Are you wondering how health care tax credits will affect your business?

Join SBA’s Web Chat:

Tips on Health Care Tax Credits for Small Biz Owners

Thursday, August 12, 2010, from 10:00 p.m. to 11:00 p.m., Pacific Time

WASHINGTON – The SBA’s Web Chat will highlight small business health care, with a focus on how the Affordable Care Act will benefit small business owners through available tax-saving incentives.  Participants can learn about the newest tax credits they can take advantage of, and additional tax provisions to be implemented during the next several years.

WHO: John Tuzynski, chief of Employment Tax and Specialty Programs for the Small Business Self-Employed (SB/SE) Division at the Internal Revenue Service, will host the August web chat on “Health Care and Small Business.”

WHAT: SBA’s Web chat series provides small business owners with an opportunity to discuss relevant business issues online with experts, industry leaders and successful entrepreneurs.  Chat participants will have direct, real-time access to the Web chats via questions they submit online in advance and during the live session, with instant answers.

WHEN: August 12, 2010, 2010, 1 p.m. ET
Tuzynski will answer questions for one hour.

HOW: Participants can join the live Web chat by going online to www.sba.gov, and clicking “Online Business Chat.”  Web chat participants may post questions before the August 12th chat by visiting http://web.sba.gov/livemeeting/Aug10/ and posting their questions online. To review archives of past Web chats, visit online at http://www.sba.gov/tools/monthlywebchat/index.html

Senator Reid’s Senior Advisor on tax and business will be speaking along with Regional  Administrator  Daniel P. Hannaher for the Small Business Administration Region 8 out of Denver.

Topics to be covered include  incentives and programs such as the Hiring Incentives to Restore Employment (HIRE) Act.  Under the HIRE Act, enacted March 18, 2010, two new tax benefits are available to employers who hire certain previously unemployed workers.

WHEN:
Tuesday, August 10, 2010
10 a.m.

WHERE:
Cathexes Architecture
250 Bell Street
Reno, Nevada

Space at this event is limited.
Please RSVP to Senator Reid’s Reno office at 775-686-5750

Victor Hugo Mercado
Regional Representative
Office of United States Senator Harry Reid

by Tracy McKenzie, Esq.

Nevada state minimum wage is going up.  The Nevada Labor Commissioner issued a State of Nevada Minimum Wage Annual Bulletin on April 1, 2010, announcing the increased state minimum wage rates as follows:

• For employees to whom qualifying health benefits have been offered by their employer, the minimum wage rate is $7.25 per hour
• For all other employees, the minimum wage rate is $8.25 per hour

The increases in the state minimum wage rates become effective July 1, 2010.

The Nevada Labor Commissioner also issued a State of Nevada Daily Overtime Annual Bulletin the same day, announcing the hourly wage rate an employer must pay an employee to avoid the Nevada overtime pay requirements.  Effective as of July 1, 2010, the minimum hourly wage an employer must pay in order to be exempted from the payment of state overtime is as follows:

• For employees to whom qualifying health benefits have been offered by their employer, $10.875 or more
• For all other employees, $12.375 or more

The federal minimum wage rate is still $7.25 per hour and employers are required to pay overtime in accordance with the federal Fair Labor Standards Act.

Download the Minimum Wage Bulletin

Download the Daily Overtime Bulletin

If you have any questions or need further information, please contact Tracy McKenzie at (775) 828-0800.

© 2010 Drinkwater Law Offices

I find myself surrounded by champions whose expertise is amongst the best in the country.  While we each have separate and unique programs and projects to manage, we are interlinked in our mission to provide value and purpose.   When you work alongside your peers for more than a decade, you are exposed to each others’ idiosyncrasies, hot buttons, personality types, fears, successes and moods.  It is inevitable that really knowing each other results in family-like behavior.  At times we take each other for granted, or we assume that person will always simply “be there” for us.  Sometimes we find ourselves feeling like the golden child, if only for moments.  Our personalities may clash, and we may unintentionally behave as sibling-rivals, but as champions, we purposefully step back, and listen…to each other.  We regain our focus on the family, our agency… and we embrace our individual value and contributions, and go back to work, with our mission and our leader (the boss) to guide us.

