MISC MUSES

U.S. Supreme Court Will Decide Fate of “ObamaCare”

U.S. Supreme Court Will Decide Fate of “ObamaCare” 150 150 PayReel

Once you get past all the legal jargon, it’s a really simple question:  Does the Constitution of the United States give Congress the power to compel every citizen to either purchase health insurance or pay a penalty?

Our Supreme Court justices listened to arguments for three days in late March and are expected to hand down a decision in June.  The smart money is on a 5 to 4 decision … either way.  If the Affordable Care Act is struck down, the federalists will shout “Freedom!” in their best Mel Gibson/William Wallace accents.  If “ObamaCare” survives intact, the liberals will proclaim “Four More Years!” in their best Ted Kennedy.

At this point in the proceedings, it looks as if Justice Anthony Kennedy will be the swing vote.  His comments and questions during the three days of hearings have supporters of the law on an emotional roller coaster.  And just in case he begins to lean too far in opposition, the Obama administration has already fired a shot across his bow.  Last week, the President (a constitutional law scholar in case you’ve forgotten) raised another simple question for us simple-minded citizens to ponder … Does the Supreme Court even have the authority to overturn legislation passed by Congress?

Are you even remotely interested in how our republic functions (or dysfunctions)? If so, the drama doesn’t get any better than this.  Imagine the fallout if the Supreme Court declares the law unconstitutional.  Our healthcare system will still be in need of reform.  It’ll still be an election year.  And the voting public will quickly begin asking “So now what?”

Let the finger-pointing begin!

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Turning Up the Heat on Worker Misclassification

Turning Up the Heat on Worker Misclassification 150 150 PayReel

If you’ve come anywhere near an HR newsletter in the last six months, you know there’s a big crackdown in progress targeting misclassification of employees as independent contractors.  The heat has risen to the point where one piece of pending legislation would make misclassification a federal offense regardless of whether the infraction was intentional or not.

Why do the IRS and DOL have their collective knickers in a bunch over misclassification?

It all comes down to simple economics.  Federal and state tax revenues are down.  Not a good thing if you’re in charge of balancing budgets.  Meanwhile, non-compliance with IRS and DOL regulations governing which workers are classified as W-2 employees versus 1099 contractors are going up.  This equates to fewer tax dollars coming from employers without a corresponding increase in tax revenues from independent contractors.

Combine this with historic federal and state budget deficits, and you’ve got a recipe for stepped-up surveillance and enforcement.  Witness two recently introduced bills:  The Payroll Fraud Prevention Act, and The Employee Misclassification Prevention Act.  Both bills are still in committee, but they underscore how much attention this issue is getting in Congress.

Still not convinced this iron is hot? Allow me to remind you about the widely announced partnerships between the IRS, DOL, and several state agencies who are now sharing employer information with the goal of tracking down practitioners of worker misclassification.

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Up the Down (Unemployment) Staircase

Up the Down (Unemployment) Staircase 150 150 PayReel

The U.S. economy’s jobless recovery has improved over the past few months to a mostly jobless recovery.  While most pundits are cautiously optimistic about the employment outlook, employers in many states are still facing increases in unemployment insurance taxes.  Yes, you read that right.  Unemployment is down and unemployment insurance taxes are going up.

Like you, I have a pretty good idea of how the unemployment insurance system is funded … via taxes that employers pay into a dedicated state account.  But what happens when those accounts run dry?  Because of our economy’s tepid recovery, ongoing claims for unemployment insurance remain high.  In some states, the cash reserves to pay these claims have long since been depleted.

Yet people in these states continue to receive unemployment checks.  Where’s the money coming from?

Title XII of the Social Security Act allows states to borrow money from the U.S. Treasury to cover the cost of these claims.  Now, however, Uncle Sam wants his money back.  If it takes your state longer than two years to make good on its Title XII loan, you can expect an increase in the federal portion of your unemployment insurance tax (FUTA).  If your company is located in Indiana, Michigan, or South Carolina you already know what I’m talking about.  Plus, some state constitutions require an increase in their SUTA (and other) rates to accelerate repayment of Title XII loan balances.

By my count, 22 states have outstanding balances more than two years old and are facing increased FUTA rates. So, forewarned is forearmed.  Keep an eye on your state’s Title XII balance.  You can find it at the following DOT website:

http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm

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PayReel, a payroll service for independent contractors, builds your digital independent contractor community, instantly connecting vendors, contractors, and internal resources to boost productivity and drive operational agility.

