HR & Compliance

Add SBAM offers a full spectrum of human resources services to keep you compliant and help your business run more efficiently and profitably....


Human Resources Solutions

ASE LogoLooking for help with tough HR issues? 

SBAM partner ASE has the answers about hiring, firing, FMLA, ADA and more! Get access to a FREE HR hotline, affordable and cost-effective research consultation services, discounted employee handbooks and workplace posters, and more.


Section 125 Plan, FSA, HSA & HRA Administration

 

KUSHNER & COMPANY LogoLooking for ways to contain health care costs?
With the cost of health insurance continuing to rise, most employers require their employees to contribute to the cost of health insurance premiums. SBAM partner Kushner & Co. can help you put a tax-favored, consumer-directed plan in place that benefits you and your employees.

 


COBRA Administration

Personalized, affordable administration for your business. 

If you have 20 or more employees, your company is required by federal law to offer continued health insurance coverage via COBRA and will face huge fines if it's not administered correctly.  Let SBAM help you stay compliant for as little as $35 per month. 

What you need to know about SNOPA (The Social Networking Online Protection Act)

Article courtesy of SBAM Approved Partner ASE

By Suneetha Giridhar, PHR


In the great arc of human existence, events always combine with technology to change peoples’ lives. In turn, they push lawmakers to draft new legislation that nobody would have imagined only handfuls of years earlier.

One such federal bill, currently in the early stages of the legislative process, is the Social Networking Online Protection Act (SNOPA) – a federal bill introduced on April 27th, 2012 by Rep. Eliot Engel, D-N.Y. This legislation would ban employers from requiring their employees and job applicants to give them usernames, passwords, and other access to the online content in their social networking sites.

Employers have naturally wanted access to those sites, especially those of their applicants, to further vet their qualifications and suitability for employment.

ASE has held several roundtable discussions on this topic where members have shared both their frustration and confusion over whether and how to use such information. In the absence of regulation there is the danger that employers may use such information to illegally discriminate against protected groups. More insidious is using the information without illegal intent but inconsistently, which can lead to disparate impact in ways they did not even consider possible. The American Civil Liberties Union (ACLU) has been urging Congress to protect applicants and employees from requests to share their private information on personal networks such as Facebook.  According to a statement from the ACLU, “We need a bright line rule—if it’s behind a password, that means keep out, whether you’re an employer, a school or the government.”

Rep. Engel stated that a federal statute was needed to protect the American public. Some states are taking their own actions. On May 2, 2012, Maryland became the first state prohibiting employers from requesting the social media passwords or accessing the social media accounts of prospective and current employees. Michigan has introduced the Social Network Account Privacy (SNAP) Act, which would also prevent schools from requesting access to student social media accounts.

Password Protection Act Of 2012 follows closely on the heels of SNOPA. This act would restrict employer access to employees online accounts.  The bill was unveiled in the Senate by Richard Blumenthal (D-Conn.), Chuck Schumer (D-N.Y.), Ron Wyden (D-Ore.), Jeanne Shaheen (D-N.H.), and Amy Klobuchar (D-Minn.).

All of these bills and statutes are seeking to address the new challenges brought on by the Internet and privacy concerns.  

There are increasing news reports in recent months of employers requiring employees and applicants to submit their passwords for personal networking sites such as Facebook. Employers are well advised to approach the issue conservatively. Obviously they need to keep a close watch on these statutes as they develop. In the meantime, they need to establish common-sense policies on accessing social networking sites for recruitment or employment-related decisions. These should include clearly informing employees/applicants of their intent (or non-intent) to access such sites, and formulating clear, job-related rationales, that they can easily articulate, for doing so.

Have a social networking related human resources question?  ASE provides free fact-based answers to your questions!  Just click here to find out how.

Tax and financial benefits of hiring your child to fill a summer job

Article courtesy of SBAM Approved Partner AdvanceHR

Here's a common situation for the family of a small business owner: The family's teenage child is looking for a job for the summer and in the afternoons after school starts in the fall. The owner needs help around the workplace during the upcoming busy season. Isn't the solution fairly obvious? By hiring the child to work for the business, it's a win-win for the family.

But putting a child on the payroll isn't just a smart move from an employment standpoint. It can also result in several other tax and financial benefits. Here are six potential perks.

1. Income tax savings. Say that you reduce your compensation by the amount of salary you pay your child. Instead of being taxed to you at rates reaching up to 35 percent this year, the income is taxable to your child. For 2012, your child can earn up to the standard deduction amount of $5,950 without paying any federal income tax. Any excess is taxed at a low 10 percent rate.  

