Dec
17
2018

Working interviews are always risky, especially if the proper steps are not being followed. Unfortunately, in the eyes of the IRS and Department of Labor (DOL), a candidate who is under your control and works in your office using your equipment on your patients, is still an employee, no matter how short the working interview is. As such, an employer could still be liable for malpractice, worker’s comp, and HIPPA violations.

In addition, if you do not pay an employee for time worked, you are seen as attempting to avoid your obligations as an employer. The employer obligations I'm referring to, of course, including withholding taxes, paying matching taxes, wage notice requirements, I-9s, and more.

Employees may not sign away their rights, even if they wish to. Therefore, any "understanding" or paperwork you put together is void and will most likely end up being used as evidence against you in a complaint.

Similarly, misclassifying the candidate as an independent contractor also violates IRS and DOL rules. If the person performs duties usually done in your office by employees, and does so under your control, using your equipment, in your office, and at the hours you request, that person is an employee. If you call the person a contractor to avoid payroll taxes or other employment benefits, you have misclassified the person.

It's very important to realize how unforgiving the IRS and DOL are when it comes to misclassification enforcement. In fact, they have incentivized enforcement so much that several states have entered into an agreement with the federal government, called the DOL Misclassification Initiative.The states that do the best job of enforcement will receive significantly more tax dollars as a reward. Therefore, your state is likely actively looking for misclassification violations in your practice.

So, what is the difference between a temp agency’s working interview (legal) and yours (illegal)? To put it simply, the candidate is employed by the temp agency. The temp agency fulfills all of the employer obligations because it hires the candidates and temps them out to you. The IRS and DOL are satisfied because the new hire paperwork is filled out and all applicable taxes are withheld, matched and paid.

However, when you do a working interview yourself (sans a temp agency), none of the employer obligations are fulfilled, thereby violating a myriad of labor and tax laws. If caught, heavy penalties from the IRS or DOL can be levied against you.

If that wasn't enough to give you pause, because the candidate is not a true employee, you are also missing key protections for you and your business. This includes worker's compensation coverage for the candidate in the event he or she is injured in your office, and proper background checks to ensure you're not giving a possible felon access to your patients' confidential information. Moreover, if you hold a working interview and then decide against hiring the candidate, he or she will have the upper hand if the person chooses to file unemployment or a complaint against you.

Therefore, as you might imagine, working interviews are dangerous and not worth the risk.

Working Interview Guidelines

Once someone starts working for you, even if only for an hour, you should do all of the following to stay legal and compliant:

  • Have them sign an offer letter outlining the working interview stipulations. This should include: wages, schedule, documents they need to bring—most importantly I-9 eligibility, etc.  
  • Pay no less than your regions minimum wage.
  • Ensure the working interview is no more than 6 hours. IF an interview extends past 6 hours, the candidate may need to receive a meal break, and possibly overtime for all hours in excess of 8 hours, if you are in a state that requires these stipulations.  If you’d like the candidate to come in for a longer period of time, you can make it a contract position and clearly establish the dates of the contract (i.e. We would like to have you work in our office from August 1st through August 8th, from 8:00 AM - 5:00 PM, Monday-Friday”
  • Withhold payroll taxes. Even if working for the Practice for one hour, the correct taxes need to be deducted.
  • Document any licenses or certifications that are needed for the work they are performing in your office, along with the I-9 and W-4 documents.
  • Verify eligibility to work in the US.
  • Notify your workers’ compensation carrier and ensure the employee is covered.
  • Ensure the employee has signed a Non-disclosure/HIPAA policy.

Working Interview Alternatives

·         Use behavioral interviews. Don’t ask simple yes-no questions or questions that may elicit a rehearsed answer. Ask for an example of a relevant work or life situation your candidate struggled with and how he or she handled it, and you’ll get a truer response.

·         Use a skills test. Ask the applicant to describe how he or she would perform a critical task. A well-thought-out skills test can help you learn almost as much as a working interview—without the risk.

·         Always do a background check. Make it clear that any offer of employment is contingent on passing.

These topics are high risk, as they fall under very strict guidelines according to the IRS and Department of Labor (DOL). It is important that you contact an HR Specialist or labor law attorney to ensure full compliance.

If you feel your practice may be at risk, or you may need some assistance with maintaining compliance, contact HR for Health, calling 877.779.4747 x option 1, or email compliance@hrforhealth.com, today!

 

 

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