Sneaking a peek at 2012

Sneaking a peek at 2012 150 150 PayReel

Now that most of us are well onto our new year’s diets and beginning to rationalize away the more strenuous of our resolutions, let’s take a look at some topics that promise to be interesting reading in 2012 …

  • Unemployment is down, but state and federal unemployment insurance tax rates are still heading up.  What’s up with that?
  • Fed and states continue to step up enforcement of employee misclassification penalties.  A hot topic gets even hotter.
  • The “YouTube Effect” – That shaky cell phone video has already redefined how information is consumed.  Now it’s evolving and finding its way into the corporate boardroom.  What does that mean for the future of corporate communications?
  • An Audience of One? – Don’t be your “independent” contractor’s only client.  If you’re alone, the IRS may take a seat right behind you.
  • SCOTUS is on the case.  The Supreme Court hears arguments on the constitutionality of the Affordable Health Care Act (aka “ObamaCare”).  With all due respect to Messrs. Ali and Frazier, this is shaping up to be “The Thrilla On the Hilla.”
  • Bold as ICE – Immigration and Customs Enforcement is serious about properly documenting workers.  Is an audit or (shudder) a site visit in your future?
  • Managing independent contractors and corporate red tape can be a neat trick.  What are some best practices from people who lived through it?

And like last year, from time to time I’ll hand over my keyboard to some guest bloggers.  So buckle up, stay tuned, and Happy New Year!

 

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it. Relax. We got it. Contact the freelancer payroll solutions company today!

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Dad, is this you they’re talking about?

Dad, is this you they’re talking about? 299 100 PayReel

Very early in my career, I got a good piece of advice:  “Never do a business deal you wouldn’t want your kids to read about in the morning paper.”  Alas, if only the Madoffs, Murdocks, and Nacchios of the business world had been privy to such sage wisdom.

Still, how many of us risk getting our 15 minutes of fame the hard way when it comes to hiring so-called Independent Contractors?  Let me quickly say that some of my best friends are IC’s … legitimate IC’s.  Contractors fill an indispensable role in our economy by providing highly-skilled, variable-cost resources.  As with many professions, however, the dishonest or misinformed few cast a cloud of suspicion over the rest.

Okay, so let’s come clean.  Haven’t we all, at some point or another, done a mental calculation of the odds of getting caught misclassifying a worker?  Or rationalized the potential fines and penalties simply as a cost of doing business?  Or even convinced ourselves that we can interpret complex labor law better than some fresh-faced IRS auditor?

Sure I have.  But then I come back to this image of my son flipping through the morning paper and seeing this headline:  “Your Dad Knowingly Broke The Law.  Mom’s Pissed.”

It’s the “knowingly” part that I wonder how I’d explain.  Even though federal and state labor laws are complex, there are plenty of resources available to help figure them out … Just Google “misclassifying workers.”

This is more than the corporate equivalent of a speeding ticket I’m talking about here.  Company reputation, your credibility, employee morale, the average penalty of $80,000 per misclassified employee, your kid’s respect … that’s what’s at risk.

 

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it. Relax. We got it. Contact us today~!

The Healthcare Reform Head Fake

The Healthcare Reform Head Fake 150 150 PayReel

At the risk of understatement, The Federal Affordable Care Act of 2010 (or, depending on your politics, ObamaCare) has become a sort of a lightning rod issue.

One of the more controversial elements of the act is the assessment of taxes on businesses that choose not to offer their employees health insurance coverage.  If your company employs more than 50 people on a full-time basis (at least 30 hours/week), you, dear reader, have a decision to make.  You’ll need to do the math and then choose either:

  1. Begin (or continue) offering “comprehensive” health insurance coverage to each of your employees, or
  2. Don’t offer your employees insurance coverage and pay a $2,000 per employee penalty (after your first 30 employees).

Not to say your decision will be driven solely by arithmetic.  There’s the competitiveness of your employee compensation package to consider.  Will you be able to attract and retain top talent if you don’t offer a health plan?  What about the composition of your workforce?  Lots of temporary workers on your roster mean this may be a non-issue for you.

But most of us will be crunching numbers to determine how the cost of offering health coverage compares to the tax bill we’ll get if we don’t offer it.

But wait!  The debate in Washington rages on about how much (if any) of the Affordable Care Act of 2010 will actually see the light of day.  Hence, the head fake.  Our federal government fakes left then moves right (pun intended), leaving us standing here with our, uh, business plan in our hands.

To be sure, there’ll be more head fakes, end-around, and flea-flickers before this all gets settled.  But I, for one, am ready to see Congress take this political football right up the middle and score one for all the sick people who can’t find any humor in this issue.

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Leadership

Leadership 150 150 PayReel

(I’m turning over this week’s post to Lisa Cobb, Payroll Supervisor at PayReel.  See you next time!  AB)

Last week I attended a Leadership Certificate Program in Washington D.C.  What I took away from the three days is how true leadership differs from good old-fashioned management.

Our instructor, Martin Armstrong, is retired military and served time in Afghanistan.  He is currently a Senior Director at Time Warner Cable in North Carolina.  He was full of stories … which reminded me of someone back at the office, but I won’t mention any names (Alva Brown).  Martin shared stories about great leaders that have impacted his life both in and out of the military.