Rarely does one find a workplace that embraces individuality, entrepreneurial creativity, and group support to feel empowered to make a difference.  We are in the business of business development.  Within this tall order, we must demonstrate our own vow to make our center the most valuable resource for existing and future clients.  And we will do this effectively, and better than any other center, because we value each other as champions above all.

On December 19, 2009, President Obama signed a new law amending the COBRA subsidy provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”).  Under the ARRA, individuals who were involuntarily terminated during the coverage period from September 1, 2008 through December 31, 2009, and were eligible for continuation of health care benefits pursuant to COBRA, could have 65% of their COBRA premium subsidized by the federal government for up to nine months.  The Department of Defense Appropriations Act 2010 amends the ARRA to extend the coverage period during which a termination occurs by two months, through February 28, 2010.  In addition, the new law also extends the maximum period for receiving the subsidy by an additional six months, for a total of fifteen months.  Eligible individuals who had reached the end of the initial nine month COBRA subsidy period before amendment of the law will now have an extension of their grace period to pay the reduced COBRA premium.  To continue their coverage, the eligible individual would have to pay 35% of the premium by February 17, 2010, or, if later, within thirty days after notice of the extension is provided by the plan administrator.  Similarly, individuals who lost the COBRA subsidy and paid 100% of the premium in December 2009 can contact their plan administrator or employer to seek a credit applied against future months of COBRA payments or a reimbursement of the overpayment.

Plan administrators or employers sponsoring health plans will be required to provide the COBRA subsidy notices required by the ARRA.  Employers should determine whether the administrator of their health insurance plan or the employer is responsible for providing notices under the COBRA subsidy extension.  More information regarding the COBRA subsidy extension may be found at www.dol.gov/ebsa/cobra.html.

© 2009 Drinkwater Law Offices

Under both federal and state employment laws, employers are required to post specific employment materials for employees in a conspicuous area (such as a break or lunch room) and in a language employees understand. When there are changes to existing employment laws or new laws are enacted, the mandatory posting requirements also change. Accordingly, employers must be aware of and comply with changes in the mandatory posting requirements.

There have been several recent amendments to both state and federal employment laws and mandatory posting requirements. Effective November 21, 2009, employers with fifteen or more employees must post the updated “Equal Employment Opportunity is the Law” poster which includes information regarding the new Genetic Information Nondiscrimination Act (“GINA”) prohibiting discrimination against applicants and employees on the basis of genetic information.

In addition, following are several recent changes to state employment posting requirements: 1) Effective October 20, 2009, the Nevada Unemployment Insurance poster must include a new website address for filing an unemployment claim online; 2) The Nevada Minimum Wage poster was recently updated to reflect an amendment to exemptions that apply to retail or service workers and to reflect the recent increase in the state minimum wage.

We recommend that employers obtain the mandated employment posters from a provider that notifies employers of posting requirement changes and provides updated posters (e.g. www.postercompliance.com).

© 2009 Drinkwater Law Offices

Effective October 1, 2009 (It’s coming up fast!), the State of Nevada will recognize a new civil contract between unmarried individuals who meet the requirements of the Nevada Domestic Partnership Act and who properly file registration documents with the Nevada Secretary of State.  Domestic partners may be the same sex or opposite sex.

The new law grants registered domestic partners the same rights, protections, benefits, responsibilities, obligations and duties as those granted to married couples under the law whether imposed by statute, regulation, rule, government policy, common law, or any other source of law.  These rights and responsibilities extended to registered domestic partners include those provided under testamentary/probate law, employment and discrimination law, and all family law statutes including community property, spousal and child support, and adoption.

Although distinct from marriage under Nevada’s Constitution, domestic partners should, in most cases, be treated as the legal equivalent of spouses with the exception listed below.

OK, Fine!  So what are you supposed to do???

To comply with the Nevada Domestic Partnership Act, you should review your policies and procedures to determine if revisions need to be made to account for registered domestic partners.  Generally, any reference an employee’s spouse in your employee handbook or policies should be revised to refer to “spouse and/or domestic partner.”  In doing these revisions, however, you should be aware that certain benefits for spouses mandated by federal law, such as COBRA continuation health coverage and Family and Medical Leave Act leave, may not be available to domestic partners.

Also, think about your company’s forms.  If you have a new hire packet that includes information about a spouse, change that to say “Spouse/Domestic Partner.”

