The present COVID-19 pandemic has led to a historically unparalleled increase in the level of unemployment insurance (UI) claims filed in California since the crisis started in mid-March. Employees that have been laid off from their job due to the COVID-19 pandemic, or that are unable to work due to childcare or school closures, or that have had their hours or wages reduced by a fraction continues to apply for the unemployment insurance benefits in order to maintain basic necessities while they are temporarily unemployed.

This article will look into how unemployment insurance works, insurance benefits, employees that may be eligible for the unemployment insurance benefits and those that are not, the requirements that must be met, as well as the various federal intervention programs aimed to suppress the effect of the COVID-19 coronavirus pandemic on affected Californians.

NOTE: As you know that things are changing rapidly, the various relief benefits and explanations described in this article are subject to change.  Therefore, this article is simply our best perception as to where things currently stand as of June 10, 2020.

HOW THE UNEMPLOYMENT INSURANCE (UI) WORKS

The unemployment insurance system usually provides about 26 weeks of regular insurance benefits to unemployed workers while they actively look for a new job. The program is funded by payroll taxes paid by California employers on the amount of wages they pay to their employees. No tax deductions are made from employees’ wages in California to finance this program.

The tax rate an employer pays is different and influenced by the number of prior unemployment benefit claims that have been filed against the employer. The more claims that are filed against an employer, the higher the tax rate is for that employer. It is therefore important that employers understand the UI system and carefully consider how its benefits affect their employees before they reduce hours, furlough, or layoff.

THE CALIFORNIA INSURANCE BENEFITS

While the State provides most of the funding to employees based on the employment taxes collected from California employers, the federal government pays part of the administrative costs for the unemployment insurance program. If an employees’ claim is approved, the amount that the employee can collect per week in insurance benefit ranges between $40 and $450, and it is dependent on their previous earnings.

CALIFORNIA UNEMPLOYMENT AND THE EMPLOYMENT DEVELOPMENT DEPARTMENT (“EDD”)

California’s Unemployment and the Employment Development Department (EDD) process unemployment claims and determine employee eligibility. The department has, in the past few weeks recorded over 1.8 million unemployment claims filed, about the same amount as all unemployment claims from the 2008 recession. For employees to be eligible for the regular California UI benefits, the EDD generally requires that the applicant must be:

• ready, willing and able to work
• unemployed without fault; and that their
• past earnings must meet certain minimum thresholds;

 If approved, the Unemployment and the Employment Development Department determines the amount for the weekly benefit based on the applicants’ past earnings, up to a maximum of $450 each week. However, these benefits can be extended by an additional 13 weeks under the Coronavirus Aid, Relief, and Economic Security Act.

What Is The Coronavirus Aid, Relief, And Economic Security (CARES) Act?

The Federal CARES Act was signed to law on March 27, 2020, by congress, as a protective measure to provide essential relief to more Californians that are impacted by COVID-19 coronavirus pandemic. It offers emergency aid to eligible businesses, individuals, and families affected by the COVID-19 coronavirus outbreak. The CARES Act, among other provisions, temporarily expands the regular California UI benefits by creating several new programs. These programs include:

a)      Pandemic Unemployment Assistance (PUA)

The Pandemic Unemployment Assistance program is an extended eligibility for some employees who traditionally are ineligible for the regular California Unemployment Insurance (UI) benefit, and are unemployed or partially unemployed due to COVID-19 reasons. These include:

• Business owners, Independent contractors, and self-employed employees
• Individuals with a limited work history
• Individuals with false statement penalty weeks on their regular UI claim.
• Individuals who have exhausted all of their regular UI benefits as well as any extended benefits.

Eligibility For PUA Benefits

To be eligible for PUA benefits, applicants must either be unemployed, partially unemployed, or unable to work for reasons related to COVID-19, like when:

• The applicant is diagnosed with COVID-19 disease or have its symptoms
• The applicant provides care for their family member diagnosed with COVID-19 disease
• The applicant has a family member who is diagnosed with COVID-19 and has to isolate
• The applicant is unable to get to their workplace due to a forced quarantine, or because the applicant is advised by a health care provider to self-quarantine due to COVID-19
• The applicant is the major caregiver for a child(ren) whose care facility or school is closed because of COVID-19
• The applicant becomes the primary breadwinner because the head of the household died from COVID-19 coronavirus infection
• The applicant was scheduled to start a new job but cannot get to the workplace because of COVID-19
• The applicant had their workplace closed due to COVID-19 pandemic
• The applicant quits their job due to COVID-19
• Meet any additional criteria specified by California EDD.

