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Ratification is the act of giving official sanction or approval to a formal document such as a treaty or constitution. It includes the process of adopting an international treaty by the legislature, a constitution, or another nationally binding document (such as an amendment to a constitution) by the agreement of multiple sub-national entities. The process of ratifying a constitution is most commonly observed in federations such as the United States, confederations or international organisations sui generis such as the European Union.

In unionized workplaces, during negotiations, a contract proposal by an employer, that may be acceptable to the collective bargaining committee, will be brought back for ratification, or a vote by the general membership, before the union can either accept or decline such a contract proposal. A ratified proposal means a “Yes” vote and will form the basis for the new CBA (Collective Bargaining Agreement) for that workplace.

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Independent Contractor or Employee

When you hire workers, they are either independent contractors or employees, and understanding the difference is crucial when it comes to recordkeeping and tax reporting. Making the determination can be a frustrating experience because the answer is not always clear. And because making the correct determination is critical, it is not always safe to rely on an “industry standard” or ” custom” that automatically treats certain kinds of workers as independent contractors. To add to the confusion, the California test and the federal test to determine whether a worker is an employee or an independent contractor differ in some cases.

California Test for EmploymentTo determine if a worker is an independent contractor or an employee, look at the main test and the ten secondary factors.

Main Test
Does the principal (you) have the right to direct and control the manner and means in which the worker carries out the job? The right of direction and control, whether or not exercised, is the most important factor in determining an employment relationship. The right to discharge a worker at will and without cause is strong evidence for the right of direction and control. When it is not clear whether you have the right to direct and control the worker, you must look further into the actual working relationship by weighing the ten secondary factors.

Secondary Factors
Depending on the type of relationship and the services performed, each factor varies in importance. Consider each factor independently, then consider them as a whole:

Is the worker engaged in a distinct trade or occupation? Does the worker make his or her services available to the general public? Does the worker perform work for more than one firm/company at a time? Does the worker hire, supervise, or pay assistants? Does the worker have a substantial investment in equipment and facilities?
Is the work done without supervision? In the geographic area and in the occupation, is the type of work usually done under the direction of a principal without supervision?
Is the work highly skilled and specialized? Is the worker trained by the principal? Does the worker personally perform the services?
Does the principal furnish/provide the tools, equipment, materials, supplies, and place of work? Does the worker perform the services on the principal’s business premises?
Are the services provided on a long-term or repetitive basis?
Method of payment – Is the worker paid based on time worked or on completion of the project?
Are the services an integral part of the principal’s business?
What type of relationship do the parties believe they are creating?
What is the extent of actual control by the principal? Does the worker have the right to terminate the relationship without liability? Does the principal provide instructions on how to do the work? Does the principal establish the work hours or the number of hours to be worked? Does the principal require the work to be done in a particular order or sequence? Does the principal require oral or written reports from the worker?
Is the work performed for the benefit of the principal’s business?
Internal Revenue Service Test for EmploymentTo determine if a worker is an independent contractor or an employee, consider behavioral control, financial control, and relationship of the parties:

Behavioral Control – Generally, anyone who performs services for you is your employee if you have the right to control what will be done and how it will be done.
Financial Control – Who directs or controls the business aspects of work? Independent contractors are in business for themselves, offer their services to the public, and have a significant financial investment in the facilities used in performing services. They can realize a profit or incur a loss.
Relationship of the Parties – How do you and the worker perceive your relationship? A permanent relationship and worker benefits generally indicate an employer-employee relationship. However, the substance of the relationship determines whether your workers are employees, not a job title or written contract.
The IRS also provides information about independent contractor vs. employee on their website.

Statutory Employees and NonemployeesCertain categories of workers, including corporate officers, are considered by law to be statutory employees: other categories are exempt employees and treated like independent contractors. See Employer’s Supplemental Tax Guide (IRS Publication 15A), and California Employer’s Guide (DE 44) for more information.

If you’re confused about whether your bookkeeper, office handyman, or neighbor’s son is an independent contractor or employee, you can ask for help from the IRS or EDD to figure this out. You can complete an Employment Determination Guide (DE 38) to help you make a determination yourself; for a written determination, complete a DE 1870, Determination of Employee Work Status for Purposes of State of California Employment Taxes and Personal Income Tax Withholding, and send it to EDD. You can complete an IRS Form SS-8, Determination of Employee Work Status for Purposes of Federal Employment Tax and Income Tax Withholding, and send it to the IRS for a written determination.

