I hope you all are enjoying the Holiday Season.
We are right at the fiscal cliff. As you know Washington is looking at ways to reduce debt . Almost everyone agrees it will be a combination of cuts and additional revenues. One of the most intriguing ideas being floated is eliminating the deduction for health insurance. I think this would raise more revenue than any other change in the tax laws. About half of the people in the country receive this tax break.
It is estimated that it would raise $150 billion a year or $1.5 trillion over 10 years. The mortgage deduction if eliminated would raise $90 billion over one year or $900 billion over 10 years. What do you think of this? If you are providing health insurance would this have any bearing on your keeping your insurance in place as you would have an added burden of paying the payroll tax.
On Friday my niece and I will be travelling to Charleston for the annual Renaissance weekend. This is an amazing event that brings together about 1400 people from all walks of life. Included will be business people, labor, politicians ,scientist, people in the media, astronauts, writers , military people, health professionals and others from all walks of life.
In past events the President of the US has been in attendance and Bill and Hillary Clinton have been there many times. It is hosted by Phil Lader who is a close friend of the Clintons. I met him when he headed up the SBA and when he was Ambassador to the Court of St James he invited me to attend a transatlantic conference in London.
This is such a thrill for a small business owner like myself and my niece who recently started teaching at Mc George law school in Sacramento.
Have a great and healthy New Year.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
.
Wednesday, December 26, 2012
Friday, December 21, 2012
Wellness/Medical/Bay Area Economy
Wellness Programs are going to become a promoted feature in 2014 when the Affordable Care Act and the Exchange are put in place. The fee paid up front to partake in a Wellness Program brings the hope of reduced premiums in the future due to closer attention paid to an individual’s overall health.
Is this something your company would be interested in doing? Do you have a wellness program in place now?
It was expected that California would expand Medical in 2014 per the Affordable Care Act. This provision would expand Medical to make it available to people with incomes of 133% [ you may also see quoted 138% and both are right depending on how the calculation is done]Governor Brown is now indicating California may choose not to increase the eligibility due to a $4 billion cost to the state unless California is given waivers and law changes.
Those supporting the expansion say the Governors cost estimates are greatly overstated as the Federal government will be picking up most of the cost. They say the Federal government will pick up 100% of the cost the first three years and then phase down to 90%. Anthony Wright executive director of Health Access says the cost would be in the low hundreds of millions over several years
This will be a major issue between now and 2014.
For those of you in the Bay Area what do you see happening to the Bay Area’s economy in 2013? What do you see for your business? My thoughts are that the Bay Area economy should improve overall but small business opinions vary by industry.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Is this something your company would be interested in doing? Do you have a wellness program in place now?
It was expected that California would expand Medical in 2014 per the Affordable Care Act. This provision would expand Medical to make it available to people with incomes of 133% [ you may also see quoted 138% and both are right depending on how the calculation is done]Governor Brown is now indicating California may choose not to increase the eligibility due to a $4 billion cost to the state unless California is given waivers and law changes.
Those supporting the expansion say the Governors cost estimates are greatly overstated as the Federal government will be picking up most of the cost. They say the Federal government will pick up 100% of the cost the first three years and then phase down to 90%. Anthony Wright executive director of Health Access says the cost would be in the low hundreds of millions over several years
This will be a major issue between now and 2014.
For those of you in the Bay Area what do you see happening to the Bay Area’s economy in 2013? What do you see for your business? My thoughts are that the Bay Area economy should improve overall but small business opinions vary by industry.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Wednesday, December 19, 2012
FUTA Increase
I have just found out that employers are going to see an increase in their FUTA[unemployment] tax retroactively to Jan 1 2012.
What apparently happened is that the state failed to repay their outstanding Federal Unemployment loan by the due date.
What this means as best as I can tell is the rate prior to this was .6% on the first $7000. In effect the payment per employee will double.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Dear Tax Filing Client,
The US Department of Labor has confirmed that 18 states and the Virgin Islands will pay higher FUTA rates for the 2012 calendar year. Employers in affected states will pay FUTA taxes for the 2012calendar year at a higher rate since the state failed to repay their outstanding federal UI loans by the federal due date. This tax increase is retroactive to January 1, 2012. The information below is from a payroll company Payality. I suggest you talk to your payroll company to see how they will handle this
The increased FUTA taxes will be due along with fourth quarter 2012 federal unemployment tax deposits.
State Net 2012 FUTA Rate
Arizona 0.9%
Arkansas 1.2%
California 1.2%
Connecticut 1.2%
Delaware 0.9%
Florida 1.2%
Georgia 1.2%
Indiana 1.5%
Kentucky 1.2%
Missouri 1.2%
Nevada 1.2%
New Jersey 1.2%
New York 1.2%
North Carolina 1.2%
Ohio 1.2%
Rhode Island 1.2%
Vermont 0.9%
Virgin Islands 2.1%
Wisconsin 1.2%
--
What apparently happened is that the state failed to repay their outstanding Federal Unemployment loan by the due date.
What this means as best as I can tell is the rate prior to this was .6% on the first $7000. In effect the payment per employee will double.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Dear Tax Filing Client,
The US Department of Labor has confirmed that 18 states and the Virgin Islands will pay higher FUTA rates for the 2012 calendar year. Employers in affected states will pay FUTA taxes for the 2012calendar year at a higher rate since the state failed to repay their outstanding federal UI loans by the federal due date. This tax increase is retroactive to January 1, 2012. The information below is from a payroll company Payality. I suggest you talk to your payroll company to see how they will handle this
The increased FUTA taxes will be due along with fourth quarter 2012 federal unemployment tax deposits.
State Net 2012 FUTA Rate
Arizona 0.9%
Arkansas 1.2%
California 1.2%
Connecticut 1.2%
Delaware 0.9%
Florida 1.2%
Georgia 1.2%
Indiana 1.5%
Kentucky 1.2%
Missouri 1.2%
Nevada 1.2%
New Jersey 1.2%
New York 1.2%
North Carolina 1.2%
Ohio 1.2%
Rhode Island 1.2%
Vermont 0.9%
Virgin Islands 2.1%
Wisconsin 1.2%
--
Tuesday, December 18, 2012
Jankey v. Lee - State Supreme Court Affirmed the Appelant Court's Decision
A major decision was handed down by the state Supreme Court yesterday in an ADA action. See below. Small Business California along with a few other business organizations file an amicus brief in this action
I've attached the Supreme Court decision. The Supreme Court affirmed the Court of Appeal and held that the prevailing defendant (here a small business in the Mission) in a disability access lawsuit under Cal. Civil Code 55 is entitled to recover his attorney fees and costs defending the action. Specifically, the Court held that Civil Code 55 mandates a fee award to the prevailing party (whether plaintiff or defendant) and that the ADA's more plaintiff-friendly fee shifting provisions (which allow a prevailing defendant to recover fees only if the court determines that the lawsuit was frivolous) do not preempt Civil Code 55's mandatory bilateral fee shifting in a lawsuit where the plaintiff alleges both causes of action.
Jim Emery
Deputy City Attorney
City Hall, Room 375
San Francisco, CA 94102
dd: 415-554-4628
fax: 415-554-4757
jim.emery@sfgov.org
Yesterday I asked if people knew what a filibuster and cloture were in the Senate. It was clear by many of your responses that many of you were not aware of these procedures. Rather than responding to all of you individually let me briefly explain.
A filibuster is a procedure for a minority to prevent a bill from moving forward in the Senate. It allowed Senators to speak as long as they want to prevent a bill from moving forward. It required a two thirds vote to end a filibuster. On 1975 the rules were changed to allow cloture on a bill if there were 60 votes to do so. In many cases filibuster and cloture are used interchangeably. It will be interesting to see if the rules get changed to a simple majority.
As I said yesterday it has been argued that this creates gridlock in the Senate on controversial bills. Both the Republicans and Democrats have used these procedures depending on who is the minority party. One other problem as I see it is that some Senators have used their vote as a bargaining chip to obtain money for their pet projects. This was believed true in the passage of the Affordable Care Act where Senator Ben Nelson was purported to take $45 million for Medicare and Senator Landrieu’s vote was called the Louisiana purchase.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
I've attached the Supreme Court decision. The Supreme Court affirmed the Court of Appeal and held that the prevailing defendant (here a small business in the Mission) in a disability access lawsuit under Cal. Civil Code 55 is entitled to recover his attorney fees and costs defending the action. Specifically, the Court held that Civil Code 55 mandates a fee award to the prevailing party (whether plaintiff or defendant) and that the ADA's more plaintiff-friendly fee shifting provisions (which allow a prevailing defendant to recover fees only if the court determines that the lawsuit was frivolous) do not preempt Civil Code 55's mandatory bilateral fee shifting in a lawsuit where the plaintiff alleges both causes of action.
Jim Emery
Deputy City Attorney
City Hall, Room 375
San Francisco, CA 94102
dd: 415-554-4628
fax: 415-554-4757
jim.emery@sfgov.org
Yesterday I asked if people knew what a filibuster and cloture were in the Senate. It was clear by many of your responses that many of you were not aware of these procedures. Rather than responding to all of you individually let me briefly explain.
A filibuster is a procedure for a minority to prevent a bill from moving forward in the Senate. It allowed Senators to speak as long as they want to prevent a bill from moving forward. It required a two thirds vote to end a filibuster. On 1975 the rules were changed to allow cloture on a bill if there were 60 votes to do so. In many cases filibuster and cloture are used interchangeably. It will be interesting to see if the rules get changed to a simple majority.
As I said yesterday it has been argued that this creates gridlock in the Senate on controversial bills. Both the Republicans and Democrats have used these procedures depending on who is the minority party. One other problem as I see it is that some Senators have used their vote as a bargaining chip to obtain money for their pet projects. This was believed true in the passage of the Affordable Care Act where Senator Ben Nelson was purported to take $45 million for Medicare and Senator Landrieu’s vote was called the Louisiana purchase.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Monday, December 17, 2012
EmailTree/Exchanges/Filibuster/ Insurance
One of the things I use this email tree for is to provide the media with small business contacts around the state. If you are interested in talking to the media on issues that impact small business please let me know. Be sure to provide all your contact information .
December 15 was the deadline for states to indicate their desire to set up Exchanges as outlined in the Affordable Care Act. The numbers I have seen are that 17 states including California will be establishing an Exchange in their state. 30 states have including ,Texas and Florida , indicated that they will not and therefore will be under the Federal Plan. To a large degree the decisions follow party lines with many Republican Governors indicating they will not be doing so. Do you think Do you agree with California’s decision to set up an Exchange?’
