Opinion: Autumn is ‘tune-up’ time for business taxes and HR regulations
Tribune Opinion Columnist
After a busy summer many businesses are now in catch-up and/or preparation mode for what promises to be a Godzilla of a winter!
While businesses were serving our residents and visitors these past months, Tahoe Chamber Government Affairs Committee (GAC) members were weighing in on numerous bills in both Carson City and Sacramento — seeking to both protect and alert California and Nevada businesses to bills that could impact their operations.
The Nevada Legislature drew to a close on June 1 and it left in its wake a commerce tax, which is also known as a gross receipts tax that impacts Nevada businesses. Those businesses who gross over $4 million annually have already begun to feels its effects as they made their first quarterly gross revenue payment in August. However, smaller grossing businesses also need to be aware that this bill will impact them as they renew their Business License Fee (BLF) for Fiscal Year 2016.
Under the former regulations the BLF was $200 and was scheduled to be reduced to $100. Instead the fee is being increased to $500 for corporations while pass-through businesses will remain at the former $200 rate. Business owners should also be prepared for a $25 per item increase on other fees such as that paid for filing an annual list.
Most Nevada businesses with employees who have a payroll in excess of $85,000 per quarter are currently paying a Modified Business Tax (MBT) at a rate of 1.17 percent of wages paid. Bill 483 broadens the impact of the MBT on businesses by reducing the exemption from $85,000 down to $50,000, and it increases the rate to 1.475 with financial and mining institutions paying a rate of 2 percent. There were numerous variations of this bill considered during the session and as a result there are some complicated formulas to take into consideration when planning for 2016.
On July 1, 2015, a new provision of the California’s Healthy Workplaces, Healthy Families Act went into effect mandating that an employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment is entitled to Paid Sick Leave (PSL). Paid sick leave accrues at the rate of one hour per every 30 hours worked, paid at the employee’s regular wage rate with accrual commencing on the first day of employment or July 1, 2015, whichever is later.
Many businesses are struggling with this new requirement, especially for employees who may work at different pay levels or positions. There are essentially three options for calculating the rate for sick-time payments with the most typical being the “regular rate of pay.” I would urge you to ensure that you have updated your employee handbooks so that it is clear as to how your firm will track and accrue hours and how the rate of sick pay will be calculated. For additional information you may want to contact the closest Labor Commissioners Office, which is in Sacramento, at 916-263-1811.
The California legislative session ended on Sept. 11 with numerous bills impacting California businesses. Below are a sampling of bills that the GAC is tracking that are awaiting the Governor’s signature or veto (due by Oct. 11) and may impact your business.
Senate Bill 406: This bill expands the California Family Rights Act (CFRA) and allows employees to take leave for additional family members, such as the child of a domestic partner, a grandchild, sibling, grandparent or domestic partner, with a serious health condition. It also removes age and dependent status restrictions, which allows employees to care for adult children as an example.
Senate Bill 579: Employees would be able to take job-protected leave under the Family School Partnership Act. Employees may take up to 40 unpaid hours to attend school activities or tend to childcare duties, including caring for children with behavioral issues and unexpected school closures. This bill impacts businesses with over 25 employees.
Assembly Bill 970: AB 970 expands enforcement powers to the Labor Commissioner for wage and hour violations. Under this bill, the Labor Commissioner may issue citations for violations of “local” overtime laws, as well as enable the Labor Commissioner to investigate violations and cite businesses for local minimum wage law violations.
As always we recommend that business owners take time each autumn to meet with their legal and financial advisors to ensure that accounting and human resource practices are in conformance with shifting regulations. If you are a small business struggling to determine which of these regulations you are required to implement, please give the chamber a call for referrals to mentors and experts who can support you.
“B” Gorman, J.D., A.C.E. is the president/CEO of the Tahoe Chamber.