How to Document Issues With An Employee

  • By proadAccountId-371192
  • 23 May, 2017

How to Document Issues With An Employee

 Whether your company has a HR manager or not, it is still up to every business owner and supervisor to keep accurate and consistent documentation of employees. From formal performance evaluations to positive recognition sent in an email, a written record of an employee's actions can be used as evidence to support everything from promotions to employment termination. Though including positive feedback in an employee's file is important, keeping a detailed record of employee violations is crucial and mandatory as it can protect a company from future litigation. Use these five tips to ensure you're documenting employee infractions appropriately:

 

1.)   Write It Down
This may seem like an obvious point, but the most important, and often the most challenging, part of keeping records of employee behavior is actually documenting it in a timely manner. Whether you are dealing with formal documentation for an employee's personnel file or informal documentation that records a manager's discussions and observances, all documentation should be written down (in print or in email) and saved in a secured, private place. This should be done for all employees, not just for employees with performance issues. If you make a record of one employee violating a company policy, you must keep records of all employees who violate that policy. Consistency and fairness are key.

2.)   Be Specific

Writing down every positive/negative behavior or action an employee makes isn't necessary, but if an event occurs that will potentially impact an employee's standing with the company, it is important to write a detailed report of the incidence immediately after it occurs. Your written record and credibility may be questioned if you wait too long to record the events, so timeliness is critical. On each document (formal or informal), include your name and title, the employee's name and title, and the date. If misconduct occurs, state which specific policies the employee violated and how this action harms the company. This provides valuable knowledge to any future supervisors who manage this employee and protects you and the company if the employee takes legal action in the future.

3.)   Be Objective

Documentation may be used by fellow colleagues and third parties (such as lawyers) at any time, so it's important to write all documentation in a professional manner. The point of keeping a record is not to editorialize, but instead to maintain a factual and fair history of events. Avoid using opinions (like calling an employee “lazy”) and interpretations of an employee's behavior (like stating a employee is “in over his head.”) Instead, note when the employee missed a specific deadline or failed to complete a task he/she was assigned. Stick to the facts without inserting your feelings.

4.)   Share Feedback

When it comes to addressing issues with an employee, it is important to be direct and provide feedback as soon as an incident occurs. Include an action item or takeaway from any initial conversations to address how the employee will avoid this behavior moving forward. If there are consistent problems, you may need to put the employee on a performance improvement plan or sit down for a formal evaluation to share detailed documentation that outlines the issues to date. During this meeting, review the infractions, discuss a plan of action to address the errors, create a timeline for improvement and state the consequences if the behavior continues. Ensure another supervisor or HR manager is in these meetings to witness all formal actions taken and ask the employee to sign and date the formal document for acknowledgment. This protects the company if further incidents occur. If the employee wishes to formally respond in written form, allow them to do so and include that in his/her file.

5.)   Follow Up

After a formal evaluation or disciplinary action is taken, it's important to continue the conversation by setting up regular meetings to track the employee's progress. Review any agreements or goals previously discussed and document any changes. If you've made commitments to help the employee strengthen their skills, document when and how you've provided assistance. If additional incidents occur or the employee is still under-performing, discuss additional options with a HR manager or legal representative. If termination is the next step, make sure you understand all legal and contractual requirements. The termination process will be much easier if you've been properly documenting the employee's behavior all along!

Want to learn more about how our trusted Aberdare Business Solutions advisers can set your business up for success? Give us a call at 281.599.3380 or email info@aberdare.us.com .

Gambling Winnings

By proadAccountId-371192 24 Oct, 2017

Victims of hurricanes Harvey, Irma, and Maria get relief from Congress. They can take casualty losses from the storms even if they don’t itemize. They’re able to deduct uninsured personal losses more than a $500 threshold without regard to the 10%-of-AGI offset that generally applies to the deduction.  2016 income can be used to figure the 2017 earned income tax credit. The same applies for the child tax credit. This will prevent a cut in these tax breaks for lower-incomers whose jobs have been suspended or lost due to the hurricanes.

 

The 10% penalty on pre-age 59½ payouts from retirement accounts is waived, if the IRA or retirement plan withdrawals are not greater than $100,000. The income tax due on such distributions can be spread over a three-year period. Amounts recontributed to the plan or IRA during that span will be treated as rollovers, and tax paid on those amounts can be recovered by filing an amended Form 1040.

