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PayTech September Newsletter

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At PayTech, we are dedicated to keeping you up-to-date on all the latest news that concerns you, your business, and the services we provide! Read on to see PayTech’s September Updates on payroll, HR, accounting, and our general market news.

Market Update

The IRS is cracking down on 1099 contractors. From businesses trying to manage expenses to businesses trying to show growth, many companies are using 1099 contract labor. In many cases, these laborers are not truly 1099 contractors but employees. The IRS has 20 items they use to determine if someone is a contractor or an employee. For more information, click here. If you have questions regarding whether or not your contractor is truly a contractor, contact PayTech today for an analysis!

Payroll Update

The US Department of Labor has proposed changes to the Fair Labor Standards Act. The proposed change is that employees classified as executive, administrative, or professional categories making less than $970 a week must be paid overtime for all hours worked over 40 hours. This will double the current standard which is employees making less than $455 a week. Therefore, if you employee an Assistant Manager and pay them $35,000 a year, they would qualify for overtime for all hours worked over 40 hours. It is believed that this law will affect between 5 million and 10 million workers. Comp time will no longer be legal. This proposed law also tightens the reigns on Independent Contractors. Overall, employers must begin evaluating their compensation packages to these employees in order to determine how it will affect their workforce.

HR Update

Paid sick leave: What are the requirements of the California paid sick leave law?

As of July 1, 2015, the Healthy Workplaces, Healthy Families Act of 2014 (AB 1522) requires employers with employees working in the state of California to implement paid sick leave. There are two significant effective dates for employers: on Jan. 1, 2015, the qualifying periods that determine which employees are eligible for paid sick leave and the employee notice requirement became effective; on July 1, 2015, entitlement to take the paid leave began.

Beginning on Jan. 1, 2015, employers are required to post, in a conspicuous place at the workplace, a poster notifying employees of the law. After Jan. 1, 2015, employers are required to provide most newly hired nonexempt employees with an individualized Notice to Employee that includes paid sick leave information. This notice requirement does not apply to employees who are exempt from the payment of overtime, though they are otherwise covered by the law.

On or after July 1, 2015, employees who work in California for 30 or more days in a year (for the same employer) and who have satisfied a 90-day employment period from the beginning of employment are entitled to paid sick leave. This includes temporary, part-time and seasonal employees, as well as out-of-state employees (as long as they work in California for 30 or more days in the year, and the 30 days worked need not be continuous). Employees covered by qualifying collective bargaining agreements, In-Home Supportive Services providers and certain employees of air carriers are not covered by this law. Beginning on the first day of employment or on July 1, 2015, whichever is later, employees will earn paid leave according to the employer’s policy, which must be either at least one hour of paid leave for every 30 hours worked, or no less than 24 hours of paid leave accrued by the 120th day of employment per year (or other established 12-month period). However, employers can limit the amount of paid sick leave taken annually to 24 hours, or three days, and cap the amount of paid sick leave that can be accrued to 48 hours, or six days. Employers may use existing policies such as PTO as long as those policies comply with the minimum requirements of the law for the accrual, carryover and use of sick leave. As an alternative to the accrual of one hour of sick leave for every 30 hours worked, employers are permitted to use an upfront or advance method, in which the full amount of accrued leave (no less than 24 hours, or 3 days) must be available to the employee at the beginning of the 12-month period. Employers with unlimited leave plans are required by the law to separately track sick leave accrual and use.

The law allows employees to take paid leave for themselves or their family members for preventive care (e.g., annual physical or flu shot), for care of an existing health condition or for specified purposes if the employee is a victim of domestic violence, sexual assault or stalking. Sick leave may be used in increments of less than one day; however, employers may set a minimum increment use not to exceed two hours.

The law also requires employers to show on the employee’s pay stub or document issued the same day as the paycheck the number of paid sick leave days available. Employers must keep records for at least three years showing how many hours were worked and how many paid sick leave hours were accrued and used. This information may be stored on documents available to employees electronically. See more information at the resources below.

Frequently asked questions about California’s new paid sick leave law:
https://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm

Healthy Workplace Healthy Family Act of 2014 (AB 1522) overview: https://www.dir.ca.gov/dlse/ab1522.html

Accounting Update

IRS Warns Taxpayers to Guard Against New Tricks by Scam Artists

The IRS is notifying tax payers of new scams that can occur over the phone, through email, or through letters with authentic looking letterhead.  These scams are looking for taxpayers to provide personal financial information or scare people into making a false tax payment that ends up with the criminal.

These criminals specialize in tricking people, and being deceptive.  The IRS urges taxpayers to be extra cautious and think twice before answering suspicious phone calls, emails, or letters.

The scammers were targeting the most vulnerable, such as elderly, newly arrived immigrants, and people which English is their second language.  They are now expanding to include virtually everyone.

They alter their caller ID to appear to be an incoming call from the IRS or maybe the DMV and they use fake titles and badge numbers to sound official.  They do online research before calling, therefore knowing some personal information before they get callers on the phone.

Fear is their biggest advocate.  As most people do not want to have a problem with the IRS or DMV they readily provide the requested information.

There are 5 things the IRS will never do:

  1. Angrily demand immediate payment over the phone, nor will they call about taxes owed without first sending a bill.
  2. They will not threaten arrest by police or other law enforcement agencies.
  3. They will not demand that you pay taxes without giving you the opportunity to question or appeal the amount owed.
  4. They will not require you to use a specific payment method for your taxes.
  5. They will not ask for credit or debit card numbers over the phone.

If you think you are being scammed contact the Treasury Inspector General for Tax Administration at 1-800-366-4484 and also contact the FTC Complaint Assistant at FTC.gov.


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