Horizon Point Consulting

Author: Lorrie Coffey

  • Taking the Guess Work Out of 1099s

    Taking the Guess Work Out of 1099s

    In fifteen years as an HR practitioner, there’s one question I can probably pinpoint as the most asked question I have gotten over the years.

    “Why can’t I just classify them as an independent contractor?”

    It’s estimated that by 2020 40% of the US workforce will be freelancers or temp employees, up from 30% in 2006. With that number growing, it’s even more important for organizations to understand the independent contractor classification and when it can be used. The penalties for misclassifying employees as independent contractors can include back payment of taxes, interest owed to employees for wages not paid, fines, and even criminal or civil charges. It’s a costly mistake, and yet it’s one I see way too often.

    Here are just a couple questions I’ve answered in the last few weeks alone:

    1. “I have a candidate that would like to be classified as a 1099, can I do that?” Simply put, no, you cannot classify someone as an independent contractor just because that’s how they prefer to be classified.
    2. “We have a candidate that we want to bring on as an employee, but we’d like them to complete a trial period. Can we classify them as an independent contractor during that trial period and then hire them as an employee at the end of that period if they are a good fit for the position?” No, you cannot temporarily bring someone on as an independent contractor to see if they’re a good fit for your company if you’re otherwise going to treat them as you would any other employee. You can certainly have a probationary or trial period during which time you evaluate them and they get to evaluate the company, but you have to pay them as you would any other employee.

    So when can an organization pay someone as an independent contractor? Here are a few questions to ask yourself about the assignment:

    1. How will the work be assigned and completed? Will regular direction be given or will an overall scope of work be provided? Who will dictate the work schedule? Where will the work be completed? If there will be regular direction given or delegation of tasks to which specific deadlines are set and the company dictates when and where the work is to be performed, chances are they should not be classified as an independent contractor. If an overall scope of work is agreed upon and they determine their own work schedule and where the work is completed, then move on to the next question.
    2. Who will provide the necessary resources to complete the work? Will the company provide necessary equipment such as computers, phones, etc.? If the company will be providing the necessary resources and equipment, there is a strong chance the position does not qualify as an independent contractor. There are some exceptions to this, for example, they provide their own computer, but the company provides them with access to software programs required to complete the work.
    3. How will they be compensated for the work completed? If they are paid as any other employee of the company, chances are they should not be classified as an independent contractor. If they are paid a set contract amount, even if paid in equal intervals such as monthly, or they provide an invoice for work completed that is then paid through accounts payable, it is possible that they are in fact an independent contractor.

    For more detailed information on evaluating the independent contractor classification, you can go to the IRS website. Many years ago the IRS designed a 20-Factor Test for Independent Contractors. They no longer support the test on their website, but it’s still floating around out there and I still recommend it to clients as the best source for helping to determine 1099 status. The information on the IRS website is not as clearly defined in my opinion as the test is.

    I recommend that if your organization currently has independent contractors, you check their status against the 20-Factor test. If the position does not meet the requirements of the test, proactively take action to remedy the error and classify them correctly as an employee and ensure that they are afforded all of the benefits that an employee receives.

  • If You’re Not Onboard, Get Off the Ship!

    If You’re Not Onboard, Get Off the Ship!

    The best piece of advice I heard at the recent SHRM19 National Conference came from Cy Wakeman’s session “Business Readiness: Ensuring Our Teams are Ready for What’s Next.”

    As a consultant, I spend a great deal of my time helping organizations navigate change, from determining what change is needed to creating the roadmap of how to accomplish the change to how to get employee buy-in. The hardest part is often getting employees on board, helping them understand the need for change and addressing their resistance.

    The current change management process caters too much to the individual employee when it should focus more on the overall business need for change. Leaders spend a great deal of time sitting on the sidelines with those few employees on the bench trying to convince them why they need to get in the game with everyone else. They allow the minority of employees who want to resist the change to stall the process or to even quash it.

    According to Cy, leadership needs to stop trying to please everyone and focus on those employees who are champions for change and who understand the vision, because they will be the ones who drive change forward. And change is all about ensuring the sustainability of the organization and creating an opportunity for growth. Those resistant will only hold the organization back and will never support the change. Their resistance is driven by their own ego, not what’s in the best interests of the organization.

    So how can organizations effectively navigate change management?