The Senate is looking at eliminating the filibuster. As you know legislation in the Senate can be stopped by a filibuster of minority Senators. The issue here is should the Senate be able to pass legislation with 51 votes What do you think of this? The Democrats contend that this would eliminate gridlock and the Republicans believe this would thwart the voice of the minority. Just out of curiosity do you know the difference between Cloture and a filibuster?
Last do you know what is the largest industry in the world? Many think it is oil or maybe the automobile industry. Actually it is insurance which is about $4.6 trillion and 7% of the world’s economy.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
.
December 15 was the deadline for states to indicate their desire to set up Exchanges as outlined in the Affordable Care Act. The numbers I have seen are that 17 states including California will be establishing an Exchange in their state. 30 states have including ,Texas and Florida , indicated that they will not and therefore will be under the Federal Plan. To a large degree the decisions follow party lines with many Republican Governors indicating they will not be doing so. Do you think Do you agree with California’s decision to set up an Exchange?’
The Senate is looking at eliminating the filibuster. As you know legislation in the Senate can be stopped by a filibuster of minority Senators. The issue here is should the Senate be able to pass legislation with 51 votes What do you think of this? The Democrats contend that this would eliminate gridlock and the Republicans believe this would thwart the voice of the minority. Just out of curiosity do you know the difference between Cloture and a filibuster?
Last do you know what is the largest industry in the world? Many think it is oil or maybe the automobile industry. Actually it is insurance which is about $4.6 trillion and 7% of the world’s economy.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
.
Friday, December 14, 2012
Waste in USD Health System/ 10 year debt numbers
The cost of US healthcare is the highest in the world. Our health system cost about 2.8 trillion dollars a year and is about 17.9% of GDP.This might be okay if the results of that spending made us healthier but in many key areas of measurement we are at or close to the bottom[ examples infant mortality and life longevity].
One of the reasons for this is because there is a massive waste of money in people having unnecessary procedures. It is estimated that the US waste $850 billion a year in unnecessary procedures. Things like CT scans MRIs, EKGs,stress test, imaging test, bone density scans and antibiotics.
A number of doctors organizations have come together with Consumer Report to address this issue. They have a campaign called Choosing Wisely. The goal is to make people question the procedures doctors are performing and to understand many of these test are not necessary Now you might think why would doctors do this. Isn’t this a criticism of doctors? The reality is that many times these test are done at the request of the patient.
Not only is this a waste of money but in many cases it can be detrimental to one’s health.
In January or February of next year Choosing Wisely will be putting together a tool kit to help consumers make informed decisions about procedures performed on them. A number of big businesses will be providing this information to their employees. I think that small businesses should also join the campaign and when the tool kit is finalized provide it to their employees. What do you think? Should Small Business California work with California small businesses in getting this information out. For more information on the Google Consumer Report Choosing Wisely.
Maybe it is just me but I get confused when I hear discussions of our debt in terms of 10 years. When did we start using this measurement? I am not saying it is wrong but I would bet there are many like me that also are confused. How about you?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
One of the reasons for this is because there is a massive waste of money in people having unnecessary procedures. It is estimated that the US waste $850 billion a year in unnecessary procedures. Things like CT scans MRIs, EKGs,stress test, imaging test, bone density scans and antibiotics.
A number of doctors organizations have come together with Consumer Report to address this issue. They have a campaign called Choosing Wisely. The goal is to make people question the procedures doctors are performing and to understand many of these test are not necessary Now you might think why would doctors do this. Isn’t this a criticism of doctors? The reality is that many times these test are done at the request of the patient.
Not only is this a waste of money but in many cases it can be detrimental to one’s health.
In January or February of next year Choosing Wisely will be putting together a tool kit to help consumers make informed decisions about procedures performed on them. A number of big businesses will be providing this information to their employees. I think that small businesses should also join the campaign and when the tool kit is finalized provide it to their employees. What do you think? Should Small Business California work with California small businesses in getting this information out. For more information on the Google Consumer Report Choosing Wisely.
Maybe it is just me but I get confused when I hear discussions of our debt in terms of 10 years. When did we start using this measurement? I am not saying it is wrong but I would bet there are many like me that also are confused. How about you?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Wednesday, December 12, 2012
Small Business Advocate/ Joining Small Business California
Yesterday I had a meeting with Barbara Vohrzek the Governors Small Business Advocate and she indicates she is looking at doing some seminars next year and wants to know what topics would be of interest to California small businesses. Some ideas we discussed were the Affordable Care Act[Obamacare] , reducing cost on workers compensation, state programs available to small business etc.
Also, what are best times and length of seminars?
I hope you all find value in these emails. I know all of you are getting end of the year solicitations from organizations and if you are not already a member I hope you will consider joining Small Business California. Consider all the business organizations you belong to is there any that provide the kind of information and advocacy for small business that we do?
Two examples are that we saved California LLCs between $500 million and $1 billion by getting a grandfather clause on SB 323 and were a major factor in the passage of the workers compensation reform bill.
You can join on line at www.smallbusinesscalifornia.org or we can invoice you. The cost is $150 for businesses less than $1 million and $300 for those over $1 million.
Thank you!
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Also, what are best times and length of seminars?
I hope you all find value in these emails. I know all of you are getting end of the year solicitations from organizations and if you are not already a member I hope you will consider joining Small Business California. Consider all the business organizations you belong to is there any that provide the kind of information and advocacy for small business that we do?
Two examples are that we saved California LLCs between $500 million and $1 billion by getting a grandfather clause on SB 323 and were a major factor in the passage of the workers compensation reform bill.
You can join on line at www.smallbusinesscalifornia.org or we can invoice you. The cost is $150 for businesses less than $1 million and $300 for those over $1 million.
Thank you!
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Friday, December 07, 2012
Correction: Fee Charged - 2013 assessment
I sent out an email yesterday with the new fees for 2013 workers compensation.
I was just brought to my attention that the chart I was provided was for self insured and not insured. Please see corrected numbers below. The increase is not 5% but .0008%. I also have found out that the California Insurance Guarantee Association was reduced from .022 to .020. I am sorry for the confusion.
So while rates are going up the fee increase will not be that severe.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
I was just brought to my attention that the chart I was provided was for self insured and not insured. Please see corrected numbers below. The increase is not 5% but .0008%. I also have found out that the California Insurance Guarantee Association was reduced from .022 to .020. I am sorry for the confusion.
So while rates are going up the fee increase will not be that severe.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Tuesday, December 04, 2012
Fee Charged - 2013 assessment
I just received the new workers compensation fees for 2013. See below. I have talked about workers compensation going up Jan 2013 you will also see fees going up.
If my calculations are right this will add about 5% to your workers compensation premiums on top of the rate increases.
Note the California Insurance Guarantee Association charge is not included but it is expected to be around the same 2.2% maybe a little lower.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Fees Charged for Fiscal Year 2011/2012 Assessments:
• Workers' Compensation Administration Revolving Fund (WCARF)
• Uninsured Employers Benefits Trust Fund (UEBTF)
• Subsequent Injuries Benefits Trust Fund (SffiTF)
• Occupational Safety and Health Fund (OSHF)
• Labor Enforcement and Compliance Fund (LECF)
• Workers' Compensation Fraud Account (FRAUD)
Fees Charged for Fiscal Year 2012/2013 Assessments:
• Workers' Compensation Administration Revolving Fund (WCARF)
• Uninsured Employers Benefits Trust Fund (UEBTF)
• Subsequent Injuries Benefits Trust Fund (SffiTF)
• Occupational Safety and Health Fund (OSHF)
• Labor Enforcement and Compliance Fund (LECF)
• Workers' Compensation Fraud Account (FRAUD)
If my calculations are right this will add about 5% to your workers compensation premiums on top of the rate increases.
Note the California Insurance Guarantee Association charge is not included but it is expected to be around the same 2.2% maybe a little lower.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Fees Charged for Fiscal Year 2011/2012 Assessments:
• Workers' Compensation Administration Revolving Fund (WCARF)
• Uninsured Employers Benefits Trust Fund (UEBTF)
• Subsequent Injuries Benefits Trust Fund (SffiTF)
• Occupational Safety and Health Fund (OSHF)
• Labor Enforcement and Compliance Fund (LECF)
• Workers' Compensation Fraud Account (FRAUD)
Fees Charged for Fiscal Year 2012/2013 Assessments:
• Workers' Compensation Administration Revolving Fund (WCARF)
• Uninsured Employers Benefits Trust Fund (UEBTF)
• Subsequent Injuries Benefits Trust Fund (SffiTF)
• Occupational Safety and Health Fund (OSHF)
• Labor Enforcement and Compliance Fund (LECF)
• Workers' Compensation Fraud Account (FRAUD)
Friday, November 30, 2012
Affordable Care Act/ Injury and Illness Prevention Seminar.
I am frequently asked about the timeline for the Affordable Care Act .I am sending in the link below the timeline for individuals from 2010 to 2018. Of particular note for many of you that have high deductible plans is that in 2014 they cannot exceed 2000 per individual and $4000 per family. I have heard from some that about 50% of the current high deductible plans exceed these limits Also effective 2014 is Out of Pocket Maximums are $5950 for individuals and $11,900 for families and the elimination of annual caps by insurers.
I am not sure how much these changes will increase premiums but it certainly will have an impact if you are not getting subsidies
Link for HCRs Impact on individuals: https://ga.beerepurves.com/hcr/docs/hcreeimpactflyer.pdf
For those of you in the Oakland area Small Business California has been working on putting together seminars to assist small business in developing an Injury and Illness Prevention Program. For those of you in the Oakland area there will be seminars December 13 and 18. See information below
For those that attend you will leave with a pretty much completed IIPP and will be well on your way in complying with OSHA requirements.
I have in attachments additional information about IIPPs and a registration form.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Dear Small Business Owner/Manager:
We are writing to invite you to an important FREE half-day training class on how to develop an effective health and safety program that meets the requirements of Cal/OSHA’s Injury and Illness Prevention Program (IIPP) standard. The IIPP standard is the #1 most often cited Cal/OSHA violation when inspectors visit California workplaces.
This hands-on training is being conducted by University of California Berkeley trainers and Cal/OSHA Consultation Service staff. Two dates are provided. Please indicate on the registration form which date you will attend.
YOU WILL RECEIVE:
• A free IIPP template and a Guidebook on how to write your IIPP.
• Free resource materials and tools to help you establish and implement your safety program.
• A free training guide to help you teach and engage your employees in safety.
• Advice on how to comply with the IIPP standard from Cal/OSHA staff.
• For SCIF policy holders, a $200 rebate on your workers’ compensation premium.
WHEN AND WHERE:
Thursday, December 13, 2012 -or- Tuesday, December 18, 2012, 8:30 a.m.–12:30 p.m.
State Office building, 1515 Clay Street, Room 11, Second Floor, Oakland, CA 94612.
