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May 13, 2015 No Comments

Beware of IRS Scam Emails and Phone Calls

Attended a great session on IRS scamming presented by Ray Cahill CPA.  I had to share it with my followers as I feel it is critical to be informed about the various Scams going on which can do some serious damage.

He presented about an interesting article that talks about bogus phone calls that claim to be from the IRS.  In short, the IRS will never call you directly. Click here to read the article.

August 24, 2012 No Comments

EEO-1 Reports – What you Should Know

The Equal Employment Opportunity Commission collects workforce data from employers with more than 100 employees (lower thresholds apply to federal contractors). Employers meeting the reporting thresholds have a legal obligation to provide the data; it is not voluntary. The data is collected and is used for a variety of purposes including enforcement, self-assessment by employers, and research. Each of the reports collects data about gender and race/ethnicity by some type of job grouping. This information is shared with other authorized federal agencies in order to avoid duplicate collection of data and reduce the burden placed on employers. Although the data is confidential, aggregated data is available to the public.  This report must be submitted to the EEOC by September 30, 2012 of each year.

The Employer Information Report EEO-1, otherwise known as the EEO-1 Report, is required to be filed with the U.S. Equal Employment Opportunity Commission’s EEO-1 Joint Reporting Committee. The filing deadline for the 2012 EEO-1 Survey is September 30, 2012.

The preferred method for completing the EEO-1 reports is the web-based filing system. Online filing requires you to log into your company’s database with a Login ID and Password. All companies should receive  EEO-1 filing materials by mail no later than mid August 2012. If you cannot locate your Login ID and/or Password, contact the EEO-1 Joint Reporting Committee at [email protected].

Consent for Background Checks

Conducting a background check must be done properly.  There are many laws governing how one proceeds with an investigation.  These laws vary from state to state.  It is important that they be conducted properly.  I advise using an experienced, knowledgeable organization to ensure compliance with both federal and state laws.

There are several areas of liability from Title VII violations to Fair Credit Reporting violations.  It’s important to “know your stuff”.  Most HR Professionals are familiar with the process.  If you do not have an HR Professional in your organization, I would recommend using a third party so that you can be sure you are in compliance.

I’ve included a copy of a consent form in today’s blog for your reference.  Please feel free to contact me if you have any questions regarding this topic.Background & Credit check consent form – standard

A Pre-Employment Horror Story

Yesterday I spoke about the importance of pre-employment screenings.  Not to scare anyone or to have you think you are hiring the next “postal” worker but it should be taken seriously.  As an owner one must take precautions to ensure the safety of not only the stakeholders within the organization but also to anyone who comes in contact with that organization, vendors, customers, etc.

Case in point, what if your business suddenly picks up and you need to hire several new customer service reps to handle the  new volume of business.  You place an ad, receive a multitude of resumes and start the interviewing process.  You find the perfect person, they are well groomed, well-spoken, and have the perfect background experience . . . just what you are looking for.  In fact, you’ve fallen in love with them and hire them on the spot.  Good move?  No!!!!

In most cases it doesn’t take more that 24 hours to perform a thorough background check on that person.  You then have peace of mind knowing you’ve done your due-diligence and you have protected your business and all concerned.

You ask, “What about the Horror Story”?  OK, here goes:

This happened to John (names have changed to protect the “not so innocent”).  He needed to hire a customer service rep because business had consistently picked up and because of the overtime it was costing him.  He found the perfect guy (Steve) and hired him on the spot.  A week later he got a call from one of his customers stating that Steve “flew off the handle” when John called about an error on a recent order.  The customer knew that John stressed the importance of superior customer service and wanted John to be aware of the unusual behavior.

John called me to ask how he should handle the situation.  We asked about background screening and John said he didn’t have time.  We then conducted a “post hire” screening to discover that Steve had several counts of domestic violence charges all stemming from a “short temper”.

