Archive for May, 2009

Fear not

May 14, 2009

Death is not the biggest fear we have; our biggest fear is taking the risk to be alive — the risk to be alive and express what we really are. Don Miguel Ruiz

The flu, the economy, the war, the drought, the floods, the next impending danger is coming at us in full force and in full color and complete with logo and 3D graphics. Do our worries escalate along with the media frenzy? What will be our crisis a year from now? Why do we worry so?

Do you wear a facemask? Do you fret the whole day long? Do we increase our stress, lessen our well being while worrying about something that may not even occur?

I’m not suggesting putting your head in the sand. I would put up sand bags too if my house were threatened by flood. There’s a difference between exercising prudence such as taking a few precautions in the event of a disaster versus running around with our head cut off.

I can’t live a life in fear. I have lost faith in those who may serve as a lookout for our invading enemies whether they be a meteor, a flu, or a terrorist. We all die. Living in a state of fear is just not a place to reside.

Here’s hoping that life finds you facing outward towards the sun.

Bryan Dear

www.payrolldept.biz

Holier than thou

May 14, 2009

Habits are safer than rules; you don’t have to watch them. And you don’t have to keep them either. They keep you.   - Frank Crane, 1861 – 1928  

It may only reside in me -that wonderful feeling of “look how good I am.” This glow may come from providing an answer correctly when others were stumped. It may come from just a few days on a different diet. It may come from getting up early to go for a long run before coming to work. Regardless of how this feeling arrives, I become full of myself and therein lies the rub. For no sooner have I gained that feeling than I destine myself for the great fall.

 Which is why I’m working on changing some of my habits. I like this quotation because it explains how we can change and once we have focused on it, we become the change. It’s not new age. It doesn’t even fall under inspirational. It’s just true. So as I begin my quest  to stretch more – such an easy thing for such a little investment of time – I’ll keep this thought in mind. I can change through habits and by staying on course, I’ll become the change. Voila!

I’ll let you know how it goes.

Sincerely,

Bryan Dear

www.payrolldept.biz

Minimum Wage

May 14, 2009

Why shouldn’t things be largely absurd, futile, and transitory? They are so, and we are so, and they and we go very well together. George Santayana, 1863 – 1952

There’s a federal minimum wage and there’s a state minimum wage. There’s a tip credit which you may use against these minimum wages in many states, but not all of them. And depending on the administration and the current majority in Congress and in the states, there are pushes to expand or slow these rates of pay.

There are good many arguments for having a higher minimum wage as well as good many arguments for abolishing the minimum wage. We’ll leave that discussion for another day.  But it is important to be aware of upcoming changes. In Colorado, voters approved a minimum wage based on the increase in the cost of living that changes each January 1. At the very least, employers should plan for the impact this could have on their finances.

I had a question asked of me recently regarding how much should this new employee be paid. I answered, “The minimum wage,” pause for effect, “that the employee will perceive as an more than fair.” It can’t always be like that, but an employee who gives you the maximum deserves more than the minimum.

Very few employers have their wages dictated by the minimum wage directly. The impact comes from a general rising of the floor with a sinking feeling by the employee above minimum wage that they’re not making much more than minimum wage and by golly it’s time for a raise.

Governtment intervention is a wild creature – there are some wages that would be lower if minimum wage law wasn’t present, but there are a lot of bureaucrats spawned in our system just to enforce this kind of legislation.

May your revenues grow at least as much as your wages much increase,

Sincerely,

Bryan Dear

www.payrolldept.biz

Garnishments

May 14, 2009

The right word may be effective, but no word was ever as effective as a rightly timed pause.  Mark Twain, 1835 – 1910

There are credit garnishments, child support garnishments, student loan garnishments, and tax garnishments for both state and federal taxes. There may be a few more that I have yet to see.

Each has different rules regarding how much of a paycheck can be garnished with the states weighing in with their own rules. A credit garnishment, in which an employee defaulted on an obligation (car loan, store credit card, etc.), is not even allowed in all states and the amount that can be garnished greatly varies.

A child support garnishment can be as much as 65% of net disposable pay depending on whether the garnishment is past due and depending from which state the garnishment is issued. Net disposable pay is generally calculated by taking gross pay and substracting the required tax amounts (FICA, Medicare, federal withholding, state witholding and local taxes) resulting in net disposable pay.