Due to building security procedures, we recommend you arrive at least 15 minutes early.
TO REGISTER:
Complete the attached registration form and return it to:
LOHP, UC Berkeley, 2223 Fulton Street, 4th Floor, Berkeley, CA 94720 by December 6.
The classes have a limited number of spaces so register early.
For more information, contact Robin Dewey at 510-642-2477 or rdewey@berkeley.edu.
This interactive, informative training is being co-sponsored by the University of California Berkeley’s Labor Occupational Health Program, the CA Department of Industrial Relations, Cal/OSHA, State Compensation Insurance Fund, Small Business California, and California Small Business Association.
LABOR OCCUPATIONAL HEALTH PROGRAM
2223 FULTON ST., 4TH FLOOR
BERKELEY, CA 94720-5120
(510) 642-5507
(510) 643-5698 FAX
SCHOOL OF PUBLIC HEALTH
CENTER FOR OCCUPATIONAL & ENVIRONMENTAL HEALTH
Thursday, November 29, 2012
Pacific Business Group on Health
I am on the Board of the Pacific Business Group on Health www.pbgh.org. This is a group of very large employers including the Boeing Target, Safeway and the University of California. I was asked to join the Board after they shut down Pac Advantage.
Their Mission Statement is ;
To improve the quality and availability of health care while moderating cost. PBGN works on many fronts to improve the quality and affordability of health care, in close partnership with our members, health plans, physician groups, hospitals consumer organizations , and others concerned about our health care system. Through an annual Member review, initiatives are chosen to advance our mission and further the organizational goals.
They are a very effective organization and hold a lot of influence on public policy.
My question to you is how do you think California small businesses can work most effectively with PBGH. Obviously we have common goals especially in the area of driving down the cost of health care and improving the quality and outcomes in our current system.
They are in the process of doing their annual review and I would like to relay your thoughts.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Their Mission Statement is ;
To improve the quality and availability of health care while moderating cost. PBGN works on many fronts to improve the quality and affordability of health care, in close partnership with our members, health plans, physician groups, hospitals consumer organizations , and others concerned about our health care system. Through an annual Member review, initiatives are chosen to advance our mission and further the organizational goals.
They are a very effective organization and hold a lot of influence on public policy.
My question to you is how do you think California small businesses can work most effectively with PBGH. Obviously we have common goals especially in the area of driving down the cost of health care and improving the quality and outcomes in our current system.
They are in the process of doing their annual review and I would like to relay your thoughts.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Wednesday, November 28, 2012
New Indexed Figures for 2013
I thought this was good information for small businesses to know. I ran this by a friend who is an accountant and he said cross checked some of the information and it is right
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
New Indexed Figures for 2013
The Internal Revenue Service (IRS) and Social Security Administration have released the cost-of-living (COLA) adjustments that apply to dollar limitations set forth in certain IRS Code Sections. The Consumer Price Index rose enough since the third quarter of last year to warrant an increase in some indexed figures for 2013.
Social Security and Medicare Wage Base
For 2013, the Social Security wage base increases to $113,700 from $110,100 in 2012. Unless Congress acts to extend the current reduction in the tax rate for employee withholdings, they will increase to 7.65 percent in 2013 from the 5.65 percent withheld in 2012. The Social Security rate of 6.2 percent is applied to wages up to the maximum taxable amount for the year; the Medicare portion of 1.45 percent applies to all wages.
Indexed Compensation Levels
The indexed compensation levels for determining who is considered highly compensated or a key employee remains unchanged for 2013:
2010 2011 2012 2013
Highly Compensated Employee $110,000 $110,000 $115,000 $115,000
Top Paid Group of 20% $110,000 $110,000 $115,000 $115,000
Key Employee, Officer $160,000 $160,000 $165,000 $165,000
401(k) Plans
In 2013, the maximum for elective deferrals increases to $17,500. The catch-up contribution for those 50 or older remains at $5,500 for 2013 (no change from 2012). That means if you are age 50 or over during the 2013 taxable year, you may generally defer up to $23,000 into your 401(k) plan.
Health FSA
We have an additional indexed figure to track starting in 2013. It’s the annual limit for participant salary reductions for the health flexible spending account (FSA). For plan years starting on or after January 1, 2013, the participant salary reduction amount to the cafeteria plan’s health FSA portion of the plan may not exceed $2,500. This cap does not include employer contributions. However, employer flex credits that may be converted to cash must be added to the participants' health FSA elections.
Adoption Credit
Unless Congress acts, this tax credit will expire at the end of 2012. Parts of the adoption tax credit, under IRS Code Section 23, will expire on December 31, 2012. The remaining section of Code Section 23 will allow for a $10,000 credit for adoption of a child with special needs, regardless of expenses.
A "special needs" adoption, which becomes final during a taxable year, will be deemed to have qualified expenses in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred.
There will be no adoption-related benefits allowed under a cafeteria plan arrangement starting January 1, 2013, unless Congress updates current legislation.
Because the credit is set to expire at the end of 2012, no indexed figures were released for the 2013 taxable year.
Health Savings Account (HSA)
Minimum deductible amounts for the qualifying high deductible health plan (HDHP) increase to $1,250 for self-only coverage and $2,500 for family coverage in 2013. Maximums for the HDHP out-of-pocket expenses increase to $6,250 for self-only coverage and $12,500 for family coverage.
Maximum contribution levels to an HSA also increased for 2013 to $3,250 for self-only coverage and $6,450 for family coverage. The catch-up contribution allowed for those 55 and over is set at $1,000 for 2013. Remember, qualifying HDHPs and no other impermissable coverage (such as coverage under another employer’s plan or from a health care flexible spending account that is not specifically compatible with an HSA) are required in order to fund an HSA.
Archer Medical Savings Account (MSA)
For a high deductible insurance plan that provides self-only coverage, the annual deductible amount must be between $2,150 and $3,200 for 2013. Total out-of-pocket expenses under a plan that provides self-only coverage cannot exceed $4,300. The annual deductible amount must be between $4,300 and $6,450 for a plan that provides family coverage in 2013, with out-of-pocket expenses that do not exceed $7,850.
Although new MSAs are not allowed, maximum contributions to an existing MSA that are attributable to a single-coverage plan is 65% of the deductible amount. Maximum contributions for a family-coverage plan are limited to 75% of the deductible amount. MSA contributions must be coordinated with any HSA contributions for the taxable year and cannot exceed the HSA maximums.
Dependent and/or Child Day Care Expenses
Just a reminder that although the day care expense limit associated with a cafeteria plan is not indexed, the tax credit available through a participant’s tax filing was raised in 2003. The day care credit must be filed on Form 2441 and attached to the 1040 tax filing form.
For 2013, unless Congress acts, the limits for the day care tax credit expenses will be reduced and based on $2,400 of expenses covering one child and $4,800 for families with two or more children. If one of the parents is going to school full time or is incapable of self-care, the non-working spouse would be "deemed" as earning $200 per month for one qualifying child and $400 for two or more qualifying children. This "deemed" earned income is used whether a person is using the employer’s cafeteria plan or taking the day care credit.
The cafeteria plan day care contribution limit is $5,000 for a married couple filing a joint return, or for a single parent filing as "Head of Household." For a married couple filing separate returns, the limit is $2,500 each.
The day care credit is reduced dollar for dollar by contributions to or benefits received from an employer’s cafeteria plan. An employee may participate in their employer’s cafeteria plan and take a portion of the day care expenses through the credit if they have sufficient expenses in excess of their cafeteria plan annual election, but within the tax credit limits.
Long-Term Care
For a qualified long-term care insurance policy, the maximum non-taxable payment is now $320 per day for 2013.
Finally, by participating in a cafeteria plan, the participant will be lowering their income for the Earned Income Tax Credit (EITC). Check out the new limits in IRS Publication 596 "Earned Income Credit" and for more information about this tax credit.
The information contained in this memo is not intended to be legal, accounting, or other professional advice. We assume no liability whatsoever in connection with its use, nor are these comments directed to specific situations.
WageWorks
1100 Park Place, 4th Floor
San Mateo, CA 94403
do_not_reply@wageworks.com
7490
No information contained herein is intended to be legal, accounting or other professional advice. We assume no liability whatsoever in connection with your use or reliance upon this information. This information does not address specific situations. If you have questions about your specific situation, we recommend that you obtain independent professional advice.
unsubscribe
New Tax Laws
There have been many recent tax law changes. For more information about these new tax laws, please visit our website at www.bpmcpa.com
IRS CIRCULAR 230 NOTICE: Please be advised that, based on current IRS rules and standards, the advice above was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. If this message is provided in any manner to another taxpayer, he or she cannot use the advice and should seek advice based on his or her own particular circumstances from an independent tax advisor.
CONFIDENTIALITY NOTICE: This email message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
New Indexed Figures for 2013
The Internal Revenue Service (IRS) and Social Security Administration have released the cost-of-living (COLA) adjustments that apply to dollar limitations set forth in certain IRS Code Sections. The Consumer Price Index rose enough since the third quarter of last year to warrant an increase in some indexed figures for 2013.
Social Security and Medicare Wage Base
For 2013, the Social Security wage base increases to $113,700 from $110,100 in 2012. Unless Congress acts to extend the current reduction in the tax rate for employee withholdings, they will increase to 7.65 percent in 2013 from the 5.65 percent withheld in 2012. The Social Security rate of 6.2 percent is applied to wages up to the maximum taxable amount for the year; the Medicare portion of 1.45 percent applies to all wages.
Indexed Compensation Levels
The indexed compensation levels for determining who is considered highly compensated or a key employee remains unchanged for 2013:
2010 2011 2012 2013
Highly Compensated Employee $110,000 $110,000 $115,000 $115,000
Top Paid Group of 20% $110,000 $110,000 $115,000 $115,000
Key Employee, Officer $160,000 $160,000 $165,000 $165,000
401(k) Plans
In 2013, the maximum for elective deferrals increases to $17,500. The catch-up contribution for those 50 or older remains at $5,500 for 2013 (no change from 2012). That means if you are age 50 or over during the 2013 taxable year, you may generally defer up to $23,000 into your 401(k) plan.
Health FSA
We have an additional indexed figure to track starting in 2013. It’s the annual limit for participant salary reductions for the health flexible spending account (FSA). For plan years starting on or after January 1, 2013, the participant salary reduction amount to the cafeteria plan’s health FSA portion of the plan may not exceed $2,500. This cap does not include employer contributions. However, employer flex credits that may be converted to cash must be added to the participants' health FSA elections.
Adoption Credit
Unless Congress acts, this tax credit will expire at the end of 2012. Parts of the adoption tax credit, under IRS Code Section 23, will expire on December 31, 2012. The remaining section of Code Section 23 will allow for a $10,000 credit for adoption of a child with special needs, regardless of expenses.
