New CA Split Shift Premium Update

New CA Split Shift Premium Update

While there has yet to be any official legal action to put it into IWC Wage Order, a recent update to the terminology regarding split shift premiums on the California Labor Commissioner’s Office website has many preparing for just such a change to take place in the near future. A split shift being the term used to describe a workday with a gap longer than one hour between those spent working – a shift from 8:00-12:00 and then 4:00-6:00 that same day, for example – under current wage law, employers are required to pay an additional hour’s worth of work as a premium, that is equivalent to at least the state minimum wage. However, with the recent change to the Labor Commissioner’s Office interpretation, that premium rate could expand to include paying the highest between the state or local minimum wage – thus potentially increasing an employee’s earnings on a split shift, depending on what the local minimum wage is. To provide an example of what should be given to an employee after working a split shift, the Labor Commissioner’s Office provides the following case study: Question: “My regular workday includes a split shift, however, I make $12 per hour and minimum wage is currently $11 per hour. I work six total hours in a workday, so am I entitled to a split shift premium?” Answer: “Yes, because you work six hours, and the minimum wage for your workday that includes a split shift is $77 (six hours times $11 plus an additional $11 for the split shift premium). If you are only paid $72 (six hours times $12),...
5 Payroll Fraud Ploys

5 Payroll Fraud Ploys

You may think payroll fraud to be nearly impossible to accomplish – after all, it’s money that visibly comes out of your account, passes your books, and should be obvious to detect, right? Wrong. While payroll fraud is more difficult to execute, unfortunately it’s complicated nature just makes it harder to catch, sometimes continuing on for months before detection and costing businesses thousands of dollars. Want to know what to look out for? Here’s 5 ploys employees use to commit payroll fraud. 1) The Non-Existent Employee More common amongst companies with a large staff, one version of payroll fraud is when an employee issues a check for another non-existent or previously laid-off worker, only to cash it themselves. Often, this can be prevented by policies that require management sign-off on each time card, while warning signs can include employees with the same address, multiple direct deposits to the same account, or social security numbers that are slightly altered or missing a digit. 2) Hours Inflation For those who pay their employees by the hour, unless sophisticated time tracking systems are in place, it can be easy for an employee to simply add hours to their time card, or clock in on days they never worked. Learn your employees’ shifts, or have your supervisors sign-off on each time card upon completion of the work day to prevent this scam. 3) Unsanctioned Pay Raise Under this scheme, employees in charge of payroll give themselves a raise in pay, extra commissions and bonuses, or unearned overtime. This can often be avoided by a payroll review policy, supervision, changing shifts of administrative duty, or...
7 Steps to Obeying Nanny Tax Laws

7 Steps to Obeying Nanny Tax Laws

Most of us when we think of the word “nanny” picture a twenty-something college student, watching the kids during the weekdays for cash before she heads home for the night. Rarely, if ever, do we think “employee, with payroll, a time-card, and W-2”. But did you know that under tax law that’s exactly how a nanny should be treated? If you’re about to hire a nanny, stop first to read just what’s required to be tax compliant. 1) Classify Your Nanny as an Employee As the IRS has consistently held that household workers are not independent contractors, but rather employees, not classifying a nanny as such can be labeled as felony tax evasion. After all, the family sets the rules, babysitting schedule, and provides the necessary equipment to keep the children fed and happy, meeting all the descriptors of an employee who should receive a W-2 at the end of each tax year. 2) Pay Overtime and At Least Minimum Wage Under federal law, all domestic workers are entitled to at least the federal minimum wage of $7.25 per hour, but many states and counties have higher minimums. Worker’s rights call for the highest minimum wage between state, local, or federal rulings to be paid, so be sure to check your area to see which rate applies. In addition, federal rules require overtime for any hours worked over 40 per week must be given to any nanny in your household – though some exceptions exist for live-in care and companionship. Failing to comply with either of these can result in costly lawsuits, so know what’s required of you as...
Check Your Payroll Withholding – Things Have Changed

