Change older Employee to Consultant
dwitt
26 Posts
We have an employee age 69, who has been employed for 20+ years as an outside salesman. Management wants to offer this individual more compensation in return for his accepting an Independent Contractor status.
I have pulled in my resources and cannot find anything on this type of termination scenario. Does anyone have any suggestions or experienced something like this before?
I have pulled in my resources and cannot find anything on this type of termination scenario. Does anyone have any suggestions or experienced something like this before?
Comments
At first glance this appears to be age discrimination. Perhaps we just need more details.
Nae
If the salesman planned the retirement, decided to offer some of his unique services to your company and others as an independent contractor, and your company has a business need for contractor services, it's probably OK. Anything less than that, especially of your company initiated the idea, is probably not OK, or at least gives enough of an appearance of age discrimination to be risky. For him to truly be an independent contractor, he should pass the independent contractor test on who controls the work & hours, who provides supplies/office space/work equipment, where & how the work is performed, and to whom else does he offer his contractor services. Finally, will his position be filled or eliminated? If he's carrying his job duties with him under the same or similar circumstances, he is no independent contractor and the responsibility for proper classification will be on your company.
best wishes
Cheryl
No, the employee did not express any desire to retire. The Company approached him and apparently he has been somewhat resistent to the offer of Independent Consultant and is countering by asking for more money and a BIG truck.
Yes, the Company wants to retire him because of his age, earnings, and potential health claim risk, etc. There are no work performance issues here other than his stubborn reluctance to use a computer. I believe his wife types up all of his call reports, and handles his email account, etc. Yes, I believe management wants to eventually fill his position with someone new.
I am fully aware of how bad this looks, and am being up front here because I really need advice. I know how wrong this is - it's unethical, and I'm aware of all the legal risks. I've already been the deterrent for several years now with respect to dealing with this employee. Now that we have a new VP running the show, this particular case is being revisited.
What I am looking for here is what does a company do with an employee who wants to work forever? How does a Company retire someone?
And then there's this piece as well, Management doesn't want him to go to work for a competitor - that is why we want to retain him as an Independent Contractor.
I'm sitting in the position where I don't think we should do anything, say anything more to this employee until we confer with a lawyer.
The most risky, of course, is to take the steps your company is trying to take. Some less risky alternatives would be to condition his employment on work performance and/or make a change in his position (for business reasons), insist he perform the new duties, and let him go if he doesn't perform them (well documented of course). Based on your input so far, that doesn't sound like a viable alternative any more than does "retiring" him because of his age.
Based on what you have offered so far, I think I would try to be very creative, design a position that fits this fella's experience and qualifications, and offer it to him with a deal so sweet that you know he will not turn it down. Include some of his current duties and bring in some new ones that could most benefit from someone with his level of experience. He would not be an independent contractor and would most likely have to draw a salary of some sort, but he would be committed to your company, performing a job he apparently loves, and performing in a manner that is most beneficial to your company.
A word of warning on the independent contractor approach you first mentioned, if your company requires him to keep his focus on your company and not be available to other companies (including competitors), he will probably not satisfy a basic test requirement for independent contractor status. To be an independent contractor, he would generally have to be in control of his work opportunities and make himself available to multiple businesses.
To turn your present sitaution into a positive, encourage your leadership team to think of a dream job, that is a job that your company would really like to have but has never really had the opportunity to pursue. If this fella has been a good worker for years with your company, he has a wealth of experience that could be used to the benefit of your company if tapped into appropriately.
best wishes.