These applicants may, however, receive below the 39 weeks of PUA benefits if:

• Their unemployment or partial unemployment is no longer due to COVID-19.
• The PUA program is no longer available for weeks of unemployment following December 31, 2020.

Exemptions To The PUA Benefits

Applicants that can work from home or on leave and being paid or receiving other paid leave stimulus are not eligible for the PUA benefits, whether or not they meet a category listed above.

b)     Pandemic Unemployment Emergency Compensation

Applicants generally collect up to 26 weeks under the regular California UI benefits within a 12-month benefit year. But the Pandemic Unemployment Emergency Compensation (PUEC) offers an extra 13 weeks of insurance benefits to the regular 26 weeks already provided to make a total of 39 weeks coverage. The extended relief is available up till December 31, 2020.

To qualify for a PEUC extension and claim, the applicant must:

• Be fully unemployed or partially unemployed as of March 29, 2020, or after.
• Have used up all the benefits they are due under the California law.
• Not qualify for a regular California UI claim.
• Meet all requirements to be eligible for California UI benefits.

c)      Pandemic Unemployment Compensation

Under the PUC provision, employees that qualify for UI benefits will receive an additional $600 benefit every week on top of the regular benefit they are entitled to receive under the California State law. This is approved for all weeks of unemployment starting from weeks available for benefits until July 25, 2020.

Given this federal benefit under CARES Act, a California employee that earns below $54,000 per year, may be eligible for pay weekly via unemployment insurance benefits than if they work reduced hours. Regardless of what their regular benefit is, from April 1 up to December 31, 2020, such an employee:

• may qualify for an extra 13 weeks of benefits according to the Pandemic Emergency Unemployment Compensation. This means the period of benefit is increased from 26 weeks to 39 weeks;
• can receive an additional $600 every week according to the Pandemic Additional Compensation, although it is only available until July 31, 2020.

APPLYING FOR THE CALIFORNIA INSURANCE BENEFITS

To receive insurance benefits in California during this COVID-19 pandemic, the employee needs to file a claim with the unemployment insurance program in person, online or by telephone. The fastest and easiest way to apply is online. The employee needs to take the following steps:

• Contact EDD as soon as possible after becoming unemployed.
• The employee will be asked for certain information, such as Social Security Number, mailing address, county of residence, addresses, and if available, their Driver’s License or state-issued ID number.
• Employees will also be asked about the dates and details of their former employer when filing a claim. To ensure your claim is not delayed, make sure you provide correct and complete information.

FREQUENTLY ASKED QUESTIONS

1. Is there any reduction in UI claims as Californians begin to resume work?

As of June 11, 2020, the proportion of California UI claimants, either not getting their initial benefit payment because their incomes were very high or are receiving partial unemployment insurance benefits increases. While only employees earning less than three-quarters of their previous weekly wages are eligible for partial UI benefits, employees that are earning above that are entirely denied the benefits for that week, resulting in a complicated decision for employees in a doubtful labor market.

2. Can California employees who lost their job and their private insurance find some sort of coverage through the State?

According to a statement made by Peter lee, every California employee is eligible for financial support through the State, except if the employee is an undocumented immigrant.

3. Can California employees collect Employment Insurance (EI) if they self-isolate?

California employees can collect employment insurance if they have to take time off work due to quarantine or self-isolation. They may also be eligible for employment insurance if they are unable to work due to illness caused by the coronavirus.

4. Can an employee apply for disability insurance if they are at home with COVID-19?

An employee that is at home because they need to take care of a family member who has contracted COVID-19 coronavirus can apply for California Paid Family Leave, but it requires medical certification. PFL assistance is presently not a feasible option in other cases. For example, the employee does not currently qualify for PFL if they have to stay home with their kids because the schools are closed.