 

Victims can borrow more from company retirement plans such as 401(k)s, up to the lesser of $100,000 or 100% of the account. Loan repayments can be deferred. The 50%-of-AGI limitation on charitable donations is suspended for any cash donations to qualified charities that aid victims of Harvey, Irma and Maria.

 

Corporations can fully deduct cash donations for hurricane relief. The usual 10% of taxable income limit does not apply to such contributions. There’s a special break for hurricane-affected firms that keep paying workers even though business operations have been suspended in the wake of the storms. They get a 40% tax credit for up to $6,000 of wages paid to each idle employee.

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By proadAccountId-371192 24 Oct, 2017

IRS’s simplified per diems for lodging, meals, and incidentals are going up. In high-cost localities, employees can get up to $284 each day free of tax. In other areas, their daily stipend is capped at $191. Both amounts are up $2. 

 

Businesses using this method have the choice to use these higher rates as of Oct. 1 or wait until Jan. 1, 2018. Firms can opt instead to use these higher rates as of Oct. 1 or wait until Jan. 1, 2018. Firms can opt instead to use federal per diems separately figured for hundreds of cities.

 

No change to the rates for meals and incidentals only, this stayed at $68 per day in high-cost areas and $57 in other locations. Self-employed individuals on travel can use these rates in lieu of keeping receipts, but their lodging expenses must be sustained separately. They cannot use the full $284/$191 per diems. The per diem rate solely for incidentals is also unchanged at $5 a day.

By lemaster 17 Oct, 2017
Harris County residents experienced one of the worst flooding disasters in U.S. history when Hurricane Harvey impacted the region late August 2017. Dozens of lives were lost and thousands of homes were destroyed as catastrophic rainfall devastated Harris and surrounding counties.

As communities continue to reclaim normalcy from Harvey, the Harris County Office of Homeland Security & Emergency Management is working in collaboration with the State of Texas, the Federal Emergency Management Agency (FEMA) & non-profit partners to help with the recovery process.

This Harvey Recovery Resource Guide offers important information about available resources and assistance available to residents affected by the floods.

All individuals impacted by flooding should apply for FEMA assistance at 1-800-621-3362 or online at www.DisasterAssistance.gov by October 26, 2017.

The Office of Ted Heap, Harris County Constable Pct. 5 continues to patrol those neighborhoods that were devastated by flooding. Contract neighborhoods received more coverage than normal as a result of diverting all the department’s resources to a law enforcement function. We hope this guide will help provide answers for those that were impacted by the storm.
By proadAccountId-371192 29 Sep, 2017
Donating leave for Hurricane Harvey.
Under new IRS guidance for leave-based donations, employers can make cash payments to qualifying charities that match vacation, sick, or personal leave forgone by employees. The donations are not income to these employees— but they are not charitable deductions either. The cash payments must be made to organizations qualified under code §170, Charitable, etc., contributions and gifts, before Jan. 1, 2019.

Key point: Employers can choose to deduct the payments as charitable contributions or as business expenses and should not include the payments as income on the contributing employees’ W-2s. [Notice 2017-48; 2017-39 IRB 10]
By proadAccountId-371192 29 Sep, 2017

A Senate proposal on worker classification is drawing praise from business.

 The bill from Sen. John Thune (R-SD) would provide a new safe harbor based on three criteria that, if met, would qualify workers as independent contractors:

  •  The relationship between the respective parties, the existence of a written contract, and the location of the services or how the services are provided. The measure lists objective factors that would satisfy each of these categories.
  •  Additionally, the proposal makes changes to the Form 1099 reporting rules. Currently, the 1099-MISC is required when payments to a nonemployee exceed $600. Third-party networks must send a 1099-K to payees who have over 200 transactions and were paid more than $20,000. Compliance with these rules is haphazard at best. Many third-party networks file 1099-Ks. Others use the 1099-MISC. Some send both.
  •  Thune would have third-party networks in the gig economy use the 1099-K, while payers in traditional independent contractor relationships would file the MISC.
  •  Reporting on the 1099-K would be required on annual payments over $1,000 to contractors. This idea would raise a significant amount of money, something that tax writers will look on favorably on as they eye revenue-raisers to offset lower tax rates in tax reform.   Additionally, the threshold for filing the 1099-MISC would increase to $1,000.

