Sunday, November 15, 2015
On October 10, 2015 Governor Brown signed AB1513 into law. The modifications to employment law that AB1513 made deal with workers’ compensation and piece-rate compensation. This post addresses the latter.
A few industry associations asked a law firm to provide an opinion of the new law as it relates to piece-rate compensation. The law firm did an excellent job addressing the various points of the new law. You can view their memorandum here. Their memorandum outlines the “safe harbor” provisions contractors will need to comply with, by December 15, 2016, in order to avoid fines and penalties. The changes required by the new law may prove costly for contractors whom have historically compensated their workers on a piece-rate basis. At a minimum, changes to how these contractors compensate their employees in California appear to be on the way.
A significant element of the changes have to do with contractors being required to pay workers for rest and recovery periods and other non-productive time. The administrative requirements being imposed by this new law all but assure the demise of piece-rate pay, at least as it has been known historically. If you have been compensating workers on a piece-rate basis and you want your voice to be heard regarding these changes, I suggest either connecting with an industry association (as referenced in the memo linked above) or contacting your local state representative directly. In the meantime, you need to become aware of the issues and requirements surrounding the new law and act accordingly.
Sunday, February 22, 2015
One of the highest costs to businesses in California is Workers Compensation Insurance. For those that have done business in California for at least the last 15 years, you have experienced roller coaster like moves in rates. Those rate swings seem to have come out of left field some in some years, with political and other market forces working behind the scenes to artificially impact those rates. Those factors are mostly out of your control. What is within your control is how you approach the issue of safety, how you handle incidents when they do occur, what processes you have in place to mitigate false claims as well as managing other variables. How you address these areas will have a tremendous impact, positively or negatively, on your experience loss modification.
One way to deal with potential negative events that would adversely impact your experience modification is to address problems at the earliest opportunity. Some of my clients use this mobile first aid service, click here for details, to help address work site injuries as they occur. The service is a 24 hour, 7 day a week operation and they offer a host of other services, as listed on the document along with pricing, designed to help run a tight ship with respect to your field workers. Beyond the services they offer, I think it is a good idea to have an independent third party tend to these matters as that could benefit you in the event of litigation.
As usual, I am not affiliated with this organization in any way. It seems like a good service worth investigating to help address these injury events as they occur. As I mentioned earlier, there are some factors that are out of your control with respect to Workers Comp Insurance. Creating and maintaining a culture of safety is within your control and you should do everything you can to maximize this area as it will result in substantial savings over time.
Wednesday, January 7, 2015
Last month, Congress passed the Tax Increase Prevention Act of 2014 and the President signed it into law. Over 50 popular incentives and credits were extended through 2014, some of the more popular of these “extenders” as they are called are highlighted below.
50% Bonus Depreciation - The 50% bonus depreciation provisions for new, qualified business property would be extended for property placed in service before January 1, 2015.
§179 Expensing Thresholds - Section 179’s increased expensing amounts would be extended through 2014. Specifically, for qualified property placed in service before January 1, 2015, the Act extends for one year the increased $500,000 maximum expensing amount under §179 and the increased $2 million investment-based phaseout amount. Afterwards, should there be no further extensions, the maximum expensing amount is scheduled to revert back to $25,000 and the phaseout will dip to $200,000.
Additional 179 Property – Allows taxpayers to treat capital expenditures related to qualified leasehold improvements, qualified restaurant property and off the shelf computer software as 179 property eligible for the accelerated deduction.
15-Year Life for Qualified Leasehold Improvements - Qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property will have a 15-year depreciation recovery period if placed in service before January 1, 2015.
S Corporation Built in Gains Tax – reduces the recognition period from ten years to five years on the sale of qualified small business stock held for at least five years.
Work Opportunity Tax Credit – Allows a credit of 40% on a maximum of $6,000 in qualified wages for employers who hire military veterans or other qualified personnel who began work for an employer prior to January 1, 2015.
Energy Efficiency Deductions for Commercial Buildings - Under §179D, deductions of up to $1.80 per square foot for energy efficient commercial building property would be extended for property placed in service before January 1, 2015.
R&D Tax Credit - Tax credits for qualified increasing research activities would be retroactively extended for one year to apply to amounts paid or accrued before January 1, 2015.
IRA Distributions to Nonprofits - Individuals age 70 1/2 and older can make tax-free distributions of up to $100,000 per year from their individual retirement plans to charitable organizations for tax years beginning before January 1, 2015.
State and Local Sales and Use Taxes - The Act retroactively allows taxpayers who itemize deductions to deduct state and local sales and use taxes instead of state and local income taxes for tax years beginning before January 1, 2015. This is beneficial for taxpayers living in a state with no income tax.
Exclusion for Discharged Home Mortgage Debt - Discharge of indebtedness income from a qualified principal residence — up to $2 million and $1 million for married filing separately — is excluded from gross income. The Act extends this exclusion to apply to home mortgage debt discharged before January 1, 2015.
Should you have any questions on any of these, as always feel free to contact me.