5. Can Employees Receive Unemployment Insurance Benefits For Reduced Hours? 

If the employer shuts down their operations or reduces their employees’ work hours due to COVID-19, the employees can file a UI claim. The unemployment insurance system under California law exclusively provides partial wage replacement stimulus to employees who have their hours reduced or were laid off without their fault.  Even if an employee is still working part-time, the employee may still be eligible for insurance benefits depending on their earnings and other circumstances. They may even qualify for more money per week if they are furloughed than if they work reduced hours.

6. When should employees affected by COVID-19 apply for insurance benefits?

Employees that are affected by COVID-19 should apply for insurance benefits the moment they realize that their employment contract and income will be impacted by COVID-19. If the employer demanded that an employee should stay home and was not offered any compensation, the employee might be eligible for insurance benefits provided they meet the financial and weekly eligibility conditions.

7. When will I get the additional $600 benefit?

The additional $600 federal insurance stimulus is available for all approved claims, and retroactive payments will be made for the weeks starting March 29 to July 25, 2020. The Unemployment and the Employment Development Department is currently paying the additional fund, and you don’t have to submit any further paperwork to qualify. The EDD will automatically add the fund on top of each week of benefits you are eligible to receive.

8. Do I Have To File A Claim Every Week?

To maintain insurance benefits, applicants are required to file a claim every week. The week starts on Sundays and ends on Saturday. Once an initial claim has been filed, the applicants will have to wait until the following week to submit another weekly claim. Applicants should understand that the weekly claims must be filed albeit their initial claim is still pending.

9. Do I Qualify For The Unemployment Insurance Benefits As A Freelancer?

The PUA program created by the CARES Act covers individuals that are ineligible for the California unemployment insurance benefits or have exhausted their benefits. These include contract workers, self-employed, etc. This program is particularly important for individuals that work in the gig economy, who work largely as freelancers and independent contractors.

FINAL THOUGHT

If you need help filing for the appropriate insurance benefits during the COVID-19 pandemic or you want to make inquiries, the team of attorneys at United Employees Law Group is always at your service. We understand your request is unique and will personalize our service to suit your insurance benefits needs. To schedule an appointment, do not hesitate to contact us through our contact form below.

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Still many employers, whether they know the law and do it anyway, or are not aware of the guidelines use the differentiation of employee from contractor to get around the cost of paying proper fees such as:

• payroll taxes
• minimum wage and/or overtime requirements
• paid and unpaid rest or break periods
•  reimbursing business expenses
•  workers compensation coverage
• Unemployment, disability or Social Security taxes and payments.

The number one reason employers claim you are an independent contractor? It’s cheaper for them. Sure, it also means you can write off all of your expenses, but is it really worth it? Those may in fact be THEIR expenses and why should you be paying to run their business all the while being left totally unprotected. Contractors don’t have coverage for workers compensation or unemployment benefits. That means unless you are paying for it on your own, if you are injured on the job you are on your own and many insurance companies will deny your claim saying you should be covered by workers comp for a “work related injury.”

The Division of Labor Standards Enforcement (DLSE) sets out the guidelines for who can and cannot be claimed as an independent contractor.

• You perform a service that is outside the norm for the business employing you, such as marketing specialist for a home builder.
• Your work could be defined as a specialized skill.
• You were hired to complete a well defined task only to completion and not offered an actual position with the company.
• You have no supervision, but were given a specific job to complete and are to do so on your own and how you see fit.

If you have been deemed a contractor rather than employee by your company, but these do not define your actual duties then you have likely been misclassified, you need to speak with an employment attorney right away who can determine what you may be owed in compensation.

You only have a short amount of time to file any claim having to do with you employment, call United Employees Law Group today before you file the wrong tax return.

