TVN’S FRONT OFFICE BY MARY COLLINS

Collins | Redesigning The Workforce, Post-Pandemic

In March, when state shutdowns began, companies had only days to transition to work-from-home. No one could predict how long such arrangements might last. Now, it seems that some employees will be returning to offices soon, while others will work from home through the end of the year or indefinitely. If they haven’t done so already, now is the time for companies to evaluate the potential issues with these arrangements.

The past few months have given media businesses a crash course in managing a remote workforce. While news and other media operations have been deemed essential services, most companies opted for the cautious approach, asking the majority of employees to work from home. Perhaps surprisingly, business continued almost as usual.

This experience, particularly when coupled with dramatic dips in projected revenue, may have companies reevaluating staffing composition with an eye to cutting expenses. However, the decisions may not be as straightforward as they may seem initially. There are significant legal considerations before finalizing any organization or reorganization that includes employing independent contractors, some work-from-home employees, or employees paid by a third-party staffing agency.

In the May/June 2020 issue of MFM’s member magazine, The Financial Manager, Lowenstein Sandler LLP legal experts Amy Komoroski Wiwi and Lauren M. Hollender outline some of the legal considerations for non-traditional employment arrangements. These include both state and federal regulations.

Independent Contractors

Classifying employees as independent contractors includes some compelling potential savings for companies. Workers who fall into this category are responsible for calculating and paying their own payroll taxes. Additionally, they are not entitled to overtime pay or other employee benefits.

Those classified as independent contractors are not included in workplace protections such as safety and antidiscrimination rules. This classification negatively affects state and local government budgets. The authors say that these groups “claim to lose millions of dollars in foregone tax and benefit contributions.”

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The result is an increase in independent contractor audits. Companies that fail such tests face significant additional costs and penalties.

Making all of this more complicated is a patchwork of laws that can apply in these cases. Some are local, some are state-specific and others are enforced at the federal level.

Wiwi and Hollender specifically call out strict regulations in California and New Jersey. Both states have codified tests to determine whether the person performing work for a company should be classified as an independent contractor. Further, the situation in these, and other, states continues to evolve.

All employers who use or are considering adding independent contractors would do well to contact legal counsel that can help them identify the risks associated with their employment arrangements.

Remote Workers

In March, when state shutdowns began, companies had only days to transition to work-from-home. No one could predict how long such arrangements might last. Now, it seems that some employees will be returning to offices soon, while others will work from home through the end of the year or indefinitely. If they haven’t done so already, now is the time for companies to evaluate the potential issues with these arrangements.

The first consideration for those who are working remotely should be privacy and security of confidential company documents and data. Employees who use an unsecured wireless home network could be exposing this information to third parties. Internal or external IT resources can assess the situation and suggest solutions.

Next, it is important to remember that remote employees are “entitled to be treated the same when it comes to the terms and conditions of employment.” This includes offering the same training, mentoring and advancement opportunities as those being made available to onsite staff. Keep in mind that such training includes legally mandated training, such as sexual harassment training, and the remote employees must also be exposed to required job notices.

Both federal and state regulations govern remote workers’ compensation. Wiwi and Hollender note that “the Federal Fair Labor Standards Act (FLSA) requires employers to pay employees for all hours worked and to keep accurate records of time spent on the job.” Clearly, it’s not easy to do this when the employee is working remotely. So, “the act requires employers to count hours worked if ‘the employer knows or has reason to believe that the work is being performed.’ ”

Wiwi and Hollender advise against the temptation to reclassify remote workers as independent contractors. They remind readers that not being in immediate control of the employee’s daily activities is not sufficient reason for the classification.

Finally, it is important to consider that each state has its own regulations for non-compete clauses in employment contracts. Employers will want to keep this in mind when formalizing agreements with remote employees. Again, legal counsel is the best source of advice in this area.

Staffing Agencies

Companies, including media businesses, turn to staffing agencies for certain short-term and other employment needs. While these workers are actually employees of the agency that placed them with the company, the company using them may be determined to be a “joint employer” in certain situations.

The determining factor seems to be whether the company for which the employee is providing services “exercises sufficient control over the terms and conditions of the temporary worker’s employment.” In this case, the company will assume additional obligations such as those for wage-and-hour, harassment and discrimination issues.

As with the situation for independent contractors, the tests for determining “joint-employer” liability vary by jurisdiction. The authors point out that the federal FLSA standard for determining the relationship was revised earlier this year. It now includes a “four-factor balancing test” to determine where employee control lies by asking whether the company using the employee:

  • Hires or fires the employee.
  • Substantially supervises the employee, controls the employee’s work schedule, or conditions of employment.
  • Determines the employee’s rate and method of payment.
  • Maintains the employment records.

Additionally, companies that retain workers through a staffing agency may be subject to mandates under the Affordable Care Act. Whether this is the case, “depends on which entity is deemed the employee’s ‘common-law employer,’ a determination that involves a complex factual analysis as prescribed by Internal Revenue Service guidance.” There are other issues to consider, which the authors cover in a sidebar piece, “The Agency Agreement.”

Our Lowenstein Sandler LLP experts provide additional detail, including an outline of the current independent contractor regulations for California and New Jersey, in their article, “Redesigning the Workforce.” A digital version of the May/June 2020 issue of TFM, which includes this article, is currently available to read on the MFM website here.

Media Finance Focus 2020 is Going Virtual Workforce issues are among the topics to be covered when MFM kicks off the virtual version of its 60th annual conference, Media Finance Focus 2020, on the 16th of this month. We will be showcasing 44 one-hour sessions along with 12 topic-specific roundtables, all of which will offer CPE credits to qualifying attendees. The complete agenda along with registration information for the 10-week event is available on our conference website here.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at [email protected] and via the association’s LinkedIn, Facebook, Instagram, and Twitter accounts.


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2018bstyrevr says:

June 15, 2020 at 7:28 am

start with giving IQ tests to newspeople..Then cut those departments drastically


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