A "special needs" adoption, which becomes final during a taxable year, will be deemed to have qualified expenses in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred.
There will be no adoption-related benefits allowed under a cafeteria plan arrangement starting January 1, 2013, unless Congress updates current legislation.
Because the credit is set to expire at the end of 2012, no indexed figures were released for the 2013 taxable year.
Health Savings Account (HSA)
Minimum deductible amounts for the qualifying high deductible health plan (HDHP) increase to $1,250 for self-only coverage and $2,500 for family coverage in 2013. Maximums for the HDHP out-of-pocket expenses increase to $6,250 for self-only coverage and $12,500 for family coverage.
Maximum contribution levels to an HSA also increased for 2013 to $3,250 for self-only coverage and $6,450 for family coverage. The catch-up contribution allowed for those 55 and over is set at $1,000 for 2013. Remember, qualifying HDHPs and no other impermissable coverage (such as coverage under another employer’s plan or from a health care flexible spending account that is not specifically compatible with an HSA) are required in order to fund an HSA.
Archer Medical Savings Account (MSA)
For a high deductible insurance plan that provides self-only coverage, the annual deductible amount must be between $2,150 and $3,200 for 2013. Total out-of-pocket expenses under a plan that provides self-only coverage cannot exceed $4,300. The annual deductible amount must be between $4,300 and $6,450 for a plan that provides family coverage in 2013, with out-of-pocket expenses that do not exceed $7,850.
Although new MSAs are not allowed, maximum contributions to an existing MSA that are attributable to a single-coverage plan is 65% of the deductible amount. Maximum contributions for a family-coverage plan are limited to 75% of the deductible amount. MSA contributions must be coordinated with any HSA contributions for the taxable year and cannot exceed the HSA maximums.
Dependent and/or Child Day Care Expenses
Just a reminder that although the day care expense limit associated with a cafeteria plan is not indexed, the tax credit available through a participant’s tax filing was raised in 2003. The day care credit must be filed on Form 2441 and attached to the 1040 tax filing form.
For 2013, unless Congress acts, the limits for the day care tax credit expenses will be reduced and based on $2,400 of expenses covering one child and $4,800 for families with two or more children. If one of the parents is going to school full time or is incapable of self-care, the non-working spouse would be "deemed" as earning $200 per month for one qualifying child and $400 for two or more qualifying children. This "deemed" earned income is used whether a person is using the employer’s cafeteria plan or taking the day care credit.
The cafeteria plan day care contribution limit is $5,000 for a married couple filing a joint return, or for a single parent filing as "Head of Household." For a married couple filing separate returns, the limit is $2,500 each.
The day care credit is reduced dollar for dollar by contributions to or benefits received from an employer’s cafeteria plan. An employee may participate in their employer’s cafeteria plan and take a portion of the day care expenses through the credit if they have sufficient expenses in excess of their cafeteria plan annual election, but within the tax credit limits.
Long-Term Care
For a qualified long-term care insurance policy, the maximum non-taxable payment is now $320 per day for 2013.
Finally, by participating in a cafeteria plan, the participant will be lowering their income for the Earned Income Tax Credit (EITC). Check out the new limits in IRS Publication 596 "Earned Income Credit" and for more information about this tax credit.
The information contained in this memo is not intended to be legal, accounting, or other professional advice. We assume no liability whatsoever in connection with its use, nor are these comments directed to specific situations.
WageWorks
1100 Park Place, 4th Floor
San Mateo, CA 94403
do_not_reply@wageworks.com
7490
No information contained herein is intended to be legal, accounting or other professional advice. We assume no liability whatsoever in connection with your use or reliance upon this information. This information does not address specific situations. If you have questions about your specific situation, we recommend that you obtain independent professional advice.
unsubscribe
New Tax Laws
There have been many recent tax law changes. For more information about these new tax laws, please visit our website at www.bpmcpa.com
IRS CIRCULAR 230 NOTICE: Please be advised that, based on current IRS rules and standards, the advice above was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. If this message is provided in any manner to another taxpayer, he or she cannot use the advice and should seek advice based on his or her own particular circumstances from an independent tax advisor.
CONFIDENTIALITY NOTICE: This email message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message.
Wednesday, November 21, 2012
D&B/Flow Chart Under Affordable Care Act
You may remember that in previous emails I brought to your attention that the Dunn and Bradstreet Credibility Corporation had contacted me saying that there had been a number of inquiries into my companies credit and that they could help us clear it up if we hired them. I found out that there was no problem with my credit. They taped the conversation without my knowledge .
I sent an email out and many of you also had received these calls and were told that the cost of hiring them would be $400 to $700.
Yesterday I heard from an attorney saying that they had been investigating this company for several months and they have uncovered evidence supporting that the company engages in fraud and unlawful business practices and planned to bring a class action law suit against them.
Please see a Chart entitled Penalties for Employers Not Offering Affordable Coverage Under the Affordable Care Act beginning 2014. Note this is only for businesses with 50 or more employees as smaller business are not required to provide health coverage.. It is not clear to me if it is accurate for employers with 200 or more employees as they will be required to enroll employees in their health plan.
http://healthreform.kff.org/~/media/Files/KHS/Flowcharts/employer__penalty_flowchart_1.pdf
Have a wonderful Thanksgiving and enjoy the time with your family. If you happen to go shopping over the Holidays remember to shop at your local small business.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Tuesday, November 20, 2012
Stakeholder Mailing: 1) TODAY, ACA Call @ 12pm PT to Discuss Proposed Rules Issued Today
One of my goals with Small Business California is to be you updated on what is happening with implementation of the Affordable Care Act. Please see latest from Herb Schultz about the elimination of preexisting conditions which will take effect 2014 and wellness.
If you are interested you could call in at noon.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
NOTE FROM: Herb K. Schultz, Director, Region IX
SUBJECT: Obama Administration Moves Forward to Implement Health Care Law, Ban Discrimination Against People with Pre-Existing Conditions
Obama Administration Moves Forward to Implement Health Care Law, Ban Discrimination Against People with Pre-Existing Conditions
Please join senior officials from the U.S. Department of Health and Human Services and the U.S. Department of Labor on TODAY at 12:00pm PT for a conference call to discuss proposed rules issued earlier today.
WHO: Gary Cohen, Director, Center for Consumer Information and Insurance Oversight, HHS
Daniel Maguire, Director, Office of Health Plan Standards & Compliance Assistance, Employee Benefits Security Administration, DOL
WHEN: 12:00 PM (PT)
Tuesday, November 20, 2012
CALL-IN: 888-810-9644
PASSCODE: HHS
If you are unable to join this conference call, a recording of the call will be available for 30 days by calling 800-925-3941.
The Obama administration moved forward today to implement provisions in the health care law that would make it illegal for insurance companies to discriminate against people with pre-existing conditions. The provisions of the Affordable Care Act also would make it easier for consumers to compare health plans and employers to promote and encourage employee wellness.
“The Affordable Care Act is building a health insurance market that works for consumers,” said Health and Human Services Secretary Kathleen Sebelius. “Thanks to the health care law, no one will be discriminated against because of a pre-existing condition.”
“The Affordable Care Act recognizes that well-run, equitable workplace wellness programs allow workers to access services that can help them and their families lead healthier lives,” said Secretary of Labor Hilda L. Solis. “Employers, too, can benefit from reduced costs associated with a healthier workforce.”
The Obama administration issued:
• A proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Under the rule, insurance companies would be allowed to vary premiums within limits, only based on age, tobacco use, family size, and geography. Health insurance companies would be prohibited from denying coverage to any American because of a pre-existing condition or from charging higher premiums to certain enrollees because of their current or past health problems, gender, occupation, and small employer size or industry. The rule would ensure that people for whom coverage would otherwise be unaffordable, and young adults, have access to a catastrophic coverage plan in the individual market. For more information regarding this rule, visit: http://www.healthcare.gov/news/factsheets/2012/11/market-reforms11202012a.html.
• A proposed rule outlining policies and standards for coverage of essential health benefits, while giving states more flexibility to implement the Affordable Care Act. Essential health benefits are a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states. For more information regarding this rule, visit http://www.healthcare.gov/news/factsheets/2012/11/ehb11202012a.html.
• A proposed rule implementing and expanding employment-based wellness programs to promote health and help control health care spending, while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status. For more information regarding this rule, visit: http://www.healthcare.gov/news/factsheets/2012/11/wellness11202012a.html
We have attached the full press release for your review.
Herb K. Schultz
Regional Director, HHS Region IX
90 7th Street, Suite 5-100
San Francisco, CA. 94103
(0ffice) 415-437-8500
(Direct) 415-437-8502
(Cell) 415-265-7049
If you are interested you could call in at noon.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
NOTE FROM: Herb K. Schultz, Director, Region IX
SUBJECT: Obama Administration Moves Forward to Implement Health Care Law, Ban Discrimination Against People with Pre-Existing Conditions
Obama Administration Moves Forward to Implement Health Care Law, Ban Discrimination Against People with Pre-Existing Conditions
Please join senior officials from the U.S. Department of Health and Human Services and the U.S. Department of Labor on TODAY at 12:00pm PT for a conference call to discuss proposed rules issued earlier today.
WHO: Gary Cohen, Director, Center for Consumer Information and Insurance Oversight, HHS
Daniel Maguire, Director, Office of Health Plan Standards & Compliance Assistance, Employee Benefits Security Administration, DOL
WHEN: 12:00 PM (PT)
Tuesday, November 20, 2012
CALL-IN: 888-810-9644
PASSCODE: HHS
If you are unable to join this conference call, a recording of the call will be available for 30 days by calling 800-925-3941.
The Obama administration moved forward today to implement provisions in the health care law that would make it illegal for insurance companies to discriminate against people with pre-existing conditions. The provisions of the Affordable Care Act also would make it easier for consumers to compare health plans and employers to promote and encourage employee wellness.
“The Affordable Care Act is building a health insurance market that works for consumers,” said Health and Human Services Secretary Kathleen Sebelius. “Thanks to the health care law, no one will be discriminated against because of a pre-existing condition.”
“The Affordable Care Act recognizes that well-run, equitable workplace wellness programs allow workers to access services that can help them and their families lead healthier lives,” said Secretary of Labor Hilda L. Solis. “Employers, too, can benefit from reduced costs associated with a healthier workforce.”
The Obama administration issued:
• A proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Under the rule, insurance companies would be allowed to vary premiums within limits, only based on age, tobacco use, family size, and geography. Health insurance companies would be prohibited from denying coverage to any American because of a pre-existing condition or from charging higher premiums to certain enrollees because of their current or past health problems, gender, occupation, and small employer size or industry. The rule would ensure that people for whom coverage would otherwise be unaffordable, and young adults, have access to a catastrophic coverage plan in the individual market. For more information regarding this rule, visit: http://www.healthcare.gov/news/factsheets/2012/11/market-reforms11202012a.html.
