Archive for June, 2009

Hiring under the age of 18

June 22, 2009

The results of political changes are hardly ever those which their friends hope or their foes fear. Thomas Henry Huxley, 1825 – 1895

It’s summer or some seasonal kind of hiring time and you’re interested in hiring that reliable fifteen year-old down the street. So, what are the three general areas to know?

  •  Age,
  •  Hours, and
  •  Hazards.

Age: In general, the FLSA establishes the minimum employment age of 14. For instance, a child under 14 may deliver newspapers, baby-sit on occasion, or work in a business completely owned by the parents. Most importantly, the job must not involve hazardous activities prohibited under the FLSA.

Hours: Employers have no federal restrictions on work hours for 16- and 17-year-olds work. On the other hand, workers 14 and 15 years of age may only work up to three hours on school days, eight hours on non-school days, 18 hours per school week, and 40 hours per non-school week. Moreover, their work hours must be between 7 a.m. and 7 p.m. (9 p.m. from June 1 until Labor Day).

 Hazards: Generally prohibited for workers under 18, the U.S. Department of Labor (DOL) deemed many types of non-farm work activities as hazardous.

IN other words, there should be no overtime for that fifteen year-old. The list is long what hazardous materials they should not be around. And don’t even think about having them work the forty hour week over Thanksgiving.

Some states can add their own restrictions above and beyond the ones carried under the federal ones.

There’s no need to avoid hiring the under age of 18 – just be familiar with the rules.

Bryan Dear

www.payrolldept.biz

 

A day in town

June 16, 2009

Some people drift along like a cork on a river, feeling that they cannot do anything except drift, moment to moment. This is an attitude of mind. Everyone can be constructive even in tiny ways.     - Edward de Bono

As does happen in our community, company came to town this week. These are old friends – the husband is one of my best friends going all the way back to high school. He, his wife and their three children were here for three nights and days.

Do you remember the weather for the week of June 8, 2009? It’s was a fairly cool and wet week. The hiking and rafting were not seen as motivating events so we took to our town – our special town.

We took them downtown for window shopping and real shopping. We stopped for hot coffees and hot teas. We visited art galleries. We took them to the recreation center for climbing and basketball. And through it all, I was so darn proud of everything that Durango is and can be.

People were friendly, even (or maybe because) it was rainy. It was easy to drive in our town compared to the metro areas our friends were from. The beauty with clouds and rain and even snow as seen on the mountaintops were special.

It’s a great place to live. It’s a great place to share. I hope you have a chance to experience it.

From Durango, Colorado,

Bryan Dear

www.payrolldept.biz

 

 

How is my Unemployment Insurance rate calculated?

June 16, 2009

We learn geology the morning after the earthquake.- Ralph Waldo Emerson, 1803 – 1882

It might be a better time to review your unemployment insurance rate before you receive your next rate notice. In Colorado, rates are assessed once a year that cover the period January 1 to December 31.  The period in which the rates are based on is the prior year beginning July 1 to June 30 so if someone is separated and they start receiving insurance in August, your experience rate won’t be affected for almost a year and a half.

So how are rates calculated? There’s a macro and micro effect. The macro effect is how the fund is doing overall. In times of rising layoffs and lower employment, the fund can be swiftly reduced and the rate may go up for every employing entity. The micro effect is how many claims are filed on you as an employer. These two factors determine your rate with your own experience carrying most of the weight.

How do you keep your rate in check? If an employee resigns there is no penalty to your rate. If an employee requests unemployment benefits and you think he/she was rightfully terminated, you may contest his/her benefits by responding to the notice sent to you by the state department of labor. Don’t waste time – respond as soon as you receive the notice because the response time is very short as in seven days.

You can contest for almost all the reasons that you would fire an employee (from stealing to refusing to work a non-overtime shift), but your documentation better be good because lacking that, you will be wasting your time and no doubt becoming frustrated to boot.

The world of unemployment insurance may become a bit more expensive in the next few years. Consider minimizing your costs by hiring right and documenting behavior that impacts the employee’s job quality. Your rate will stay lower than most.

Here’s to keeping a low rate of turnover and insurance,

Bryan Dear

www.payrolldept.biz

One on one (as in basketball)

June 16, 2009

Man does not live by words alone, despite the fact that sometimes he has to eat them.     - Adlai Ewing Stevenson, 1900 – 1965

I’m at that age where my son is passing me in terms of ability on the athletic front, but he isn’t equal to those very important skills of craftiness and cunning. This becomes very apparent in our head-to-head basketball games. Because of these, ahem, additional skills I’m able to win about the same number of games that I lose. A fake here, a bump there and I’m able to steal a win – much to his frustration.

Of course that frustration doesn’t make him play any better. It might make him more determined. It might make him play with a clearer sense of mission. It does change his focus. The focus becomes winning instead of playing well. It would be like saying our mission is to make a profit without focusing on those areas which contribute to profit (people, service, marketing).  When we lose or feel disappointment or we feel that we have been wronged, we respond in a way that may not be the most effective response.

Revenge is a dish, best served cold. Whether it’s revenge or a renewed focus to better the service,  the energy or the response, remember to inhale, remember to ask, “What’s my goal and what’s the best way to accomplish this?” As soon as my son realizes this, I’m going to have to come up with some new foul calls just to break even.

Cheers,

Bryan Dear

www.payrolldept.biz

The Audit

June 1, 2009

The first principle is that you must not fool yourself – and you are the easiest person to fool.     Richard Feynman, 1918 – 1988

The letter can almost look innocent except for the return address. A notice that an audit is coming down the pike can produce many different reactions (denial, procrastination,and probably the most common, a kind of fear). But fear not.

 It’s amazing how many different audits we see. There are retirement plan audits by the IRS, there are Department of Labor audits from both the federal and the state agencies, there are state department of revenue audits and then there is the plain jane IRS audit of the company tax return that inevitably pulls in the payroll information.

In these audits, we find they look for regulation compliance (are the proper forms being prepared correctly and submitted in a timely manner), is there unpaid overtime, are S Corporation owners claiming enough wages, are there contractors who should be treated as employees, are there employees who don’t have a legal status to work  and do the numbers line up with what’s claimed on the tax returns?

While the chance of being audited is relatively low from any of these agencies, there is a decent chance at least one of them will find you because there are so many of these agencies. And if you have chosen to raise the red flag such as forgoing paying overtime to your employees or not claiming wages as an S Corporation owner, there’s a better than even chance that you will be audited.

So what do you do? It’s really pretty simple.  Do what’s right – pay your overtime, file your tax returns on time, make your payments on time and when you have a question as to what’s the right way to do something, ask someone who deals in this all the time.

Audits can be an inconvenience or a real pain. Good record keeping and doing what’s right will greatly reduce the pain factor. If you business model can’t afford to do what’s right, question your assumptions.

Here’s to having an audit-free business. Preparing for one will certainly allow for better sleeping.

Cheers,

Bryan Dear

www.payrolldept.biz


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