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Employment issues have increased drastically across numerous global companies in California. These issues are not only unlawful but at the same time they affect the company as well as the employee who spends his/her days of hard work for the company. To help you know more about such issues related to the workforce of California here are the top 4 employment issues which are becoming major concerns for global companies.
1. Use of Social Media at Workplace
The world of digitization has undoubtedly enhanced our way of living, however there are some restrictions associated with it. Now, it is often seen that employees are linked with social media with the help of their personal devices like mobile phones and this somehow blurs the line between personal activity and professional work. This is the reason why NLRB of California has created policies where any employee who uses social media platforms for personal activity can stand liable for the company.
2. Implementing Federal Health Care Law
ACA or Affordable Health Care Act which was delayed till 2015 which is mandate for employer has been officially finalized by the policymakers of California. This act says that employers need to send an official notice regarding Health Insurance Marketplace options to the employees. And if the employer does not adhere by this responsibility then he/she stands to be liable for the employee.
3. Fighting Against False Claim Acts
In the past years there has been a steady increase in false lawsuits, which are illegal under the FCA (False Claim Act). Most of the time, these type of cases lead to large settlements where the accused has to pay a hefty compensation to both the innocent victim and the government too, more or less for wasting everyone’s time. Hence, this shows that it is important for any employee to first understand the legal polices and law of their state and make their move in accordance to that. Consulting a knowledgeable and reputable attorney should be your first stop.
4. Protection from Bullying At Workplace
Bullying is not at all a new thing on the list. Over 25 states in US, including California have urged it to be one of the major employment issues at every sector. This is the reason why almost 16 bills are presently active around 11 states of US to gain complete protection from bullying at the workplace. Just when you though high school was over!?

If you are facing any of these issues at work United Employees Law Group is here for you.

Contact our team today for more information.

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It’s that time of year again, yes the holidays too, but with the end of the year comes TAX TIME! If you own a business or work as an independent contractor you are probably well versed with your deductions and either can’t wait to add them up are dreading the big bill to Uncle Sam. On the other hand most employees just file what the w-2 says on April 15^th and wait for their tax return, BUT are there deductions you can take too. What about your boss are they using you as a deduction where they shouldn’t?

Time to double check your paystub, there are only a few LEGAL deductions an employer can make from your paycheck and it pays to pay attention.

Of course it is the HR department’s job, along with payroll to make sure your check is calculated correctly, but this is easier said than done and you may be surprised at the number of mistakes that go un-checked, mistakes that may be costing you big. The company has the right and in fact, is required by law to make some deductions from your check, such as income tax and social security contributions, but are you sure you know everything coming out of your check each pay day?

Is your company overstepping and deducting additional items from your check? This is essentially stealing; if your company is trying to deduct their cost of doing business from your paycheck you need proper representation as soon as possible. It is best to have a professional help you address this rather than going to the company yourself. The team at UELG can verify if in fact the deductions were made in error and help you collect in a manner that will help ensure you get everything you are owed.

Here are a few of the deduction you may not realize you should NOT be paying for:

These are the most common issues we see with deductions.

-Employer deduction for tips. Your tips are yours, they are gratuity left for you for a job presumably well done and CANNOT be re-appropriated by your boss. You cannot have tips deducted from you minimum wage either.

-Should your employer need or want photographs for interviews or employment , they must pay for them.

-Employees who are required to be insured or bonded must be covered under the employer and/or the policy paid by the employer.

– Uniforms must be purchased or reimbursed by the employer, other that your footwear almost all other REQUIRED apparel is the responsibility of the company to pay for.

-Business expenses are just that, you cannot be required to pay out of your pocket any expense that is a necessity to operate the business in question. This includes entertaining clients, travel expenses and meals anytime you are required to work off-site, phone bills for work use, etc. Your company writes off business expenses even if you are a sales person, if you are an employee and not a contractor, you are not responsible for business costs, that includes the cost of GETTING business.

-All drug or health checks required by the employer or by law for employment are the sole responsibility of the company.

Seen any of these on your check stub? CALL US NOW, we can help you separate the legal from the cheating and help you get what you are entitled to.

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No, this is not a crazy movie with mind control and robots; though the title of Labor Enforcement Task Force may sound a little ominous, they are actually working to help improve conditions for hardworking employees. Also known as the LETF, it was put in place for the benefit of both employees and LEGAL businesses working to follow the letter of the law. This coalition of enforcement agencies within the California State government operates under the Department of Industrial Relations to help enforce work condition violations, wage violations and other illegal actions by companies working in what they call The Underground Economy.

Members of the LETF coalition include:

-The Division of Occupational Safety & Health

-The Division of Labor Standards Enforcement

-The Employment Development Department

-The Contractors State Licensing Board

– The California Department of Insurance

– The Board of Equalizations

– The Bureau of Automotive Repair

– The State Attorney General, and

-The Alcoholic Beverage Control agency (ATF).