    1. Don’t jump the gun. Change management isn’t a race, it’s not about being the fastest out of the starting gate. Take the time needed upfront to thoroughly assess the need for change, the options for how to make the change, and the impact each option will have on the organization as a whole. Proper planning will lead to proper execution. Making snap decisions too often leads to the need to backtrack, which causes employees to lose faith in leadership’s ability to manage and makes them more resistant to change.
    2. Explain the why then move forward. It’s important to maintain a level of transparency with employees. Explain the why behind the change in terms that all employees can understand and outline how the change will positively impact the organization as a whole. But don’t dwell on it. Once you’ve explained it, move on to the how and when. Don’t let resistant employees continue to question the why this is where change stalls.
    3. Think inside the box. A key point that Cy made was that we’ve been conditioned to “think outside the box” and that method of thinking tends to lead to passing the buck. The tendency when we think outside the box is to think of how we can use others to get things accomplished. She recommends we start thinking inside the box by asking “what can I do” instead of “what can others do”.
    4. Stop trying to please everyone. You will have resistant employees, it’s inevitable. Stop focusing on pleasing them. Organizations change because it’s necessary to continue to thrive and grow. It’s best for the organization as a whole, so stop wasting your energy on that small minority who refuse to get on board, who protest change. They are stalling your organization’s growth and the majority of employees who are supportive of the change are suffering as a result, so is the organization. Those employees have a choice, and Cy put it so eloquently:

    “Stay in joy or go in peace, but you can’t stay in hate.”

     

    For more on change management, you may also enjoy our posts Change Management: Celebrating the Small Victories and 4 Ways to Help Change Happen When Change is Hard

  • Leadership Reminders From my Night in O’Hare

    Leadership Reminders From my Night in O’Hare

    Things don’t always go as planned. 

    After a great week at SHRM19 in Las Vegas, I planned to be back in the comforts of my own home Wednesday night. But thanks to bad weather and a missed connection, I spent the night at Chicago O’Hare Airport. I was exhausted and just wanted to get home. But what could have been a miserable experience turned out to be an adventure. And as I sit here watching the sun come up over Chicago, waiting for my flight home, I’m reminded of a few leadership lessons. 

    1. Be flexible. Things won’t always go as planned. Be willing, and able, to adjust to unexpected changes. Be willing to consider plan B or plan C, and sometimes Plan D. And don’t be surprised if someone else comes up with a better solution. As I stood in line last night waiting to try to get a flight home, I considered my options, which included flying into Nashville and driving almost two hours back to Huntsville. When I finally got up to the ticket counter, the customer service rep came up with a better solution for me, she switched my airline from United to American and was able to get me on an early morning flight and have me home by 10 AM when every United flight wouldn’t have gotten me home until late afternoon. 
    2. Be patient. Try to look at the situation from other perspectives and understand what those involved are trying to accomplish or are enduring. Due to the bad weather, the line at customer service took me almost two hours to get through. I was tired and not looking forward to a night in the airport, but I knew that it was due to circumstances outside of anyone’s control and the Delta customer service reps were working diligently to help fliers find a way to their destinations. Even though I stood in line for so long, the experience was a positive one and I didn’t mind the long wait. (the free fruit snacks and bottled water helped!)
    3. Seek out a mentor or partner. Find someone who has been there and done that who you can learn from, or at the least, someone who is in the same boat that you can walk the walk with. Last night while grounded in Milwaukee I met Allison on the plane. She too attended the SHRM Conference and was trying to get back to Huntsville. We decided to stick together through this adventure and that made it much more bearable, and even fun. And since neither of us has ever found ourselves missing our flight and stuck overnight in an airport, it was nice to have someone else to figure it out with. 
    4. Don’t be afraid to ask for help. Sometimes you just can’t figure it all out on your own. Others may have information or solutions that you need, you just need to ask. After getting our return flight figured out, walking for what felt like forever to our new terminal gate, and trying to figure out how we were going to get any sleep, we met a very nice housekeeper and asked her how we could get a blanket. She led us to the jackpot! Thanks to her help we found two bags full of fresh blankets and were able to use them to make ourselves “beds” on the floor so that we could get at least a little bit of sleep during the night. 

    You don’t have to be in a leadership role to practice leadership. How do you practice leadership at work or outside of work? 