    Example:

You pay your child $5,000 to work during the summer before she heads off to college. The entire $5,000 in wages is covered by the standard deduction. In contrast, in your 33 percent bracket, $5,000 in wages would cost you $1,650 in tax. Your adjusted gross income (AGI) is also lowered, which means there is less chance that you'll be subject to unfavorable AGI-based phase-out rules.

2. Kiddie tax avoidance. Generally, the unearned income of a child under age 19, or a full-time student under age 24, is taxed at the parents' tax rate to the extent it exceeds an annual threshold ($1,900 in 2012). But this rule doesn't apply to "earned income" that your child is paid in wages.

3. Business tax deduction. You get a business deduction for money that, as a parent, you might have given your child anyway.

The wages you pay the child are deductible by the business just like the wages paid to any other employee of the company. However, when a family member is employed, you must take care to ensure that the wages are reasonable in amount for the services actually provided (see right-hand box).

4. Payroll tax savings. If a child under age 18 is employed by his or her parent in an unincorporated business, the earnings are exempt from FICA tax. This exemption also applies to FUTA tax up until the age of 21. These payroll tax breaks can provide significant tax savings for a parent who is self-employed or a partner in a partnership.

An unincorporated business includes a sole proprietorship; husband-and-wife partnership (owned only by you and your spouse); a husband-and-wife limited liability company (LLC); or a single-member LLC, which is treated as a sole proprietorship for federal tax purposes.

What if your business operates as another type of entity, such as a C or S corporation? Your child's wages are subject to Social Security, Medicare, and FUTA taxes, regardless of age. That's the bad news.

The good news: The $5,950 standard deduction for 2012 still provides a great shelter against the federal income tax. And your business can deduct your child's wages and the employer's share of employment taxes on those wages. So this is still a tax-effective strategy for both the child and your business.

Children Age 18 and Older: After your children reach age 18, the tax advantages decrease, because their wages are then subject to Social Security and Medicare taxes (however no FUTA tax is due until age 21).

As the employer, your business must pay its share of the Social Security and Medicare taxes. The employee's share is withheld from your child's paychecks. However, again, the child's standard deduction still shelters up to $5,950 from the federal income tax. And you still collect a nice business write-off that cuts your income tax and self-employment tax bills.

MEDC's Mike Finney and a culture change of supporting small business. Wednesday on the Business Next program!

There’s a new state culture that supports small business growth and entrepreneurship. Michael Rogers talks with MEDC President and CEO Mike Finney about how the culture change came about. Also on Wednesday's program, Dave Haviland of Phimation Strategy Group in Ann Arbor talks about the important it is that fast growing small businesses have accurate job descriptions; business consultant Tom Borg discusses his three tips for business success; and U.S. SBA National Small Business Financial Champion Dave Adams, CEO of the Michigan Credit Union League, talks about the role of credit unions in meeting the needs of small business owners and how to boost your chances of getting a business loan at your credit union.

Listen Wednesday at 10 a.m., 3 p.m. and 8 p.m. on the 
Michigan Business NetworkSBAM members can log in and listen to archived programs anytime on a PC or mobile device by going to the Business Next show page.    

Health insurance cost problems are not going away

Health insurance cost problems are not going away
(by Scott Lyon, SBAM health insurance expert)

The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23 by President Obama. Today, the question turns to will the U.S. Supreme Court decide to allow the PPACA to stand or rule the law as unconstitutional? Regardless, this is shaping up to be a landmark Supreme Court decision that will impact the provision of health care and health insurance in America for decades to come whether its upheld, struck down, or parts are maintained while others are not. The key elements in question include:

  • The Individual Mandate and its related provisions including the requirement for individuals to maintain a minimum level of health insurance coverage, the design of insurance exchanges, insurance market reforms (guarantee issue and renew, no pre-existing conditions exclusions, covering children on their parent health insurance until the age of 26, among others), etc.
  • The Expansion of Medicaid, essentially who is eligible for this program and how is it funded.

People who follow the Supreme Court have indicated that the conventional wisdom is that the justices will release a decision at the very end of this session – either June 25h or June 28. This makes some sense for a couple of reasons. First, the Supreme Court issues decisions on Mondays and Thursdays and the 25th and 28th are the last Monday and Thursday of the Court’s year. Second, regardless of how they rule, it will be the beginning of a media and political feeding frenzy and why do this before the Justices head out of Washington for the summer?

Either way, Michigan and for that matter the rest of the country, still will have a health insurance cost problem. The cost of U.S. healthcare services is expected to rise 7.5 percent in 2013, more than three times the projected rates for U.S. inflation and economic growth, according to an industry research report released by PricewaterhouseCoopers on May 31. 