One of the main objectives of this group is to weed out and crack down on companies operating without proper licenses, effectively working under the radar and avoiding paying proper taxes, carrying legal coverage for workers compensation, or following labor codes pertaining to minimum wage and other wage requirements for their employees. Businesses like these which operate without oversight create unsafe working conditions for employees, do not pay fair wages, and hurt the local business economy by doing so. This underground economy creates an imbalance where the legally operating businesses that pay the correct wages and follow rules for taxes and licensing are unable to match the low undercutting prices of the “black market” businesses. Because these illegal businesses pay no taxes, the government has a clear reason to support the coalition’s initiative, but you should too. When these underground businesses are shut down it means better wages and better, safer working conditions for employees as well.

While this “underground economy” is certainly an issue throughout the US, it is a HUGE industry here in California. Our State alone accounts for an estimated loss that could be as high as $28 BILLION a year from the lack of insurance, payroll taxes, income and business taxes and licensing. The numbers paint a clear picture as to why the Government wants to crack down on the businesses operating underground, but this kind of discrepancy in the economy places far too great a burden on the honest, legal companies not trying to abuse the system and the great resources of the Golden State.

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CA Vacation time Rules:

Living in California it’s easy to feel that we live a place everyone else wants to vacation, that doesn’t mean California employees don’t need time off too.

It may come as a surprise given all the other regulations on time set out in the CA labor code, but there are no laws currently on the books that mandate an obligatory number of paid or unpaid vacation days an employer must provide. That being said, if your company has a well established policy either written or implied and known by all employed, that employees will receive a given amount of paid vacation time, there are guidelines on how that agreement must be fulfilled, at the benefit of the employee.

The labor codes pertaining to vacation time lay it out as follows:

Vacation time is considered park of your wages and is EARNED.
Earned Vacation time accrues as you work, the longer you work the more vacation time you earn.
Once vacation time is earned it CANNOT be taken away or expire.
The employer may place a cap on the number f days that an employee may earn without using any their paid time off.
Because vacation time is considered wages it must be paid upon leaving the company.

Se the case law here for more reference. (Suastez v. Plastic Dress Up (1982) 31 C3d 774)

Because vacation days add up as you work they will be earned as you work, for example, if you are given 10 days a year you do not have to wait a full year to have any vacation time. At six months you would have earned five days. You are responsible for knowing an following your companies policies for requesting time off in order to use your vacation days.

As stated above your employer does have the right to cap the number of days you may “bank” without using them. See (Boothby v. Atlas Mechanical (1992) 6 Cal.App.4th 1595.) This was decided by the courts for the reason that an employee who was with a company for many years and never used any of their vacation time could place an undue hardship on a company upon leaving. Because your accrued vacation time must be paid out the final rate of pay when you leave the company, if you were there for 20 years and raising through the company this pay out could be very large.

At the end of the day the laws surrounding vacation pay are quite good and weigh heavily in favor of the employee. If you have been denied your vacation time or been told it has expired, whether you are still with the company or not we may be able to help you collect.

Contact United Employees Law Group for a FREE and CONFIDENTIAL look at your case.

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Does your employer offer a 401k, profit sharing, or a money market account? Were you given specific details about this plan prior to signing up, such as past performance, fees and expenses? Do you get monthly or quarterly statements on your investment?

Until recently none of this was required by law. The US Dept of Labor (DOL) has better defined what is required to be shared with participants and beneficiaries prior to investing and throughout the term of the investment. In general, all of these new requirements will go into effect as early as May 31, 2012.

Under the Employee Retirement Income Security Act (ERISA)the following information must be shared with potential employee investors and existing employee investors as well as their beneficiaries.

