Contents
Q-5.1 Is it acceptable to talk business with co-workers in the elevator?
Q-5.2 What is the correct way to answer a business phone?
Q-5.3 What are the IRS 20 Questions? (U.S.)
Q-5.4 Is it appropriate to visit a co-worker in the hospital?
Q-5.5 Is all discrimination in employment illegal?
Q-5.6 I just noticed that 10% of my paycheck is taken out as union dues. I don't want to be a union member. Can I have a refund?
Q-5.7 How does deferred compensation (retirement benefits, profit sharing, etc.) work?
Q-5.8 How do insurance coverage benefits work?
Q-5.9 How does paid time off work?
Q-5.10 How do stock options work?
Q-5.11 What other benefits are commonly offered to full-timers?
Q-5.1 Is it acceptable to talk business with co-workers in the elevator?
Return to Top of Page / Return to Wisdom FAQ Index No, for two reasons. First, the co-workers are a captive audience and have no choice but to listen to you. Second, visitors may be listening in.Q-5.2 What is the correct way to answer a business phone?
Return to Top of Page / Return to Wisdom FAQ Index When answering your own line, state your name: Jane Doe speaking. When answering someone else's line, state their name: John Roe's office, how can I help you? When answering a general line, state the department (application development, how can I help you?) or the organization (Hacks 'R' Us, how can I help you?).Q-5.3 What are the (U.S.) IRS 20 Questions?
Return to Top of Page / Return to Wisdom FAQ Index The 20 Questions are a paraphrased version of what the IRS uses to determine if you are an independent contractor or an employee. The 20 questions exist also to protect individuals from being taken advantage of by large companies. Without them, the protection guaranteed to employees such as unemployment insurance, workmen's compensation, social security, paid overtime, non-discrimination, and right to organize unions would be worthless. It is not just the IRS that is concerned about these issues. A bigger concern for the client is legal liability. If you have someone on site for a long period, and that person is seriously hurt, they are VERY LIKELY to file for workmen's compensation, and claim that they are a common law employee. If their contract ends after a long period, and they can't find work, and can't pay the mortgage, they are likely to file for unemployment insurance. When retirement time comes around, they may try to force past clients to pay social security. Text of the Twenty Questions [From IRS form SS-8 (which you can file with the IRS and let them determine your status).]- Is the person providing services required to comply with instructions about when, where, and how the work is to be done?
- Is the person provided training to enable him to perform a job in a particular method or manner?
- Are the services provided integrated into the business' operation?
- Must the services be rendered personally?
- Does the business hire, supervise, or pay assistants to help the person performing services under contract?
- Is the relationship between the individual and the person that performs services for a continuing relationship?
- Who sets the hours of work?
- Is the worker required to devote his full time to the person he performs services for?
- Is the work performed at the place of the business of the potential employer?
- Who directs the order or sequence in which the work must be done?
- Are regular oral or written reports required?
- What is the method of payment-hour, week, commission, or by the job?
- Are business and/or traveling expenses reimbursed?
- Who furnishes tools and materials used in providing services?
- Does the person providing services have a significant investment in facilities used to perform services?
- Can the person providing services realize both a profit or a loss?
- Can the person providing services work for a number of firms at the same time?
- Does the person make his services available to the general public?
- Is the person providing services subject to dismissal for reason other than nonperformance of contract specifications?
- Can the person providing services terminate his relationship without incurring a liability for failure to complete a job?
Q-5.4 Is it appropriate to visit a co-worker in the hospital?
Return to Top of Page / Return to Wisdom FAQ Index No. A professional will resent being seen lying in bed, incapacitated, and wearing pajamas. Instead, send flowers, books, cards, notes, and call on the phone as soon as the person is well enough to receive calls. Don't say either We're doing fine without you, or The office is falling apart without you.Q-5.5 Is all discrimination in employment illegal?