We discussed the results with John and he was not willing to give Steve a second chance based on the results of the report and his behavior with one of John’s customers.  Because Steve was within his 90 day introductory period, we advised John to terminate Steve immediately as he was within his introductory period and to state that Steve just wasn’t the right fit for the position.

John was fortunate because his customer cared enough to report Steve.  What would have happened to John’s business if the customer did not report Steve?  Take the time to check the backgrounds of those you hire, it will save you in the long run.

Don’t have time to do it yourself? Use a third-party vendor.  We’d be happy to assist you.

The Importance of Pre-employment Screening?

How honest are applicants on their resume?

What are good pre-employment screening procedures?

Pre-employment screening is more common these days than ever before. It’s estimated that over 40% of resumes can contain false or ‘tweaked’ information.  Employers want to insure that what they are getting in an employee is what they were promised.  The employer may perform a reference check to find out whether an applicant actually graduated from the college they said they did or to confirm that they worked at their previous employer(s) during the time stated on their resume or job application.

Employers need to know who they are hiring and they have a duty to their stakeholders and co-workers to keep everyone as safe as possible.  Background checks typically include both a criminal and credit check on the potential employee.  Finding out the truth about someone using a background check is quick, inexpensive and allows an employer to take the guess work out of hiring.

Do you know who you just hired?  Do you REALLY know who you just hired?

Looking for a Way to Save Money?

Why not look in to a Health Savings Account (HSA)? HSA’s are designed to help employees manage their medical expenses and reduce health care expenses. Money saved in an HSA, if not used for medical expenses, remains with the employee for future medical expenses or as part of their retirement account. It is a way for employees to save money tax free and unlike an IRA there are no penalties if used at any time for qualified health care expenses.

HSA’s are tied to high deductible health insurance which means that employees will have to pay for medical care using their HSA until they spend their deductible. This provides both the employee and the employer added savings in premiums as high deductible plans are usually less expensive.

Here’s an example of how an HSA would work:

• John has elected to have a high deductible health insurance plan and will be saving $100 a month in premiums.

• John’s deductible with the new policy is $1200 which means that John will have to pay the first $1200 in medical bills before his insurance will make any payments towards his health care.

• John has calculated that he will need to deposit $100 per month into his HSA to cover the deductible.

• In order for John to get $100 in his HSA on a monthly basis, he only needs to have $80 come out of his paycheck because of the pre-tax status.

• John’s employer has received the same savings on the portion of the premium they have saved because of the high deductible plan.

• John’s employer has agreed to contribute $100 per month into John’s HSA.

• Between John’s contribution and his employer’s contribution, John will have $2400 in his HSA by the end of the year. With a $1200 deductible, John should have $1200 in his account at the end of the year that can be used for future medical expenses or for his retirement when he reaches age 65.

HSA’s are a great way to save on current health care expenses and at the same time, offer individuals a way to save for the future. It’s a no brainer.

Are You in Compliance With Federal and State Wage and Hour Laws?

Do all of your employees receive a salary? Are you certain that they all should be paid a salary? Why are you paying employees salaries instead of a per hour wage? The US Department of Labor sets specific guidelines on when to pay employees a salary and when to pay them by the hour. Are you familiar with these guidelines?

The Fair Labor Standards Act (FLSA) was enacted in 1938. It established a federal minimum wage, time and one half overtime and prohibited employment of minors. Unless an employee is exempt from this act, they must receive at least minimum wage for hours worked and received time and one half for hours worked over 40 in a week (168 consecutive hours). The current federal minimum wage is $7.25 per hour. Each state also sets a minimum wage. Employers must pay the higher of the two wages. Currently in the state of Florida, the minimum wage is $7.31 per hour. January 1, 2012 the Florida minimum wage increases to $7.67 per hour.

Who is exempt from overtime? Again, this is not determined by employers, the FLSA sets specific guidelines for these exemptions. The categories for exemptions are executive, administrative, professional, computer and outside sales.

