January 2013 Newsletter

E-Verify Is Coming

E-Verify is a nationwide, Internet-based system operated by USCIS – the United States Custom and Immigration Services.  This system provides an automated link between the Department of Homeland Security and the Social Security Administration databases in order to immediately determine the eligibility of new hires to work in the United States.

While participation is voluntary for many employers, state governments have mandated that private employers use this system in accordance with state-by-state regulations and implementation dates.

Four Point HR enrolls existing clients in the program per state laws — or as requested by the client businesses.  Once clients sign a MOU, or Memorandum of Understanding, they are eligible to participate.  Clients must hang E-Verify posters wherever new hires would complete applications.  In this way, clients complete the requirement to tell prospective employees that they utilize E-Verify in our employment processes.

Clients still complete an I-9 form and forward that information so that Four Point HR can register each new employee in the system.

If there is a mismatch of information on any employee, the USCIS system issues a TNC or Tentative Non-Confirmation.  When this occurs, instructions are sent to the client employer and the employee.  Each TNC allows the employee time to correct any information, which may have lead to the mismatch.  It is important that clients know that we take no action while the employee resolves the issue.  The employee may need time to visit the Social Security Administration office or other government offices to clear up any issues, but they remain on payroll while the issue is resolved.  Managers should always maintain privacy around any potential issues and safeguard the privacy of the employee at all times.

Finally, while there is a self-check process that individuals can utilize on themselves, this process should never be used on prospective employees, nor should any prospective employee ever be asked to run a self-check on their status.

The self-check process was designed so that each individual can check their own status, confirm US employment eligibility, and correct records if necessary.

In 2013, many of you will hear more about E-Verify as your state requirements are implemented.  If anyone has questions about E-Verify, implementation dates, or timeframes, please contact the Director of Human Resources at kschene@fourpointhr.com.


Documenting Terminations

While never pleasant, Terminations are a part of life in any business office.  Properly documenting terminations will ensure that the action is clear at the time, and that there are no misunderstandings about the reason for the Termination later.

There are two types of Terminations:  the first consists of implementing a Corrective Action Plan and trying to get the employee to correct their behavior—usually within a specific period of time.  The second type, an immediate termination, occurs when there is an act of untenable behavior on the part of the employee–usually endangering themselves or others by their actions.

Four Point HR follows a 3-Step Corrective Action Plan where the inappropriate behavior is addressed in a series of discussions.  The first step is a Documented Verbal Warning, the second step is a Written Warning, and the third is a final Written Warning.  Each of these warnings should completely outline the inappropriate behavior and detail the correct behavior that the employee should follow.   Four Point HR will provide this document to any client who should need assistance with this procedure.

Complete documentation includes follow up dates to ensure that the employee understands the progress they have made and any additional steps they must take to bring their behavior into a fully satisfactory status.  The document should always detail the next step in the process so that the employee is fully aware of the implications of their actions.

In the final written warning the Manager must be clear that if the employee does not correct their behavior, then the next step will be Termination.  Very specific wording is available for this step.

When a Manager and Employee reach this final stage and the employee has not modified their behavior as requested, it is time to terminate the employee.  Managers should prepare several documents for this last meeting.

  • A summary of the Corrective Action discussion points and the meeting dates.
  • A Termination letter, which allows the employee to see the exact reason for the termination.  This document should include a request for the return of any company property, the date of the final paycheck, the duration of any benefits, as well as a notation on the Company’s reference policy.  Finally, Managers always ask the employee to sign the letter, which states that the employee understands the contents of the letter, and will comply by returning any company property.

If any client should need additional assistance with a termination, please contact Four Point HR Director of Human Resources at kschene@fourpointhr.com.


DOT Office Of Drug And Alcohol Policy And Compliance Notice

Tax season can be stressful even if you have done all the right preparation. When planning for 2012 tax returns, keep the following tax preparation tips in mind:

Contact a tax professional or accountant
One of the best ways to ensure you are prepared is to make sure you have a quality accountant or tax professional on hand to help with your tax preparation and filing needs. If you pay someone to prepare your tax return, choose that preparer wisely. Taxpayers are legally responsible for what is on their tax return even if it someone else prepares it. Regulations require all paid tax return preparers to obtain a Preparer Tax Identification Number (PTIN). Preparers must renew their PTIN each year by December 31.

Collect all of your expense records
Business expenses are the costs of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit. When tracking expenses through an Excel spreadsheet, QuickBooks program, or your accountant, look over your numbers and make sure all the business expenses are accounted for and organized.

Certain beneficial tax provisions are still available in 2012
Consider taking advantage of the following provisions that is still available for 2012:
A deduction of 50 percent of the asset’s cost is allowed for qualifying property placed in service after 2011 and before January 1, 2013. This bonus depreciation provision is scheduled to expire December 31, 2012.

Preparing for tax season can be stress free, but no one can predict with certainty what the future tax season might present. We recommend you contact your tax professional to make contingency plans now so you are not forced to react quickly later.