• A proposed rule outlining policies and standards for coverage of essential health benefits, while giving states more flexibility to implement the Affordable Care Act. Essential health benefits are a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states. For more information regarding this rule, visit http://www.healthcare.gov/news/factsheets/2012/11/ehb11202012a.html.
• A proposed rule implementing and expanding employment-based wellness programs to promote health and help control health care spending, while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status. For more information regarding this rule, visit: http://www.healthcare.gov/news/factsheets/2012/11/wellness11202012a.html
We have attached the full press release for your review.
Herb K. Schultz
Regional Director, HHS Region IX
90 7th Street, Suite 5-100
San Francisco, CA. 94103
(0ffice) 415-437-8500
(Direct) 415-437-8502
(Cell) 415-265-7049
Wednesday, November 14, 2012
Worker Compensation/SBDCs/IIPP
For those of you who have your workers compensation coming up Jan1 or later expect a rate increase that could be substantial especially if you are in a higher hazard industry. State Fund has filed for a 7% decrease but I believe they will be the exception.
I wish I could tell you how much the increase will be but I just don’t know. Companies are in the process of determining what their filings will be. The reason for the increase is that the industry loss ratio is around 138%. While the workers compensation reforms should reduce the rate increase it still will be substantial for many.
You should also be aware that you will probably receive your renewal quote late because of the companies figuring out what there filings will be. This really creates problems for many of you that are bidding on work next year. You get locked into a bid and then find out your cost are considerably more than you expected.
I will be meeting today with a major financial institution asking them to provide money for the Small Business Development Centers around the state. I have 25 associations cosigning. This is really important to small businesses around the state as the money they raise gets matched by the SBA.
Yesterday I met with some people at Cal OSHA around the issue of Injury and Illness Prevention programs which every employer around the state is required to have. As I have said before this is the number one citation OSHA hands out. It was interesting that most of their citations were not for not having an IIPP but for not making it effective. Make sure you let your employees know about the plan and that they all have access to it. You should bring the IIPP up at safety meeting and get your employees involved in making your workplace safe. To set up an IIPP and to make sure it complies with OSHA go to
http://www.dir.ca.gov/DOSH/etools/09-031/index.htm
For those of you in the Oakland area there will be two four hour seminars in how to set up an IIPP and how to comply with OSHA.Small Business California is cosponsoring this. It will be Thursday Dec 13 and Dec 18 from 8:30 to 12:30 at 1515 Clay Street Room 11 second floor., If you are interested in attending let me know and I will send you a registration form
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
I wish I could tell you how much the increase will be but I just don’t know. Companies are in the process of determining what their filings will be. The reason for the increase is that the industry loss ratio is around 138%. While the workers compensation reforms should reduce the rate increase it still will be substantial for many.
You should also be aware that you will probably receive your renewal quote late because of the companies figuring out what there filings will be. This really creates problems for many of you that are bidding on work next year. You get locked into a bid and then find out your cost are considerably more than you expected.
I will be meeting today with a major financial institution asking them to provide money for the Small Business Development Centers around the state. I have 25 associations cosigning. This is really important to small businesses around the state as the money they raise gets matched by the SBA.
Yesterday I met with some people at Cal OSHA around the issue of Injury and Illness Prevention programs which every employer around the state is required to have. As I have said before this is the number one citation OSHA hands out. It was interesting that most of their citations were not for not having an IIPP but for not making it effective. Make sure you let your employees know about the plan and that they all have access to it. You should bring the IIPP up at safety meeting and get your employees involved in making your workplace safe. To set up an IIPP and to make sure it complies with OSHA go to
http://www.dir.ca.gov/DOSH/etools/09-031/index.htm
For those of you in the Oakland area there will be two four hour seminars in how to set up an IIPP and how to comply with OSHA.Small Business California is cosponsoring this. It will be Thursday Dec 13 and Dec 18 from 8:30 to 12:30 at 1515 Clay Street Room 11 second floor., If you are interested in attending let me know and I will send you a registration form
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Monday, November 12, 2012
Health law guide for business
You all know that we have a serious deficit and the so called fiscal cliff is quickly approaching. A number of ideas have been floated to resolve the debt issue as indicated by Simpson Bowles.
I have heard that the idea of eliminating or modifying the mortgage deduction may be seriously considered. What do you think about this?
Also being considered is an increase in the capital gains tax. Thoughts?
I asked a question in a previous email about Exchanges and whether you will be considering them for health insurance for you and your employees. It seemed pretty clear that a number of you are not very familiar with how the Exchanges will work. Please see below a couple of websites that may be useful to you in getting more information about them. Keep in mind they will not be in place until 2014.
Health law guide for business
http://www.healthlawguideforbusiness.org/
Insure the Uninsured Project.
www.ITUP.org
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
I have heard that the idea of eliminating or modifying the mortgage deduction may be seriously considered. What do you think about this?
Also being considered is an increase in the capital gains tax. Thoughts?
I asked a question in a previous email about Exchanges and whether you will be considering them for health insurance for you and your employees. It seemed pretty clear that a number of you are not very familiar with how the Exchanges will work. Please see below a couple of websites that may be useful to you in getting more information about them. Keep in mind they will not be in place until 2014.
Health law guide for business
http://www.healthlawguideforbusiness.org/
Insure the Uninsured Project.
www.ITUP.org
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Friday, November 09, 2012
Exchange/ Independent Contractors/ Social Media
I have been contacted by a few people asking if small businesses are going to be looking at placing their health insurance in the Exchange created by the Affordable Care Act[ now being referred to as Obama care]. Please give me your thoughts on this. Here are some questions
1. If you currently have insurance for your employees will you be looking at the Exchange for your coverage?
2.If you don’t have insurance will you be looking at the Exchange to provide this for your employees?
3. If you are a sole proprietor will you be looking at placing your individual coverage with the Exchange
4. If you are a sole proprietor have you had problems getting insurance because of a health problem? Remember come 2014 medical conditions will not be a factor in obtain insurance?
In a previous email I asked the question; Do you hire independent contractors? I admit it was a trick question and most of you that answered the question fell into the trap. You do not hire independent contractors. Hire is a term that implies employment and could be a red flag in the event of an EDD or IRS audit. The answer to the question is that you contract with independent contractors.
I did not get many answers to my question about do you use social media and if so how effective is it to you in getting business. Most of the answers I did get said for a variety of reasons you don’t use social media. Is that really true?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
1. If you currently have insurance for your employees will you be looking at the Exchange for your coverage?
2.If you don’t have insurance will you be looking at the Exchange to provide this for your employees?
3. If you are a sole proprietor will you be looking at placing your individual coverage with the Exchange
4. If you are a sole proprietor have you had problems getting insurance because of a health problem? Remember come 2014 medical conditions will not be a factor in obtain insurance?
In a previous email I asked the question; Do you hire independent contractors? I admit it was a trick question and most of you that answered the question fell into the trap. You do not hire independent contractors. Hire is a term that implies employment and could be a red flag in the event of an EDD or IRS audit. The answer to the question is that you contract with independent contractors.
I did not get many answers to my question about do you use social media and if so how effective is it to you in getting business. Most of the answers I did get said for a variety of reasons you don’t use social media. Is that really true?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Wednesday, November 07, 2012
Election/ SBA Venture Capital Program/Independent Contractors
Tomorrow I will be speaking to a group of woman small business owners about the election. The topic will be how it impacts small business on a National and State basis.
What are the your thoughts? Do you think that given the results we are facing more gridlock at both the National and State level? Did the passage of Prop 30 signal a willingness of Californians to pay more taxes?
The SBA licensed Small Business Investment Companies provided about $3 billion in funding to 1094 small businesses in fiscal 2012 ending September30. This is a 14 % increase compared to the previous year.
The SBA provide $1.92 billion in loan guarantees to SBICs in 2012 and these 301 firms raised $1billion in private capital.
The SBA issued 30 new SBIC licenses in 2012 compared to 22 the prior year.
Venture capitalist overall invested $6.5 billion in 890 deal during the third quarter down 11%.
This is a real turnaround as SBICs declined from 2005 to 2010. Thanks Kent for this story
This may sound like a silly question but I have purpose in asking. Do you hire Independent Contractors? When you answer I will tell you why this is important.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
What are the your thoughts? Do you think that given the results we are facing more gridlock at both the National and State level? Did the passage of Prop 30 signal a willingness of Californians to pay more taxes?
The SBA licensed Small Business Investment Companies provided about $3 billion in funding to 1094 small businesses in fiscal 2012 ending September30. This is a 14 % increase compared to the previous year.
The SBA provide $1.92 billion in loan guarantees to SBICs in 2012 and these 301 firms raised $1billion in private capital.
The SBA issued 30 new SBIC licenses in 2012 compared to 22 the prior year.
Venture capitalist overall invested $6.5 billion in 890 deal during the third quarter down 11%.
This is a real turnaround as SBICs declined from 2005 to 2010. Thanks Kent for this story
This may sound like a silly question but I have purpose in asking. Do you hire Independent Contractors? When you answer I will tell you why this is important.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Tuesday, November 06, 2012
Small Business Biggest Problem
What is the biggest problem for small business. Some would say the cost of health insurance, others would say regulations,access to capital, taxation etc. I would contend the biggest problem for small business is our own apathy.
In a Pew survey in 2010 71% of respondents felt positive about small business. This was higher than any other people listed like doctors, and firefighters. There are about 27 million small businesses in the US and about 3.5 million in California.
So with these numbers and the respect we have from the public why aren’t we more effective in getting our views heard? I think the answer is pretty simple. Most of us do not make our voices heard.
In the Small Business California survey 59% of the respondents have never written to their representatives in government.
Now you may be saying to yourself’ I don’t have time and they don’t listen anyway” Well that becomes a self fulfilling prophecy. You don’t need to spend a lot of time. A half hour a month and we would make a major difference. I would contend we all have a half hour a month where we could write or call our representatives.
Let me cite two examples of where small business became proactive.
1. Repeal of the Affordable Care Act of the requirement to provide 1099s for all independent contractors. Small businesses rose up and got this repealed.
2. In SF a gross receipts tax was put on the ballot. This was supported by the Mayor , almost all the Supervisors, Labor, Nonprofits and a very large number of big businesses. The only opposition was small business.
Small business got involved and talked to their employees. They talked to their customers and they talked to their friends. We were outspent about 5 to 1. On election day small business won getting 55% of the vote.
You can make a difference and if you really want to change the business climate for small business you have to get involved.
