October, 2008

Happy Halloween!

Hope your tricks or treats are lots of fun. It's really great when Halloween falls on a Friday ... it helps remove many of the week's pressures. And with voting happening this coming week and the economy being what it is right now, we have pressures! I have several articles this month that I hope will help you through, at least, some of it ... keep reading!

Voting is this Tuesday ... and that falls on a work day. Has anyone asked for time off? Here is a short article that will answer any questions you may have about "time off" requests.

TIME OFF TO VOTE Voting is such a hot button issue this year that I don't think you want to be accused of making it difficult for your employees to get out to vote. With early voting in many states, this is not a serious issue for most, but I thought it might be interesting and informative to learn what our neighboring states say about this topic. Arizona – If polls aren't open three consecutive hours outside the employee's regular shift, the employee can have up to three hours to vote. Employees must give notice in advance of Election Day to be given this time off, and the employer may specify the time that the employee can take off. The leave is paid. (Ariz. Rev. Stat. Section 16-402) California – Employees are allowed up to two paid hours time off at the beginning or end of their regular working shift to vote. An employee must provide notice at least two working days in advance of the election if, on the third working day prior to the election, the employee knows or has reason to believe there will be a need for time off to vote. An employee will be excluded from the time off rules if there is sufficient non-working time to vote. Although the law requires time to be taken at the beginning or end of the work shift, the employer and employee can agree on another arrangement. Employers must post a conspicuous notice of employee voting rights ten days before every statewide election. (Cal. Election Code Sections 1400 and 1401) If you have not posted such a notice already, here is a link you can use. http://www.sos.ca.gov/elections/tov_final.pdf Nevada – If polls aren't open a "sufficient" amount of time during an employee's non-working hours, the employee is allowed anywhere from one to three hours to vote. "Sufficient" time depends on the distance between the employer and the employee's polling site. The employee must make a request prior to Election Day for the time off, and the employer may specify the time of day the employee may take to vote. This leave is paid. (Nev. Rev. Stat. Section 293.463) Interestingly, there is no state law regarding time off to vote in the following states: Colorado, Delaware, District of Columbia (D.C.), Florida, Idaho, Indiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia. And, there is no Federal law requiring time off to vote, so if you are in one of these states without a state law, you are not required to allow employees time off whether paid or unpaid. Additionally, 5 states permit time off to serve as an election official without penalty from the employer. They are: Alabama, Illinois, Kentucky, Ohio and Virginia.

The economy is what is hitting us all very abruptly. To help you out, I have two articles this month addressing some of the issues that the economy may be presenting in your business. Scroll down a little further to see ...

And don't forget to take this month's quiz!

In July, the Department of State and the Department of Homeland Security began producing the U.S. Passport Card. The new card provides a less expensive and more portable alternative to the traditional passport book and will expedite document processing at United States land and sea ports-of-entry for U.S. citizens traveling to Canada, Mexico, the Caribbean, and Bermuda. The card may not be used to travel by air. Can the card be used in the Employment Eligibility Verification form (I-9) process, according to U.S. Citizenship and Immigration Services? No The card can be used to prove an individual's identity but cannot be used to verify employment eligibility when completing Form I-9. The card can be used to verify an individual's employment eligibility but cannot be used to prove identity when completing Form I-9. The card can be used to prove both identity and employment eligibility when completing Form I-9. The answer is found at the end of this communication.

Let's now go to our main articles with some thoughts for managing your business during this uncertain economy!

We've received questions lately from some of our clients facing tremendous pressure to reduce their operating expenses. Some of their ideas actually implicate state and federal employment laws. We want to take a look over the next several months at which laws are implicated by proposed cost-cutting efforts.

For this month, let us look at reduction in hours or pay which seems to be one of the first areas that employers look at for cost savings before actually letting employees go. Let's look right now at how this might impact compliance efforts and expose the company to risk.

Reduction in hours won't be a problem with non-exempt employees so long as you continue to record time and pay at least minimum wage for all hours worked. However, if you have exempt salaried employees, you may have a problem reducing hours and wages.

If you reduce exempt employees' non-fluctuating salary below the minimum salary threshold required for the exemption you risk losing the exempt status. In CA it is two times the state minimum wage or $640 per week. In states covered by the Fair Labor Standards Act (FLSA), the minimum salary would be $455 per week. If you reduce those exempt employees salaries below the minimum levels or make deductions from their pay based on your failure to provide work, you may lose the exemption. One alternative may be to reclassify them as nonexempt during the downturn.

