Scenario One

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Scenario One: Cost Club
JanKay Brown, Dennis Campbell, Rasheta Reed
Yvonne Sepulveda, Franchescka White
HRM/546
Bernard Cookson, Jr.
December 17, 2012

The attached memo addresses ongoing HR situations requiring immediate response. As human resources managers, we have recommended a course of action for each situation according to employment laws and regulations. We also considered the best interest of Cost Club and all parties involved. Moving forward, we ask that management document and retain details for each situation for future reference. Message 1: Discharges at the Anderson Cost Club store.

In regards to the discharges at the Anderson Cost Club store, we believe that the GM did not have the company’s best interest in mind. The two employees do have the right to sue the company for wrongful termination regardless if it is a right to work state. Title VII protects them if they feel they have been discriminated against. The company runs the risk of having to pay for reinstatement or compensatory and punitive damages for the loss they encountered if it is found that they were wrongfully terminated. Again had the GM been mindful of the company, he would have had documentation showing the reason for his decision to terminate the two employees. Perhaps we should consider refresher trainings for the GM to ensure that terminations are not in violation of any basic principles of dignity, respect, or social justice (Bennett-Alexander, 2007). Message 2: Regional CEO’s question about reducing employee costs. In an effort to reduce costs, our Region’s CEO has asked us to look at the viability of using temporary agency employees and independent contractors. To that regard, here are a few pieces of key information that should be considered prior to making that decision: the generally accepted definition of an employee is that they are a worker who performs services at the instruction or direction of an employer.  If the organization can control what will be done and how it will be done by the person, then they are typically seen as an employee. An independent contractor is usually an individual or organization that provides services to another business. The independent contractor is a separate entity and is not considered an employee. They do not receive their day-to-day instruction from the employer. We deduct Social Security/Medicare taxes from employees and pay an equivalent amount to the Social Security Administration. We do not have to make those payments if an individual is working as an independent contractor. The independent contractor must pay all of his or her own "self-employment taxes" along with income tax on earnings. There are implications that may still arise in employment laws even if we use independent contractors and temporary employees. You should be aware of be the following: Although we may save money in employment taxes we may not be excluded from all potential liability due to an independent contractor or temporary employee’s actions. We may still be held to be liable or responsible for claims that are non-compensation or tax related. Therefore, in terms of reducing employee costs, we should give careful consideration to whether we would really save enough to justify the risks associated with allowing important aspects of our work to be conducted by non-employees. Message 3: Safety Manager’s concern about injury and damages Determining who is liable for injuries and damages requires Cost Club to clearly define if the worker is an employee or independent contractor. The common-law agency test, the Internal Revenue Service 20-factor analysis, and the economic realities analysis are all tests used by the courts to identify the status of a worker (Bennett-Alexander & Hartman, 2007). After the workers' status is classified, Cost Club should evaluate the authorized duties assigned to the worker and note whether or not the worker performed within or beyond his or her authorized duties. The...
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