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When is a good time to start a business?

So True!

LeikHong's Blog

“When is a good time to start a business?”

many people want to start a business, but too many of them just can’t find the right timing. if you’re one of them who still not willing to leave your comfort zone.

below is the info-graph that illustrate every single moment in life seem to be a good moment to start a business (except being dead).

stop giving yourself more excuses and start dive into your passion. if you still don’t know what you like to do? keep searching don’t settle.
you would know when you found it.

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Do I Need a DBA?

So as you are sitting, drinking your coffee and reading the newspaper, you come across the section that contains lists of business names and DBA’s.  What is this you ask? How does a company come to be listed in this publication?  That section of the newspaper is for the publication of Fictitious Business Names or DBA’s.  A Fictitious Business Name, assumed business name, trade name and doing business as (DBA) are names in which a business can operate under a name other than their legal name.  Why would a business need to operate under a DBA?

When to file a DBA

1. You want to use a business name that is different that your own name.  Your name is John Doe and you want to operate your plumbing company as a sole proprietorship, and call it Southwest Plumbing. Since your business name does not contain your name, John Doe,  you would need to file a DBA. In some places you are able to use your name plus the description of your business without having to file the DBA, such as  John Doe Plumbing.

2. You are a corporation, LLC or other legal entity that is entering a new business area not reflected by your current name.  John Doe formed Southwest Plumbing, Inc. as a California Corporation and is operating in southern California.  He is doing well and is ready to expand his business into northern California, Oregon and Washington. The business name Southwest Plumbing, Inc. is not descriptive of  the services he will be providing after his expansion, so he will need to file a (or multiple depending on jurisdictions) DBA so that he can conduct business as West Coast Plumbing, Inc..  His legal entity will still be Southwest Plumbing, Inc. but he will be able to advertise, conduct business and otherwise operate under the name West Coast Plumbing, Inc.; not restricting him to the Southwest region, as indicated by his name.

3. To open a bank account. Sometimes a bank requires a sole proprietor or general partnership to file a DBA to allow the individuals to open a business account.

The DBA is a means by which you announce to the world who is really behind an operating business. This helps mitigate the ability of unscrupulous people hiding behind new business entities and names to avoid taxes and other liabilities. The publications in the newspaper you were reading is the way that the businesses are announced to the public.

How to file a DBA

To file a DBA or Fictitious Business Name, you must complete the appropriate paperwork with the applicable state, county or local agency that handles such filing. Some states or counties require publication in a newspaper as described above, providing public notice. As soon as those requirements are met, you may begin using your DBA.

For assistance with your DBA or Fictitious Business Name contact SBCS.

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Texting in the Workplace and its pros and cons

TekGabber

Texting in the Workplace and it’s pros and consAllowing employees to send and receive text messages in the workplace is a practice that is becoming more common. This practice has its advantages and its disadvantages. Before you make the decision to allow your employees to use text messaging as a form of business communication, you should take a moment to consider what it could entail.

Advantages

Sending a Text For Business purposes is convenient and easy to do. Instead of having to pull up a contacts number, go to a phone, and dial the number, employees can simply use text messaging. It also allows employees to work on the go. If an employee has to run around the office and will be away from his desk phone and email, they can send a text message. Text messages are also advantageous, because they can be sent and received silently. No longer do your workers have to be distracted by…

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Why Caring About Equal Pay Could Save You Money

President Obama declared April 9, 2013 as Equal Pay Day to highlight  the discrimination women currently face in equal wages for equal work. It is said that women make 77 percent of what their male counterparts make, and face discrimination in benefits, wage increases and time off. This Handout [2013_04_11_11_04_27]  from the Lawyer’s Club of San Diego’s Equal Pay Day Luncheon and outlines and summarizes the pay discrepancies.

In an attempt to combat this discrimination The Equal Pay Act of 1963 (EPA) was created allowing any employee (male or female) adversely affected by a covered employer’s failure to pay equal wages to employees of different genders performing the same jobs to bring an action against the employer .  More recently, President Obama signed into law the Lily Ledbetter Fair Pay Act which expands the time frame in which employees can sue for discriminatory compensation under Title VII of Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 and the Americans with Disabilities Act of 1990.

