Employers Statewide Relieved by Recent Meal-and-Rest Break Decision

State Supreme Court Ruling in Brinker Case Spares a Broad Range of Golden State Industries Including Construction, Restaurant, Trucking and Hospitality

Employers paying wages in the state of California may breathe easier tonight due to the landmark labor law decision on the case, Brinker Restaurant Corp. v. Superior Court, which was unanimously passed yesterday, April 12, 2012, by the California Supreme Court. 

At the heart of the case lay the question of an employer’s duties when it came to providing meal breaks for their employees.  The law clearly states that employers are required to provide workers who work over 6 hours with a full, unpaid, half-hour, responsibility-free meal period.  What was unclear was whether the employer was required to police these meal periods; forcing employees to stop working entirely during their break, regardless of how practical that might be, or any possible negative impacts this might have on the employee. This kind of absolute blind enforcement raised issues for employers and employees in many industries where a forced total cessation of work related activities might threaten the success of a delicate procedure, as in the health care and construction industries, or where it might cause employees to lose tips or a sales commission.

In what many seem to consider a “common sense” decision, the Supreme Court chose to alleviate these concerns.  Now, although employers must provide their employees with the opportunity to take a break, that time is to be considered as belonging entirely to the employee.  The employee may, therefore, choose to cut their meal period short, or to skip it entirely.  It is no longer the duty of the employing company to ensure that employees drop everything and take a rest, only to ensure that it is possible for them to do so. 

The hope is that by allowing this flexibility in the timing and length of meal breaks, fewer class action law suits will be filed against employers in businesses where it is not always reasonable for employees to drop everything at a pre-set time in order to take a break.  This also releases employers from the financial concern of spending management time policing employee breaks.

 It should be noted and emphasized that employers cannot in any way compel employees into giving up their meal periods without paying them a penalty of an extra hour’s worth of wages at the coerced employee’s regular rate of pay. Giving up their meal period must be the sole decision of the employee if the employer is to be released from this lawful obligation. Furthermore, if an employee chooses to work through their break period, the employer is still responsible to pay them for all time spent working.

Other important clarifications set forth by the court, and a simple bulleted list of labor laws as they have been interpreted by this decision can be found (here)[link to http://californiaemploymentlaw.foxrothschild.com/tags/brinker-restaurant-corp-v-supe/].

The full 63 page court decision may be found (here)[link to http://www.courtinfo.ca.gov/opinions/documents/S166350.PDF].

For more information call Brett Adolph at 714.467.3434 x 231 or visit paydayonesource.com.

Payroll Tax Update

Check out the latest payroll taxes, limits and quick links. This is a handy tool for any medical practice. Click here.

For more information call Brett Adolph, 714.467.3434.

Federal Government to Recover Money From Employers

As you know, a Federal tax levied on employers covered but the Unemployment Insurance Program at a rate of 6.0% on annual wages paid up to $7000 per employee. With full credits in place, employers pay only .6% per covered employee, per year.

The credits can be reduced when a state has an outstanding advance or loan for two consecutive years, thereby allowing the Federal government to recover their monies directly from employers.

As a result of outstanding loans, tax reduction of .3% will be applied to wages paid in 2011 for 21 states, inculding California.

For more information please call Brett Adolph, 714.467.3434 x 231

Payroll Tax Cuts; To Cut or Not To Cut?

With the expiration of the payroll take cuts just around the corner, there has been a lot be debate on this topic. Check out this great article about what the GOP candidates are saying about the cuts, here.

For more information call Brett Adolph, Payday Payroll at 714.467.3434

Check References Before Hiring

Everyone practice has or has had a problem employee at some point. Handling employees can be difficult and scary because of the legal ramifications associated if not handled properly. Nip problem employees in the bud by calling references before hiring. Here is an great blog about this process, click here.

Brett Adolph

PayDay Work Force Solutions

brett@paydayonesource.com

New Payroll Requirements for 2011

By Brett Adolph, Payday One Source
www.paydayonesource.com

As of January 1, 2011, many businesses will be required to make federal tax deposits electronically. If you are processing your payroll in-house, you need to know about these changes.