Start by making sure you vote today if you haven’t already done so.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
In a Pew survey in 2010 71% of respondents felt positive about small business. This was higher than any other people listed like doctors, and firefighters. There are about 27 million small businesses in the US and about 3.5 million in California.
So with these numbers and the respect we have from the public why aren’t we more effective in getting our views heard? I think the answer is pretty simple. Most of us do not make our voices heard.
In the Small Business California survey 59% of the respondents have never written to their representatives in government.
Now you may be saying to yourself’ I don’t have time and they don’t listen anyway” Well that becomes a self fulfilling prophecy. You don’t need to spend a lot of time. A half hour a month and we would make a major difference. I would contend we all have a half hour a month where we could write or call our representatives.
Let me cite two examples of where small business became proactive.
1. Repeal of the Affordable Care Act of the requirement to provide 1099s for all independent contractors. Small businesses rose up and got this repealed.
2. In SF a gross receipts tax was put on the ballot. This was supported by the Mayor , almost all the Supervisors, Labor, Nonprofits and a very large number of big businesses. The only opposition was small business.
Small business got involved and talked to their employees. They talked to their customers and they talked to their friends. We were outspent about 5 to 1. On election day small business won getting 55% of the vote.
You can make a difference and if you really want to change the business climate for small business you have to get involved.
Start by making sure you vote today if you haven’t already done so.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Friday, November 02, 2012
Small Business Health Insurance/ Small Business Development Centers/Social Media
There was an article in the LA Times yesterday saying that a report done by the Commonwealth Fund found that 49% of small business workers were offered health insurance by their employers. This was down from 58% in 2003. Small business in this report was define as under 100 employees
It also said that health premiums had gone up 154% over the last decade.
Think there may be a correlation here.
I am pleased to report that we now have 15 Associations supporting the Small Business Development Centers around the state. I am meeting with a major financial institution mid month and plan to bring the support letters to the meeting. I am looking for Associations and small businesses to sign on to the support letter. Let me know if you would agree to sign on.
We hear a lot about Social Media, What social Media Outlets do you use? Which are most effective? Do you get much business from it? Any hints on how small businesses can most effectively use Social Media? What is best training source you have found to help you develop a social media presence
If you are interested in the results of this survey let me know and after I tabulate them I will send them to you.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
It also said that health premiums had gone up 154% over the last decade.
Think there may be a correlation here.
I am pleased to report that we now have 15 Associations supporting the Small Business Development Centers around the state. I am meeting with a major financial institution mid month and plan to bring the support letters to the meeting. I am looking for Associations and small businesses to sign on to the support letter. Let me know if you would agree to sign on.
We hear a lot about Social Media, What social Media Outlets do you use? Which are most effective? Do you get much business from it? Any hints on how small businesses can most effectively use Social Media? What is best training source you have found to help you develop a social media presence
If you are interested in the results of this survey let me know and after I tabulate them I will send them to you.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Thursday, November 01, 2012
Exchange/Support California Small Business Development Centers
Yesterday the Exchange Board voted to allow employers to select one tier of coverage[bronze,silver,gold and platinum]] and employees get to select any carrier within that tier. This is required by the Affordable Care Act. California could however go beyond that. The other options which have been discussed are
Employers choose two insurers and two tiers and employees pick from the offered health plans and tiers
Employers choose the health plan and employees choose the level of coverage of coverage they want.
It was the Exchange board’s decision to go with the most simple plan at this time as they believe it delivers the best balance of employee choice and affordability.
Yesterday I asked for people to support additional funding of the Small Business Development Centers. Small Business California is going to develop a strategy to do this either by getting additional funds from the private sector and/or from the state. We are looking for support from individual businesses and associations.
Please see email I received from someone at an SBDC office.
Scott, I am not sure if you will read this e-mail or not (with all you do you must be busier than anybody else). With this e-mail, you have made me feel more encouraged to continue working for the SBDC at a moment where most of us are very pessimistic of the future of the SBDC. I am sure that with your support, credibility and reputation, more prospective funders will approach us. THANKS AGAIN. I will share this with our consultants team (I am the only staff left for now).
Please let me know if you will help us in our efforts
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Employers choose two insurers and two tiers and employees pick from the offered health plans and tiers
Employers choose the health plan and employees choose the level of coverage of coverage they want.
It was the Exchange board’s decision to go with the most simple plan at this time as they believe it delivers the best balance of employee choice and affordability.
Yesterday I asked for people to support additional funding of the Small Business Development Centers. Small Business California is going to develop a strategy to do this either by getting additional funds from the private sector and/or from the state. We are looking for support from individual businesses and associations.
Please see email I received from someone at an SBDC office.
Scott, I am not sure if you will read this e-mail or not (with all you do you must be busier than anybody else). With this e-mail, you have made me feel more encouraged to continue working for the SBDC at a moment where most of us are very pessimistic of the future of the SBDC. I am sure that with your support, credibility and reputation, more prospective funders will approach us. THANKS AGAIN. I will share this with our consultants team (I am the only staff left for now).
Please let me know if you will help us in our efforts
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Friday, October 26, 2012
CEOs urge Congress to reduce federal deficit
There was a piece this morning in the LA Times saying that CEOs from more than 80 US companies are pressing Congress to reduce the deficit by raising taxes and reducing spending especially in the area of entitlements.. The article goes on to say that the CEOs say a $1 trillion deficit the last 4 years is dampening business hiring .
A yearend deadline looms and if these cuts and taxes are not implemented an across the board spending cut and tax increases will automatically be put in place. The cuts would be about $100 billion and taxes would be increased $400 billion according to the Times.
What do you as a small business person think?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
A yearend deadline looms and if these cuts and taxes are not implemented an across the board spending cut and tax increases will automatically be put in place. The cuts would be about $100 billion and taxes would be increased $400 billion according to the Times.
What do you as a small business person think?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Monday, October 15, 2012
Jim Baird - member profile
This is our first membership profile. Jim has been a great supporter of Small Business California but more than that a great supporter of California small businesses
Thank you Jim.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
September 2012: Jim Baird, CEO, Bay Area Development
Member since: 2005
For more info, please click here: Bay Area Development
Mission Statement: "It is the vision of Bay Area Development Company to be the highest quality provider of SBA loans in the entire industry"
1. What is your reason for joining SBC?
It is so critically important that real local small businesses band together and make sure that it is their voices being heard on the essential issues of the day. Small Business California fills this critical need by truly understanding the needs and diversity of the small business sector and by talking to all sides about practical rather than polarizing solutions to key small business policy issues.
2. What do you feel is the most important issues effecting SBC?
Small Business California is very important to us, and as someone who has worked with small business financing on Main Street as well as small business legislation in Washington DC.I know that often times small business does not get what they want because they are not well represented by groups that really understand the problems and issues small businesses face.
3. How has SBC benefited your company/organization?
Small Business California does two very important things for our organization. The first is that they keep us up to date and informed on a myriad of issues effecting small business that otherwise, we would not be knowledgeable or up to date on. The second is that SBC is always a well informed voice of reason when advocating for small businesses that we can always count on SBC to take good positions on issues affecting small business. With SBC, we feel like our voice is being heard.
Thank you Jim.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
September 2012: Jim Baird, CEO, Bay Area Development
Member since: 2005
For more info, please click here: Bay Area Development
Mission Statement: "It is the vision of Bay Area Development Company to be the highest quality provider of SBA loans in the entire industry"
1. What is your reason for joining SBC?
It is so critically important that real local small businesses band together and make sure that it is their voices being heard on the essential issues of the day. Small Business California fills this critical need by truly understanding the needs and diversity of the small business sector and by talking to all sides about practical rather than polarizing solutions to key small business policy issues.
2. What do you feel is the most important issues effecting SBC?
Small Business California is very important to us, and as someone who has worked with small business financing on Main Street as well as small business legislation in Washington DC.I know that often times small business does not get what they want because they are not well represented by groups that really understand the problems and issues small businesses face.
3. How has SBC benefited your company/organization?
Small Business California does two very important things for our organization. The first is that they keep us up to date and informed on a myriad of issues effecting small business that otherwise, we would not be knowledgeable or up to date on. The second is that SBC is always a well informed voice of reason when advocating for small businesses that we can always count on SBC to take good positions on issues affecting small business. With SBC, we feel like our voice is being heard.
Small Business Acton Committee
On the November ballot two very important Propositions will be on the ballot.
Proposition 30 which is called the Governors measure will raise about $9 billion in taxes.
Proposition 32 which will ban automatic deductions by corporations, unions and government of employees wages to be used for politics.
Small Business California does not take positions on ballot measures and we know there are small businesses on both sides of the issue.
We are however very concerned about an organization called the Small Business Action Committee. This Committee is sponsoring adds asking voters to vote yes on 32 and it is expected they will also sponsor adds to vote no on 30.
This organization does not represent small business.
Over $21 million has come from Charlie Munger a Stanford physicist and brother to Molly Munger who is funding Proposition 38 and his father who is an executive for Warren Buffets Berkshire Hathaway. If Proposition 32 passes he will be able to contribute to PACs in unlimited amounts.
I don’t know if any small businesses have contributed to the Small Business Action Committee but clearly they are not making the decisions on where to spend the money.
Does this bother you that very wealthy individuals that have no history of representing small business are using the moniker of small business as if they are representing your interest?
An interesting piece in the Sacramento Bee yesterday. Yuba City announced it would be paying attorney George Louie $15000 not to file ADA lawsuits. In June of 2011 a Contra Costa Superior Court placed Louie on a state list of “vexatious litigants “in California courts. But he was still free to file in Federal Court until this agreement.
The agreement was exclusively with Louie and I am sure there are many other attorneys that will pick up the slack.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Proposition 30 which is called the Governors measure will raise about $9 billion in taxes.
Proposition 32 which will ban automatic deductions by corporations, unions and government of employees wages to be used for politics.
Small Business California does not take positions on ballot measures and we know there are small businesses on both sides of the issue.
We are however very concerned about an organization called the Small Business Action Committee. This Committee is sponsoring adds asking voters to vote yes on 32 and it is expected they will also sponsor adds to vote no on 30.
This organization does not represent small business.
Over $21 million has come from Charlie Munger a Stanford physicist and brother to Molly Munger who is funding Proposition 38 and his father who is an executive for Warren Buffets Berkshire Hathaway. If Proposition 32 passes he will be able to contribute to PACs in unlimited amounts.
I don’t know if any small businesses have contributed to the Small Business Action Committee but clearly they are not making the decisions on where to spend the money.
Does this bother you that very wealthy individuals that have no history of representing small business are using the moniker of small business as if they are representing your interest?
An interesting piece in the Sacramento Bee yesterday. Yuba City announced it would be paying attorney George Louie $15000 not to file ADA lawsuits. In June of 2011 a Contra Costa Superior Court placed Louie on a state list of “vexatious litigants “in California courts. But he was still free to file in Federal Court until this agreement.
