It looks like the IRS will be in-charge of policing the health care reform, when the legislation is past.  By 2013 individuals will have to prove they have health insurance or face a tax penalty.    The IRS needs to set up a matching program between all health insurers and all taxpayers to insure compliance.  Filers that do not have health insurance will pay a penalty when filing their tax return.
The state-run health insurance exchanges, which is scheduled to provide health insurance for the low incomers will need to set up another system with the IRS to validate income requirements and exchange tax credits for the purchase of health insurance.
The IRS will also be collecting fees (penalties) for mid size - large companies that do not provide health insurance to its workers.
There will be a new excise tax on high level health insurance plans.  Again the IRS is responsible for collecting and policing this new tax.
Finally the IRS needs to manage and enforce compliance on small businesses for tax credits claimed for providing health insurance to its employees.

If you think you have difficulties now in resolving an issue with the IRS, wait until they are in charge of policing the largest social welfare program in the history of the US. ... << MORE >>

A couple of clients have recently informed me that the NJ Department of Labor is requiring employers who track time with a time clock to report the EXACT time on payroll.  If they report hours that round to, say, the nearest quarter hour, they are requiring the employer to go back through payroll records for three years and to compensate anyone who was not rounded in their favor.  This can be a major administrative headache and it could cost you.  It does not matter if you rounded down as many times as you rounded up.  The rules state that an employee must be paid for time worked, period. 

Bottom line:  If you have a time clock, report the actual time worked.  Keep the time sheet/card records for at least 6 years. 

The stock market is up over fifty percent since the low of the year (in March).  According the government statistics the economy improved third quarter and GDP was up to 3.5% fueled by consumer spending and the housing market.  With all of this good news concerning the recovery why isn't the small business owner seeing these changes?

If we ignore the Wizard of Oz for a moment and "Pay no attention to the man behind the curtain" and look a little deeper we may find some answers.  The stock market, more specifically, the S&P 500 is made up of 500 of the largest companies in the US.  These large companies do a large percent of their business overseas.  Most of the recent increased profits are from these overseas markets.  This overseas market is not just the sale of  goods but also the manufacturing of goods.  So while the stockholders are enjoying the increase of the stock price, it is not doing any thing for the US economy since jobs and spending is being increased in India or China not in the US.

The housing market and consumer spending has recently increased.  But has it really, or is the government really doing the spending?  The housing market recent increase can be attributed to the $8,000 tax credit given to first time home buyers and consumer spending increase is directly related to the cash-for-clunkers program.  So in reality the government is subsidizing and in a way manipulating some of the recovery news that we have been hearing.

For the small business owner, revenues are not necessarily increasing they just aren't decreasing.  Although I am not jumping on the recovery band wagon, business stabilization is the first step to a better economic environment.  Small business still need to endure another twelve months of stagnation before reality can catch up with the headlines.

According to high level economists and Federal Chairman Ben Bernanke the recession is over.  Really?  Are your sales increasing? Are you hiring any new employees?  Are your profits increasing?  Are you looking at growing your business rather than cost cutting measures?  If you answered yes to any of these questions then maybe the recession is over but if you are like the rest of us I don't see it yet. 

High unemployment isn't expected to end until the latter part of 2010.  So the recession is over but 10% of workers are still out of a job and will be for another year.  Doesn't make much sense.  That is where the disconnect is between government, large business and small businesses.  Government looks at GDP to ascertain if the country is on the road to financial health (or at least repair). Small businesses look at their check book.  If there is money left over after they pay their employees and all of the bills then it was a good month.  Government looks at TARP funds given to big banks to keep them afloat and states it is working.  Small businesses still can't get credit without given up their first born and secured dollar for dollar by a CD.

The recession has ended?  You tell me.

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Conflict in the work place is not necessarily a bad thing.  Debates, fresh ideas and alternatives concerning various work related issues can bring about innovative solutions.  The problem of conflict is often in the process not necessarily due to the disagreement of handling the issues. 

Employees may be disheartened in disagreeing with peers or superiors since past conflicts resulted in unpleasant results.  The unpleasant results  vary from being constantly beaten down, or ends up in emotional turmoil.  The process must include a professional atmosphere and attitude along with a strategic thought process.  Emotions should take a back seat in the process.  Home work should be done to back up suggestions that may counter the current trend.  Build on areas were there is agreement and build your case from there.  It is easier to begin a debate from common ground then go into areas of controversy then to jump right into conflict.  Listen to the other opinion.  There may be merit in truly understanding the opposing point of view.  Be willing to compromise creating a solution that contains both sides of the argument. ...<< MORE >>

In an attempt to quell the public's fear of increased permanent taxes, the government sometimes initiates temporary taxes.  These temporary taxes are anything but temporary.  More times than not, these taxes become a permanent increase in our tax structure.  By the time they become permanent the taxpayer has already accepted the new tax therefore there is not much fanfare or press given to temporary taxes that are extended indefinitely. 