When an employee has two or more orders, then the process can become complicated depending on priority (child support for example trumps a credit garnishment regardless of which garnishment was received first).

When you receive a garnishment, take your time to go through it. Call the agency that issued the garnishment if you have questions. Don’t take any actions against the employee because of the garnishment. (Some states will allow you to charge the employee a monthly fee because of the additional paper work required).

Regards,

Bryan Dear

www.payrolldept.biz

Warren and Charlie

May 14, 2009

All over China, parents tell their children to stop complaining and to finish their quadratic equations and trigonometric functions because there are sixty-five million American kids going to bed with no math at all.- Michael Cunningham

Two weeks ago, my father and I set off for Omaha to hear the “Oracle of Omaha,” Warren Buffet and his partner Charlie Munger of Berkshire Hathaway. This is the annual shareholders meeting, but $5 will get you into the event, even if you’re not a shareholder.

Of course spending six plus hours on a Saturday with 35,000 people listening to questions regarding the econmy, investment strategy and corporate governance may not fit your bill for a delightful day. But between Warren and Charlie, their answers are intelligent, pithy at times, and most importantly for me, understandable.

Both are billionaires although Warren is the CEO of Berkshire and probably controls more billions than Charlie. Both have a strong belief in finding and buying companies with great managers who are free to run the company in a manner which they understand. Both Warren and Charlies take the long view. As long as the company is  profitable and as long as the employees are not guided by a contract (as in union), Berkshire Hathaway will not sell the company.

I admire most their ability to proceed with their strategy even when others are clamoring around them that their strategy is outdated or wrong.  That takes guts whether it’s thousands of dollars your investing or billions of dollars.

Cheers from Omaha,

Bryan Dear

www.payrolldept.biz

Rounding the wrong way

May 14, 2009

There is no greater mistake than the hasty conclusion that opinions are worthless because they are badly argued. Thomas Henry Huxley, 1825 – 1895

Rounding is almost always permissable in any activity as long as the outcome is fair. For example, when adding a set of numbers, always rounding up will result in an unfair outcome while rounding up on five or higher and rounding down when under 5 will result in a much closer result as compared to adding the actual numbers.

Time and Attendance is where we see rounding violations. The employer doesn’t trust the employee. The belief is that the employee clocks in early, before actually working, and clocks in late, after their work is long done resulting in an overstatement of time by the employee. To repair this breach, the employer may program the clock to deduct five to fifteen minutes from the employee’s clock in and clock out time.

Don’t do it. This could result in the payment of late wages complete with fines and penalties while dragging you through an ugly audit process. It also can degrade the trust between the employer and employee. You can program your clock to round to the nearest tenth of an hour, the nearest five minute increment, etc. as long as you round without favor to the employer.

Rounding good, rounding in favor of the employer, bad.

Cheers,

Bryan Dear

www.payrolldept.biz

Tough news

May 14, 2009

The rung of a ladder was never meant to rest upon, but only to hold a man’s foot long enough to enable him to put the other somewhat higher. Thomas Henry Huxley, 1825 – 1895

It doesn’t take much to bring home how little are small cares can be. I have a wonderful friend from my high school days. He and I have stayed friends over the years with many phone calls and lots of visits. He is the father of three beautiful girls.

Three years ago his oldest and then eighteen year old daughter was diagnosed with juvenile diabetes. It’s not an ugly disease. But there are permanent changes in lifestyle that must occur: changes in diet, changes in behavior, and changes that require daily monitoring. As a parent, we want to weep for this new direction that our child must now go through for the rest of their life.

Yesterday, his fourteen year old daughter was diagnosed for the same condition. Again, as a parent we want to weep for the changes that our children must now face. And to face this disease for a second time is a huge slap in the face.

And yet, my friend goes to the bright side. True, he grieves. But then he moves on. He becomes an even greater advocate for his daughters whether it’s in sports or in education. He listens, he learns, he is a force for positive energy for all who are around him.

What’s this have to do with payroll? Nothing. What’s this have to do with how we live our lives? Everything. How we respond to life changes (especially negative ones) exemplifies who we are. We can choose to go down the drain with sadness and woe and who can blame you. Or we can grieve, then turn about and face the sun.

Yours truly,

Bryan Dear

www.payrolldept.biz


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