1.     Initial & Annual Notice
Before the investor begins making contributions and every year after the investor should be notified of the following information.

a. Investment-Related Information
Investment related information can be complex and very detailed so the employer is required to provide the following: performance data, benchmark information, fee and expense information, Internet website address to obtain more specific or current information, and a glossary of terms. As well as a side by side comparison of each of the plans that are offered.

b. Plan-Related Information.

i. General Plan Information
Information regarding the operation of the investment including when and how to invest, if there are any limitations to the times amounts that can be invested, a description of “brokerage windows”, reference to any applicable voting rights and identification of investment managers.
ii. Administrative Expenses Information.
Administrative expenses are expenses that are typically related to cost of managing the fund such as monthly, quarterly or annual record keeping. If multiple accounts exist this information must be provided for each individual account and be specific that account.
iii. Individual Expenses Information
These are expenses that may be charged against a participant’s or beneficiary’s individual account for services provided on an individual basis (e.g., fees to process loans or qualified domestic relations orders (QDROs), or sales charges).

2.     Updating Notice
Any changes to the plan information previously disclosed must but updated and disclosed within at least 30 days but not more than 90 days prior to the effective date of the change. It’s important to note that updating notices do not apply to investment related information
3.     Quarterly Notice
Quarterly notices occur every 3 months and usually align with the fiscal year. Investor and beneficiaries must receive notice of the dollar amount of the plan related fees and expenses, both administrative and individual, and a description of services for all fees and expenses. It’s important to note that if notices of the account were made and outside of the regularly scheduled notices, then those notices do not need to be reiterated at the regularly scheduled time.
4.     Disclosures Subsequent to Investment.
Not only do potential employee investors and beneficiaries need to be informed of the above mentioned investment-related information and the plan-related information prior to investing, but they also need to be informed of the final regulations. Final regulations should provide information such as: voting rights, management rights and how these rights will and can be passed or shared with the beneficiaries.
5.     Information Provided Upon Request
Investors and beneficiaries can at any time request copies of any plan or investment related information including: financial statements, prospectus, reports, non-registered investment alternatives, share value information, dividend disbursement, list of assets comprising the portfolio.

Labor law is complex; if you have any questions regarding your employment it is recommended that you contact a San Francisco labor law attorney who can help you understand your rights and in many cases will review your situation without charge.

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Two federal laws provide maternity leave and parental leave to employees as benefits. These laws are Title VII of the Civil Rights Act of 1964 and the Family Medical Leave Act of 1993 (FMLA). Title VII prohibits employers from leave practices that discriminate against pregnant women or temporarily disabled new mothers.

Treating either of these two categories of women differently from other temporarily disabled employees is prohibited, and, in fact, they are guaranteed a specific unpaid 12-week leave under the FMLA. The FMLA leave can be used to care for the newborn baby or an adopted child, and it provides for parental leave. The FMLA covers women and men who have been working at least one year for employers with 50 or more employees. However, the pregnancy disability leave and family care leave laws in California are the most generous and the best leaves of this type in this country. For example, under California law pregnancy disability leave must be provided by employers with 15 or more employees. The parental leave provisions provide for some income to the parent on parental leave.

Maternity Leave
The California Fair Employment and Housing Act (FEHA) is more generous than the FMLA. The FEHA provides a pregnant woman the right to a maternity leave of up to four months as long as the woman is disabled by her pregnancy, childbirth or a related condition. However, the four months are available only if the woman requires four months to recover. She may not be entitled to four months if she recovers faster, but she will still be eligible for the FMLA 12-week recovery period. Her job is protected, and she cannot be fired because she is pregnant or disabled after pregnancy. The FMLA only applies to employees of a company with 50 or more employees. FEHA applies to companies with 15 or more employees.

Parental Leave
The federal FMLA requires employers with 50 or more employees to provide an unpaid 12-week job-protected leave to help care for a newborn infant and to assist the newborn’s mother. California’s Paid Family Leave Act (PFLA) is more generous because it provides income replacement for the parent who takes time off work to help with the family adjusting to the newborn infant. It also provides the parent with a unique opportunity to bond with the newborn. Adopted children are also included in establishing eligibility. PFLA should be taken concurrently with the FMLA to ensure job protection. Up to six weeks of pay at 55 percent of the weekly wage up to a maximum benefit is provided by the PFLA.

Job Protection
While the state and federal laws provide job protection for people on maternity leave and parental leave, their job may not be guaranteed under some circumstances. For example, a reduction in the work force due to downsizing or economic conditions could eliminate your job. However, the employer may not retaliate in any way against a person who takes advantage of these leaves.