Your options for making your federal tax deposits include:

1. Using the Web site or the voice response system.

• You must be enrolled in EFTPS (Electronic Fund Transfer Payment System) to pay via either system. If you recently were pre-enrolled in EFTPS and cannot find your PIN, call (888)434-7338. Payments must be scheduled by 8 p.m. ET the day before the due date to be received timely.

2. Asking your financial institution to initiate an ACH Credit payment on your behalf.

• This option requires an EFTPS enrollment, but your banking information is not part of that enrollment. Financial institutions are not required to initiate payments for you, and may charge you a fee if they offer this service. Check in advance for cutoff times, which may be earlier than if you make a payment yourself using EFTPS.

3. Asking another trusted third party such as Payday Payroll Service (see contact information below) to make the payment for you.

4. In extraordinary circumstances, asking your financial institution to make a same-day tax wire payment for you.

• Financial institutions are not required to do this, and may charge you a fee. Check with your financial institution in advance for cutoff times.

Do you need more information or the link to the website mentioned above? Please contact Brett at (714) 467-3434 (office), (562) 889-0730 (mobile) or via e-mail at brett@payday2000.com

New Payroll Taxes on Tap

By Brett Adolph
Payday Payroll
www.paydayonesource.com

Currently, the 1.45% Medicare tax portion of Social Security tax applies to “earned income,” such as wages, but not “unearned income.” Effective in 2013, the new health care law creates two new taxes:

*An additional 0.9% Medicare tax is imposed on earned income of joint filers above $250,000 ($200,000 for single filers).

*A 3.8% Medicare tax is imposed on “net investment income” of joint filers with a modified adjusted gross income (MAGI) above $250,000 ($200,000 for single filers). For this purpose, net investment income includes interest, dividends, royalties, rents, gains from dispositions of property and passive activity income, but not distributions from qualified retirement plans and IRAs.

HIRE ACT Update

By Brett Adolph
Payday Payroll
www.paydayonesource.com

Posted 5/11/2010

Click here (link to come shortly)

Are You Considering Changing Employees to Independent Contractors?

By Brett Adoph, Payday One Source
714.467.3434
www.paydayonesource.com

This is a common question that we get from our clients. Although it is advantageous to the business to have independent contractors over employees, make sure that yours qualify for the designation.

According to the IRS, people engaged in an independent trade, business, or profession in which they offer their services to the general public generally are not employees. However, whether such people are employees or independent contractors depends on the facts in each case. The general rule is that an individual is an independent contractor if you have the right to control or direct only the result of the work and not the means and methods of accomplishing the result. If workers must follow your instructions on when, where, and how to do the work, they are more likely to be employees. The law favors classifying workers in an employee status whenever possible.

Although classifying an individual as an independent contractor can be a valid and appropriate business choice, employers need to exercise extreme caution in making the proper distinction between employees and bona fide independent contractors. Failure to make the correct decision is risky business. In addition to back taxes or premiums, sanctions can include civil fines, interest, and criminal prosecution.

For the IRS list of questions to consider in determining whether an individual is an employee or an independent contractor, click here.

Time and Attendance

By Brett Adolph, Payday Payroll

Like all enterprise software, time and attendance solutions are sold in various configurations. Typically, pricing is based on four variables.

The server, or program engine, is priced according to its functionality. Specialized features such as a health care module may be extra. The number of employees who will use the time and attendance solution also affects pricing, with differing costs for administrators and employees. Finally, the quantity and type of data collection devices you use will also affect your total costs. Web-based time and attendance solutions typically have monthly fees instead of an upfront server license but also price their systems by the number of employees.

A small company can expect to pay less than a $1000 for a basic time and attendance solution with scheduling functionality and payroll service integration. Prices can climb swiftly into the tens of thousands of dollars as you add more people and data collection devices to your system. Companies with thousands of employees should expect to pay a bill in the $100,000+ range. Software customization adds significantly to the price tag.

No matter what your time and attendance solution setup, make sure the vendor itemizes what they are charging you for their technology rather than just paying the full price for a closed box system.

Is it a good idea to use a Time and Attendance system? Yes, it is! They eliminate employee theft of time and save the company money. In combination with Job Costing, this resource can be very beneficial to companies, especially in this economic downturn where people need to know where every dollar goes.