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Disciplining & Terminating Problem Employees: An Employer’s Guide

• As published in the July/August 2001 issue of California Builder Magazine

One of the most important duties performed by managers is the administration of the company’s performance standards and work rules and, when necessary, disciplining or terminating employees. However, if managers are not consistent in their disciplinary and termination practices, they leave the company open to lawsuits from disgruntled workers.

Nearly six out of ten California employers have reported being sued by former employees. Last year, the average jury verdict in employment cases was $870,390. The average jury verdict in wrongful termination cases was $366,237, and in sexual harassment claims, the average was $458,431. Indeed, the average awards in gender, race, disability, age, and pregnancy discrimination cases were all more than $1 million.

What About At-Will Employment?
Under California law, an employment agreement having no specified term may be terminated at the will of either party with or without notice or cause (Labor Code Section 2922). However, there are limits to this doctrine of at-will employment. An employer cannot terminate at-will if there was an implied or expressed contract with an employee not to terminate except for good or reasonable cause. Likewise, an employer cannot terminate an employee in violation of federal or state laws prohibiting discrimination based on race, color, national origin, gender, sexual orientation, age, disability or other protected characteristics. Finally, an employer cannot terminate an employee in violation of public policy, such as discharging an employee who has filed a workers’ compensation claim or an employee who is on a pregnancy disability leave of absence.

Steps in the Corrective Discipline Process
About 5% of employees cause 95% of workplace problems such as poor performance, increased absenteeism, rule infractions and misconduct. Most performance or behavioral problems can be corrected through counseling and employee discipline. Whenever a manager imposes discipline without first making expectations clear, there is a good chance an employee will attribute the manager’s actions to some improper or illegal motivation. Thus, it is important for a manager to follow these key steps when administering corrective discipline:

• Clearly communicate work rules and expected performance standards. Make sure the employee understands these work rules and job requirements, and be sure to review performance and give feedback to the employee on a regular basis.
• Act promptly on unacceptable behavior or poor performance, but avoid making a hasty decision.
• Be sure to investigate before taking any corrective action.
• Get all the facts and allow the employee an opportunity to explain his or her side of the story – avoid prejudging.
• Coach and counsel an employee to accept personal responsibility for his or her behavior. Your corrective action should require immediate and sustained improvement, and should indicate the consequences if the employee’s performance or conduct does not change.
• Implement discipline consistently.
• Document and maintain timely, accurate records in order to justify your action if your decision is ever questioned.

Termination Guidelines
When employees do not correct their performance or behavior within a reasonable time, then terminate those who need to be discharged. While most problems result in corrective discipline, some serious misconduct such as theft or insubordination may merit immediate termination.

When terminating an employee, employers should follow these guidelines:

• Is the reason for the termination clear?
• Are there sufficient facts and documentation to support the termination decision?
• Is the termination consistent with the way other similarly situated employees have been treated?
• Has the employee been given adequate notice of the work rules and the consequences of violating company policies?
• Has an adequate investigation been conducted?
• Has the employee been given a meaningful opportunity to explain, rebut statements, and influence the employer’s decision?
• Has the employer considered the employee’s prior work record?
• Does the decision to terminate the employee comply with company’s policies and practices on performance and corrective discipline?
• Is the company’s stated reason for the termination consistent with prior discussions and documentation of the problem; e.g., prior warnings and performance reviews?
• Did criticism of the employee’s conduct or performance start after the employee raised concerns about an alleged unlawful condition at work?
• Is the employee in a protected class or is involved in a protected activity?
• Has the employee been given an opportunity to appeal the termination decision to a higher management authority?
• Has the company completed the required termination paperwork; e.g., final paycheck in accordance with state law time requirements, change of status notice, COBRA notification, etc.

Since the company chooses the time and place to terminate an employee, no employer should ever be sued for wrongful termination. Applying the company’s performance standards and work rules consistently — and documenting those efforts — are crucial functions to disciplining and terminating employees fairly and legally.