Wal-Mart appears in the news again, this time in a more positive light in the New York Times.

In the article “FLY ON THE WAL”, Charles Platt goes under cover to find out what Wal-Mart is doing that is keeping their growth increasing and why people continue to want to work for this behemoth. The insight and contrary opinions that Mr. Platt gives concerning Wal-Mart’s continued employment law plight is refreshing.  There are no “big labor” complaints or threats here, only one man’s personal experience working undercover for Wal-Mart.

Mr. Platt does a very good job defending Wal-Mart’s driving forces, but in that he also explains some basic economic principles that our country is founded on. Too many people, mostly our politicians, forget these basic principles, and since Mr. Platt did such a good job explaining them, I quote him here:

“I found myself reaching an inescapable conclusion. Low wages are not a Wal-Mart problem. They are an industry-wide problem, afflicting all unskilled entry-level jobs, and the reason should be obvious.

In our free-enterprise system, employees are valued largely in terms of what they can do. This is why teenagers fresh out of high school often go to vocational training institutes to become auto mechanics or electricians. They understand a basic principle that seems to elude social commentators, politicians and union organizers. If you want better pay, you need to learn skills that are in demand.

The blunt tools of legislation or union power can force a corporation to pay higher wages, but if employees don’t create an equal amount of additional value, there’s no net gain. All other factors remaining equal, the store will have to charge higher prices for its merchandise, and its competitive position will suffer.”

See Also

• CHARLES PLATT GOES UNDERCOVER AT WAL-MART - New York Post
  Some people, usually community activists, loath Wal-Mart. Others, like the family of four struggling to make ends meet, are in love with the chain. I, meanwhile, am in awe of it. With more than 7…

The “Making Work Pay” provision of the stimulus package will reduce income tax withholding for majority of employees.

The IRS has just released the changes to the income tax withholding tables used to calculate employees’ tax withholdings from their pay checks. The change comes from the $400 to $800 refundable tax credit provided under the stimulus package. This tax credit will be provided to employees through out 2009 and 2010 by changing the tax withholding from their normal paychecks. This credit is for employees making less than $75,000 individually or $150,000 for married couples. A new W-4 form is not needed to claim this tax change.  StaffScapes  recommends that employees with multiple jobs or couples that combined put them in higher tax brackets should contact their tax advisor to verify and/or revise their W-4.

The IRS has made it clear that the new tax withholding tables are to be used as soon as possible, but at the latest by April 1, 2009.  As of Monday, March 2, 2009, StaffScapes’ employees will have the advantage of having their checks processed using the new tax tables, resulting in more “take home” pay for most employees.  Additional information about the stimulus package, including the “Making Work Pay” provision, can be found on the IRS website at: http://www.irs.gov/newsroom/article/0,,id=204335,00.html?portlet=6.

Federal contractors have been granted a small delay until E-Verify becomes required.

The United States Citizenship and Immigration Services (USCIS) recently announced that the rule mandating the use of the E-Verify program for federal contractors has been delayed again.  Federal contractors are not required to use the E-Verify system until June 30, 2009, pushing back the date by six weeks. The rule requiring E-Verify for federal contractors was first published to go into effect on January 19, 2009. As published, any contractor performing a prime federal contract that will be performed 120 days or longer and has a value of $100,000 or more would be required to E-Verify all new-hires and any employee (new and current) that will be working on the contract. For more information go to the USCIS website at: http://www.uscis.gov/everify

See Also

• USCIS E-Verify Delay Notice
  Notice from USCIS regarding the delay in E-Verify requirments

New law mandating employers to provide unpaid time off to parents for their children’s educationOn August 5^th, 2009, employers with 50 or more employees must provide up to 18 hours of unpaid leave for parents to attend parent-teacher meetings and other school-related events. The bill, Parental Involvement in K-12 Education Act, was signed into law by Gov. Ritter on June 1^st of this year. Parents must be allowed to take up to 6 hours of leave each month, and a maximum of 18 hours in a year. The parent must “make a reasonable attempt to schedule academic activities… outside of regular work hours” and schools “shall make their best efforts to accommodate the schedules of employees”. The parent must give notice to the employer no later than one week in advance of the needed time off.

See Also

• House Bill 09-1057, Parental Involvement in K-12 Education Act
  Parental Involvement in Kindergarten Through Twelfth Grade Education

Federal minimum wage increases Friday

The federal minimum hourly wage will increase this Friday (July 24, 2009) to $7.25 per hour. This is the last and final increase put in place by The Fair Minimum Wage Act of 2007. Many states have a seperate state minimum wage different from the federal.  Employers are required to pay which ever (federal or state) minimum wage amount is higher to their employees.  Colorado’s minimum wage of $7.28 per hour is higher than the required federal minimum wage, therefore Colorado employers will need to use the states minimum wage.  

A house bill has recently been introduced that will significantly change the liability of misclassifying employees as independent contractors.

A bill concerning employee status was introduced in the House on July 30 by Rep Jim McDermott (D-Wash). The bill, H.R. 3408 or Taxpayer Responsibility, Accountability, and Consistency Act of 2009, makes it substantially harder to avoid employment tax liability for misclassifying an employee as an independent contractor, repealing the safe harbor provisions of current Section 530 in the Code. The bill also states “any individual who performs services for a taxpayer may petition (either personally or through a designated representative or attorney) for a determination of the individual’s status for employment tax purposes”. In addition, H.R. 3408 would significantly increase (by 1,200% with some fines) employer penalties for misclassification.

