On June 23, 2008, the Internal Revenue Service announced an increase to the optional standard mileage rates.

For the last half of 2008, the optional standard mileage rate will increase from 50.5 cents to 58.5 cents per mile. Taxpayers have the option of using the optional standard mileage rate to calculate deductible costs of operating an automobile for business purposes.

The rate for computing the deductible medical or moving costs have also increased by 8 cents to 27 cents per mile, however the rate for providing services for charitable organizations has remained unchanged at 14 cents per mile. For further information you can go to the IRS announcement at: http://www.irs.gov/newsroom/article/0,,id=184163,00.html.

The Small Business Administration has recently updated their free online training courses.

The Small Business Administration (SBA) is a great resource for any small businesses across America. The SBA “was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation”. The SBA continues to help Americans start, build and grow businesses through a network of field offices and partnerships with public and private organizations.

Part of the SBA is the Small Business Training Network (SBTN).  The SBTN provides online training for prospective and existing business owners.  The already wide range of online training through the SBTN has just been increased to include courses on “Loan Packages” and “Loan Guaranty Programs”.  To view a listing of SBTN’s free online courses go to http://www.sba.gov/services/training/onlinecourses/index.html.

Several labor law initiatives heat up Colorado’s ballot in November.

The 2008 general election ballot will have a battle between organized labor and business interests competing to get ballot initiatives passed for their side. The battle began when business interests, led by Jonathan Coors, filed a “Right to Work” initiative. Organized labor then filed offsetting initiatives, four of which would be economically devastating to Colorado. These four initiatives, discussed in greater length in later blogs, include; Initiative 74- Criminal Accountability for Business Executives, Initiative 76- Allowable Reasons for Employee Discharge or Suspension, Initiative 92- Employer Responsibility for Health Insurance, and Initiative 93- Additional Remedies for an Unsafe and Unhealthy Workplace. 

Major Colorado leaders representing both sides, including Governor Ritter, Senator Salazar, Denver Chamber of Commerce CEO Joe Blake and MDEDC Executive VP Tom Clark, have unsuccessfully made efforts to get all of the initiatives removed. If voters do not take the time and effort to understand the effects of these initiatives, they will be passed and dramatically stunt our state’s economic growth.  

StaffScapes review of the devastating labor initiatives on the November Ballot.

Initiative #74 would “hold a business executive criminally responsible for the business’s failure to perform a duty required by law if the official knew of the duty and the failure to perform it.” The term executive extends to partners, officers, directors, managers, proprietors, supervisors and includes executives of non-profits and home owner associations. This initiative would extend criminal accountability to business executives who were aware of their business’s failure to perform a legal duty.

Listed below is the potential impact of initiative #74:

Ø      Current state and federal laws already hold business executives accountable with recent federal laws strengthening criminal and civil penalties for executives who commit fraud.

Ø      Initiative 74 does not require the party bringing the suit to have legal standing, allowing politically-motivated or frivolous charges to be brought against business executives.

Ø      Initiative 74 also allows the plaintiff’s attorney fees to be reimbursed if successful but does not extend that to the executive defending the suit.

Ø      Extending the definition of an executive down to manager level can hinder recruitment of employee talent.

Ø      Community leaders and volunteers may be reluctant to serve on nonprofit boards and home owner associations due to fear of prosecution.

Ø      Initiative 74 creates a way to avoid accountability by creating an immunity loop-hole for executives who report knowledge of their business’s failure to comply with the law.

Should your son or daughter, working as a shift-manager at a local fast food restaurant, face criminal prosecution for a hair on a french fry? Do you think a teenage supervisor at your city’s recreation center should be imprisoned for the pool’s chlorine level being slightly too low? Should you have criminal liability for volunteering on your home owners association? Do you want political organizations to be able to threaten criminal lawsuits against individuals employed by companies that they do not like?

If the organized labor initiatives are successfully passed this November, our state’s economic growth will be dramatically stunted for years to come. Please check future editions of our blog to view the other initiatives that can have a devastating impact to Colorado.

Sources: Tomlinson & Associates; Economic Development Council of Colorado

StaffScapes review of the devastating labor initiatives on the November Ballot.

Initiative #76 would eliminate “at will” employment in Colorado, prohibiting employers from firing or suspending full-time employees except for reasons defined in the amendment as “just cause”.  The term “just cause” includes: incompetence; substandard performance; neglect of job duties; repeated violations of an employer’s written policies and procedures; gross insubordination; employer bankruptcy; and documented adverse economic circumstances. This initiative would allow the terminated employee to sue the employer, challenging the firing or suspension. The court may order the employee to be reinstated and awarded back wages, damages and legal fees.

Listed below is the potential impact of initiative #76:

Ø      Current state and federal laws already limit at-will employment and protect employees from being terminated for reasons for discriminatory reasons such as race, sex, religion and age.

Ø      Imposing constitutional restrictions on businesses will increase administrative and litigation costs, hurting our local businesses and economy

Ø      Initiative 76 will prevent businesses from making basic financial decisions such as reorganization, automating operations and reducing unnecessary employment

Ø      Initiative 76 requires “binding arbitration” making the decision final without ability to appeal

Ø      New business may be reluctant to relocate to Colorado or may force existing businesses to move outside of Colorado

Ø      The estimate of fiscal impact shows an increase of government spending from this initiative of $1.3 million based on roughly 3,750 lawsuits being brought (which this writer believes is underestimated)

Should a business be forced to continue employing someone who has a major personality conflict and brings down the motivation and enjoyment of the entire organization? Do you want to be forced to continue to work with a co-worker such as this? Will you be comfortable working next to this disgruntled co-worker after reinstatement? How would you feel if your employer went out of business due to frivolous lawsuits from this initiative?

