First the good news: the economy is growing and companies are adding jobs.

The bad news?  The growth is slower than everyone would like and has slowed since the beginning of the year.

Why?  Well, as ADP CFO Jan Siegmund explained in an interview with Fortune magazine Editor-At-Large Geoff Colvin, small businesses in particular are still scared to hire due to a number of economic factors.

“Since the beginning of the year, we believe that potentially the tax rate changes had an impact and anticipation of the healthcare reform may impact hiring decisions, as well as the reemergence of payroll taxes,” Siegmund said.

Hiring appears to be particularly slow for companies in the 30 to 50 employee range, he added.  This is most likely due to the employer mandate of the healthcare reform law known as the Affordable Care Act (ACA) or Obamacare.

In 2015 (recently pushed back from 2014), the employer mandate will require employers with 50 or more full-time or full-time equivalent employees to provide healthcare insurance to those employees.  Employers who are close to the 50-employee threshold may choose not to hire to avoid being subject to the employer mandate, Siegmund said.

This could be bad for recruiters who depend on hiring for their livelihoods.  Or it could create an opportunity for them to position themselves as a strategic partner for their clients.  Simply not hiring to avoid Obamacare is not going to be a good strategy for companies trying to grow.

Recruiters can provide a viable solution.  You can provide contractors who are W-2 employees of a contract staffing back-office.

That way, small companies can get the help they need to continue growing without being subject to the employer mandate.  As the employer for the contractors, the back-office assumes all of the employment responsibilities, including Obamacare compliance.

To get started, simply let your clients know that you can provide contractors and align yourself with

As the number of wage-and-hour lawsuits under the Fair Labor Standards Act (FLSA) hits an all-time high, recruiters can help clients avoid what one attorney calls “one of the top threats to U.S. employers.”

Human Resource Executive Online recently reported that 7,764 FLSA lawsuits were filed between April 2012 and March 2013, which is the reporting year that is used by the Federal Judicial Center.

“With no clear catalyst during the past 12 months, this strong spike and new high for FLSA claims makes them one of the top threats to U.S. employers,” Richard Alfred, chair of Seyfarth Shaw’s wage-and-hour litigation practice, told Human Resource Executive Online.

While there is no obvious reason for the spike, Alfred largely blames the economy.  As the economy improves, he believes attorneys are targeting new companies with growing workforces.

On the flip side, the long, stretched out recovery has put increased pressure on existing employees who might be looking more closely at their employer’s pay practices as a result.  Social media has also made employees more aware of the FLSA and the rights that they have under it.

As a recruiter, clients often look to YOU as an employment expert, so it’s important that you are familiar with the FLSA and counsel your clients on the proper application of the law to help them avoid this fate.  Below are six key points to remember:

1. Overtime (1.5 times the regular pay rate) must be paid to most employees for any hours worked over 40 in a workweek.
2. Your clients also need to be aware of state laws that may be more generous to employees.  For example, in California, employees must be paid overtime (OT) for any hours worked over eight in a work day.
3. Your clients MUST prohibit off-the-clock work.  They should require that employees get pre-authorization before working overtime and that they keep accurate records, Alfred told HRE Online.
4. Some employees may be considered exempt from OT, but they must fall into the Executive, Administrative, Learned Professional, Computer-Related, or Outside Sales classifications.  They must meet speific requirements to fall under these categories. Please see the exempt requirements provided on the Department of Labor website.
5. Exempt individuals must also be paid on a basis of at least $455 a week on a salary, not hourly basis.  There are a couple of exceptions to this rule.  Computer-Related professionals may be paid at an hourly rate of at least $27.63 per hour ($39.90 per hour in California). Additionally, the salary requirements do not apply to those under the Outside Sales exemption.
6. DO NOT let your clients misclassify W-2 employees as Independent Contractors to avoid the overtime rules.  Doing so is just asking for Internal Revenue Service audits and FLSA lawsuits for back OT wages.

(Editor’s note: This article is intended for informational purposes ONLY and should not be considered legal advice.)

For many years, The Cornerstone, the newsletter of Top Echelon contract staffing, was sent to the recruiters of Top Echelon Network.  The Cornerstone was eventually discontinued in favor of another newsletter, Contracting Corner, which is now published once a quarter.

However, we at Top Echelon Network still run contracting statistics in select issues of The Pinnacle Newsletter Blog.  These statistics include Non-Split Contract Placements, Split Contract Placements, and Non-Recruited Placements, among others.

And in this week’s issue of The Pinnacle Newsletter Blog, we have a boatload of contract staffing placements to show you!  As you can see, many of these placements come with hefty recruiter shares, such quite a few over $20 per hour.

Remember, that’s money that these recruiters will earn hour after hour after hour . . . while they work making direct-hire placements at the same time.  If you want to be part of this “boatload of placements,” then don’t “miss the bus.” Are you noticing a transportation theme?  That’s because contract staffing can take you where you want to go.

You’ve been a great audience! Thank you and goodnight!

Many of the Top Producers in Top Echelon Network have added contract staffing to their recruiting firm’s business model.  Not only that, but they’ve also taken advantage of the services provided by Top Echelon Contracting, the recruiter’s employer of record services.