The CDC has some very good information for employers and employees concerning this years influenza season.

The Center for Disease Control and Prevention has recently updated their website with a Communication Toolkit for Businesses and Employers to prepare for the upcoming influenza season.  With the concern of the H1N1 (Swine Flu) coming back around this season, the CDC has some helpful information for employers and employees to help prevent the spread of the flu.  Included in the toolkit are communication pieces addressing steps that employers can take to keep their workplace healthy, suggested actions to design an influenza plan, posters, and notices to employees on staying healthy during this flu season.  The CDC webpage where the toolkit can be found is here: http://www.cdc.gov/h1n1flu/business/toolkit/

StaffScapes highly recommends that our clients review these suggestions and create an influenza plan to prepare for this season.  Employees should not come in to work if they are infected and businesses should plan for having higher than normal employee leaves this year.  Preparing now can help businesses get through the trying times that happen when higher percentages of employees are missing from work.

A pharmacy technician is suing her employer for traumatizing her during a recent training session.

Recently reported on FindLaw, a New Jersey pharmacy technician claims she was traumatized from a mock hold up arranged by her employer. The gunman told the technician that he had taken another employee hostage and demanded the pain narcotic OxyContin. Later she found out that the hold up was fake and the employer arranged it for a training exercise.

The technician claims that she is suffering from post-traumatic stress disorder arising from this training exercise.  The technician’s claim rests on the fact that she was not notified in advance of the training drill.

Employers need to be cognizant of how these training exercises will affect their employees and try and prevent any undue stress or hardship.  There is a balance between realism and effectiveness that must be calculated for any training exercises.  In this case the effectiveness of the training seems to have been significantly overshadowed by the trauma caused by its realism. 

See Also

• FindLaw article
  FindLaw article

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

Employees who are participating in a HSA must file a Form 8889 along with their 1040. Form 8889 must be filed for any year that an individual makes or receives HSA contributions or any year that they take a HSA distribution.

Employers will report any contribution it made to the HSA on the W-2 on box 12. In addition, individuals should receive a Form 5498-SA from the HSA trustee that reports total contributions made during the year and the value of the HSA at year end. If any distributions were taken during the year, the trustee will also send a Form 1099-SA to the individual reporting total distributions made for the year.  These three forms will be used to complete Form 8889.

Additional information can be found in the instructions for Forms 1040 and 8889 at the IRS website. Individuals should consult their tax advisors if they have any additional questions.

The US Department of Labor has recently released their new smartphone application, and instead of explaining its advantages to employers, they state the reason for this app is so the employees do not have to rely on their employer’s records. What? Quoting DOL’s press release, “The first DOL application for smartphones is a timesheet to help employees independently track the hours they work and determine the wages they are owed… This information could prove invaluable during a Wage and Hour Division investigation” and “This new technology is significant because, instead of relying on their employer’s records, workers now can keep their own records.”

So my interpretation of the message the DOL is presenting is employers are no longer to be trusted keeping and recording time worked by their employees or to determine the wages they are owed. The current DOL Administration continues to show their bias against employers through this press release.

With that being said, I believe the actual application could be useful to employers and mobile employees. The application makes it pretty easy to track hours through a few pushes of buttons and at the end of the pay period can be emailed to the supervisor for approval, or for the purposes of the DOL to the employee’s attorney or DOL representative. Providing employers with a free application to improve recording time worked by employees would be very beneficial to the productivity of our country and economy. I do not know how the DOL thinks that economic recovery is going to happen by attacking employers at every turn. The DOL should have released the application with information going to employers getting “buy in” and stating the benefits to them provided by the app.

Back in March of this year, the Maine Unemployment Insurance Commission overturned a lower ruling and awarded unemployment benefits to an employee that was fired for illegally downloading 800 music files onto her work computer. The Portland Press Herald reported that after the employee was fired, she sought unemployment benefits and was initially denied. However, the Commission overturned the denial 3-0 stating, as the Press Herald reported, the claimant “made an isolated error in judgment when she downloaded the software on the company’s computer and that the action “does not constitute misconduct”.  

What? I must have a different definition of isolated. Illegally downloading 800 files would not constitute isolated in my world. Also, not only did the employer have to pay wages to the employee for this unproductive time, but this could also open up legal action taken against the employer for copyright infringement and media pirating.

The Press herald goes on to report that the Commission ruled that the employer’s code of conduct policy “was not imposed, enforced, or communicated in an equitable manner.”

So what can we learn form this extreme case? Make sure that your policies, including code of conduct, computer and/or electronic usage policies are well documented, communicated and enforced. Contact StaffScapes to review your current policies for proper creation and implementation.

The Department of Labor and Employment has submitted a draft proposed rule to establish fines associated with employee misclassification. If this rule is approved and enacted, an employer who willfully misclassified an employee as an independent contractor will be fined by the CDLE. The CDLE will fine first offenders 5% of each misclassified employees annual gross wages or $100, which ever is greater. Also, repeat offenders will be fined 25% of each misclassified employees annual gross wages or $500, whichever is greater. This is just the fine; employers should expect to pay the unemployment taxes on these misclassified employees as well as having the IRS and state revenue department being notified.

If you have questions concerning employee and independent contractor classifications feel free to contact your representative at StaffScapes to discuss further.

The proposed rule or amendment may be found here.