CA Passes Salary History Ban

CA Passes Salary History Ban

AB 168 passed into law on October 12, 2017, amending the California Fair Pay Law by prohibiting all California employers from inquiring into an applicant’s salary history starting January 1, 2018. Specifically, under the new law, all California employers are required to follow these rules during the hiring process: Employers cannot use (rely on) the salary history information of an applicant when determining whether to offer employment to an applicant or Employers cannot use (rely on) the salary history information of an applicant when determining what salary to offer an applicant. Employers cannot seek salary history information, including compensation and benefits, about an applicant. Upon reasonable request, employers must provide the pay scale for a position to an applicant applying for employment. It is important to note that the law does not prohibit an applicant from voluntarily disclosing salary history information to a prospective employer. If an applicant voluntarily and, without prompting, discloses salary history information to a prospective employer, the law does not prohibit that employer from considering the voluntarily disclosed salary history information. Next step for employers California employers should review this new law and provide training to those people involved in the hiring process about the new requirements, as these new requirements impact the interview process.  In addition, all California employers should review their job applications and verify that any inquiries regarding prior salary history or wage rates are removed from the application before January 1st. This information was written by Laurian Rutterbush and shared on https://blog.eplaceinc.com....
The Five Factors of Improving Your Business Credit Score

The Five Factors of Improving Your Business Credit Score

The Five Factors of Improving Your Business Credit Score Are you looking to improve your business credit score? A good business credit score is critical in being approved for trade credit and company financing. Similar to personal credit scores, a business credit score serves as a financial report card in determining credit worthiness. A statistic-driven algorithm derived to assess risk calculates a business’s scores based on several factors. There are five common factors used to calculate a business credit score, although you should keep in mind each credit-reporting agency has its own scoring model. The Five Factors Are: 1. Making Prompt Payments One of the most important factors is paying bills on time. For the best credit score possible, be sure to pay invoices before the due date. The sooner payments are submitted, the better the impact it will be on your business credit score. 2. Creating Positive Trade References Positive payment experiences with suppliers, vendors, or business partners can have an important impact on your business credit ratings and scores. Not all vendors and suppliers share data of payments with business credit-reporting agencies, but you can add trade references to your company’s Dun & Bradstreet (D&B) credit file. If you didn’t know this before, it takes a minimum of three trade references to generate a Paydex® Score with Dun & Bradstreet. 3. Maintaining a Low Credit Utilization Ratio A company’s credit utilization ratio is the percentage of the company’s available credit used. It is calculated by dividing a company’s total outstanding balance on all credit cards by the sum of each card’s limit. This ratio plays a very...
Deductibility Guidelines for Charitable Donations

Deductibility Guidelines for Charitable Donations

Do you enjoy making donations to charities and having the benefit of a tax write-off for your contribution? It’s important to understand the tax provisions that apply to these donations, especially contributions of clothing, household items, and monetary giving. Rules for Clothing and Household Items Clothing and household items must generally be in good condition including furniture, furnishings, electronics, appliances, and linens. Guidelines for Monetary Donations A taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank, and credit card statements which should show the name of the charity, the date, and the amount paid. Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity. These requirements for the deduction of monetary donations do not change the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet both requirements. Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of this year count for that year even if the credit card bill isn’t paid until later. If checks are postmarked by December 31, they still qualify...
CA Minimum Wage Increase January 1, 2018

CA Minimum Wage Increase January 1, 2018

January 1, 2018, will bring about another minimum wage increase in California. This change is due to Law SB3 which increases the California minimum wage to $15.00 per hour for large employers by the year 2022. Firms with 25 or fewer employees must meet this minimum pay rate by 2023. Once this rate of $15.00 per hour is reached, rates will then increase up to 3.5 percent (rounded to the nearest 10 cents) in relation to inflation. Below is the chart that shows the minimum wage schedule through 2023. If you have employees exempt from overtime, you’ll have to make sure their wages are adjusted, if necessary, due to this change. California labor law requires that anyone not subject to overtime must earn at least twice the minimum wage. Review your pay scale for any employees currently classified as non-exempt. This will help you keep track of whether or not an employee is to receive overtime pay. It’s also important to make sure you have posted the new labor law poster which reflects this new rate. If an employee’s rate of pay will increase on January 1, they must receive notice from the employer by January 7. However, this notice is not required if the change is reflected on a timely itemized wage statement given no later than January 7. Remember that if you are in the City of Los Angeles or unincorporated cities under county jurisdiction, there is a different pay scale which must be followed as it goes into effect at a faster rate than the state minimum wage. Effective Date Employers With 26 or more Employees Employers...
2017 Federal FUTA Credit Reduction Rates Announced

