Fifty-eight percent of Canadian hiring managers said they plan to add new employees in the second half of the year, according to a
survey by CareerBuilder.
Information technology ranked as the top area for recruitment with 30% of hiring managers saying they are adding jobs in that area. It was followed by customer service with 26% of managers hiring in this area.
"While companies plan to hire more workers in the second half of the year, they report they will do so gradually," said Brent Rasmussen, president of CareerBuilder North America. "In addition, they will continue to focus on revenue generating positions and maintaining their current staff levels in an effort to facilitate growth and sustain their businesses through the rest of 2010."
The survey included interviews with 239 Canadian hiring managers conducted between May 22 and June 3.
Source: SIA
by Maria Ricci
There are quite a few steps that should be considered before providing a 
contractor with an engagement contract and sealing the deal. Whether you are hiring for a couple of hours or several months the impact of a poorly executed engagement can result in misfortune later!
Get Ready, Set and Go!:
- A Statement of Work (SOW) is provided to the engagement officer (hiring manager) with the following details: name of the contractor, contact information, rate, start date and end date of the engagement.
- Have both an Independent Contractor Agreement and an Employment Agreement available and insure that both have been carefully established and approved by your legal counsel based on the classification the worker is electing to engage with.
- Communicate with the Contractor. Review the statement of work and establish whether they will be processed as an Independent Contractor or Employee. The on boarding package you will provide to the contractor and the checklist you need to use is different depending on the workers classification status.
Below are examples of items you need to include on a checklist. Items may vary based on federal, state/provincial tax and labor laws.
| EMPLOYEE (T4/W2) CHECKLIST | INDEPENDENT CONTRACTOR CHECKLIST
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| |
- Employment Agreement w/ resume
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- Federal, State/Provincial Tax Forms
| - Articles of Incorporation
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- Corporate Employee Handbook
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- Copy of Policies and Procedures
| - Copy of Policies and Procedures
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- Payroll Forms/Direct Deposit
| |
- Background Check Authorization
| - Proof of Background Check Completion
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- Expense Reimbursement Forms
| - Expense Reimbursement Forms
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- Time Sheet/Entry Instructions
| |
ETC...
| ETC...
|
As you can see there are quite a few things to consider. Building the process, actualizing the agreements, validation, distribution and collection of the forms, ongoing compliance, etc… You also need to factor in the cost and time you will need to invest before you even get to the, "Get Ready, Set and Go stage!"
Once you see what's behind compliance, outsourcing may be a great option. :)
Let PSC know how we can help...
As we have been reporting over the past month on the heightened interest in the Tax Authorities' pursuit of misclassified workers, here is a recent ruling from Massachusetts last week on why the IRS feels that there is an opportunity to generate rev
enue in this arena.
BOSTON, MA-Two former owners of a temporary employment agency in Stoughton were charged today with paying more than $24 million dollars in unreported cash to employees of their temporary employment agency as part of a conspiracy to avoid paying more than $7 million dollars in taxes, and hundreds of thousands dollars in workers compensation insurance premiums.
(Media-Newswire.com) - BOSTON, MA—Two former owners of a temporary employment agency in Stoughton were charged today with paying more than $24 million dollars in unreported cash to employees of their temporary employment agency as part of a conspiracy to avoid paying more than $7 million dollars in taxes, and hundreds of thousands dollars in workers compensation insurance premiums.
United States Attorney Carmen M. Ortiz; Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Division – Boston Field Office; Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation – Boston Field Office; and Anthony DiPaolo, Chief of Investigations for the Insurance Fraud Bureau of Massachusetts,
announced today that MICHAEL POWERS, age 45, of Wesport, and JOHN MAHAN, age 46, of Stoughton, were charged with one count of conspiracy to defraud the Internal Revenue Service ( IRS ) and their workers compensation insurers, one count of mail fraud, and two counts of false tax returns, all arising out of their operation of a temporary employment agency.According to the Indictment, between 2000 and 2004, POWERS and MAHAN owned and operated Commonwealth Temporary Services, Inc. It is alleged that in order to avoid paying employment taxes, such as Social Security and Medicare, and to fraudulently reduce the businesses’ insurance premiums, POWERS and MAHAN arranged to pay more than $24 million of their payroll in cash, under the table.