So what does this mean for you as the employer? Why should you be concerned? Well, as the employer you should be aware and sensitive to the salaries, benefits and time off each member of your team receives. It may be easy to even unintentionally overlook an imbalance between similarly-situated genders; and a failure to close whatever gap may exist could be costly.  If a current or former employee brings action for discrimination based on gender under any of the above Acts, it could be tremendously costly and time consuming for you.

In an action under the EPA, a prevailing employee can receive back pay, interest, attorney’s fees and litigation costs. Where the court finds a lack of good faith, an employee can recover  “liquidated damages” by way of doubling the back pay award. This can be extended to three years of doubled back pay when the violation of the EPA is willfull.

For example, in Cooke v. United States, the Plaintiff, a former female Director, who alleged her former employer willfully and in bad faith discriminated against her by paying her less than  similarly-situated https://sbcompliance.wordpress.com/wp-admin/post-new.php(all) male Directors. The Plaintiff was awarded a $446,0oo judgment for her lost back pay, lost retirement benefits and the court also extended her damages back three years and doubled the award.

You don’t want your organization to incur a liability and cost such as that. Be aware of any unfair treatment between the genders in your workplace and make other managers and supervisors aware of the risks as well. You should review your employment manuals and procedures to ensure compliance and risk minimization.

For more information: Small Business Compliance Services, Inc.

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Are your Paystubs Compliant?

If you are a California Employer you should have a keen understanding of Labor Code Section 226 and what it requires to be included on your paystubs.

California law requires 9 specific items to be included on every paystub for every employee for every pay period- no exceptions.

 

 

The items are:

  1. gross  wages earned (before any deductions)
  2. total hours worked by the employees- unless the employee is a salaried employee exempt from overtime
  3. if the employee is paid on a piece-rate basis, then the number of piece-rate units earned and the piece-rate
  4. all deductions taken such taxes, healthcare, etc.
  5. net wages earned (after all deductions)
  6. the inclusive dates of the period for which the employee is paid
  7. the name of employee and last four digits of the employees social security number or employee identification number
  8. the name and address of the legal entity that is the employer
  9. the applicable hourly rates in effect during that pay period and the corresponding number of hours worked at each hourly rate. Think 40 hours rate and then overtime rate hours and maybe even double time hours

Copies of the above need to be printed in ink or other indelible form, properly dated, showing month, year and a copy of the statement or record should be kept for 3 years at the place of employment or at a central location within the State of California.

Oops! What if you have not been complying with this Labor Code Section? Unfortunately, failure to comply with each and every requirement of this Labor Code Section 226 is a misdemeanor.  The Employer is liable for $50 for the first violation, and $100 per pay period for each violation thereafter up to a total of $4,000.  While on an individual claim it may not seem to be a steep fine, if you made the same mistake on all 50 employees’ stubs for a number of pay periods you may have a liability of up to $4,000 per employee!!

This is one of the many reasons that processing your own payroll and can be tricky. Outsourced services help protect the employer from violations such as this.

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Are you using the right I-9?

As of January 2013, it wasn’t only a number of laws that changed, but certain forms and poster disclosures as well.

Are you using the correct forms?

Form I-9
Effective May 7, 2013 new Employment Eligibility Verification Forms I-9’s are required to be used. The new revised form was published March 8, 2013 and can be found here.  Starting in May, any employer hiring a new employee needs to use this revised form.

FMLA Posters and Forms
Effective March 8, 2013, employers must ensure that they post the new Family and Medical Leave Act Poster (FMLA) and updated FMLA notice and certification forms. The Forms can be found here.  To ensure compliance, make sure the poster is posted in the appropriate place in your office.

FCRA Forms and Enforcement AgencyEffective January 1, 2013, employers who use a third-party service (such as Small Business Compliance Services, Inc.) to conduct background checks on applicants or new hires  are required to provide three revised notices under the Fair Credit Reporting Act (FCRA):

  • Summary of Consumer Rights:
  • Notice to Users of Consumer Reports of Their Obligations;
  • Notice of Furnisher of Information of Their Obligations.

The forms can be found here.