For more information about contract staffing and the back-office services that Top Echelon Contracting provides, call (888) 627-3678, Ext. 2.

According to a recent Society for Human Resource Management (SHRM) article, I-9 audits are on the rise (SHRM membership may be required to access this article).  In 2004, only three audits were conducted compared with 3,004 in 2012.  Simple paperwork errors can cost employers up to $1,100 per violation.

If you serve as the W-2 employer for your contractors, YOU are responsible for I-9 compliance . . . and any fines assessed in an I-9 audit.  Here are some tips for making sure your I-9s pass muster.

1. The newest version of Form I-9 must be used exclusively starting May 7, 2013.
2. Make sure the employee completes Section 1 on their first day of work.  Inspect it to be sure that all the required information is provided and that Section 1 is signed and dated.  If anything is incomplete, don’t fill in the missing information.  Only the employee can complete or correct Section 1.
3. Be sure that you complete Section 2 within three days of the employee’s start date.  So if a contractor starts an assignment on a Monday, Section 2 must be complete by Thursday.
4. Remember that you must physically view each original document the employee presents in order to complete Section 2.  So what if you are too far from the employee to meet them?  The I-9 does allow for an “authorized representative” to complete Section 2 instead of the employer.  You could ask the client or a Notary Public to serve as the authorized representative.  If you encounter a lot of reluctance, you may want to work with an attorney to draw up a disclaimer that assures them they will not be held liable for I-9 penalties.
5. Conduct annual I-9 audits and make corrections where needed.  But remember, don’t white out mistakes.  Cross them off, initial, and date any changes.  Don’t make changes to Section 1—again only employees can make changes there, so if you find a mistake, ask the employee to make the correction.  And be sure not to back date anything.  While correcting I-9s may not eliminate penalties, they could reduce them.
6. U.S. Immigration and Customs Enforcement (ICE) normally audits companies that are connected to the nation’s “critical infrastructure,” such as power plants, food-service businesses, airports, etc., according to SHRM.  But complaints to ICE from disgruntled employees can also now initiate an audit, so don’t assume that your firm is flying under the radar.

Disclaimer: This article is for informational purposes only and should NOT be construed as legal advice.

One of the trickiest things about running your own back-office is navigating the complex web of state and local laws.  Paid sick leave (PSL) is an area where recruiters need to be especially careful.  With no paid leave laws on the federal level, some states and cities are taking matters into their own hands.  Most recently, the city of Portland, Ore., passed a sick leave ordinance that will go into effect on Jan 1, 2014, according to HR Hero. If you’re running your own back-office, you are responsible, as the employer of your contractors, for providing PSL when required.  Here is a quick breakdown of the PSL laws currently on the books in specific areas: Portland, Ore.—Employers with six or more employees will be required starting 1/1/2014 to provide PSL to those working 240 or more hours per year within the city limits.  This will apply to employers even if they are not based in Portland and even if the employee only works in the city occasionally, as long as they meet the 240 hours per year requirement.  Employees will earn one hour of paid leave for every 30 hours worked up to a maximum of 40 hours per year.  They can also carry up to 40 unused hours over.  This law will also require employers with less than six employees to provide them with one hour of UNPAID sick leave for every 30 hours worked up to 40 hours per year. San Francisco—All San Francisco employers are required to provide one hour of PSL to employees for every 30 hours worked.  The maximum is 40 hours per year for small businesses (10 or fewer employees) and 72 for larger employers (more than 10).  Unused leave carries over every year, not to exceed the maximum limit.  Visit the City & County of San Francisco Labor Standard Enforcement site for more details. Seattle—Seattle’s PSL law applies to employers with a total of five or more full-time employees.  If any of those employees work at least 240 hours per year within Seattle’s city limits, the employer is required to provide one hour of leave for every 40 hours they work.  The maximum hours range from 40 to 72, depending upon the size of the company.  This law is unique in that it not only allows employees to use the time to care for themselves or a family member in the case of injury or illness, but it also can be used as “safe leave” if their place of business has been closed by a public official for health or safety reasons. Washington, D.C.—Under the Washington D.C. Paid Sick Leave Act, employees must be employed for a year without a break in service and work at least 1,000 hours prior to their request to take time off.  The law excludes the following types of workers: independent contractors, students, health care workers who have opted into a premium pay program, and restaurant servers and bartenders who receive both wages and tips.  The number of hours accrued depends upon the employer’s size, but cannot exceed seven days a year. Connecticut—With the only state-wide PSL law so far, Connecticut requires employers with 50 or more employees in the state to provide up to 40 hours of PSL.  The tricky part about this law is that it only applies to “service workers,” those who are not exempt from the Fair Labor Standards Act (FLSA) requirements and who fall into one of the positions listed in the legislation.  You can view a list and other details about the law by clicking here. Just because you don’t have contractors working in these areas doesn’t mean you don’t need to be concerned.  New York City is also close to passing legislation, and Philadelphia is considering its own PSL law.  Chances are that more will follow suit.  As a contract staffing recruiter running your own back-office, it’s important that you stay on top of these developments and make sure you’re following any applicable PSL laws. This article is for informational purposes only and should NOT be construed as legal advice.