Commonwealth Temporary Services, Inc. supplied hundreds of temporary laborers to businesses throughout Eastern Massachusetts. The amount an employer pays in payroll taxes ( FICA ) and workers compensation insurance premiums is largely dependent on the size of their payroll. POWERS and MAHAN allegedly lied to both the IRS and their insurers about the size of their payroll, and paid the majority of their employees in cash to make their fraud more difficult to detect.
If convicted, POWERS and MAHAN each face a maximum of five years in prison, three years of supervised release, and a $250,000 fine on the conspiracy charge; 20 years in prison, three years of supervised release, and a $250,000 fine on the mail fraud charge; and three years in prison, one year of supervised release, and a $250,000 fine on the tax fraud charges.This case was investigated by the Internal Revenue Service, Criminal Investigation – Boston Field Office and the Federal Bureau of Investigation – Boston Field Office, with assistance from the Insurance Fraud Bureau of Massachusetts. It is being prosecuted by Assistant U.S. Attorney Sarah E. Walters of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
We have a guest writer jumping on the PSC Blog Train today. Maria Ricci is the General Manager for PSC in Canada and has many years of industry experience. Recently she has come upon a reoccuring risk to companies who use contract labor and wanted to share her experiences with us. I'm sure you will find it insightful.
PROTECTING YOUR INTELLECTUAL PROPERTY
by Maria Ricci, GM, PSC
Many corporations today find themselves associated with staffing firms whose multifaceted service offerings include Traditional Staffing, Specialty Staffing, Outsourcing Services, MSP Services, VMS Technology, RPO services, PEO services and what not. A one stop shop philosophy remains the most commonly used value proposition and marketing tool for the majority. Very interesting at the outset and may, at times, seem beneficial. Upon further inspection, risks may present themselves for the corporation regarding the protection of their intellectual property.
A contractor’s professional experience is gained by delivering their services to various and continuous mandates that allow them to put their specialty to work. Contractors will look to staffing companies for assistance in the quest to find these opportunities. Staffing companies make this their priority. A contractor is most valuable to them for placement when they have developed this professional experience particularly within the same industry. This is where the risk presents itself. The Staffing Company will continue to place the contractor where they will continue to deliver the utmost professional and beneficial services which will most often be within a competitive environment to the Corporation. Often then, the contractor finds himself being able to put his experience to practice and sharing his knowledge within this new opportunity and environment. The Corporation’s request for these experienced contractors is high and industry specialized contractors are few. This will prompt the corporation to bring back those same contractors through the years. A corporation’s Protected Intellectual Property has transformed to Shared Intellectual Property.
PSC’s service offering is singularly that of a Professional Employer Organization. This is our key differentiator in comparison to a staffing company. We do not participate in any recruiting activities. We provide 3rd party independent contractor engagement and billing services to those corporations who are manning their Independent Contractor population on their own, bringing known independent contractors back from previous projects or pay rolling independent contractors through staffing companies for long periods of time. PSC’s agreements, contrary to those of staffing companies, allow for and provide all the needed protection for the corporation through our Non- Solicit and Non-Competition, Confidentiality and Non-Disclosure, Intellectual Property clauses which or only amongst some of the clauses within our agreement.
Our value proposition goes beyond the one stop shop.
Please share your thoughts…….
As we have been discussing over the past several weeks has been the US and Canadian Governments beginning to look at new revenue opportunities by pursuing
companies who mis-classify workers thus "avoiding" payroll taxes. Malicious intent or not will not deter the authorities from pursing these opportunities at the business level.
Now if that wasn't enough to make you cringe, the individual states are jumping into the fray. Canadian Provincial pursuits cannot be far behind.
The excerpt below is from a release from the state of Indiana:
INDIANAPOLIS — A bill that Republicans hope will roll back business tax increases and Democrats want to encourage job creation has become the Indiana General Assembly's stingy first domino that refuses to fall.
If an agreement is reached soon, another handful of bills is ready to sail through the Democratic-controlled House and Republican-led Senate in its wake. Then, state lawmakers can adjourn for the year and head home.
The House will meet today for the first time since Speaker Patrick Bauer, D-South Bend, surprised members last week by adjourning for six days. The GOP-led Senate, which took only the weekend off, also will meet.
