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Introducing the Agency Check Program
COBRA Model Notices
2010 Workers' Comp Changes
New Laws Effecting Businesses in 2010
Recent Court Decisions Effecting Employers
Employee Safety Manual
How to Avoid SSN Reconciliation Errors
View Newsletter Archives
Introducing the Agency Check Program
We would like to introduce a new feature of Payroll Masters that we call our Agency Check Program. Agencies are any vendors that you, the employer, pay on a regular basis, based on deductions from your employees’ paychecks. Examples of this would be child support, federal or state garnishments, and 401(k) deductions (we can even include the employer paid contributions). All of these deductions require you to withhold money from your employees’ paychecks and pay it to an “agency”.
With our Agency Check Program, we create a database of the agencies to be paid and a schedule of when to pay them. Payments are generated with each payday or once a month, depending on when they are due. Some of these payments, such as child support, must be made by electronic funds transfer if your business is mandated to deposit taxes electronically, while other payments will have a check generated at the appropriate time.
Each payday an Agency Check Payment Report is generated that shows the complete history of the Agency Check payments including the employee, paydate, check number and year to date totals for each Agency Check Payment so you can see at a glance what agencies have been paid or where an employee stands in paying off a garnishment or how much has been contributed to a 401(k).
Contact Payroll Masters today to find out more about our Agency Check Program.
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COBRA Model Notices
The ARRA, as amended by the Department of Defense Appropriation Act, 2010 (2010 DOD Act), mandates that plans notify certain current and former participants and beneficiaries about the premium reduction. COBRA was extended on March 18, 2010 click here to read the latest update.
Download the latest Department of Labor COBRA Model Notices
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2010 Workers' Comp Changes
Each year brings new laws and regulations for employers, and 2010 is no exception. To help employers stay informed about regulations and issues impacting workers’ compensation insurance, here is a preview of some of the potential changes on the horizon.
SB 313 – Penalties for failure to provide workers' compensation coverage
Summary: This bill increases the potential penalty assessment imposed upon employers based on periods in which they had been unlawfully uninsured for workers’ compensation. Employers without insurance would be liable for the greater of twice what their premium per employee would have been, or per-employee penalties of $1500, up from $1000.
Why: Employer fraud is a major problem in the workers’ compensation system, with dishonest employers seeking to avoid paying premiums. The Department of Industrial Relations has indicated that 12 percent of California employers are uninsured, which contributes to increased workers' comp costs for everyone.
AB 483 – Requires website to verify workers’ comp coverage
Summary: This bill requires that the Workers’ Compensation Insurance Rating Bureau (WCIRB) establish a Web site to help determine whether an employer is insured for workers' compensation. Many other states have sites for online proof of coverage. The new workers comp verification site would augment California’s database for contractor licensing www.cslb.ca.gov.
Why: Public access to the coverage information will discourage employers from operating without coverage. A major UC Berkeley study conducted for the California Commission on Health, Safety and Workers' Compensation (CHSWC) shows that California employers may be under-reporting payroll by as much as 23 percent on average, with high risk occupations such as construction extremely affected by fraud. This translates to billions of dollars in payroll, and contributes to honest employers paying higher premiums.
Changes to the California Experience Rating Plan Modification Formula
Summary: Insurance Commissioner Steve Poizner recently approved revisions to the formula for calculating experience modifications (ex-mods). The changes will not affect the ratings of all employers in the same way. The degree of change for an individual employer based on the revised formula will largely be determined by the number and size of losses and the employer’s payroll. Most employers will experience a change of a few percentage points under the new methodology.
Why: At the request of Commissioner Poizner, the WCIRB formed a task force to examine the ex-mod formula in 2007. The group set out to enhance the ex-mod’s predictive value and make it easier to understand, so that employers would more strongly perceive their ex-mod rating as an incentive to manage a safe workplace.
New Labor Enforcement and Compliance (LEC) Surcharge on 2010 Policies
Summary: This surcharge will fund activities of the Division of Labor Standards Enforcement (DLSE), an agency that works to ensure compliance with wage and hour standards. The LEC surcharge will assess premium at a rate of 0.1924 percent for all California workers’ compensation policies incepting on or after January 1, 2010.
Why: In implementing the LEC surcharge, the Department of Industrial Relations is continuing its move toward user funding of certain institutions, including Cal/OSHA and the Workers’ Compensation Appeals Board. As a result, the LEC surcharge will be taking its place alongside the six existing surcharges on premium bills:
•Workers’ Compensation Administration Revolving Fund (WCA)
•Workers’ Compensation Fraud Assessment (WCFA)
•Uninsured Employers Benefits Trust Fund (UEBTF)
•Subsequent Injuries Benefits Trust Fund (SIBTF)
•California Insurance Guarantee Association (CIGA)
•Occupational Safety and Health Fund (OSHF)
Did you know that Payroll Masters has partnered with E-COMP to offer you Pay as you Go Workers' Compensation Insurance. Visit www.payrollmasters.com/ecomp for a quote.
Source: SCIF
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New Laws Effecting Businesses in 2010
The California Chamber of Commerce released a list of new laws for 2010 or existing laws that will have an impact on businesses in California.
New Form I-9
Revised August 7, 2009, the new Form I-9 contains an updated list of acceptable documents that employees must present upon hiring. The new form also bears a note that all documents presented to establish identity and/or ability to work in the United States must not be expired.
E-Verify Required for Federal Contractors
Federal contractors and subcontractors must use the E-Verify system when hiring employees. Other employers may use the verification system if they wish to do so. The E-Verify compares the Form I-9 information against federal government databases to verify employment eligibility.