Return to Top of Page / Return to Wisdom FAQ Index While discrimination in employment is a complicated and a controversial topic, one can definitely say than not all discrimination is illegal. For example, an employer has the right to discriminate against candidates with little education -- unless this leads effectively to discrimination on other, illegal, criteria. A city can require its employees to live in the city and refuse to hire anyone from the suburbs. Certain criteria for discrimination have been outlawed in the last few decades in most countries. For example, it's usually illegal to refuse to hire or promote someone because of the color of their skin or their sex (but there are exceptions to that, such as the 'affirmative action' program in the U.S.). Other examples of legal discrimination might be a family refusing to hire a man as a babysitter (insisting on a woman), or a theater refusing to hire a black actor to play a white character. Many jurisdictions also have outlawed discrimination based on marital status (can't refuse to hire someone because s/he is/isn't married), religion (with some exceptions: a synagogue can refuse to hire a Christian to work as a rabbi), disability (if it doesn't interfere with the job duties), and sexual preferences. A company that tried to practice no discrimination in employment would probably have to hire all applicants indiscriminately on first-come, first-hire basis (and even then it would discriminate against the late comers). It probably wouldn't hire the best people. On the other hand, a company that practices 'illegal discrimination' is probably violating certain laws.Q-5.6 I just noticed that 10% of my paycheck is taken out as union dues. I don't want to be a union member. Can I have a refund?
Return to Top of Page / Return to Wisdom FAQ Index This section is under construction. Contributions welcome.Q-5.7 How does deferred compensation (retirement benefits, profit sharing, etc.) work?
Return to Top of Page / Return to Wisdom FAQ Index In various deferred compensation plans, the employer defers part of the compensation until later. Sometimes no income tax is paid on the deferred compensation until it's actually paid. Sometimes the employee can make additional voluntary contributions funds to the plan and not pay income tax on them. Sometimes the employer makes a matching contribution. In the US, retirement plans can be qualified (confirming to S.401 of the Internal Revenue Code, and qualifying for tax benefits) or nonqualified. In qualified plans, neither the contributions nor the interest from the investments in the plan are taxed until actually received by the employee. Nonqualified plans can't be unconditionally funded by placing the deferred payment in escrow. The employee has the company's promise of payment, but the compensation is not secured. If the company goes bankrupt, it may be lost. Under nonqualified plans, some companies require their employees that in order to receive their pensions they must not compete and must make themselves available for consultations after retirement. Read the fine print. Unlike a pension plan, a profit sharing plan has no commitment by the employer to contribute a fixed amount of money. Instead, the contributions are typically a portion of the employer's profit in a given year. In bad years, contributions may be reduced or skipped altogether. Wording like UP TO 15% of profits means that the management may choose to contribute a much smaller percentage in a good year. Pension plans can only be used to save for retirement or disability. Profit-sharing plans can sometimes be used after as little as two years for house mortgage financing, college tuition, emergency loans, etc. If you leave the job, you may be able to withdraw your vested contributions (and pay income taxes) or do a rollover into your new employer's plan or your own Individual Retirement Account (IRA) within 60 days. Some plans (even qualified) have rigorous vesting provisions. For example, if you become 50% vested after 5 years of employment, with 10% increments each year, this means that if your employment is terminated within the first five years, you forfeit all your contributions, and if you leave in the seventh year, you forfeit 30% of your contributions. Read the fine print. Some companies also allow an employee to set aside a specific amount for child care, dental and medical expenses not covered by the insurance, etc. The employee does not pay income tax on this portion of the compensation. During the year, this fund is used to pay for these expenses. At the end of the year any unused funds are forfeited (to allow for the tax deduction).Q-5.8 How do insurance coverage benefits work?
Return to Top of Page / Return to Wisdom FAQ Index Employees as a group generally get lower rates on various types of insurance than they would if they purchased it individually; and employers often pay some or all of the insurance premiums. In many countries, medical insurance is provided by the state. In the US, medical coverage became very generous during the periods when the government capped wages, and employers tried to attract better workers by offering more benefits. Currently, medical benefits are shrinking. Most employers offer a choice of several medical insurance plans; depending on which one you choose, and whether you want coverage only for yourself or for your family as well, a certain amount is deducted from your paycheck. Things to look out for in a medical package:- Some plans don't cover pre-existing conditions. E.g., if you're pregnant, or if you already have an ulcer when you start working, none of the related medical expenses may be covered.
- Different components of coverage may begin on different dates: on the first day of work, after 1 month, 6 months, 1 year, etc.
- Health maintenance organizations provide inferior medical care at a lower cost to the employer.
- Many plans have deductibles (an amount you pay before you start being reimbursed; often a few thousand dollars per year) and co-pays (percentage of the expenses over the deductible that you pay; typically 20% to 30%).