YOU HAVE A CHOICE REGARDING HEALTH CARE BENEFITS!

The major exception to the rights extended to registered domestic partners is required employer health care benefits.  Public and private employers in Nevada are not required to provide health care benefits under their applicable plan to registered domestic partners, but they may choose to do so.

If you wish to extend insurance benefits to domestic partners, we suggest that you call your insurance provider to discuss whether you can and/or will offer benefits to domestic partners of your employees.  Under this new law, employers who offer benefits to their employees and spouses will need to carefully evaluate each benefit and determine if they are required, or if they elect, to include domestic partners.

Please keep in mind that under federal law, neither same-sex spouses nor domestic partners are generally recognized as spouses for whom favorable tax benefits apply. This would usually mean that certain tax-favored benefits (like pretax cafeteria plan or flexible spending account benefits) cannot be provided to employees who add domestic partners to group health plan coverage.

The conditions that must be met to register a domestic partnership can be found in Senate Bill 283 in the 2009 session information on the Nevada Legislature’s website:  www.leg.state.nv.us

For more information on how to register a domestic partnership with the Nevada Secretary of State, go to:   www.nvsos.gov/licensing/securities/domesticpartnership.asp

© 2009 Drinkwater Law Offices

Effective August 15, 2009 in the State of Nevada, if you are an employer with fifty (50) or more employees (for each working day in each of twenty (20) or more calendar weeks in the current calendar year), you must comply with the new parental leave for school activities law.

This law requires you to provide an employee who is a parent, guardian, or custodian of a child enrolled in a public or private school four (4) hours of unpaid leave per school year per child to:

• Attend parent-teacher conferences;
• Attend school-related activities during regular school hours;
• Volunteer or otherwise be involved at the school in which the child is enrolled during regular school hours; and
• Attend school-sponsored events.

You may place the following restrictions on an employee’s use of the parental leave:

• The leave must be taken in increments of at least one (1) hour;
• The leave must be taken at a time mutually agreeable to both the employer and the employee;
• The employer may require the employee to request the leave in writing at least five (5) school days in advance of the leave; and
• The employer may require an employee to provide documentation indicating that the employee attended or participated in the school-related function for which the leave was granted.

What changes should I make to my employee handbook?

You should prepare and distribute a new (or updated) policy which sets forth who is eligible for the leave, the amount of leave, the activities for which leave will be granted, and the procedure an employee must follow to request the leave.  The policy should also contain a provision indicating that the company will not terminate, demote, suspend or otherwise discriminate against an employee, or threaten to take such action against an employee, who utilizes the leave benefits provided by the new law.

Do I need to do training?

The employer should also train their supervisors and managers regarding the provisions of the new law to avoid discrimination against employees who take parental leave.  There are provisions in the law itself that make it an unlawful employment practice for an employer to terminate, demote, suspend, discriminate against, or to otherwise threaten to assert such action against an employee who:  (1) takes the parental leave granted by the statute; (2) attends a conference requested by an administrator of the child’s school; or (3) is notified during work hours by a school employee of an emergency regarding the employee’s child.

What happens if I don’t comply?

The provisions of the new statute provide specific remedies for a violation.  If you terminate, demote, suspend, discriminate against, or threaten to take such action against an employee in violation of the new law, you may be guilty of a misdemeanor.  There is a procedure for an aggrieved employee to file a complaint with the Labor Commissioner.  You then have an affirmative duty to provide the employee “who is discharged from employment or who is demoted, suspended or otherwise discriminated against with all the forms necessary” to file a complaint with the Labor Commissioner.  If the Labor Commissioner finds in favor of the employee, the Labor Commissioner may award, in addition to any remedies provided in NRS Chapters 607 and 608, the following:  (1) lost wages and benefits as a result of the violation; (2) an order reinstating the employee to their position without loss of seniority, pay or benefits; and (3) damages in the amount of the lost wages and benefits.

© 2009 Drinkwater Law Offices

The new law, which is coming very rapidly into effect, established two separate tiers for minimum wages for the first time.

If employers are not providing “qualified health insurance benefits”, they must pay a minimum of $6.15 per hour beginning Tuesday, November 28. “Qualified health benefits” means health insurance that covers the employee and the employee’s dependents. The employee’s share of the premium cost cannot exceed 10% of the employee’s gross taxable income.

