October 2012 Newsletter

The Stay Interview

Most managers are familiar with the Exit Interview process as an interview that takes place after an employee turns in notice, and prepares to leave an organization.

A relatively new concept is the Stay Interview, which is a proactive approach to understanding employee concerns while employees are still working for the company.  Many of you will recognize the questions below as questions that you may have asked during a performance appraisal, or during an annual employee survey.

Think of the process as preventative health care for your company.  It allows you the chance to hold a face-to-face, one on one meeting, where an employee can be totally candid with you about his job, department, or the company.  It also has the impact of showing employees that you really care about their ideas, and that you want to be sure that they are happy in the work place.  Finally, it allows you to see the workplace from a different perspective, and the chance to address morale issues before you lose a valuable employee.

Our experience with Stay Interviews has been very positive.  If you have a manager in your organization that clearly gets along with all employees, and is a positive role model for your organization, considering asking this individual to hold a series of interviews with employees to better understand any issues that you may not be aware of, or that lie beneath the surface.

If your business is small enough, encourage all employees to participate.  It is important that the very vocal employees are represented, but you must also be sure that the quiet ones have a chance to participate as well.  Often those who are usually quiet, have the most to say in a one on one interview.  (Be sure that each employee has been with the organization at least 6 months.  Those who have shorter tenure are still learning the ropes and may not have a complete picture of the business.)

Typical Stay Interview Questions may include:

  • What do you like about your work?
  • If you could change one thing in your job, what would it be and why?
  • What is the number one reason you stay here at ABC Company?
  • What would make your workday more enjoyable?
  • Is there anything that you would change about the way the company operates?
  • Do you feel like we have positively recognized you for the work that you do?
  • What, if anything, would make you want to leave us?

Finally, be sure to hold a meeting of managers to review what is going well, and to discuss any employee concerns. Work as a group to find solutions that show the employees that you not only listened to their thoughts, but that you care enough to make changes where it makes sense for the business.

Paying Off Debt the Smart Way

Being in debt isn’t necessarily a terrible thing. Between mortgages, car loans, credit cards, and student loans, most people have debt. Being debt-free is a worthwhile goal, but most people need to focus on managing their debt first since it’s likely to be there for most of your life.

Handled wisely, that debt won’t be an albatross around your neck. You don’t need to shell out your hard-earned money because of exorbitant interest rates or always feel like you’re on the verge of bankruptcy. You can pay off debt the smart way, while at the same time saving money to pay it off faster.

Assess the Situation

First, assess the depth of your debt. Write it down, using pencil and paper, a spreadsheet like Microsoft Excel, or a bookkeeping program like Quicken. Include every financial situation where a company has given you something in advance of payment, including your mortgage, car payment(s), credit cards, tax liens, student loans, and payments on electronics or other household items through a store.

Record the day the debt began and when it will end (if possible), the interest rate you’re paying, and what your payments typically are. Add it all up, painful as that might be. Try not to be discouraged! Remember, you’re going to break this down into manageable chunks while finding extra money to help pay it down.

Identify High-Cost Debt

Yes, some debts are more expensive than others. Unless you’re getting payday loans (which you shouldn’t be), the worst offenders are probably your credit cards. Here’s how to deal with them.

  • Don’t use them. Don’t cut them up, but put them in a drawer and only access them for emergencies.
  • Identify the card with the highest interest and pay off as much as you can every month. Pay minimums on the others. When that one’s paid off, work on the card with the next highest rate.
  • Don’t close existing cards or open any new ones. It won’t help your credit rating.
  • Pay on time, absolutely every time. One late payment these days can lower your FICO score.
  • Go over your credit-card statements with a fine-tooth comb. Are you still being charged for that travel club you’ve never used? Look for line items you don’t need.
  • Call your credit card companies and ask them nicely if they would lower your interest rates. It does work sometimes!

Save, Save, Save

Do whatever you can to retire debt. Consider taking a second job and using that income only for higher payments on your financial obligations. Substitute free family activities for high-cost ones. Sell high-value items that you can live without.

Do Away with Unnecessary Items to Reduce Debt Load

Do you really need the 800-channel cable option or that satellite dish on your roof? You’ll be surprised at what you don’t miss. How about magazine subscriptions? They’re not terribly expensive, but every penny counts. It’s nice to have a library of books, but consider visiting the public library or half-price bookstores until your debt is under control.

Never, Ever Miss a Payment

Not only are you retiring debt, but you’re also building a stellar credit rating. If you ever move or buy another car, you’ll want to get the lowest rate possible. A blemish-free payment record will help with that. Besides, credit card companies can be quick to raise interest rates because of one late payment. A completely missed one is even more serious.

Pay With Cash

To avoid increasing debt load, make it a habit to pay with cash. If you don’t have the cash for it, you probably don’t need it. You’ll feel better about what you do have if you know it’s owned free and clear.