Meanwhile, the important action is happening behind closed doors, where Bauer, his close deputies and Senate leaders are attempting to broker compromises on several issues before Sunday's constitutionally mandated date for adjournment.
Republicans want to delay by one or two years the onset of higher premiums that businesses must pay into the state's unemployment insurance fund. To get that delay, they have offered Democrats 13 separate items the party has sought, such as business tax credits.
But Democrats are holding out for one more item. They want to sharply stiffen the penalties on businesses that mis-classify workers as independent contractors to dodge payroll taxes.
Republicans on Tuesday were resisting. Sen. Brandt Hershman, a Lafayette Republican who is one of the four joint House-Senate conference committee members involved in negotiations, who said the added regulation would have a "chilling effect" on businesses.
Hershman pitched a compromise that would have a state agency study the issue, draft guidelines for enforcement and deliver its results to lawmakers by November.
"I think it's a very reasonable procedure and very common to try and deal with a complex issue," he said.
But that didn't satisfy House Democrats.
"As legislators, that's our role. We are the ones that should define what's to take place," said House Labor and Unemployment Chairman David Niezgodski, a South Bend Democrat who is one of the conferees on Senate Bill 23.
His party wants to enhance enforcement and levy greater penalties against employers found to be inappropriately classifying workers. Doing that, he said, would "throw dollars into the unemployment insurance fund."
Most employee misclassification takes place in the construction industry, said Marc Lotter, a spokesman for the Indiana Department of Workforce Development.
He noted that Indiana has ranked consistently among the nation's leaders in identifying misclassified workers. The state pinpointed 71,000 such workers in a five-year period from 2004 to 2008.
In that time period, the state has taken in $5.1 million in taxes from businesses that were classifying workers wrongly, but paid out $28 million in jobless benefits to workers who were misclassified, Lotter said.
Indiana's unemployment fund is bankrupt and has borrowed $1.7 billion from the federal government to stay afloat.
With jobless rates hovering around 10 percent, it’s not an unusual predicament, and Indiana’s neighbors are borrowing, as well. So far, the federal government has loaned Kentucky $714 million, Illinois $1.8 billion, Ohio $2 billion, and Michigan $3.6 billion.
Unless legislation Indiana lawmakers passed last year is delayed, businesses will begin making payments under the increased tax rates at the end of this month.
The Indiana Department of Workforce Development estimates an extra $350 million would be collected this year under the higher rates.
Businesses face an unemployment benefits-related tax increase of about $50 million statewide next year, regardless of what the General Assembly decides.
The annual federal fees employers pay now – $56 per worker, per year – will increase by $21, to $77 per worker, per year, starting with the payments due in January 2011. The tax hike is the federal government’s mechanism to prod states into paying down their debts.
When states borrowed from the federal government during the recession of the early 1980s, Congress waived that federal increase for states that were making progress toward paying down their debts.
Update taken from Money
Important information for our Canadian Contractors and Clients
Employment insurance premiums are likely to spike for both workers and employers in coming years, adding costs that could result in 200,000 job losses, a group representing small-to-medium sized businesses found.
The increases will be triggered as the government’s E.I. fund falls into deficit following a temporary freeze in premiums during the recession and because of higher unemployment, the Canadian Federation of Independent Business said.
The fund is likely to have a shortfall of $14.7 billion by the end of 2012, triggering an automatic 15-cent increase in premiums every year until a $2 billion surplus is restored in 2016, it said.
That will mean employees’ E.I. premiums will rise from $1.73 per $100 of maximum insurable income to $2.48 in 2015. For companies, contributions will jump from $2.42 on that basis to $3.47, it said.
The increases will probably add about 0.6% to payroll costs, leading to a reduction of 200,000 jobs in the short term and a 1.5% reduction in wages over the longer term, the business group said.
Once the situation improves the CFIB projects the fund will swing to a large surplus because under the Canadian Employment Insurance Financing Board’s rules rates will not come down fast enough.
The CFIB is urging changes to the mechanism to smooth out future swings from deficit to surplus and the resulting impact on business.
Let us know how this will effect your business. And, don't forget to take our Free Risk Reward Evaluation.