  • Five Quick Teambuilding Activities

    Five Quick Teambuilding Activities

    I once put on about 30 articles of clothing in a matter of a couple of minutes. My team won. I once had to build a wooden tower while blindfolded and being instructed by others what to do. My team lost. I did these things (and many more) at a previous employer where we had morning meetings and every Friday was Fun Friday. We’d forego the regular meeting content of financials, project updates, and announcements every Friday morning to have fifteen minutes of fun. It was the weekly meeting everyone looked forward to and usually, we all walked away laughing and smiling. And we’d talk about it for days, weeks, and sometimes I still see former co-workers posting old videos and pictures from some of the activities we did.

    Managers took turns planning the activities, which ranged from trivia to challenges to charades to getting pies in the face. Some were team activities, some were every man for themselves. And there was always a prize for the winners.

    Here are five quick teambuilding activities to get your teams engaged, energized, and best of all, working together and having fun.

    1. Team Trivia. Pick a theme and come up with 10-15 questions. Divide up into groups and each group is given a copy of the questions to write down their answers. Then switch papers with another team and reveal the right answers. The team with the most right wins a prize.
    2. Scavenger hunt. Give each team 5-10 clues for items that are found around the office or facility and send them on their way. The first team to bring back all the items wins a prize.
    3. Charades. Break into teams and take turns having one player from each team draw a clue and act it out. Their team has 30 seconds to guess what the clue is. If they fail, the other team has a chance to steal the point. Some clue ideas- movie titles, song titles, or animals.
    4. Pass the package.  Wrap a gift or just a box in layers of wrapping paper. Grab a die and two oven mitts. Pick a number 1-6. The first player has to put on the oven mitts and try to unwrap the gift while the next person in line rolls the die. When they roll the designated number, it becomes their turn and the next player begins to roll the die. To see this fun in action, here’s a video.
    5. Get to know you. This works well with slightly larger groups. Prior to the meeting ask everyone attending to submit one unusual fact about themselves. For example, I have traveled to 45 out of the 50 states. Compile all of these statements and give a copy to each employee in the meeting and give them 10-15 minutes to mingle and find out who the statement belongs to. The person with the most at the end wins a prize. This is a great way for employees to get to know each other better and is a great conversation starter. Employees may also find that they have some things in common.

    These activities don’t take a lot of time, but they can have a big impact on your employees, their team dynamics, and just overall morale.

    How do you encourage teambuilding at work? What other quick teambuilding activities can you come up with?

  • Sometimes You Will Fail, And That’s Okay

    Sometimes You Will Fail, And That’s Okay

    “If at first you don’t succeed, try, try, try again.”

    During a recent conversation with a client, he raised a concern about his leadership team expecting him to make every decision. The previous leadership set that expectation, but he wants to empower his team to make decisions they are capable of making.

    The conversation reminded me of when my children were younger and learning new skills, like riding a bike. My youngest is very headstrong and lacks patience (he doesn’t take after his mother at all). If he doesn’t get it right the first time, he’s quick to say “I can’t.”  

    One of the best mentors I ever had, who just happened to be my first boss in HR, empowered me while still providing me with the guidance I needed as a new HR practitioner. Whenever I brought him an issue, he would ask me what I thought I should do. Eventually, I learned to come prepared with those possible solutions. Together we would weigh the options and determine which route to take. The longer I worked for him, the easier it became for me to determine what I needed to do to resolve a situation. And in the end, I learned to make those decisions on my own and simply inform him of how I intended to handle it.

    I have a client that is experiencing a high level of change in their organization and as part of that change, I helped them lead an interactive workshop with their staff. When reviewing the potential outcomes of the feedback received during the workshop, I was very transparent with the group. Their feedback will guide change and the success of that change will be measured. Some of those measurements will show that the change is effective, but some is going to show that the change isn’t effective. And that’s okay. It means that we go back to the table. We reevaluate the plan and determine if we need to adjust to get the desired results. Or we decide that the plan isn’t the right one and we start over from scratch. Many of them looked a little shocked that I admitted that we will fail.

    Failure isn’t a bad thing, as long as you learn from it and grow from it. Just as parents tell their children, as long as you learn from your mistakes, you are still succeeding.  

    By mentoring employees to assess issues and come up with possible solutions, eventually, they will take that initiative without even having to think about it. And they will grow more confident in their ability to formulate those solutions and implement them. And in turn, they will empower their own employees and the impact will continue to trickle down the ladder and the entire team will become more effective, more cohesive, and more productive.

    Do you empower your employees to create solutions? Do you support them when they fail?