Shop Wisely, and Use the Savings to Pay Down Your Debt

If your family is large enough to warrant it, invest $30 or $40 and join a store like Sam’s or Costco. And use it. Shop there first, then at the grocery store. Change brands if you have to and swallow your pride. Use coupons religiously. Calculate the money you’re saving and slap it on your debt.

Each of these steps, taken alone, probably doesn’t seem like much. But if you adopt as many as you can, you’ll watch your debt decrease every month.

Source: Forrestall, Galeano & Li CPAs

What is The FUTA Credit Reduction?

Before we can explain the FUTA Credit Reduction, we need to understand the FUTA tax that is paid by each employer.  Under the American Federal Unemployment Tax Act (FUTA), employers pay FUTA tax on the first $7,000.00 of employee’s taxable wages annually.  The FUTA tax rate is 6.0%, but employers who pay their state unemployment tax timely and in full receive a 5.4% credit.  Thus, the FUTA tax rate paid by employers is 0.60% (6.0% – 5.4%).  So, employers pay a maximum of $42.00 annually ($7,000.00 x 0.60%) of FUTA tax per employee.

Since the economic downturn in the American economy, unemployment benefit claims have risen dramatically due to the number of Americans filing for unemployment benefits.  Also, states have extended the unemployment benefit periods to help Americans during this difficult economic period.  Many of the states have exhausted their own unemployment funds available to pay these benefit claims and have turned to the Federal Government to borrow funds in order to meet the demand of the unemployment benefit claims.  The Federal Unemployment Tax Act provides that the FUTA tax credit (of 5.4%) may be reduced if the state has an outstanding loan from the Federal Government.

If the loans to the state are not paid back to the Federal Government by the end of the following calendar year, then that state is subject to a FUTA Credit Reduction.  The FUTA credit of 5.4% is reduced, usually by a rate of 0.30% for the first year and an additional 0.30% for each succeeding year until the loans is paid off to the Federal Government.

So, employers that work in a state that has not paid the Federal Government back for the loans that they took out, will find themselves paying additional FUTA tax each year until the loan has been paid in full.  For example, the state of Georgia borrowed funds from the Federal Government to pay unemployment benefits.  The loan had not been paid back to the Federal Government by the end of 2011 or 2012.  Employer XYZ paid Employee 123 $25,000.00 in 2010, $30,000.00 in 2011, and $35,000.00 in 2012.  The state of Georgia was considered to be a credit reduction state for the years of 2011 and 2012.  So, the FUTA tax expense for Employer XYZ is as follows:

Wages Earned Taxable Wages Rate FUTA Tax Paid
2010 – Employee 123 $25,000.00 $7,000.00 0.60% $42.00
2011 – Employee 123 $30,000.00 $7,000.00 0.90% $63.00
2012 – Employee 123 $35,000.00 $7,000.00 1.20% $84.00

The Department of Labor determines the credit reduction states each year and does not make that announcement until after November 10th of each year.

The additional FUTA tax is computed on the IRS Schedule A form for the annual 940 tax return.

Adaption To Workplace Change

Business environments are constantly changing in today’s society whether it is due to employee hire-ins and / or terminations, a change in the company’s main operating system, opening a new branch of business in another state, etc.  It is important to always be on top of current processes, flexible and open-minded so when change does happen to creep in we are not caught off-guard.  Employees should be able to easily adjust; at the same time, creating a positive impact within the company.  How can businesses today prepare for change, inform and help employees manage the change, then ensure the change is successfully implemented with minimal impact to production?

  • Keep Informed: Change, however frequent, can ride both sides of the fence. Positive and negative will play a part at times but it’s important that managers openly communicate the impact as best they can from all angles. Dissuade rumors by constantly updating employees on any decisions affecting the staff. Honestly convey any extra work or impending pressure that may be added due to the change and let everyone know that the company will be supportive and make the transition as seamless as possible. Make employees feel like they are a part of the process and this will inspire loyalty.
  • Make Aware:  Change affects all employees on different levels.  The personalities that produce a successful company can also cause a negative impact overall and possibly the loss of a business transaction.  Make employees aren’t aware of the influence their emotions, body language or communication can have on the company as a whole.  If the stress levels are high, encourage employees do more things they enjoy such as volunteering, exercising, spending time with family, getting out of the office for lunch or breaks, etc.
  • Open Door: Managers should always be open to listening and understanding during times of uncertainty. Employees need to feel secure and know that assistance will be provided as much as possible. This will encourage workers to embrace the change and accept it for the opportunity to make their business a better place overall.

West Nile Virus: Protecting Outdoor Workers From Infection

The Centers for Disease Control and Prevention (CDC) have reported an increase in West Nile virus infections in the United States, including more than 1,500 cases in people and at least 65 deaths. West Nile virus is a potentially serious illness transmitted to humans through mosquito bites. Workers at risk include farmers, foresters, landscapers, gardeners, painters, construction workers, mechanics, and other outdoor workers. Preventing mosquito bites reduces risk to outdoor workers.