Employers who do provide this health insurance coverage will not see an immediate increase in their required minimum wage. The new state law for these employers fixes the minimum wage at $5.15 the same as the federal requirement, for now.

This whole issue will likely get more complex as time goes on. Under the new law, if the federal government raises its minimum wage, both of the new tiers of the Nevada minimum will be increased by the same dollar amount.

The new law also provides a mechanism that requires the minimum wage be reviewed each year and increased by a corresponding increase in the cost of living as measured by the Consumer Price Index (CPI), although no CPI adjustment for any one-year period will be greater than 3%.

It is likely that these increases will be announced in April of each year and any increases will go into effect on the following July 1.

Nevada’s Labor Commissioner Michael Tanchek and his staff have been working diligently to get the word out about these changes, but are concerned that many people won’t know about the change in time. They have put up some information on their website at www.taxcommissioner.com, including a list of FAQs, but since we were unable to reach the site when we checked several times this morning, we will reproduce them here:

• When does the law go into effect? The Constitutional amendment goes into effect on November 28, 2006.

• What is minimum wage? Nevada has a two-tiered minimum wage. The first tier is $5.15 per hour for employers who provide qualified health insurance benefits. The second tier is $6.15 per hour for employers who do not provide qualified health benefits. These rates will be adjusted annually to include increases in the federal minimum wage and a yearly cost of living adjustment.

• When does the annual adjustment become effective? The annual adjustments will be announced in April and become effective on July 1 of each year.

• If the federal minimum wage goes up, how much will the Nevada minimum wage go up? Each minimum wage tier will increase by the same dollar amount as the federal rate increase.

• Who is covered under the new minimum wage? The minimum wage applies to all employees in Nevada except employees who are under 18 and either employed by a non-profit organization in “after school” or summer jobs or are hired as “trainees” for the first ninety days of employment.

• Are there any other exceptions? No. The employees who were exempt under the provisions of Nevada’s minimum wage statute [NRS 608.250 (2)] are no longer exempt and must be paid the new minimum wage.

• Does the minimum age apply to part-time or temporary employees? Yes. The amendment does not make any distinction between whether an employee is full-time, part-time, or temporary.

• What is the pay rate for the exempt employees? Nevada does not set the pay rate for exempt employees. Employers must still comply with the federal minimum wage statute for those employees.

• What are the qualified health benefits? Qualified health benefits means health insurance that covers the employee and the employee’s dependents. The employee’s share of the premium cost cannot exceed 10% of the employee’s gross taxable income.

• Are tips included in the minimum wage? No. Tips and gratuities are not considered as part of the wages.

• Does the new minimum wage affect overtime? Yes. All non-exempt employees are entitled to be paid overtime any time they work more than 40 hours in a workweek. However, Nevada law also requires employers to pay overtime on a daily basis to employees who are paid less than one and a half times minimum wage. This daily overtime requirement has been the law for more than thirty years. As the minimum wage goes up, the upper limit for daily overtime goes up with it.

I must say, that given the speed and number of businesses likely to be affected by these changes, I was very surprised not to find a link to information on this topic on the State of Nevada Homepage.

We tend to get quite a few aspiring business owners and entrepreneurs that come into our offices thinking that they will save some time and costs if they simply hire the people they need in their business as independent contractors.

Usually it’s a “friend” or relative that’s provided them this advice. After all, if you don’t have to mess around with payroll, withholding, reporting & paying various taxes, and providing all the other things employees need, then it must be better.  After all, you can just pay a contractor what you owe them, and let them take care of the taxes and such.

The advice I usually give them is “If it looks like a duck, walks like a duck, and quacks like a duck, it’s probably a duck,” because this test usually works for this employee/contractor determination.

If you are hiring someone to work at your direction, provide them training and tools to do the job, set their hours, pay them by the hour, week or month, and treat them like an employee, that’s probably what they are.

We have a really good publication concerning this determination, “Employee or Independent Contractor?” among the many tools on our website.

The Internal Revenue Service sets the rules on this, and provides detailed information in its Publication 15A “Employers Supplemental Tax Guide. They will also help you make the determination for your particular business if you fill out their form SS-8 and send it to them.

Before you hire anyone, as an employee or contractor, you should really talk it over with your accountant or tax advisor, they will help you figure it out, and get it right!

Quack, Quack.