2017 Federal FUTA Credit Reduction Rates Announced

Are you an employer who must take into consideration the credit reduction when filing your FUTA tax return for 2017? A state is a credit reduction state if it has taken loans from the federal government to meet its state unemployment benefits liabilities and has not repaid the loans within the allowable time frame. If a state has outstanding loan balances on January 1 for two consecutive years and does not repay the full amount of its loans by November 10 of the second year, the FUTA credit rate for employers in that state will be reduced until the loan is repaid. This year there are only two locations that must pay higher taxes above the regular FUTA rate for 2017. These are California and the Virgin Islands. Each must pay an additional 2.1% tax for each employee’s wages up to the $7000 limit. The Virgin Islands is also subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive January 1’s with an outstanding federal advance. The BCR add-on is an additional 1.1%. The standard FUTA tax rate is 6.0% on the first $7,000 of subject wages, but employers may receive a credit of 5.4% when they file their Form 940 Employer’s Annual Federal Unemployment Tax Return, to result in a net FUTA tax rate of 0.6% (6.0% – 5.4% = 0.6%). The FUTA credit reduction is reported on the annual 940 tax return. Any increased FUTA tax liability due to a credit reduction is considered incurred in the fourth quarter and is due by January 31 of the following year. If you...
How to Save Money on Bookkeeping

How to Save Money on Bookkeeping

If you’re currently working with a bookkeeper, but are looking to save money on your service fees, then we have a few tips to share with you. Our company has been assisting many small business owners for over 12 years. Over those years, we’ve been able to provide our clients with the best services and prices that fit their specific bookkeeping needs. In today’s post, we want to share 7 tips on what you can do to decrease your fees and help your bookkeeper streamline your bookkeeping process in order to perfectly fulfill your needs and budget. Send All Paperwork at One Time Paperwork that is sent in incomplete batches may result in an unnecessary lag time. Stopping tasks in progress to request missing paperwork creates a higher probability of mistakes and missed deadlines. You may find creating and following a check sheet to ensure all paperwork is sent is helpful. Send Time-sensitive Documents Early Although this tip applies to all bookkeeping, it can be more specifically applied to bill-pay services. It’s always best to forward all bills/statements consistently and ahead of time in order to process payments. Delayed paperwork can result in late fees, disconnected services, etc. If this isn’t a viable option contact your service providers and update your contact information to “in-care-of” your bookkeeper. Be Organized Avoid submitting your paperwork in a large box for your bookkeeper to sort through. You can simplify the process by creating a checklist of all the items that need to be given on a monthly basis and organizing statements and receipts by month. Provide all Necessary Details Providing details on...
Why It’s Important to Forecast Before Opening a Business

Why It’s Important to Forecast Before Opening a Business

Are you planning on opening a business? Have you created a plan and really written out a budget and forecasted sales/expenses? This is an extremely important step to improve the probability of the success of your business. I have recently seen the frustrations that have arisen because a business owner didn’t really sit down and look at the cash flow that would be needed to cover the known monthly expenses. And as anyone knows who starts a business, there are often unexpected things that can pop up and have an impact on profit. It’s important to write down known expenses and estimate the income that will be generated once the business opens and how much cash will be available to pay the bills that will be due including rent, operating costs, financing fees, materials, and more. And often it costs much more than estimated to actually get the business open. If in an industry that needs a permit, it may take weeks or months to get approval, and in the meantime, rent is due on your space. Improvements on the property can also take longer than originally planned meaning your open date is pushed back later than planned. Look at businesses in your industry to see average profit margins. Then because new businesses usually aren’t as profitable as established businesses, reduce the expected income and increase expected costs. Will you be able to cover your monthly expenses with the income generated from the business? If not, what you can do to reduce them? Perhaps it’s finding a different location where the rent is less. Or finding other vendors who can provide...
How to Prevent Over-Payment of Unemployment Claims