Additionally the Consumer Financial Protection Bureau (CFPB) has become the new enforcement agency for the FCRA.  CFPB is replacing the Federal Trade Commission. A result of the change is that now both private individuals and the CFPB can bring claims for negligent violations of the FCRA; seeking damages and attorneys fees and for willful violations punitive damages.

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The Business Owner’s Guide to Obamacare.

Major aspects of the Affordable Healthcare Act are now in effect and many more will be effective in the near future.

Below are some of the most important aspects that business owners should be aware of.

  • Additional Medicare Tax: There will be an increase of 0.9% on the employee portion of the hospital insurance tax portion of FICA for wage earners who earn above a threshold amount for tax years beginning after 12/31/2012.  The threshold for joint returns or surviving spouse is $250,000. For a married individual filing separately, it is $125,000, and for any other filer, the threshold is $200,000.
  • Medicare Tax on Unearned Income: Individuals making $200,000 or joint filers making $250,000 will pay an additional 3.8% Medicare payroll tax in unearned income. Excluded from the increased tax is Interest on tax-free bonds veteran benefits, and gain from the sale of a principal residence that are excluded from gross income are not considered net investment income for purposes of the additional tax, nor are qualified retirement plan and IRA contributions.
  • Flexible Spending Account Contribution Limits: The contributions to Flexible Spending Accounts cannot exceed $2,500 per year.  After December 31, 2013, the amount will increase.
  • Employer Retiree Subsidy: In 2013, Employers will no longer be able to receive a subsidy to and also claim tax deduction for providing prescription coverage to retirees. Instead the amount the Employer is able to deduct will be reduced by the amount of the federal subsidy received.
  • State Based Insurance Exchange: State health exchanges will be set up to facilitate the purchase of qualified health plans  and provide for a Small Business Health Options Program  to assist small employers in enrolling their employees in qualified plans. Beginning in 2017, states may allow employers of any size to offer coverage through an exchange.
  • Notice of Exchange: By March 1, 2013, employers will be required to provide all new hires and current employees written notice about the state health benefit exchanges and the consequences if an employee decides to purchase a qualified health plan through one in lieu of employer-sponsored coverage.
  • W-2 reporting: Tax form W-2s issued in 2013 for wages paid in 2012 must for the first time include a line showing the benefit employees receive from their employer-sponsored health care. The provision is an attempt to make health-care benefits and spending more transparent.

For more information and guidance see www.healthcare.gov/law. There you can read the full text of the law, view a timeline and find other helpful resources.

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Employee or Independent Contractor?

One of the biggest employment problem areas for small business owners is the misclassification of workers. So often, employers will label someone as an independent contractor when in fact they should be labeled as an employee.

Why does it matter? What’s the difference? Generally, employers withhold money for taxes from an employee’s payroll check. Employers also pay unemployment tax for employees. However, for independent contractors, the employer does not pay payroll taxes or contribute to the unemployment insurance fund.

Classification of a worker as an employee or independent contractor can have dramatically different tax consequences. Thus, the IRS has created a publication to explain the differences between the two and help business owners properly classify their workers. Here are some of the factors that should be considered when classifying a worker:

  • Level of Control (Does the employer control how the worker completes the work? Does the employer require the worker to show up and leave at a certain time? The general rule is, the more control, the more likely the worker is an employee.)
  • Tools or Equipment Used (Does the employer provide the necessary tools? If the employer provides the tools, this factor weighs in favor of the worker being an employee. If the worker uses his/her own tools this weighs in favor of the worker being an independent contractor. This applies to other items such as supplies as well.)
  • What Kind of Work (Generally, if the worker is doing the same kind of work that your business does, they likely qualify as an employee. Example – I own a bakery and I have a worker who makes cupcakes. This worker would likely be an employee. However, consider this example. I own a bakery and I pay someone to come clean the facilities after hours. This worker would likely be an independent contractor. My business is to bake and this worker’s main job is to clean. Of course there are exceptions to this rule, but it is a good rule of thumb for most classifications cases.)

There is no black and white answer for independent contractor and employee classifications. Generally, courts look at the facts of each case and balance a series of factors to determine the proper classification. If you are ever in doubt as to whether someone should be classified as an independent contractor or employee, I would highly suggest contacting an attorney. A little money up front can save you a ton in the end if you are faced with a misclassification lawsuit.

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