Day one, we learned about the different leadership styles and discovered where we fit in.  We discussed the weaknesses that each style can exhibit and were given tools to help build on our personal weaknesses.  It was great to learn that I actually have a leadership style!

Day two, we split into groups and built the old index card, paperclip, and tape tower.  My group won … of course!   Unfortunately, the prize was more index cards, paperclips, and tape.  It was really interesting to see how different groups of people go about accomplishing (or not accomplishing) the same task. And it was fascinating to see how leaders emerge.  It made an otherwise goofy exercise somewhat poignant.

The final day was full of topics.  Evidently, I felt like I hadn’t received enough attention that day, so I volunteered for a role play exercise.  Turns out, I was the lucky individual who had to call an employee in to discuss a very awkward issue …  body odor.  This exercise reminded me how much “fun” being a leader can be.  Even so, I couldn’t wait to get back and practice some of my newly acquired skills … not that body odor is a burning issue at PayReel.

So, what is the difference between being a leader and being a manager?  I guess the moral of Martin’s stories was that to manage is simply to enforce policy.  To lead is to take a stand for the success of your employees and teammates.  Sometimes that involves following the rules … sometimes that may involve changing them.

Anyhow, before heading back to Denver, I was able to spend the weekend with one of my daughters who lives in D.C.  We hit the National Zoo, shopped, and ate too much.  It was perfect!

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Freelancers: This ain’t your father’s career track!

Freelancers: This ain’t your father’s career track! 150 150 PayReel

I hear so much about changes in hiring practices … Fewer full-time positions, more project-oriented, “we’ll call you when we need you” jobs.  Funny thing is many young, culturally diverse people coming into the workforce don’t necessarily want to be anchored to a single employer.  They certainly aren’t looking for the 8-to-5, half-hour-lunch, 2-week- vacation gig their parents coveted.  These workers, in some circles referred to as “millennials,” are not looking to belong to one company, but to networks in which they can explore and thrive.

Boredom is the true enemy of the emerging workforce … and after a steady diet of MTV and Halo 3, employers have their work cut out for them to keep these expressive, gifted, and demanding people engaged.  The folks at Google sure seem to have it figured out (e.g. free meals, all the Xbox you can play, etc).  But those of us without Google-sized budgets will have to get even more creative.  Yes, the workforce *is* evolving, and those of us looking to harness the skills and creativity that come packaged as 20- and 30-somethings need to adapt.

Please recognize, though, that it’s not just an age thing.  Anyone living in Texas, California, and Arizona can attest to the existence and growth of the new “minority-majority.”  In the 1990s, corporate diversity programs were popular because they made sense from a social responsibility perspective.  Today, access to top talent (and the competitive advantage that comes with it) means your company’s culture has to support the complete assortment of A-Player packaging.

Just one last comment on the age thing … You may be wondering how long you can continue to ride those older, reliable baby boomers.  Well, consider this:  An AARP-sponsored study of 1,500 workers age 45 to 74 showed a whopping 69% plan to continue working, in some capacity, beyond their retirement age … some because they have to, but mostly because they want to.

I think that makes us lucky!

 

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it. Relax. We got it.

Why you should read this blog

Why you should read this blog 150 150 PayReel

Let me begin by saying what this blog isn’t. It’s not a way for payroll professionals to stay up-to-date on pending legislation. It’s also not a thinly veiled attempt to sell you something. It’s not particularly well constructed or worthy of being plagiarized.

It is, on the other hand, a good read for busy people who recognize that talent is more frequently being packaged in the form of freelance contractors. This is talent that busy people must harness in order to keep their production projects on-schedule and on-quality. This is also talent that can be a bitch to manage.

This blog is an acknowledgment that we are living – and working – in interesting times. Many young people (anybody south of 30 IMHO) entering the workforce are not on their fathers’ career track and have different expectations of employers than their ancestors. In particular, they’re not looking for a cradle to grave relationship with a single company. They want to network, play the field, take a year off. But more on these millennials in a later post.

Given this paradigm shift on employment, the IRS, DOL, DHS, etc are scrambling to keep pace. Busy people making use of this re-packaged talent need to keep pace of them keeping pace.

And then there’s the specter of health care reform. What impact will it have on this emerging workforce? No one can say for certain, but if you read this blog I’ll make sure you stay informed and appropriately confused.

I promise to do my best to keep my posts short, informative, and maybe even humorous. Thanks for reading!

 

PayReel’s clients, who are some of the biggest companies in the world, are constantly immersed in the chaos of producing multimedia content or executing live events. PayReel makes sure they have the right contractors at the right time in the right place, and that everyone gets paid properly. And, most importantly, they handle every last detail perfectly while making sure their clients think nothing of it. They are your employer payroll solutions for freelancers!

Relax. We got it.