Our general counsel, Jeff King, working with Lobbyit, has been responding to Member questions about the recent legislation passed in response to the Coronavirus crisis. We have compiled the most common questions and answers below. This page will continue to grow. Please check back often.
Answer:
There are two new federal laws enacted in the last two weeks.
With all the disruption of business as a result of the coronavirus, companies are vulnerable to fraud. Matters can simply slip through the cracks as a flooring retailer or contractor is dealing with urgent issues on cash flow, employees, state orders on what can and cannot be opened, and simply staying healthy. It is important, however, to ensure your business does not become a victim of fraud.
There are many types of fraud that affect businesses. One of the biggest concerns is Automated Clearing House (“ACH”) fraud. ACH is a system that enables the exchange of funds between businesses and individuals through the use of checks, wire transfers, and direct deposits. Criminals need only two pieces of information to commit ACH fraud: your business checking account number and your bank routing number. This means that anyone who has a check from your business may have all the information needed to steal money from your account through an ACH transfer, either by phone or online.
A great deal of concern and confusion has arisen around Assembly Bill (“AB”) 5, California’s revised standard for determining whether a worker is an independent contractor or should be classified as an employee. The law which took effect on January 1, 2020, and adopts the ABC test for determining whether a worker is an independent contractor or an employee. While the ABC test strictest standard, it does not make all independent contractors employees of a flooring retailer or commercial contractor.
AB 5 Not All That New.
As a flooring retailer, you handle credit card transactions every day. You swipe or insert the card into the credit card reader or terminal and receive authorization from the card processor. In some sales, the customer may call after visiting your store to buy the flooring. The customer will give you credit card information for the purchase. You may also make online sales. In these transactions, you gather the required information, submit it to the credit card company, and again receive authorization.
The #MeToo movement brought the issue of sexual harassment to the forefront. While claims of sexual harassment in the workplace are not new, the focus on this issue increases employers’ potential risk for complaints and related liabilities. In response, many states have enacted new laws meant to combat workplace harassment. Several states have imposed a requirement to provide training for employees on preventing sexual harassment and discrimination, and the deadline to provide the training is rapidly approaching.
It has been a busy few weeks, requiring your warehouse employees to work overtime. Given the demand, the warehouse employees were also paid a production bonus based on the amount of flooring processed. To calculate the wages owed for those extra hours of work, your payroll office took each employee’s hourly rate and multiplied it by 1 and a half and paid the overtime rate for the extra hours worked. Seems simple enough. But did you include the performance bonuses? If not, you underpaid these employees.
Minimum wage will increase in 19 states and 21 cities and counties on January 1, with many reaching $15 an hour. Twenty-one additional jurisdictions will raise pay later in the year. Obviously, an increase in the minimum wage will impact the pay for most employees paid the minimum wage. Just because a retailer pays more than minimum wage, however, does not mean it can ignore these increases.
The Tax Cuts and Jobs Act of 2017 (the New Tax Law) made many changes in tax code. The New Tax Law substantially lowered tax rates on all businesses, whether they pay taxes as a C or S corporation. In exchange for the lower rates, the New Tax Law also eliminated or reduced some popular and widely used business deductions. The New Law also raised many questions and created some confusion as to what is and is not a deductible business expense.
One of the first actions by the Department of Labor (DOL) under President Trump’s administration was to withdraw the prior administration’s interpretation that “most workers are employees” and not independent contractors. For more information, see Independent Contractors—Another BUT Welcome Change, at The Law, The Floor, and You (June 12, 2017)