Executive Exemption:
1. Employee is paid at least $455 per week
2. Primary duty is to manage the business or a recognized department
3. Customarily directs the work of two or more employees; includes the authority to     hire, fire, make recommendations that carry particular weight regarding employment status.

Administrative Exemption:
1. Employee is paid at least $455 per week
2. Primary activities are performing non-manual office work on matters of significance to the management or business operations of the firm or its customers which requires the exercise of discretion and independent judgment

Professional/Creative Exemption:
1. Employee is paid at least $455 per week.
2. Employee who primarily performs work requiring advanced knowledge/education and which includes consistent exercise of discretion and independent judgment.
3. The advanced knowledge must be in a field of science or learning acquired in a prolonged course of specialized intellectual instruction. Creative professionals perform work requiring invention, imagination, originality and/or talent in a field of artistic endeavor.

Computer Professional:
1. Employee is paid at least $455 per week or $27.63 per hour
2. Employee who primarily performs work as a computer systems analyst, programmer, software engineer or similarly skilled work in the computer field performing a) application of systems analysis techniques and procedures; b) design, development, documentation, analysis, creation, testing or modification of computer systems or programs; or c) design, documentation, testing, creation or modification of computer programs based on and related to user or system design specifications.

Outside Sales:
1. Does not have to make at least $455 per week
2. Employee performs sales work off the company’s premises and whose primary duties include making sales or obtaining order or contracts for services or for the use of facilities for which the client or customer pays.
3. The employee is customarily and regularly away from the company’s place of business while performing such duties.

If you are paying your employees a salary and they do not meet the criteria in one of the exemptions, then you do not meet the guidelines set forth by the FLSA and could be subject to fines and penalties. I strongly encourage you to audit your payroll to ensure that you meet these requirements. The Department of Labor is cracking down on small businesses in this area, please don’t be caught.

Has an Employee Ever Asked to See Their Personnel File?

Have you have been asked by an employee to review their personnel file? How did you answer them?
Here’s the general rule. Employers should treat all personnel files as they would treat any other sensitive company documents. They should be kept locked in a cabinet/room where only those authorized access to the information should have it. For various reasons, you may not want to allow employees access.
You may ask, why not allow employees access to their files? There can be very sensitive information that is retained on an employee that may not necessarily be for their eyes. For example, reference and/or background checks, incident investigations, to name a few.
There are eighteen states that have laws regarding employee access to their personnel files. If your business is in one of these states, you have no choice but to allow them access. The important thing is to know the law in your state and have your own policy that is compliant with your state law. You can have a policy on what documents get stored where, keeping all sensitive information separate.
I’ve always recommended employers maintain five separate files where employee information is stored. They are:
1) Records pertaining to an employee’s performance
2) Medical and benefit information
3) I-9 Information
4) Payroll Information
5) Worker’s Compensation records if applicable

FICA wage base increases to $110,100 for 2012

FICA will increase to $110,100 in 2012. The wage base for 2011 is $106,800. This will effect 10 million tax payers in the US. Note that with the exception of pretax medical and tax free fringe benefits, there is no cap for Medicare.

Employees who are collecting social security and working at the same time are still required to pay FICA and Medicare taxes on their pay. This is a common question often asked.

October 21, 2011 No Comments

Florida Minimum Wage Increases by 36 cents effective January 1, 2012

Hot off the presses, Florida minimum wage is increasing by 36 cents per hour effective January 1, 2012.  This increase takes effect just seven months after a 6 cent increase on June 1, 2011.

What does this mean?

Employers are going to have to review payroll and make adjustments to anyone earning $7.68 and lower.

They should also evaluate all employees’ wages to see if the increase might cause other issues (morale, wage compression). For example, someone who is currently making $7.69 per hour and has been in their position for a while is not going to be happy when a newcomer joins the organization and earns the same rate.

This comes at a difficult time for small business owners. While trying to make ends meet and keep their doors open, they now must make adjustments to wages, increasing expenses and reducing an already dismal bottom line.