Check Your Payroll Withholding – Things Have Changed

With the recent Tax Cuts and Jobs Act (TCJA) that was passed back in November of 2017, we’ve been dedicated to covering every available aspect of the new tax law as the information becomes available. Today’s topic? The small, but crucial changes to the rules of withholding, and why you should now always double-check your payroll to avoid possible blowback from the IRS. As the first, clear TCJA change explained by the IRS, everyone is excited that the tax rate for Individuals has been lowered – many reasoning that they’re likely over-withholding now with their income tax. However, what is easily missed by many taxpayers, is the accompanying fine print of similar alterations that comes with that lowered tax rate – these changes holding the potential for you to actually under-withhold! What’s Changed To make sure the correct amount of income tax is being withheld, here’s what provisions are different and how they could potentially apply to you: ● The standard itemized deduction threshold has now nearly doubled to $12,000 for single filers, and $24,000 for spouses filing jointly. ● The Child Tax Credit (CTC) has also doubled from $1,000 to $2,000, while $1,400 can be refunded. However, there is now a $500 credit for dependents who aren’t your children, that cannot be refunded. ● Personal exemptions – even for dependents and qualifying relatives – no longer apply. ● The State and Local Tax (SALT) deduction – including that for sales tax, local income tax, and both state and local property tax – is now reduced to $10,000 per year. ● The mortgage interest deduction has also been lowered...
California Governor Signs Two New Employment Bills

California Governor Signs Two New Employment Bills

Decent humanity had a win when California’s Governor Jerry Brown signed two new employment bills into state law on July 9th. The two bills, scheduled to take effect January 1st of next year, are simple but effective in nature – one addressing workplace sexual harassment, and the other Paid Family Leave regulations – while both were unanimously voted through by bipartisan Legislature. Curious about the changes? Read on… Bill to Alter Paid Family Leave Regulations After the previously required seven-day waiting period before receiving Paid Family Leave (PFL) benefits was removed from state law altogether at the start of this year, one of the bills signed by Governor Brown, AB 2587, was more of a clarifying update to existing legislation. Back when there was a seven-day waiting period, if employers demanded their employees use up their vacation time before receiving PFL benefits, that waiting period could simultaneously count towards their earned time off, making it so that an employee would only have to wait two weeks instead of three to receive their benefits. Now that the waiting period no longer exists, AB 2587 merely removes the law’s reference of it counting towards an employee’s vacation time – the vacation law itself remaining unchanged. Sexual Harassment Protection Bill for Victims and Employers Coded as AB 2770, this bill is a major milestone towards protecting victims of sexual harassment, while helping to prevent it from happening again to others in the future. An old problem when it came to sexual harassment in the workplace, if a victim ever did have the courage to speak up about it, a common response from...
How to Detect Workers’ Compensation Insurance Fraud

How to Detect Workers’ Compensation Insurance Fraud

While many employers have to deal with the accidental trip, cut, or injury happening to one of their employees at some point throughout the lifespan of their business, no one should have to put up with fraud in the process. According to a study done by the National Insurance Crime Bureau, workers’ compensation insurance fraud is a casually-committed crime that annually costs businesses over $30 billion nationwide. Perhaps one of the more common forms of this is “claim-related fraud”, which happens when an employee either falsely reports an injury or overexaggerates the extent of an existing one in the effort to receive better workers’ compensation benefits. Want to avoid being scammed out of a higher insurance payout? If you’ve just received a workers’ comp. claim from your employee – while there’s no one-size-fits-all guideline to know a fraud when you see it – a simple fact-check against these 10 common warning signs can help narrow down your suspicions. The claim might be a fraud if: You receive the report on a Monday morning, even if the injury was said to have happened the Friday before; The alleged accident is reported right after or before the employee is fired, given less work, or quit; The employee’s lawyers or doctors have a record of dealing with multiple or suspicious claims; There are no witnesses to, or an illogical reason was given for the accident; The employee’s story regarding the injury does not match with the evidence given by medical records; The employee has a reputation for lying or making questionable claims; The employee refuses to have a check-up with a medical...

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