How to Prevent Over-Payment of Unemployment Claims

Did you know incorrect payments of unemployment insurance (UI) benefits can be costly for your business? Over-payment of benefits can be charged to your account and alter your UI reserve, requiring a larger tax rate in a subsequent year. But rest assured, you can avoid this by looking out for the UI notifications from your state agency and replying to them quickly. What are UI benefits? Unemployment insurance is a program created to provide eligible workers, who are unemployed due to no fault of their own, with temporary financial assistance. Some examples for why an employee has been let go that would quality are: reduction of hours/ staff or if an employee is not the right fit for the position. The individual must have received enough wages during their base period, be physically able to work, and be actively looking for work in order to apply for benefits. Incorrect over-payments of UI benefits happen when an employer or former employee provides the wrong payroll information or neglects to provide the information on time. When this happens, former employees might collect benefits that they should not receive. How to prevent over-payments: When a worker leaves your company, give correct and complete information regarding the separation. This can help prevent over-payments and can save you from going through the appeals procedure. Respond as rapidly as possible to requests for proof of the employee’s weekly pay amount. Report new hires to your state agency within the required number of days (usually 10-20 days) to prevent collecting benefits while working. If an employee does receive more UI benefits than he or she should,...
QuickBooks: Desktop Vs. Online

QuickBooks: Desktop Vs. Online

We are often asked by our clients, “Which is better; QuickBooks Online or the desktop version?” Even though our company has our own personal opinion on which software if better, it’s important to find out how the varying functions of QuickBooks lines up with your bookkeeping needs in order to suggest which is best for you. In order to help you decide which one will best fit your needs, it is important to understand the pro’s and con’s of both. We hope this post can help aid you in making the best decision on how to reach the level of efficiency and functionality you require. To begin, if you are looking for the convenience of having access anytime and anywhere to your company’s books, the online version offers access for up to 25 simultaneous users while the desktop version does not. This of course does not mean that if you choose the desktop version you’re not able to access your data when you are on the go. By using a software such as LogMeIn, you are able to work on your file via remote access. We currently use this software with several of our clients with great success. If you are a retail establishment using QuickBooks Point of Sale, the desktop version would be a best option since the online version does not integrate with this software. However, when it comes to upgrades and technical support the only one that offers this at no additional cost is QuickBooks online. If you would like to use class tracking to see profitability by specific areas within your business, you are able...
Federal and CA Medical Leave Laws

Federal and CA Medical Leave Laws

Are you aware of the local and national laws regarding medical leave for your employees? An article from Swipeclock.com, written by Annemaria Duran, provides us with knowledge on businesses can stay in compliance with different levels of employment laws. In the United States three main levels of employment law can apply to employers simultaneously. Locally, businesses may have to comply with city or county employment law. In addition every state has labor laws and the United States Department of Labor oversees employee to employer relationships. In the case of Family or Medical leave, this sometimes means that employers have to be aware of multiple laws. While often these laws appear to duplicate requirements, in reality, these laws often create variations of requirements for compliance. Owners, managers, and HR departments are often not aware of the variations and inadvertently break these leave laws. Here is a little information on both the federal and California leave requirements: United States Family Medical Leave Act The Family Medical Leave Act (FMLA) was put into law in 1993. The law oversees companies across the United States. FMLA applies to employers who have at least 50 employees within a 75 mile radius. Their employees who have worked at least 1 year and 1,250 hours in the last year are eligible for FMLA leave. FMLA provides up to 12 weeks of leave for family or medical purposes. In specific circumstances, employees can take up to 26 weeks of protected leave. Employees are able to take leave to bond with new children, care for ill family members, or take care of their own serious illness. Family members...

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