If you, or someone you know, are facing legal issues in the workplace United Employees Law Group has answers, Call Today for your free and confidential case review. Please feel free to CONTACT US with any questions about this blog or your exact situation.

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Extensive paperwork, high costs and complicated administration associated with certain qualified retirement plans may cause many small businesses to shy away from establishing any retirement plan at all. This may be true of your small business, even though you recognize the many tax and employee retention benefits of providing a plan. Whether you are a doctor, lawyer, free-lance writer, artist, manufacturer’s representative or another type of self-employed business owner, the Simplified Employee Pension Plan, or SEP-IRA plan, may be a good fit for your small business.

Although a SEP IRA account is technically an Individual Retirement Arrangement (IRA), the SEP plan functions more like a cross between an IRA and a profit sharing plan. As with a profit-sharing plan, your small business may make a tax-deductible contribution to each employee’s SEP-IRA account up to the lesser of 25 percent of compensation or $44,000 (2006). The business owner has the flexibility to choose any level of contribution (within the above limits). The business owner has the discretion to set the contribution amount as low as zero. This can come in handy in years when business cash flow is a little less than desirable. But, it is the difference from, not the similarity to, a profit sharing plan that makes the SEP too good to overlook: the SEP is simple.

The simplicity of the SEP significantly distinguishes it from the traditional profit sharing plan. A SEP is easy to establish and maintain, which makes it less expensive than a profit sharing plan. The SEP may be established by any corporation (“S” or “C”), partnership, non-profit organization or sole proprietor. There is no complicated adoption agreement to purchase, complete or file with the Internal Revenue Service (“IRS”). A simple one-page form is all that is required to establish a basic SEP, and this form may be obtained at no cost.

Other aspects of the SEP illustrate its simplicity as well, including vesting and the allocation of contributions. SEP contributions are always 100% vested in the employees, so there is no vesting schedule to keep track of. Additionally, each employee receives the same percentage of pay contribution. So the contributions are easy to calculate. Alternatively, you may choose to purchase a SEP document that “integrates” with Social Security to provide a larger contribution for the higher wage earner, which is usually the business owner.

The uniformity of the SEP eligibility rules also creates simplicity. Eligibility rules are applied in the same manner to the business owner and each employee. SEP eligibility rules provide that the plan must cover employees who have reached age 21 and who have earned at least $450 in any three out of the last five years. Of course, you do not have to use the maximum three years of service. You may want to use a shorter period if, for example, your business is a younger than three so that you are not eliminated from your SEP.

The simplicity of the in-expensive SEP makes it a powerful tool for many small business owners. The above article mentions just a few of the many tax and retirement planning benefits that may make the SEP a good fit as one component in your business plan. For assistance in evaluating the fit of the SEP with your small business and before implementing any significant retirement planning strategy, please consult with your Financial Advisor.

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You may not even be familiar with the acronym EEOC, but it is very important to how business is done in this country. The Equal Employment Opportunity Commission protects all employees and prospective employees at work, and they have been VERY BUSY in recent years. The ever expanding problems swirling around employment, including social media passwords, new rights and discussions for the LGBT community, as well as domestic violence reports, provide plenty of work, but what is being done?

Truly enormous strides have been taken as of late and these changes can be seen in several areas such as benefits equality for domestic and same-sex partners. The changes that came with Obama Care have certainly had an effect on the employment world, and you need to be aware of the changes it can mean for you.

While employment laws are a constantly changing and growing animal, at United Employees Law Group we work hard to stay abreast of the issues and keep you informed on matters that can affect your rights at work.

One such development is the EEOC’s newest Strategic Enforcement Plan (SEP). The design of the new directive is to combine the forces of local and federal agencies to address and enforce what they feel are the six biggest issues for the coming years.

Hundreds of thousands of complaints are filed each year against employers in these six areas:

• The hiring and promotion of minority groups
• The protection provided to vulnerable employees (immigrants and migrant workers)
• A better examination of new and emerging discrimination issues
• The enforcing of existing equal pay laws
• The improved availability of legal help to all who need it
• The improved education of workers and possible victims to their rights

While the EEOC continues to work hard at improving the workplace statewide, we are here to help every employee who finds themselves in a discriminatory work situation. UELG helps employees understand and STAND UP for their rights.

Call TODAY for your free and private consultation.

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