Increase in State Withholding
State withholding increased on November 1, 2009. There is a 10 percent mandatory increase on employee withholdings, a 0.6 percent increase in supplemental wage withholding and a 1.2 percent increase on wage stock options and bonus payments.
Alternative Workweek Schedules
The law regarding alternative workweek schedules was amended to permit an eight-hour day as a valid alternative schedule.
Additionally, the Division of Labor Standards Enforcement (DLSE) issued an opinion letter stating that under some circumstances, an alternative workweek schedule may be in place for less than a full year — for example, during the summer months only.
FMLA Amendments
Federal legislation changed the definition of which service members are covered for leave under the 'qualifying exigency' category.
For regular Armed Forces members, 'covered active duty' means duty during the deployment with the Armed Forces to a foreign country. Reservists are covered when they are on duty during deployment with the Armed Forces to a foreign country or notified of an impending call to active duty.
Civil Air Patrol Leave
Employers with more than 15 employees are subject to a new leave for employees who are volunteer members of the Civil Air Patrol.
Minimum Wage for Exempt Computer Professionals and Licensed Physicians
Rates for exempt computer professionals and licensed physicians do not change for 2010. The current rates for these professions are:
Computer Professionals:
•$37.94/hour
•$6,587.50/month
•$79,050/year
Licensed Physicians:
•$69.13/hour
Safety
AB 1083 (John A. Perez; D-Los Angeles) adds requirements to the Health and Safety Code requiring all licensed hospitals to annually conduct a safety and security assessment.
SB 188
(Runner; R-Lancaster) amends the Code of Civil Procedure to permit post-secondary educational institutions to seek temporary restraining orders and an injunction on behalf of a student or students. This requires written consent of the student(s).
Out-of-State Marriages
California recognizes out-of-state marriages as legal in California if they are legal in the state where the marriage occurred. SB 54 (Leno; D-San Francisco) provides a same-sex couple's marriage, valid in the state in which it was contracted, will receive the same rights in California as spouses, with the exception of the designation of 'marriage.'
Workers' Compensation Cannot Be Denied
Workers' compensation cannot be denied because an employee was killed by a third party in the course of the employee's work, no personal relationship existed between them and the injury/death was because of third party's personal belief relating to the employee's race, religion, color, national origin, age, gender, disability, sex or sexual orientation.
Mental Health Parity Changes in Effect
Effective January 1, 2010, the Mental Health Parity and Addiction Act of 2008 requires most employers (with more than 50 employees) that offer a health insurance plan to provide mental health benefits at the same level as medical and surgical benefits. View Fact Sheet.
Social security and Medicare tax for 2010
Do not withhold social security tax after an employee reaches $106,800 in social security wages, which remains unchanged from 2009. (There is no limit on the amount of wages subject to Medicare tax.) Social security and Medicare taxes apply to the wages of household workers you pay $1,700 or more in cash. Social security and Medicare taxes apply to election workers who are paid $1,500 or more.
Social Security Administration (SSA) is no longer manually verifying social security numbers (SSNs) over the telephone
SSA now offers an automated telephone service, Telephone Number Employer Verification (TNEV), that lets employers and authorized reporting agents verify up to 10 employee names and SSNs.
CalChamber and HR Support Center
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Recent Court Decisions Effecting Employers
Exempt Employee Pay:
In a recent opinion letter, the California Labor Commissioner approved an employer’s ability to reduce an exempt employee’s work hours with a commensurate reduction in salary.
Comment: Previously, any reduction in an exempt employee’s salary potentially jeopardized the exempt classification of that employee (thereby subjecting the employer to overtime, meal/rest breaks, etc.)
Non-Compete Agreements:
Non-compete and non-solicitation clauses in California employment agreements are void as a matter of public policy. Dowell v. Biosense Webster, Inc. In this case, an “employee’s secrecy, non-competition and non-solicitation” agreement contained a covenant not to compete and a covenant not to solicit business from employer’s accounts for a period of 18 months after termination of employment.
Comment: It is settled California law that NCAs and NSAs are generally unenforceable in California. Further, attempts to require employees to agree to such NCAs and NSAs may itself be illegal.
Individiual Liability:
Individual managers can be liable for unpaid wages under the FSLA. Boucher v. Shaw. In this case, the court found that the chairman/CEO and CFO of defunct casinos, hotels and bowling alleys were “employers” within the meaning of the FSLA because they “exercise control over the nature and structure of the employment relationship”.
Comment: A properly capitalized corporation would probably provide an effective shield for liability to the officers and directors of the corporation.
Information provided by LGG attorney Ron Souza If you have questions regarding any of the aforementioned employment law developments, he can be contacted at rsouza@lgglaw.com.
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Employee Safety Manual
The health and safety of all your employees is crucial for the overall wellness and productivity of your workforce. Having a company safety manual represents an important part in the process. Your company Employee Safety Manual should cover topics such as:
Employee Safety Responsibilities
Emergency Action Plan
Harassment in the Workplace
Reporting Injuries
Emergency Contact Information
Fire Prevention Plan & Electrical Safety
Hazard Communication
Are you a current HR Support Center user? If so visit the HR Support Center website now and under the Essentials tab click on Guides and then simply search for 'Employee Safety Manual', click on the document to download and customize to fit your company needs.
Not a current user, give Payroll Masters a call today at 226-1428 to get a free two week trial and get instant access to this valuable document.
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How to Avoid SSN Reconciliation Errors
Each January or February review the prior year's Forms 941, 943, 944, or Schedule H against your payroll records. Compare the amounts to be reported to SSA on Form W-3 to the sum of the amounts you reported to IRS on Forms 941, 943, 944, or Schedule H for the tax year.
www.socialsecurity.gov
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Required workplace posting: http://www.dir.ca.gov/WP.asp
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