If the organized labor initiatives are successfully passed this November, our state’s economic growth will be dramatically stunted for years to come. Please check future editions of our blog to view the other initiatives that can have a devastating impact to Colorado.

Sources: Tomlinson & Associates; Economic Development Council of Colorado

Thursday October 2nd, labor and business leaders came to an agreement to pull four anti-business amendments from the ballot.

With only a few hours left, before a 5pm deadline, labor and business leaders delivered letters to the Colorado Secretary of State withdrawing four amendments that would have negatively affected Colorado’s economy. To get the labor leaders to drop four anti-business amendments, business leaders had to promise to raise $3 million for labor campaigns for use in fighting three anti-union amendments on the ballot. The four anti-business amendments will still appear on the ballots however the votes will not be counted toward passing these new measures.

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On November 24, 2008, the Internal Revenue Service announced a reduction to the optional standard mileage rates for 2009.

For the year 2009, the optional standard mileage rate will reduce from 58.5 cents to 55 cents per mile. Taxpayers have the option of using the optional standard mileage rate to calculate deductible costs of operating an automobile for business purposes.

The rate for computing the deductible medical or moving costs have also reduced 24 cents per mile, however the rate for providing services for charitable organizations has remained unchanged at 14 cents per mile. For further information you can go to the IRS announcement at: http://www.irs.gov/newsroom/article/0,,id=200505,00.html

Ever wonder what a PEO does? Or what does a PEO have to offer? Hopefully this insight will clear up some questions you may have.

PEO stands for Professional Employer Organization. PEO’s can often reduce the cost of a business’s workers’ compensation rates, offer superior benefit plans that smaller company’s can not offer, and manage risk. They also offer assistance with human resources and employee questions as well as tribulations. When a company decides to sign on with a PEO the PEO then takes on the many responsibilities and liabilities that come with business ownership. They keep clients up to date with all compliances and safety issues making it easy for a business owner to concentrate more time to grow their business.

By outsourcing certain functions to StaffScapes it allows more time for businesses to simplify and allows more time for core activities of the business. StaffScapes, Inc takes time and dedication to administer each of our clients. We manage the risk, take care of compliance and costs associated with Human Resources. Compliance falls under all state and local government regulations. StaffScapes offers employees reliable paydays, quality health- vision – and dental insurance, a safe working setting, opportunities for retirement savings as well as quality human resource services for example employee manuals, grievance procedures and prompt communication which is said to increase job satisfaction and productivity in the work place.

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On December 3, 2009, the Internal Revenue Service announced a reduction to the optional standard mileage rates for 2010.

For the year 2010, the optional standard mileage rate will reduce from 55 cents to 50 cents per mile. Taxpayers have the option of using the optional standard mileage rate to calculate deductible costs of operating an automobile for business purposes.

The rate for computing the deductible medical or moving costs have also reduced to 16.5 cents per mile, however the rate for providing services for charitable organizations has remained unchanged at 14 cents per mile. For further information you can go to the IRS announcement at: http://www.irs.gov/newsroom/article/0,,id=216048,00.html

A highly overlooked aspect of the health care reform, Patient Protection and Affordable Care Act, is the expanded 1099-MISC reporting requirements. The 1099-MISC reporting is being expanded in two different ways. The first expansion requires businesses to include payments made to corporations, and the second expands reporting to include payments of property.  The definition of “property” is still unclear, but IRS Commissioner Douglas Shulman recently made reference to “goods” instead of property which would suggest the IRS is looking at using a larger, more comprehensive definition.

This increased reporting requirement being placed on all businesses seems to be substantially burdensome in my opinion. How many businesses in this country will have to send 1099s to companies such as their local office supply store, and how many office supply stores want to receive potentially hundreds of thousands of 1099s from their customers? Businesses of all sizes will be required to report hundreds of 1099-MISC reports for any individual or corporation for which it pays $600 or more to in the year. Currently the requirement only applies to payments made to individuals, which makes sense, since individuals have the higher risk of not fully reporting income.  However, businesses already have reason to fully report their income to offset expenses and show owners and investors a return on their investment, not to mention potential SEC requirements and the fear of audits.

The AICPA, American Institute of Certified Public Accountants, is currently trying to influence Congress to repeal this section of the new health care law. If we are lucky, Congress will see the problems with this section and repeal it, however businesses in the mean time should review their systems to begin preparing for additional reporting burdens coming in 2012.

The expanded 1099 reporting provision of the PPACA has been repealed as of April 14, 2011. For additional information please proceed to our recent post: Two Provisions of Health Care Reform Recently Repealed.

On December 12, 2011, the Internal Revenue Service announced that the standard mileage rates for business will remain unchanged from the mid-year adjustment for 2012.

For the year 2012, the optional standard mileage rate will stay 55.5 cents per mile. Taxpayers have the option of using the optional standard mileage rate to calculate deductible costs of operating an automobile for business purposes.

The rate for computing the deductible medical or moving costs have also reduced to 23 cents per mile, however the rate for providing services for charitable organizations has remained unchanged at 14 cents per mile. For further information you can review the IRS announcement here.