If you prefer to try to maintain the exemption with reduced salary and hours, you should consult with an experienced employment attorney to make sure you aren't placing their exempt status in jeopardy.

Also remember that some employees whose hours are reduced may change from full-time to part-time status during a downturn, which may affect their eligibility for benefits. It is important that you contact the administrator of your group medical benefits plan about the possible ramifications of reducing employees' hours. Certain employees may be entitled to continuation coverage under COBRA or Cal-COBRA in such a scenario.

If you have specific situations that require more personal or in-depth discussion, contact us at margaret@mjms.net or 480-924-6101 or 310-798-4569. We are here to assist you during this most difficult economic time.


THE BOTTOM LINE OF PAYROLL

In reviewing a business loan proposal, the lender will often ask how much time is spent on making money and how much time is spent on non-revenue generating activities. The processing of payroll is one of those items that is clearly important, but may not be the best use of time for a small business owner.

As small businesses are looking at ways to cut costs in these uncertain economic times, one area that should be examined is that of processing payroll. While it is a relatively small cost in the overall budget, the impact of not filing reports and making deposits correctly and on time is significant. Now that we are in this final quarter of 2008, it is time to review this issue and make plans to outsource this function starting January 1, 2009.

Here are some thoughts from Steve Goldstein of Payroll Management Solutions on a poll from the NFIB which showed that nearly two thirds of the nation's small businesses process their own payroll due to concerns about cost and control. Here's what Steve has to say…

After 23 years in the payroll outsourcing business, the most common misconception I deal with every day is that by processing their own payroll, employers save money or maintain a degree of control they would otherwise have to give up as if their time is worth nothing and there is no risk involved. Like rent, payroll processing is a task that produces no revenue though it is a necessary evil for business owners who wish to stay in business. Time spent processing payroll is time not available to add to the bottom line, whether that might be increasing sales, collecting receivables, developing new products or strategies, or even taking some time to relax and recharge the batteries. All of these things are more productive than payroll processing which can only create risk for the owner as well as cost time and money. What's the risk? Every single paycheck includes at least five required tax deductions in each state which then must be added to other employer taxes and voluntary deductions, and every one of these items is an opportunity for a problem to occur. The late or incorrect deposit of these tax liabilities can result in costly penalties and interest for a business owner. For a company with as few as five employees, a small boutique provider of payroll services might charge as little as $20 per pay period plus $1.65 per check to completely outsource the task of calculating payroll and properly paying all state and federal taxes. The time spent on payroll can be reduced to simply reporting the hours worked. The payroll service provider shoulders both the workload and the liability of the payroll processing and the business owner can now focus on bottom line - running and growing their business. The employer maintains complete control over when and how the payroll is processed, wages, raises, reviews, hiring, and benefits. Access to information is also not a valid consideration as business owners have complete access to all reports, history, and personnel data as well as report writing capability with our web based service. Since there are no "contracts" in payroll, no employer is ever forced to stay with a service they find unsatisfactory for any length of time. All payroll services can be terminated with a simple letter or phone call. The biggest benefit of tax filing service is that if ever a notice arrives from the IRS or other State Agencies, a client simply faxes that to their service provider to be handled. These notices often result from a mistake by the IRS or the State Agency and are cleared up very quickly – all without any effort from the business once that fax is sent. Employers who do it for themselves (for "free") will spend many hours responding to such notices, hours away from the business that can never be replaced. Source: Steve Goldstein is founder of Payroll Management Solutions, a national provider of payroll services. Steve can be reached at 310-491-3467 or at support@payrollmanagementsolutions.com. His website is www.payrollmanagementsolutions.com Answers To This Month's Quiz: 4 - The card can be used to prove both identity and employment eligibility when completing Form I-9. Explanation: The passport card is considered a "List A" document that may be presented by newly hired employees during the employment eligibility verification process. "List A" documents are those used by employees to prove both identity and work authorization when completing the Form I-9. (c) hr.blr.com Don't Forget To Access Our WebForms. Answer All Your Human Resource Needs! Manage Your Day-to-Day Non-Profit or Small Business Organize All Necessary Human Resource Information Promote Legal Compliance Within Your Organization. Click Here To Know More!