell phone use, the excess of $5 should be returned to you, or they would need to file it as income, which can be taxable.

The essentials of a reimbursement policy

The key to complying with the California Labor Code 2802 is to have a policy in place. As you create this for your organization or revisit your existing rules, you must ensure that it covers the following: 

  • Who’s eligible for reimbursement? Look at your operations and determine which roles rely heavily on their personal cell phones to get work done. For instance, employees who usually work at the company headquarters with access to company resources are less likely to use their mobile plan than those who work in various locations and are more likely to use their cell phones for work-related purposes while on the go. 
  • What type of usage warrants reimbursement? Specify what work-related tasks done on mobile entails because it’s best to define what constitutes business and personal use. Typically, work-related usage includes company calls, emails, and accessing company platforms.   
  • What is the documentation needed? List the documents employees must submit, such as receipts, invoices, or billing statements.
  • How will the reimbursement be computed? State clearly in your policy whether you will reimburse down to the cent or assign a stipend. 
  • How will the reimbursement process go? Detail the steps involved so that your employees will know how to proceed. 

When you create a reimbursement policy, see that you’re using clear language and be specific as much as possible. Keep it accessible to all employees, and make sure to update it if need be. 

Other states with reimbursement laws

There is no federal law that requires employers to reimburse employees for work-related expenses. However, the FLSA states that you might need to if those expenses cause wages to go down below minimum wage. 

Aside from California, here are other places that have laws on reimbursing employees for work-related expenses:

District of Columbia – DC Municipal Regulations Section 7-910

On top of wages, employers must also “pay the cost of purchasing or maintaining any tools required of the employee in the performance of the business of the employer.”

Illinois – Illinois Wage Payment and Collection Act Section 9.5

An employer must pay back an employee for any necessary costs or losses the employee has while doing their job and directly related to work for the employer. ‘Necessary costs’ include all reasonable expenses or losses required for the job that mainly benefit the employer.

Iowa – Iowa Code 2024 Section – 91A.3(6)

Any expenses an employee has that are approved by the employer must either be paid back before they’re spent or within 30 days after the employee submits an expense claim.

Minnesota – Minnesota Statute 174.24 Subd. 5

Once employment is ended, employers must reimburse the total amount deducted directly or indirectly for any items listed in the previous subdivision except for uniform or clothing rental and maintenance by motor vehicle dealers. Once reimbursed, employers can ask the employees to return any items they the employee provided reimbursement for. 

Montana – Montana Code 39-2-701

An employer must cover an employee’s necessary expenses or losses that happen while doing their job or following the employer’s orders. 

New Hampshire – New Hampshire Revised Statutes Section 275:57

If an employee spends money for work-related expenses at the employer’s request, and these expenses aren’t normally covered by the employee’s wages or advance payments, the employer must reimburse them within 30 days after the employee provides proof of payment.

New York – New York Labor Law Section 198 C – Benefits or Wage Supplements

Besides any other penalties, if an employer agrees to pay benefits or wage supplements to employees, but fails to make the payments within 30 days, they can be charged with a misdemeanor.

North Dakota – North Dakota Century Code Section 34-02-01

An employer must reimburse an employee for any necessary expenses or losses from doing their job or following the employer’s orders, even if those orders were illegal, unless the employee knew they were illegal at the time.

Pennsylvania – Unreimbursed Business Expenses

Some employees might be able to subtract certain job-related expenses from their state income tax. Qualified expenses may include travel and mileage, certain mobile phone use, and office supplies. 

South Dakota – South Dakota CL 60-2-1

An employer must cover any necessary expenses or losses an employee has while doing their job or following the employer’s orders, even if the orders were illegal, unless the employee knew they were illegal at the time.

Seattle – Wage Theft Ordinance

Seattle employers must pay employees on a regular pay day. Compensations include wages, tips, and reimbursements for expenses incurred on behalf of the employer. 

Massachusetts

While Massachusetts law doesn’t explicitly mention about expense reimbursement, the state’s Attorney General strongly recommends employers to cover necessary and unavoidable employee expenses. 

Handle cell phone reimbursements with ease

Worried about cell phone reimbursement logistics? Maybe it is time you consider leaving it to the experts.

Workforce.com is a powerful HR tool that covers time and attendance, scheduling, and payroll — helping you comply with obscure labor laws every step of the way. Employees can check their shift schedules, clock in for work, update their direct deposit information, and much more, all in one place. 

Workforce.com is uniquely equipped to handle all things related to California labor compliance, including cell phone reimbursements. Within the system, you can easily classify employees eligible for reimbursement with special tags, provide them with a way to upload necessary documentation, and ensure that they receive their reimbursements.

Worried about a scheduling and time clock app adding to your reimbursement bill? Think again. Workforce.com offers flexibility since staff can access it from computers too—devices not tied to personal cell phone plans. This can help minimize or even eliminate the need for cell phone reimbursements entirely.  Regardless of how big your HR team is, you can rest assured that crucial admin tasks are taken care of. 

Discover how Workforce.com can help you with payroll, reimbursements, and more. Book a demo today.