According to the report, premiums for large employer health plans could increase by only 5.5 percent as a result of company wellness programs and a growing trend toward plans that impose higher insurance costs on workers. The projected growth rate of 7.5 percent for overall healthcare costs contrasts with expectations for growth of 2.4 percent in U.S. gross domestic product and a 2 percent rise in consumer prices during 2013, according to the latest Reuters economic survey.

That said, why is health insurance so expensive and what are some big picture things that might help reduce costs?

One of the reasons health insurance costs so much is due to the federal programs of Medicare and Medicaid. A couple of years ago, the actuarial firm Milliman estimated that for a family of four, there is a cost shift of $1,788 (15 percent of premium) because these programs do not pay providers at a fair rate. Ending this cost shift would help small businesses and their employees afford coverage. While paying providers at a “fair or fairer rate” may sound easy enough, the big question that needs to be resolved is, of course, where does that money come from? 

A second reason health insurance costs as much as it does is due to the cost shift from the uninsured to the insured, which is estimated at $922 for a family of four. No one on either side of the political aisle denies the uninsured and the cost shift; this is the problem that the Democrats and the Affordable Care Act are trying to resolve with the individual mandate and employer “play of pay provision.” Keep in mind that before the rules changed as a result of the PAACA - of the 47 million uninsured: 4.7 million (10 percent) were college students, 10 million (21.28 percent) are non-citizens, 11 million (23.40 percent) are eligible for, but not enrolled in public programs like CHIP and Medicaid and another 9 mil

To catch a thief: Is a polygraph a good idea?

Article courtesy of SBAM Approved Partner AdvanceHR

If you think an employee may be stealing from the company, there's a good chance you are right. But is a polygraph test the best way to establish the truth? The answer is... maybe. Find out what happened in one new case involving a Wendy's restaurant employee, and learn the ground rules for using a polygraph test.  

Congress laid down the law on the acceptable use of lie detectors --specifically polygraph tests -- at the workplace with the Employee Polygraph Protection Act of 1988 (EPPA). On occasion courts weigh in to say whether a particular employer's use of the polygraph was legal. One such case was recently decided, though narrowly, in favor of a Wendy's restaurant.

First, a reminder of EPPA's basic provisions. According to Jon Hyman, a partner with the Cleveland-based law firm Kohrman Jackson & Krantz, EPPA prohibits private employers from:

  • Requiring, requesting, suggesting or causing an employee or prospective employee to take or submit to any lie detector test
  • Using, accepting, referring to, or inquiring about the results of any lie detector test of an employee or prospective employee, and
  • Discharging, disciplining, discriminating against, denying employment or promotion, or threatening to take any such action against an employee or prospective employee for refusing to take the test, or on the basis of the results of a test.
Were it not for some exceptions to those broad limitations, there would be no point in considering the use of a polygraph. The most important exception, Hyman explained, involves "employees who are reasonably suspected of involvement in a workplace incident that results in economic loss to the employer and who had access to the property that is the subject of an investigation."

Bass v. Wendy's: The Facts of the Case

In Bass v. Wendy's of Downtown, Inc. (U.S. District Court, N.D. Ohio, Case No. 11-CV-940, May 1, 2012), Donald Bass was a part-time manager, who was asked to take a polygraph test after a cash deposit went missing. Only two employees had access to the cash. Both were asked by Wendy's to submit to a polygraph examination as part of the investigation. Although they could have refused, both agreed and, according to the polygraph operator, Bass flunked. However, he was not terminated.

Two years later, Wendy's posted openings for two management positions. By this time, Bass had already left Wendy's, after he was recorded on a security camera, inappropriately touching a female employee. His resignation came at the request of management. Later, when he learned Wendy's was hiring managers, Bass asked to be considered for one of the new jobs. Wendy's declined.

Bass then filed a complaint with the Ohio Civil Rights Commission, alleging he had been a victim of age discrimination. In its defense, Wendy's offered a variety of justifications for its decision -- including Bass's failure of the polygraph test.

Bass sought damages from Wendy's in federal court based on:
  • Wendy's disclosure to the Civil Rights Commission that the polygraph and been administered and
  • Wendy's statement that Bass admitted to criminal conduct.

While the court faulted Wendy's references to the polygraph results and Wendy's characterization of those results, it nevertheless decided to drop the case. Why? Bass offered "no evidence that he was in any way damaged by Wendy's disclosure of his failed polygraph examination."

Although its action appears blameless on a substantive level, Wendy's may have dodged a bullet in this case through its reference to the polygraph results. The case illustrates the critical importance of scrupulous adherence to EPPA's exacting requirements. Hyman li
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