An example of this is the Federal Unemployment Tax.   The FUTA tax covers the administration of federal unemployment funds and assists unemployment programs in all states.  In times of high unemployment the program the fund permits states to borrow from the Federal Fund.  Assuming a state has an unemployment program, FUTA tax is an employer only tax of 0.8% of all payroll per employee up to $7,000 of wages per year.  The 0.8% includes a temporary surtax of 0.2% enacted by Congress in 1976.  Every time this surtax was about to expire Congress would extend it for another specified time period.  Most recently the surtax was supposed to expire in 2009, but it was once again extended through 2010.  So from 1976 to now 2010 (34 years) we have had a temporary FUTA surtax. ...<< MORE >>

New York has imposed a new employer payroll tax.  The Metropolitan Commuter Transportation Mobility Tax (MCTMT) is a .34% (.0034) rate on all payroll retroactive to March 1, 2009.    The tax is imposed on all employees who work in New York City (the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, and Richmond (Staten Island), and the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess and Westchester.

The first payment to the State will be due October 31, 2009 for the retroactive period from March 1, 2009 through September 30, 2009.  After the initial period the new tax will be paid quarterly unless the employer is a mandated PrompTax filier (over $100,000 in NY Withholding liability for a calender year) then the tax is paid with every withholding payment.

For More Information Go to MCTMT

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As the Health Care Reform Bill is temporarily stalled it is likely that some sort of bill will be passed by the end of the year.  It looks like, at a minimum, small business will be faced with either forced employee health care coverage or a $750 tax per worker.  The scaled down version initiates this tax on payrolls over $500,000 per year (originally is was set at a lower $250,000 threshold).

We can argue the merits of a Health Care Reform all day, but the question is why are small businesses again being hammered with additional mandates and taxes.    This is after the government stimulus package practically ignored any subsidies going the way of the small business.  It seems the new legislative mantra is take from the small and give to the very large.  ...<< MORE >>

According to the Labor Department release on Tuesday regarding worker productively, workers are getting more done with less people.  The Labor Department statistic indicated that there was an increase of 6.4 percent in goods and services produced compared to the same quarter last year.  The clincher is the total cost of the workforce by employers fell 5.8 percent.  One of the reasons for the decrease in workforce costs was due to massive layoffs over the last year.  So basically workers are getting more done with less people.
This is mainly a statistic of larger entities surveyed by the Department of Labor, but can easily be seen in smaller companies as well.  Businesses just trying to survive were forced into lay-offs, but yet needed production of services or goods to continue.  Therefore workers either stepped up to the plate or were let go.
If the recession is truly ending than does that mean companies will begin hiring back everyone they just let go?  I don't think so. With high unemployment and consumer spending still in check it will be some time till we see the economy bounce back to what it was three years ago.  This may mean more ingenuity by the displaced workers.  Meaning that some may find themselves in alternative industries, careers and maybe even becoming entrepreneurs themselves.  ...<< MORE >>

Big business are finally figuring out what small businesess have known all along.   That small businesses do a better job, less expensively.  According to a recent article in the Wall Street Journal (July 6, 2009 "Midsize Law Frims Pick up Clients from Pricey Giants")  large companies are leaving the large law firms and going to small firms to save costs.  The smaller firms are getting the job done for alot less than their bigger counter parts. ...<< MORE >>

The federal minimum wage is scheduled to increase from $6.55 to $7.25 this month.   For small businesses this cannot come at a worst time.  Already struggling to cut costs, small businesses will now be forced to increase one of their biggest expenses, payroll.  Many businesses base their hourly rates on the minimum wage.  If an employee with more experience is currently receiving $7.25, after the increase will be boosted up to $8.00 while the newer workers are increased to the mandated rate of $7.25.

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by By Ariane de Bonvoisin and John Kilcullen--Business Week (Excerpts taken from)

Skills are not the number one reason for job retention in a time of massive lay-offs.   In invterviews with employers the following are the major reasons why one employee retains their job and another employee receives the pink slip.

1. Remember: It's not about you right now
Force yourself to focus with laser accuracy on your company's success, not your own. In challenging times, the last thing your employer wants is to cater to you and your fears. They want you to be a selfless, highly collaborative team player who meets and exceeds your commitments. Your presence can't be an energy drain or create work.

2. Become a black belt at change
The most important skill to develop right now is finesse at navigating change. That means flexibility and open-mindedness. Accept whatever is thrown your way. If they change direction (again), shuffle the product mix, add new goals, or refine strategy on the fly, say yes to all of it. Resisting change only makes life more difficult for management and for everyone.

