Corporate & Business Law Blog
Employing Unauthorized Aliens
Posted on October 07, 2011 by Attorney Josh Cook
The Indiana General Assembly recently passed Senate Enrolled Act No. 590 (the “Act”). On May 10, 2011, the Act was signed by Governor Mitch Daniels, and it became effective on July 1, 2011. This blog highlights some of the provisions of the Act that may affect local businesses. The Act principally relates to the employment of unauthorized aliens and contains various rules for businesses doing business in Indiana. The following is a table that summarizes a few requirements of the Act:
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Rules: |
Effect of failing to comply: |
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Businesses are prohibited from knowingly hiring, employing, or contracting with unauthorized aliens. |
Businesses are not permitted to deduct wages and other payments made to such persons that are employees when calculating Indiana income taxes UNLESS the business was enrolled and participated in the E-Verify program (the Internet-based system operated by the U.S. Department of Homeland Security that determines the eligibility of persons to work in the United States). The Indiana Department of Workforce Development can file a lawsuit against the business in order to recover amounts paid by the department as unemployment insurance benefits plus costs and attorney fees; however, no actions can be filed against employers that use the E-Verify program. Any contracts for services that the business has with Indiana state agencies or local governments can be terminated and the business will be liable for all actual damages unless the violation is remedied within 30 days after notification. |
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Businesses that have, or may have, contracts with state agencies or local governments must enroll in the E-Verify program and sign an affidavit affirming that the business does not knowingly employ an unauthorized alien. |
The state agencies or local governments cannot enter into, or renew, a contract with the business. |
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Subcontractors employed under public contracts for services are prohibited from knowingly employing or contracting with unauthorized aliens and must certify that they are enrolled in the E-Verify program and do not knowingly employ or contract with an unauthorized alien. |
The contractor that has contracted with the subcontractor may terminate the contract. |
Reiling Teder & Schrier, LLC is an Indiana Limited Liability Company. The information contained in this website has been prepared by Reiling Teder & Schrier, LLC for informational purposes only, and is not legal advice. The information on this website should not be relied upon to make any decision, legal or otherwise. If you have any specific questions or inquiries regarding any of the information contained in this website, you should consult with an attorney licensed in your state. The information contained in this website pertains only to matters of Indiana law and the laws of other states may be completely different from the laws of the State of Indiana.
May 2011 -- Business Organization Series
Posted on May 31, 2011 by Attorney Ryan Munden
When deciding what organizational form to choose for a business, the process of weighing available options can be daunting. Indiana law offers a widely diverse range of organizational forms which include Partnerships, Limited Partnerships, Limited Liability Partnerships, Corporations, Limited Liability Companies, and the list goes on.
Each of these choices comes with its own unique combination of benefits and drawbacks, which makes the process of choosing how to form a business a very important one. Some forms allow you to exercise more control over the business while sacrificing some of the benefits of other forms such as limited liability. Yet, other forms grant you the benefit of limited liability at the expense of control. There are even forms that allow both limited liability and a high level of control over the business, however, what may be an appropriate form for the business down the street may not be appropriate for yours.
The key to maximizing the benefits of organizing a business is to have a clear understanding of where you envision your business going and using the tools that the various organizational forms offer to assist you in getting there. Over the next several months I will be posting a series of blogs each of which will highlight a different organizational form, beginning next month with Limited Liability Companies.
Choosing to organize a business can yield some very valuable benefits, but as you can see, the wide range of options can make this important decision very intimidating. Before choosing an organizational form you should consult with an experienced attorney who can advise you as to which form is appropriate for your business.
Reiling Teder & Schrier, LLC is an Indiana Limited Liability Company. The information contained in this website has been prepared by Reiling Teder & Schrier, LLC for informational purposes only, and is not legal advice. The information on this website should not be relied upon to make any decision, legal or otherwise. If you have any specific questions or inquiries regarding any of the information contained in this website, you should consult with an attorney licensed in your state. The information contained in this website pertains only to matters of Indiana law and the laws of other states may be completely different from the laws of the State of Indiana.
April 2011 -- Independent Contractors vs. Employees
Posted on March 29, 2011 by Attorney Ryan Munden
It sounds like a great deal – you could use another worker for your business, so you plan to hire someone and call them an independent contractor. You think that since the worker is not an employee, you save the expense of paying worker’s comp and federal and state employment taxes. You don’t even have to include them in your company’s benefit plans. But whether the worker is an independent contractor or your employee really isn’t your decision to make. In Indiana, independent contractor status is determined by a myriad of factors. Choosing the wrong label can have costly consequences.
An independent contractor is not controlled by the employer, or “principal,” with respect to his performance. For example, a brick mason who agrees to construct a new chimney for a homeowner is not the homeowner’s employee; rather, the mason is an independent contractor who decides the method and details of how he will perform the task. He answers to the homeowner only as to the final product of his efforts.
On the other hand, an employee is subject to the employer’s control in performing services for the employer, i.e., the employer can establish the particulars of how the employee performs the work.
Significant advantages make hiring independent contractors appealing to employers. For example, independent contractors work for themselves and are therefore responsible for paying their own federal and state employment taxes. Moreover, independent contractors have no right to be included in an employer’s benefits such as health insurance and paid time off. Perhaps most importantly, an employer is generally not liable for harm caused by an independent contractor’s negligence.
Indiana courts use a ten-factor test to determine whether a worker is an independent contractor. Among the factors examined are the extent of control which, by agreement, the employer may exercise over the details of the work; whether or not the worker is engaged in a distinct occupation or business; and the skill required in the particular occupation. In a lawsuit, evidence of each of the ten factors would be examined to determine a worker’s classification as an employee or as an independent contractor.
Before an employer determines how to handle a worker’s employment taxes and benefits, and as an employer considers whether it is prepared to be responsible for a worker’s actions, it is important to know whether the worker will be considered an employee or an independent contractor under Indiana law. Payment of past due employment taxes may be the least of an employer’s problems if the worker is found to be an employee and has been injured or has caused injury to someone else.
Reiling Teder & Schrier, LLC is an Indiana Limited Liability Company. The information contained in this website has been prepared by Reiling Teder & Schrier, LLC for informational purposes only, and is not legal advice. The information on this website should not be relied upon to make any decision, legal or otherwise. If you have any specific questions or inquiries regarding any of the information contained in this website, you should consult with an attorney licensed in your state. The information contained in this website pertains only to matters of Indiana law and the laws of other states may be completely different from the laws of the State of Indiana.
