Sunday May 20, 2012
Many colleges and universities have begun their summer breaks, and high schools will be closing for the summer soon. Maybe you are considering hiring a high school or college student for the summer. Before you start running ads and interviewing those summer workers, some things to remember:
1. Complete all New Hire Forms
Summer hires should complete all the required new hire forms, just like all other new employees. This includes having each new hire complete a W-4 for federal income tax withholding, and an I-9 or E-verify to check U.S. work eligibility. Check out this article on new hire forms to make sure you and the employee have completed all the required forms.
2. Check Minimum Wage Laws
Federal minimum wage rates are set by the Department of Labor. Some states have different minimum wage rates, so be sure to check these rates before you hire summer workers and start paying them. Younger workers (under age 20) may be aid a lower minimum wage of $4.25 per hour during their first 90 consecutive calendar days of work, as long as their work does not displace other workers.
3. Check Child Labor Laws
If you are hiring workers under age 18, you should also check to be sure you are complying with federal and state laws relating to hiring minors. Hours of work and types of work are restricted for young workers, even in the summer. If federal and state laws differ, you must comply with the most restrictive. This article provides details on federal and state child labor laws.
4. Treat Like Other Employees
If summer workers qualify for benefits, you must treat them the same as other workers. For example, if you hire a summer worker 30 hours a week, and other employees working 30 hours a week are eligible to sign up for health coverage, you must give the summer worker this option too. You don't have to provide summer workers with paid time off, unless they qualify
5. Update Your Employee Handbook
Finally, if you hire summer workers regularly, you should include your policies and benefits for summer workers in your employee handbook. Having a written policy about pay and benefits for summer workers can help avoid issues.
Image: Getty Images
Thursday May 17, 2012
My husband works for a small business that does contract work for a large company. Very often, the checks are held up by the big company, someones for months, while my husband's business waits, and sometimes the boss has trouble meeting payroll.
Why do big companies delay payments? Well, it's that 500 pound gorilla thing - because they can. And with the economy still in the doldrums, many more big companies are avoiding paying their vendors as long as they can. According Wall Street Journal, in 2011, "small businesses waited up to 46 days on average to get paid, six days longer than in 2010 and 10 days longer than 2006, according to the National Federation of Independent Business, a small-business lobby group."
That's an average, but it's still a significant number and a significant cash flow problem for small businesses.
It's about Cash Flow
This is a cash flow problem, which is a significant continuing concern for small businesses. What to do when you don't get paid and you need money?
1. Trickle-down. The trickle-down effect is to delay payments to your creditors. While this may help temporarily, it may cost you early-payment discounts and goodwill with companies you do business with.
2. Delay paying employees. This is NOT a good solution. Employees can sue for non-payment of wages, or file a complaint with the state labor commission, and while this will take some time to resolve, it means lots of attorney fees, which is an expense you don't need.
Some suggestions on managing cash flow from other About.com Guides:
- Rosemary Peavler at Business Finance shows you how to do a cash flow analysis and provides tips for increasing cash flow
- Phillip Campbell, CPA says you should always be able to look out six months and know what your cash balance will be six months from now, and
- Susan Ward, at Small Business Canada, provides information on how to protect your cash flow.
Image: Getty Images
Monday May 14, 2012
The phrase "nibbled to death by ducks" might apply to this situation: Amazon is being picked at by many U.S. states who want the big online retailer, and all retailers, to collect sales taxes on all online transactions. The states are individually going after online sales tax laws, but a national sales tax law may not be far behind. Recently, Kay Bell at Don't Mess with Taxes reports that Amazon, the large online seller, has agreed to collect sales taxes in Texas and Nevada.
If you are an online retailer, you must now collect sales tax for all online sales to buyers in Texas and Nevada. The Nevada collection of sales tax deal will begin January 1, 2014, while the Texas Taxes begin July 1, 2012. According to the Wall Street Journal, Amazon has also reached an agreement with California to start collecting sales tax for affiliate sales in that state starting September 2012.
Amazon reached an agreement with the state of Texas to begin to collect and remit sales taxes. In addition, according to the agreement, "the Company plans over the next four years to create at least 2,500 jobs and make at least $200 million in capital investments in the state."
Both Amazon and the state of Texas emphasized the importance of a national sales tax law. Amazon said, "We strongly support the creation of a simplified and equitable federal framework, because Congressional action will protect states' rights, level the playing field for all sellers, and give states like Texas the ability to obtain all the sales tax revenue that is already due."
National online sales tax bills are going through the Senate (S. 1452 "The Main Street Fairness Act") and the House of Representatives (H.R. 3179 "The Marketplace Equity Act"), and both are said to have bipartisan approval, but it's unlikely that any law will be enacted before the November election. In the meantime, I'll monitor state-by-state changes in online sales taxes and let you know of changes.
For more about online sales taxes:
Background and Issues in Online Sales Tax
Do I Have to Collect Taxes on Online Sales?
How to Collect, Report, and Pay State Sales Taxes
Saturday May 12, 2012
One of the most confusing parts of starting a business is knowing what types of licenses and permits you are required to obtain. Of course, if you are starting a partnership, LLC, or corporation, you must file the appropriate legal documents with your state.
But even if you are a sole proprietorship, and are not required to register your business with your state as a legal entity, some states require you to have a state business license. Some examples:
- Nevada state business license information. If you have registered your business entity with the state, you don't need to complete this license application. But sole proprietorships must have a state business license, in addition to any local business licenses or permits.
- Washington state also requires a business license for every business, and
- The Alaska business license requirement is for individuals, partnerships or companies that engage in business activity in Alaska.
Business License? Business Registration?
Just to confuse things even more, some states require businesses to register with the state, which is not the same thing as a business license. Utah requires each new business to complete a business registration which includes registration with the:
- Utah State Tax Commission
- Utah Labor Commission
- Utah Department of Commerce
- Utah Department of Workforce Services
- Utah Department of Environmental Quality
It's all very confusing. North Carolina, for example, has "over 700 regulatory, state issued and occupational licenses and permits. In addition, a local license may be required for your business." And many service and technical professions require licensing. How are you supposed to know what to do and what is required?
Search for License Information on the SBA Website
The best place to start your search is on the SBA website, which has a great page with links to all state licensing websites. For example, I clicked on "Kentucky" and was taken to their "One Stop" business license page, which says, "Kentucky does not have a statewide business license that applies to all businesses...." but there are, of course, special permits and licenses for special types of businesses. Find your state, click on the link, and find out the state business licensing requirements for business startup.
More Useful Information
Local Business Licenses and Permits
Business Licenses - FAQ
Special Licenses and Permits
State Sales Tax Registration Information