Jim L. Swart, Director from the Office of the Secretary of Transportation released the below statement.

Recently, some states passed initiatives to permit use of marijuana for so-called “recreational” purposes.

We have had several inquiries about whether these state initiatives will have an impact upon the Department of Transportation’s longstanding regulation about the use of marijuana by safety‐sensitive transportation employees – pilots, school bus drivers, truck drivers, train engineers, subway operators, aircraft maintenance personnel, transit fire‐armed security personnel, ship captains, and pipeline emergency response personnel, among others. We want to make it perfectly clear that the state initiatives will have no bearing on the Department of Transportation’s regulated drug testing program. The Department of Transportation’s Drug and Alcohol Testing Regulation – 49 CFR Part 40 – does not authorize the use of Schedule I drugs, including marijuana, for any reason.

Therefore, Medical Review Officers (MROs) will not verify a drug test as negative based upon learning that the employee used “recreational marijuana” when states have passed “recreational marijuana” initiatives.

We also firmly reiterate that an MRO will not verify a drug test negative based upon information that a physician recommended that the employee use “medical marijuana” when states have passed “medical marijuana” initiatives.

It is important to note that marijuana remains a drug listed in Schedule I of the Controlled Substances Act. It remains unacceptable for any safety‐sensitive employee subject to drug testing under the Department of Transportation’s drug testing regulations to use marijuana.
They want to assure the traveling public that our transportation system is the safest it can possibly be.


The Fiscal Cliff Deal – A Primer

  • Higher taxes for individuals earning $400,000+ and for families making $450,000+: This makes the Bush-era tax cuts permanent for all but the wealthiest households.
  • Taxes on capital gains and dividends will increase to 20% for individuals making more than $400,000 and for households with income of more than $450,000 annually.
  • 2-month delay to automatic spending cuts to domestic and defense programs.
  • One-year extension for unemployment insurance.
  • One-year delay in scheduled cuts to physician payments under Medicare. A 27% cut was scheduled to go into effect this month.
  • Nine-month extension to the farm bill, preventing milk prices from drastically increasing.
  • Phasing out of personal exemptions and limitations on deductions for individuals making over $250,000 and families earning more than $300,000 annually.
  • Business tax breaks for provisions such as research and development.
  • A pay freeze for members of Congress.
  • Increase to the estate tax from 35% to 40%. With the first $5 million in assets exempted.
  • Permanent fix to the Alternative Minimum Tax to index it to inflation to replace annual patches that were previously implemented to protect middle-class Americans.
  • Tax breaks for working families. Includes five-year extensions of the American Opportunity Tax Credit, which can be claimed for college-related expenses; the Child Tax Credit; and the Earned Income Tax Credit, which is a refundable income-tax credit for low- to moderate-income working Americans.

Are Your Social Security Benefits Taxable?

Minimum Wage rates will increase in several states, effective 01/01/2013. The Federal minimum wage will remain the same at $7.25 per hour and $2.15 per hour for tipped employees. The following states have approved a minimum wage increase.

  • Arizona: From $7.65 to $7.80. Tipped Employees from $4.65 to $4.80.
  • Florida: From $7.67 to $7.79. Tipped Employees from $4.65 to $4.77.
  • Montana: From $7.65 to $7.80.
  • Ohio: From $7.70 to $7.85. Tipped Employees from, at least, $3.85 to, at least, $3.93. Note: State minimum wage provisions only apply to business with annual gross receipts of more than $288,000 for 2013.
  • Oregon: From $8.80 to $8.95.
  • Rhode Island: From $7.40 to $7.75.
  • Washington: From $9.04 to $9.19.
  • Colorado has proposed a minimum wage increase that was not yet approved at the time of this notice.
  • Missouri and Vermont minimum wage determinations are pending.

Four Point HR will continue to monitor states for any additional changes for 2013. Notices for affected clients will be distributed in December.

All Social Security recipients should receive a Form SSA-1099 from the Social Security Administration, which shows the total amount of their benefits.

But many people may not realize the Social Security benefits they received in 2012 may be taxable. The information outlined below should help you determine whether those benefits you receive in 2012 are taxable or not.

1. How much, if any, of your Social Security benefits are taxable depends on your total income and marital status.

2. Generally, if Social Security benefits were your only income for 2012, your benefits are not taxable and you probably do not need to file a federal income tax return.

3. If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status (see below).

4. Your taxable benefits and modified adjusted gross income are figured on a worksheet in the Form 1040A or Form 1040 Instruction booklet. Your tax software program will also figure this for you.

5. You can do the following quick computation to determine whether some of your benefits may be taxable:

First, add one-half of the total Social Security benefits you received to all your other income, including any tax-exempt interest and other exclusions from income.
Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.

6. The 2012 base amounts are:

  • $32,000 for married couples filing jointly.
  • $25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouse at any time during the year.
  • $0 for married persons filing separately who lived together during the year.

Source: Forrestall, Galeano & Li, CPA, LLC