The agreement was exclusively with Louie and I am sure there are many other attorneys that will pick up the slack.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Friday, October 12, 2012
64 out of 74 Businesses Cited for State Labor Code Violations
The Independent Contractor[IC]/underground economy is a huge issue for California small business. On the one hand we hear from small businesses that the state and IRS audit them and nitpick to find ways to reclassify independent contractors as employees. Small Business California is working with one of our members who had an attorney and Human Resource person develop their contract for ICs and still the state insist these people are employees. It also should be noted that our member is following standard industry practice.
However there are numerous situations where the employer is clearly breaking the law. Charles Welsh who is a member came to us awhile back as many of his competitors were paying their employees under the table. We reported this to Christine Baker head of the Department of Industrial Relations who turned it over to Renee Bacchini her Special Assistant. See below results of their investigations. Looking at the reasons for citations none of these are nitpicking in my opinion. These people are competing with people like Charles who is playing by the rules and is clearly at a competitive disadvantage.
What do you see in your industry?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Hello Charles,
I hope your fall is going well too.
Please see below from the inspections conducted statewide in the salon industry. Our enforcement is to level the playing field, educate the employers and bring them into compliance if there are violations found. It is not within our jurisdiction to regulate how much they charge. There is high competition in this industry, it’s possible for the businesses to try to remain competitive with their rates in order to stay in business. Again, that is beyond what we enforce. We conducted 74 inspections throughout these counties and brought them into compliance with state labor law. Of the 74 salons inspected, 64 were found out of compliance.
Here are the results of the salon industry inspections during the week of April 16 – 20, 2012 in the following geographic areas:
SF/Alameda/Marin/Contra Costa/Sonoma/Napa counties; Tehama/Shasta/Placer/Sutter counties, and Santa Clara and Monterey counties.
Number of inspections……. 74
Citations issued .....……...… 64
WC amount….…………....….. $ 399,283.59 / 50 citations
Cash Pay 226 cites………….. $ 67,250.00 / 11
Minimum Wage Cites…….. $ 3,360.00 / 2
Overtime Cites……..……….. $ 350.00 / 1
Total Penalty Assessments $470,244.00
Please let me know if you have further questions.
Renée Bacchini
Special Assistant to the Director
Department of Industrial Relations
1515 Clay Street, 17th Floor
Oakland, CA 94610
510.286.1106 o
415.859.6005 m
510.622.3265 f
From: Charles Welsh [mailto:cvwelsh@mac.com]
Sent: Wednesday, October 10, 2012 5:48 PM
To: Bacchini, Renee@DIR
Subject: Re: Question on Independent Contractor Contact
Hello Renee,
Hope you are having a great fall!
Can you please share what the results were of the audit? It appears that most of the under the table, non-compliant "bad players" are still doing business at their low price point, I was wondering what the results were of the hair salon audit.
Many thanks!
Regards,
Charles
On Jul 24, 2012, at 4:37 PM, "Bacchini, Renee@DIR"
Hello Charles,
I found out DLSE BOFE Division went out and found quite a bit of non-compliance. Unfortunately it doesn’t necessarily close them down. I don’t know that we can publicize names of businesses, but overall results. Also, it had to be compelling enough for someone to write about it.
Renée Bacchini
Special Assistant to the Director
Department of Industrial Relations
1515 Clay Street, 17th Floor
Oakland, CA 94610
510.286.1106 o
415.859.6005 m
510.622.3265 f
From: Charles Welsh [mailto:cvwelsh@mac.com]
Sent: Monday, July 23, 2012 7:56 AM
To: Bacchini, Renee@DIR
Subject: Re: Question on Independent Contractor Contact
Hi Renee,
Hope you had a great weekend. I was wondering what the outcome was of your enforcement action. Also, do you think publicizing results might help garner more compliance?
Regards,
Charles
Sent from my iPhone
On Jun 13, 2012, at 11:12 AM, "Bacchini, Renee@DIR"
Hello Charles,
I checked in with our BOFE Division. This has been assigned and they are currently planning strategic enforcement.
Please let me know if you have further questions.
Renée Bacchini
Special Assistant to the Director
Department of Industrial Relations
1515 Clay Street, 17th Floor
Oakland, CA 94610
510.286.1106 o
415.859.6005 m
510.622.3265 f
From: Charles Welsh [mailto:cvwelsh@mac.com]
Sent: Tuesday, June 12, 2012 9:40 AM
To: Bacchini, Renee@DIR
Cc: Scott Hauge; Baker, Christine@DIR
Subject: Re: Question on Independent Contractor Contact
Hi Renee,
Hope your year is going well. Was driving down "Underground Economy Row" and thought of you. Sure hope that the State can do some meaningful enforcement on this. These businesses who hire employees and mis-classify them as "contractors" can cut hair for about half the price of legitimate businesses.
Regards,
Charles
On Jan 30, 2012, at 9:55 AM, Bacchini, Renee@DIR wrote:
Hello Charles,
Thanks so much for bringing this to our attention. This is interesting information. We will take a look and I will be in touch.
Kind regards,
Renée Bacchini
Special Assistant to the Director
Department of Industrial Relations
1515 Clay Street, Room 901
Oakland CA 94610
510.286.1106 o
415.859.6005 m
510.622.3265 f
From: Charles Welsh [mailto:cvwelsh@mac.com]
Sent: Sunday, January 29, 2012 6:41 PM
To: Bacchini, Renee@DIR
Cc: Scott Hauge
Subject: Re: Question on Independent Contractor Contact
Hello Renée,
It is a pleasure to meet you. I appreciate your interest in helping us to address the rampant mis-classification of workers we see in the Bay Area salon industry. I am a franchised hair salon owner with two locations in San Jose, CA. I've been operating since 2002 and working with Scott to help address the misclassification of salon workers in the Bay area.
What first alerted me to this problem, was the large number of salons with price points for haircuts that are ridiculously lower than virtually any other place in the country. For example, even in super-cheap cost-of-living places in the Midwest, you can't get a haircut for under $12 or so. Yet there are huge numbers of $6.99 - $9.99 salons throughout the bay area. Of course because a haircut service is pure labor -- no technology improves productivity to make it cheaper. So how could it be that one of the most expensive places to live in the country has the cheapest haircuts? Something didn't seem right.
Next, in our salon business, we began having job applicants come to us -- people who had been working at those cheap haircut places. Many of them would try to convince us to pay them all cash under the table. We told the applicants that we don't do that -- they were puzzled since they said this was common practice elsewhere.
Finally, when I sold one of my locations a few years ago, it was bought by an independent salon owner. He took over my old staff, my old location, put up his own price board, schedule, and simply made the employees sign agreements saying they agreed to split the cash take 50 - 50 (which he would pay them every two weeks) and they proclaimed that they were independent contractors. (No chair rental, no risk, all control of the business his, a regular payroll schedule, the works.) He told me he'd done this two times before with other salons he had bought and had made good money doing so. That's when I realized that people -- business owners, accountants, and lawyers are, on a massive scale, reconfiguring the beauty industry in California by misclassifying their workers.
To share with you the scope of the problem in San Jose, here are all the super cheap salons within just a mile radius of one small section of San Jose. These are all commercial storefront businesses-- not people working out of their home. I created this in January '10 by walking the mile radius and stopping in every salon and asking the owners and employees questions. Then I took all the information, mapped it in Google Maps. Every one of these ~25 salons has multiple chairs and multiple employees (not just a sole proprietor). It appears that most of these have misclassified their employees as "contractors". And as I mentioned earlier -- look at those prices -- on the left side of the map -- you won't find these kind prices even in the low-cost-of-living areas of the US. It is amazing how little one can charge when one chooses to misclassify workers, doesn't follow labor laws, doesn't buy insurance, and doesn't pay taxes.
http://g.co/maps/v5jc3
On a related note -- I recently found an article of an IRS audit that was done. While the audit and article occurred in the Midwest, the issues we face here are the same. The article does an outstanding job of illuminating:
a. the way professionals including accountants and lawyers give new owners bad advice about setting up workers as "independent contractors" ("Just have them sign a contract, then they are contractors.")
b. the method these businesses use to operate -- and why even the owners think everything is legitimate ("My attorney/accountant told me this was the way to do it.")
c. how when businesses that use these practices are put under scrutiny, they are found to be clearly in violation of the law
d. some crystal clear criteria that serve as a bright line between IC's and employee businesses.
http://www.nailsmag.com/article/916/youre-being-audited-one-salon-owners-harrowing-irs-journey
If we had a few well-publicized investigations in our region with significant penalties, there would be much more compliance.
Some suggestions that I think would be effective to pursue this might include:
a. Choose regional areas to target (San Jose, San Francisco, Sacramento all come to mind)
b. Select 3-5 businesses in each locality to audit.
c. Throw the proverbial book at the offenders
d. Publicize the result in papers and through professional organizations (Bureau of Cosmetology, in our case)
e. Send case outcomes to Attorneys and Accountants, remind of clear requirements for contractor status to ensure they are not mis-advising their clients.
I hope some of this is helpful. There are many others in my franchise who could share their stories with you, as well. If you are interested in talking with them, let me know and I'll introduce you, to them. Do call or write if I can be of additional assistance - and thank you so very much for helping us to get better industry compliance with the law. Without your help, I fear we are likely to see our industry taken over by under-the-table operators.
Regards,
Charles
On Jan 26, 2012, at 1:33 PM, Bacchini, Renee@DIR wrote:
Thank you for the introduction Scott. Charles, please feel free to send me information that you have.
Renée Bacchini
Special Assistant to the Director
Department of Industrial Relations
1515 Clay Street, Room 901
Oakland CA 94610
510.286.1106 o
415.859.6005 m
510.622.3265 f
From: Scott Hauge [mailto:shauge@CAL-INSURE.com]
Sent: Thursday, January 26, 2012 1:03 PM
To: Bacchini, Renee@DIR
Cc: Charles Welsh
Subject: RE: Question on Independent Contractor Contact
Charles meet Renee. She works with Christine at DIR. She is Christines point person on the underground economy.
You may want to send her information that you have discovered with hair salons and some ideas you have to deal with this.
Scott
From: Bacchini, Renee@DIR [mailto:RBacchini@dir.ca.gov]
Sent: Thursday, January 26, 2012 8:17 AM
To: Scott Hauge; Baker, Christine@DIR
Subject: RE: Question on Independent Contractor Contact
Mr. Hauge,
I will be available this afternoon. Is there a good time to call you?
I heard you speak at the legislative hearing in December. I look forward to working with you.