3. Everything is your job
Demonstrate your commitment to the overall success of your team and your company by taking on tasks that fall outside your job responsibilities. Pitch in on packing up the trade-show booth. Manage your own schedule/address book/travel plans. Offer to take notes and follow up after every meeting.

4. Walk away from the water cooler
When straits are dire and headlines scary, the last thing your company needs is negative, gossipy employees who polarize colleagues into an us-vs.-them dynamic. Employers value passionate overachievers whose uplifting attitude contributes to a more energizing team culture. Whatever it takes, keep the negative mindset out of the office. This is your mantra: No complaining, no blaming! Dwell on what can be rather than what can't.

5. "Unwritten Rules" are now engraved in stone
Show up early, stay late. Everyone notices people who leave on the dot of 5 (or before) or take very long lunches or excessive coffee/smoking breaks. Don't get a reputation for being one of those people who takes forever to respond to an e-mail, voicemail, or a simple question. Vigilantly follow up on all assigned action items.

6. Step up — and wear very big shoes
Don't wait for someone else to solve your problems. Your manager needs to hear how the organization can trim costs, manage the supply chain better, find a new client, improve processes, motivate the workforce, and deliver the next big thing. Observe what your competitors are trying and testing, read everything relentlessly, and ask people how you can improve what you do.

Your goal here is to make sure there'd be a gaping hole if you were no longer around. Make the choice every day to do work that really matters to the success of the team and the company. Put yourself in a position that is crucial to the success of a new initiative, or dig in to solve a vexing, long-neglected problem. Maintain a bias for action in every meeting.

7. Transparency is your new trump card
You must be totally transparent as to what you're working on and how it fits with management objectives. There can be no hiding, and no withholding information. If you don't have enough on your plate, say it. Ask to take on more—or better yet, suggest projects you can spearhead that have killer ROI.

The more honest your superiors believe you are, the more likely they are to trust you and keep you close. Being authentic builds relationships, even more than just hard work. Stop hoping no one finds out who you are or what you really do all day. Let people in … or they'll be showing you the door. Employers are likely to keep you around if they see you as a vital associate.

8. Make friends in new places
Human resources and finance are two departments that can have a significant impact on your career whether you realize it or not. They know a lot about you that can influence how you're perceived. Respect those folks, socialize with them, ask for their advice, and make sure you carefully do a little self-promotion. When cuts need to be made, you won't be an unknown quantity to them.

9. Start Tweeting or start packing
Look at the Millennials and see how they work, how they make decisions, and what technology and tools they use. No time for "I don't do Twitter or Facebook." Acquaint yourself with social networks, mobile applications, and commerce platforms to remain relevant. Let them intimidate you and you give your boss reasons to replace you with someone younger and more in the game. Ask a family member to help, take a course, read a book … and dive in.

10. Fit club
Healthy people tend to have better outlooks and are easier to be around. They take good care of themselves, which in turn earns them the respect of others. Fit people often set high standards for themselves both at work and at play. And they just have more stamina, so they tend not to get tired when on deadline, and they don't call in sick as much. They have incredible endurance when others are reaching for that 10th Coke or itching to make that next trip to Starbucks. They are also calmer and more productive. So get your sleep, eat well, exercise, stay hydrated, and avoid excessive caffeine and alcohol. This is an investment that will pay dividends for you and your employer. And yes, your employer does notice.

Rate yourself. Which of these 10 areas are you excelling in, which are you doing O.K. in, and where do you need to change your behavior? The truth hurts, doesn't it? But take the steps to make sure that it's your career that gets rolling, rather than your head.

As we look around us as small to medium sized business operators, several of our brethren are folding. This is not always due to their own operational issues or financial strength.  Supplier can be a major cause.  Note some ideas cultivated from CFO.com Editor Josh Hyatt.  This is good advice for large and smaller business:

With every link you add to your supply chain, the chance of a disruption rises. But you can take steps to reduce your vulnerability.

Identify Critical Suppliers. A company can't begin to mitigate against risk until it knows where it is most vulnerable. Which disruptions have the potential to do the most financial damage?

Cultivate Multiple Suppliers. Depending on the location, commodity or service; one backup might not be enough.

Form Cross-Functional Teams. Various departments need to be involved in planning for contingencies, including purchasing and logistics.

Check Out Your Supplier's Address. You can't afford to guard against every natural disaster. But if a supplier is situated in a precarious spot — four feet above sea level on the Gulf coast, say — you'd better be prepared. Or choose a different supplier.

Collaborate More. If a supplier makes anything other than a commodity, try to strengthen your ties with a joint venture of some type.

Rethink Logistics. Given what happened with fuel costs last year, it may be worth re-analyzing the total flow of goods in the chain. Price volatility (in food, for example) can also spark labor unrest and slowdowns.  Remember to look below the first tier of suppliers.

 Incorporate ...<< MORE >>