By proadAccountId-371192 29 Sep, 2017

You won’t automatically be audited for having above-average deductions; however, if your write-offs are excessively large, your audit risk can go up because that is a key factor in the Revenue Service’s return selection process. 

 Here’s an example where taking large charitable deductions raised a red flag with the agency.  A couple was audited after they claimed total charitable write-offs of $142,250 for property donations to Goodwill. Because they couldn’t prove the value of the items donated, the Tax Court disallowed all but $250 of their deduction and slapped them with the 20% penalty for negligence (Ohde, TC Memo. 2017-137).

 Charitable deductions can sometimes be lost if conditions are attached by the donor. In this case, the owner of a run-down movie theater wanted to transfer it in a bargain sale to an unrelated, newly formed nonprofit. Since the transferee hadn’t yet received its tax exemption, the building’s owner arranged a bargain sale with another charity but agreed that it could direct a subsequent conveyance to the ultimate transferee. This transfer restriction included in the contract of sale caused the Tax Court to rule that the owner didn’t relinquish dominion and control over the building and that no charitable gift was made (Fakiris, TC Memo. 2017-126).

By proadAccountId-371192 29 Sep, 2017

Worker classification remains a priority. The Internal Revenue Service continues to seek back taxes and penalties from firms that wrongly treat workers as contractors. Unreported or underreported employment taxes make up a big chunk of the overall federal tax gap. The Labor and Justice Departments, along with Individual States also have vital roles to play in ensuring that workers are properly classified by the businesses they work for.

 

The stakes have always been high, lost taxes for federal and state governments and fewer benefits for workers who are improperly treated as contractors.  The importance is magnified with the growth of freelance service gigs. Freelance gigs such as Uber, Rover, Grubhub and Fiverr are making up a growing portion of the part time economy.  

 

To classify workers, the IRS uses three tests, each made up of multiple factors.

             

The Behavioral Test focuses on whether the company controls or has the right to control what the worker does and how to do the job. Key factors for employee status include instructions about performing the work, evaluation criteria and training.

 

The Financial Test looks at who controls the economics of the worker’s job. Being able to work for multiple firms and providing your own tools needed for the job are indicative of independent contractor status. Some factors favoring employee status are eligibility for reimbursement of travel costs and payment based on hours worked.

 

The Type-of-Relationship Test examines how the parties perceive each other. Providing paid vacation and retirement benefits indicates a worker is an employee, as does hiring to provide services indefinitely rather than for a specific time. Written language stating the worker is an independent contractor isn’t determinative.

 

Aberdare Business Solutions offers a variety of Lunch & Learn Seminars or on-site seminars regarding the above topics. Additionally, we include information pertaining to the Department of Labor and the Texas Workforce Commission. If you are interested in attending a seminar or having us speak at your company or association please contact our office at 281.599.3380 or info@aberdare.us.com

By proadAccountId-371192 29 Sep, 2017

The cost to become a dog groomer doesn’t qualify for an education tax break through The American Opportunity Tax Credit. The couple in the case has a daughter who after taking one class at a local community college, decided on a different track and enrolled in a dog grooming program with a company aptly named Canine Clippers.

 Only tuition paid to accredited postsecondary institutions is eligible for the AOTC, and the parents provided no evidence that Canine Clippers met that standard or that their daughter attended at least half-time (Martin, TC Summ. Op. 2017-73).

By proadAccountId-371192 29 Sep, 2017

IRS is on the prowl for filers who claim large charitable deductions, as a big-game hunter found out after he took a $1.45 million write-off for animal hides, skulls, horns, and other hunting specimens he donated to charity. He claimed the items he gave were of museum quality, with no market comparables, and should be valued at their estimated replacement cost.

 

The Tax Court disagreed, saying the specimens were commodities, not collectibles, and that fair market value is based on market prices of similar items. The Court allowed a $163,000 deduction, the figure determined by the Service’s appraiser (Gardner, TC Memo. 2017-165).


 

By proadAccountId-371192 29 Sep, 2017
IRS’s efforts at combatting tax identity theft seem to be paying off. Complaints of ID theft fell 46% in 2016 from the previous year, to 376,500.

Additionally, the numbers for the first quarter of 2017 seem to be following that trend. Some of the decline may be because of new antifraud measures the agency is using to filter out returns filed by identity thieves. Last year, IRS computers stopped more than $6.5 billion in fraudulent refunds on approximately 970,000 returns filed under stolen Social Security numbers and tax identification numbers.
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