Renée Bacchini
Special Assistant to the Director
Department of Industrial Relations
1515 Clay Street, Room 901
Oakland CA 94610
510.286.1106 o
415.859.6005 m
510.622.3265 f
From: Scott Hauge [mailto:shauge@CAL-INSURE.com]
Sent: Thursday, January 26, 2012 8:14 AM
To: Baker, Christine@DIR
Cc: Bacchini, Renee@DIR
Subject: RE: Question on Independent Contractor Contact
Ms Bacchini, I would like to talk to you to see how Small Business California can work with you.
Thank you in advance for talking to Denise.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2109
From: Baker, Christine@DIR [mailto:CBaker@dir.ca.gov]
Sent: Thursday, January 26, 2012 8:08 AM
To: Scott Hauge
Cc: Bacchini, Renee@DIR
Subject: RE: Question on Independent Contractor Contact
Hi Scott,
We just signed an MOU with DOL. I am asking Renee Bachinni to contact Denise.
From: Scott Hauge [mailto:shauge@CAL-INSURE.com]
Sent: Thursday, January 26, 2012 7:34 AM
To: Baker, Christine@DIR
Subject: FW: Question on Independent Contractor Contact
Who do I tell her to contact
From: Denise Collins [mailto:dcollins@auntanns.com]
Sent: Wednesday, January 25, 2012 5:17 PM
To: Scott Hauge
Subject: Question on Independent Contractor Contact
Hi Scott..
This is a link about the IRS/DOL effort to work together to prevent independent contractor mis-classification.
Here’s the announcement: http://www.dol.gov/whd/workers/MOU/irs.pdf
Do you know Who would be the reporting agency in California.. I'm looking for the California Underground Task Force Personnel so I can discuss a couple hundred agencies that are using independent contractors .
Denise Collins
Aunt Ann's In House Staffing
Aunt Ann's Homecare
www.auntanns.com
650 757-2000
Staffing homes since 1958
Please LIKE us on Facebook!
________________________________________
From: Tom Breedlove [mailto:Tom.Breedlove@mybreedlove.com]
Sent: Wednesday, January 25, 2012 4:07 PM
To: Denise Collins
Subject: RE: Counselor's Corner
Hi Denise,
Here’s the announcement: http://www.dol.gov/whd/workers/MOU/irs.pdf
I hope that helps.
Best,
Tom
Breedlove & Associates
phone 888-273-3356
fax 512-347-9331
website www.myBreedlove.com
Payroll & Tax Service for Household Employers
From: Denise Collins [mailto:dcollins@auntanns.com]
Sent: Wednesday, January 25, 2012 4:36 PM
To: Client Service
Cc: Tom Breedlove
Subject: RE: Counselor's Corner
Hi Tom... Where can I find a IRS and DOL reference about the following? Who could I contact?
WARNING: The IRS and the Department of Labor have recently announced a collaborative effort to aggressively enforce worker misclassification,
which costs taxpayers billions of dollars in lost tax revenue.
The household employment industry has been listed as one of the primary targets for this enforcement initiative.
Denise Collins
Aunt Ann's In House Staffing
Aunt Ann's Homecare
www.auntanns.com
650 757-2000
Staffing homes since 1958
Please LIKE us on Facebook!
________________________________________
From: Tom Breedlove [mailto:tom@breedlove-online.ccsend.com] On Behalf Of Tom Breedlove
Sent: Wednesday, January 25, 2012 12:25 PM
To: Denise Collins
Subject: Counselor's Corner
Counselor's Corner
JANUARY 2012
"You guys are the most efficient
and responsive people
I have ever met in my life."
- MARTA GARCIA ABADIA, Palo Alto, CA
QUICK TAX FACTS
$1,800: Social Security & Medicare ("FICA") reporting threshold
$1,000: Unemployment reporting threshold (some state thresholds are lower)
$2,500: Total childcare tax breaks available for families who pay legally
1.5: Overtime rate of pay when live-out employees work more than 40 hours in a 7-day work week
$0.555: Mileage reimbursement rate
$7.25: Federal minimum wage (some state rates are higher)
55: IRS estimate of annual hours needed to manage household payroll & tax compliance process
$2: Approximate daily cost to have Breedlove & Associates handle all payroll and tax compliance duties with no work, no worry and no risk.
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TAX ID REMINDER
As families work to prepare their 2011 tax returns, many will be looking to itemize their childcare expenses in order to maximize their tax breaks. Qualified childcare expenses include 1) gross wages paid to the caregiver, 2) employer taxes on those wages, and 3) any fees paid to your agency.
If you get requests for your agency's tax ID (they may call it "FEIN" or "EIN"), we strongly recommend that you make sure your agency's tax ID is not linked to the caregiver's wages or the employer taxes. The client -- not your agency -- is the employer so their tax ID should be associated with those expenses.
Your agency tax ID should be linked only to the fees you received from the family during the tax year (this includes fees for perm and temp placements).
If you or your families have any questions about tax breaks, visit our Expert Advice section or call us at 888-BREEDLOVE (273-3356).
FORM W-2, GOOD. FORM 1099, BAD.
By early February, your caregivers should be receiving Form W-2s from the family(ies) they work for (we've mailed them to every employee -- and posted electronic copies online -- on behalf of our clients, but the deadline for employers is to have them postmarked by January 31).
If your caregivers get 1099s from their families, it's a problem for both parties. First, the caregivers have to pay an additional 7.65% in taxes (independent contractors must pay both the employee and employer portions of Social Security & Medicare taxes "FICA"). Second, by issuing a Form 1099, the families are subject to worker misclassification charges, which is considered felony tax evasion.
WARNING: The IRS and the Department of Labor have recently announced a collaborative effort to aggressively enforce worker misclassification, which costs taxpayers billions of dollars in lost tax revenue. The household employment industry has been listed as one of the primary targets for this enforcement initiative.
If you or your families have any questions about worker classification, visit our Expert Advice section or give us a call at 888-BREEDLOVE (273-3356).
888-BREEDLOVE (888-273-3356)
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3711 S. MoPac Expy.
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Tuesday, October 09, 2012
Affordable Care Act/Proposition E in SF/ Data Breeches
Today in the Kaiser Health News there was a piece about an analysis prepared by Urbans Health Policy Center saying that if the health law was implemented this year, the number of Americans covered by employer sponsored insurance would increase by 2.7% and cost for small businesses with under 50 workers would decrease by 7.3%. For businesses less than 100 employees health insurance cost would be reduced by 1.4%. The report goes on to say that businesses with 101 to 1000 would see a 4.6% increase.
I am a supporter of the Affordable Care Act but these numbers for small businesses with less than 50 employees seem pretty optimistic. What do you think?
For those of you in San Francisco you know that Proposition E is on the ballot for November. This would change the current payroll tax to a gross receipts tax. There is no opposition but in a recent poll it was found that one third of those surveyed support the measure,one third oppose and the remainder were undecided. Small Business California has no position on this as it is a local issue but most small business associations in SF support this. I think most small businesses support this measure but we have to do a better job of talking to our employees, customers and friends encouraging that they support the measure. San Francisco is the only City or County in California that has a payroll tax.
I have put together a short piece on how a small business can protect itself from security breaches. This is a serious problem for small businesses and most have not taken steps to protect themselves. I don’t send attachments on my emails so if you would like a copy please let me know.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Wednesday, October 03, 2012
Presidential Debate/ Voluntary Classification Settlement Program
You all know that tonight there will be a debate between President Obama and Mitt Romney. As a small business owner what would you like to hear them say?
The IRS recently announced a new program called the Voluntary Classification Settlement Program. This program will allow taxpayers to voluntarily reclassify their workers from Independent Contractor status to employees. Under VCSP a taxpayer will pay 10% of the amount of employment taxes calculated under the reduced rates of section 3509[a] of the Internal Revenue Code for the compensation paid for the most recent tax year to the workers being classified under the VCSP. In addition ,the taxpayer will not be liable for any interest and penalties on the payment under VCSP, and will not be audited for employment tax purposes for prior years with respect to worker classification of workers.
This appears to be a great opportunity for small businesses. You all are aware that the IRS has stepped up their audits in this area. Talk to your accountant about this.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116shauge@cal-insure.com
415-680-2188
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116shauge@cal-insure.com
415-680-2188
Thursday, September 27, 2012
California Economic Report/ EDD
A report came out yesterday from the Assembly Committee on Jobs, Economic Development and the Economy about California’s economy.
Some of the findings were
In 2011 total GDP was $1.95 trillion as compared to US GDP of $15 trillion
If California was a country it would be the 9th largest GDP in the world
There were 2.7 million foreclosures in the US in 2011 a 34% reduction from the prior year. California registered the third highest foreclosure rate in the country with 1 in every 31 housing units having at least one foreclosure filing during the year
California ranks 4th among 50 states in science and technology
California ranked 1 among 50 states in patents issued in 2010 with 30080 patents.NY was second with 8095
California ranked 3 in startups and 1 in new branches in high tech manufacturing
The Milken Institute ranks the UC system first in technology transfer and commercialization.
Please let me know if you would like the full report.
Yesterday one of Small Business California’s member wrote me about a situation he had with EDD. He had an employee quit and move to Hawaii. The employee filed an unemployment claim with EDD saying his personal circumstances forced him to move. The judge for EDD found in favor of the employee because of compelling personal circumstances and that a personal circumstance can cause a reasonable person desirous of continuing employment to give up employment. According to our member he was kicked out of the place he was living and he did not find another place suitable to live so moved back to Hawaii. Our member is now being charged in his reserve account.
Does this seem right to you? Needless to say our member does not think so.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116shauge@cal-insure.com
415-680-2188
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116shauge@cal-insure.com
415-680-2188
Wednesday, September 26, 2012
Barbara Vohryzek/ Public View of Small Business
Yesterday I had the opportunity of talking to and hearing Barbara Vohryzek who has recently been appointed by Governor Brown to Deputy Director of Small Business at the Governor’s Office of Business and Economic Development. This position is usually referred to as the Small Business Advocate. Barbara is clearly very intelligent and has hit the ground running. She has a strong background in finance and 504 loans
She has been in her position only two weeks and is committed to helping small businesses around the state. She also says she definitely has the ear of the Governor.
Issues she has identified are access to capital, streamlining regulations and giving input on California’s implementation of the Affordable Care Act.
What ideas do you have on how she can help California Small Businesses?
In San Francisco there is a ballot measure to change the current payroll tax to a gross receipts tax. In polling that has been done small business had a 67% favorable rating of people. This is the highest of any group and is a big reason the campaign is working with us to get the measure passed.
I would contend that this is true throughout the state and is a good reason small businesses if they speak up can make a difference in public policy.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116shauge@cal-insure.com
415-680-2188
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116shauge@cal-insure.com
415-680-2188
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