MSECMOUNTAIN STATES EMPLOYERS

COUNCILExiting Employee Issues

S. Lorrie Ray, Esq.

MSECIssues to Consider

Independent Contractor Status After Discharge

Layoff Considerations Unemployment Waivers and Releases Final Pay COBRA Employment References

MSEC

Independent Contractor Status After Discharge

Two agencies regulate Independent Contractors– IRS– State Unemployment Division

Fines and Taxes a reality if employees improperly classified. Red Flags:– Employee becomes an independent contractor– Work remains the same– Employer controls the work– Worker paid hourly– Worker only does jobs for one employer

MSECLayoff Considerations

Strategic View Alternatives Planning Selection Legal review – WARN? Administration Message and Behavior Managing Survivors

MSECUnemployment

Only 1 test:– Was the employee at fault– Fault of employer immaterial

Considerations:– Employee’s likely success– Employee’s likely suit

Consider helping employee to file:– If short time employee, sooner is better– Providing employee with income can ease

tension

MSECWaivers and Release

Advisability Necessary Elements

– Consideration– Release– Advice of Counsel

Tax Payments: wise to deduct for income tax

MSECWaivers and Release

Under 40– Give 7 days to reconsider to avoid coercion

Over 40– Give 21 days to consider

– Give 7 days to reconsider Group Release with persons in group over 40

– Give 45 days to consider

– Give 7 days to reconsider

MSECFinal Pay

In Colorado:– If employee quits – next payday– If employer terminates – immediately – Cannot deduct amounts if no written

employee permission, unless theft, then must prevail at criminal trial.

In Other States: laws are similar Cannot deduct below minimum wage

MSECCOBRA

Don’t overlook ARRA through 2009, maybe 2010– Employer pays 65% and deducts amount from

payroll taxes– Congress may extend this benefit – legislation is

being considered Qualified Beneficiaries Covered Coverage – 18, 29 or 36 months Election – 60 days Payment – 45 days

MSECEmployment References

Consider neutral or positive references References must be truthful Designate reference provider If employee engaged in violent or

unlawful behavior – do NOT provide positive reference; consider strongly providing documented job-related information to potential employers requesting it