West Nile Virus (WNV) infection is an illness transmitted to humans primarily by mosquitoes. The pathogen that causes WNV infection is a virus that is known to infect birds and other animals as well as humans. Employees working outside are at risk, particularly in warmer weather (when mosquitoes are more likely to be present). The following information below is designed to educate employers and workers on the virus and also offer ways to reduce the risks of infection.

What are the signs and symptoms of West Nile Virus?

In most cases, persons infected with WNV either show no symptoms or have very mild flu-like symptoms, called West Nile fever. These mild cases of West Nile fever normally last only a few days and are not believed to cause any long-term effects. The typical time from infection to the onset of signs and symptoms is 3 to 14 days. Signs and symptoms of the milder illness, West Nile fever, include headache, fever, body aches, swollen lymph nodes, and/or a skin rash on the body. According to the Centers for Disease Control and Prevention (CDC), severe illness is reported to occur in about 1 in every 150 persons infected with WNV. Symptoms of severe disease may last several weeks and may have permanent neurological effects. The signs and symptoms of more severe infection (West Nile encephalitis or meningitis) include headache, high fever, stiffness in the neck, disorientation (in very severe cases, coma), tremors, convulsions and muscle weakness (in very severe cases, paralysis). Persons who develop symptoms of severe WNV illness should seek medical attention immediately, as this disease can be fatal.

How can workers become exposed?

Flooded areas, particularly in warm climates, provide the opportunity for mosquitoes to breed in stagnant water. Bites from infected mosquitoes may result in WNV.

What can employers do to reduce the risk to workers?

Employers should keep in mind that elimination of mosquito breeding grounds is a highly effective way of reducing mosquito populations and reducing the number of mosquito bites. Mosquitoes lay eggs in standing water. Employers with employees working in and around areas of stagnant water should:

  • Be aware of working conditions, i.e., the presence of equipment or areas where water accumulates.
  • Advise employees to inspect work areas and, where possible, get rid of sources of stagnant or standing water to remove a potential breeding ground of mosquitoes.
  • Reduce or eliminate mosquito populations by disrupting mosquito breeding grounds (i.e., whenever possible, drain ditches gutters, etc., to get rid of sources of stagnant or standing water).
  • Encourage workers to protect themselves from skin contact with dead birds. CDC recommends using gloves or an inverted plastic bag when handling dead birds.

What can workers do to protect themselves?

It may not always be possible to eliminate all potential mosquito breeding grounds. Knowledge of some key steps that employees can take to minimize the risk of mosquito bites is, therefore, important in reducing the risk of WNV infection. Employees who work outdoors should be aware that the use of personal protective equipment and techniques is essential to preventing mosquito bites. Employees should:

  • Cover as much of the skin as possible by wearing shirts with long sleeves, long pants and socks whenever possible. Use lightweight clothing to minimize the potential for heat-induced illnesses.
  • Use insect repellents containing DEET on skin that is not covered by clothing. According to the CDC, the most effective repellents contain DEET (N, N-diethyl-mtoluamide or N, N-diethyl-3-methylbenzamide).
  • Avoid the use of perfumes and colognes when working outdoors during peak times when mosquitoes may be active.
  • Choose a repellent that provides protection for the amount of time that they will be outdoors/in areas of concern. The more DEET a repellent contains, the longer time it can protect them from mosquito bites.
  • Spray insect repellent on the outside of clothing.
  • Do NOT spray insect repellent on skin that is under clothing.
  • Never apply repellents over open wounds or irritated skin.
  • Do NOT spray aerosol or pump products in enclosed areas. Do NOT spray a pump or aerosol product directly on one’s face. First spray on hands and carefully rub on face (do not allow insect repellent to contact one’s eyes and mouth).
  • After working in areas where mosquitoes are a concern, use soap and water to wash skin that has been treated with insect repellent.
  • Be extra vigilant at dusk and dawn when mosquitoes are most active.

Source: OSHA

Medicare is a Big Concern for the 2012 Election

This past week a leading Web site known as AgingCare.com that connects people caring for the elderly parents to other caregivers and provides resources, conducted a survey to uncover the issues in the upcoming election that matter the most to caregivers.  More than 600 caregivers responded to the online survey.

The outcome of this survey reflected that 44.74% of caregivers stated that potential changes to Medicare was their top concern.  Healthcare reform was at 28.32% and last was the economy at 26.94%., 84% of the caregivers will vote for a candidate who provides the best solid plan for our country.

How to fix the Medicare issue has been in debate for years between the Republicans and Democrats.  The failing system and how to fix it has caregivers divided as well.  With the 2012 election approaching, Medicare has become a hot topic on the AgingCare.com forum, where caregivers are responding to the forum question “Will the debate over Medicare sway your vote in the 2012 election”?

Regardless of their party affiliation, a majority of the caregivers say cracking down on Medicare fraud is crucial in fixing the Medicare crisis.  While the caregivers leaning toward the Democratic side are against privatization, the caregivers leaning toward the Republican side feel that if President Obama remains in office, financial resources will be depleted due to policy.

The one thing that both parties have in common is that Medicare needs to be changed and fixed for the better.