July 2011 Newsletter

Are You Required To E-Verify

The Illegal Immigration Reform and Enforcement Act of 2011 is a new law in the state of Georgia.  Effective July 1, 2011, Georgia employers with more than 10 employees will be required to use a Federal internet-based system called E-Verify to ascertain the eligibility of their employees to work in the United States. The U.S. Department of Homeland Security in partnership with the Social Security Administration administers the program.

The law will have a phase-in period for each employer as shown below:

  • Any business in Georgia with 500 or more employees must use the E-Verify program to confirm the employment eligibility of employees hired after January 1, 2012.
  • Businesses with 100 or more employees but fewer than 500 employees must use the E-Verify program beginning July 1, 2012.
  • Businesses with more than 10 employees but fewer than 100 employees must use the E-Verify program as of July 1, 2013.

In addition, law enforcement will now be able to question and investigate an individual’s immigration status under certain circumstances.

How does it work?

  1. Any employer hiring a new employee to their company must accurately complete an I-9 form within 3 business days of the employee’s start date. This is the first step in verifying that an employee is authorized to work in the U.S.
  2. The next step requires the employer to enter information from the I-9 form into the E-Verify system where it is compared against numerous records in the Social Security and Department of Homeland Security databases. Most inquiries are resolved within 72 hours.  If an employee’s eligibility cannot be confirmed within the E-Verify system, the employee must visit a local Social Security office or call the Department of Homeland Security toll-free.  The employee has eight federal workdays to start resolving the case. If a resolution cannot be found, the employee is considered not eligible to work and cannot continue employment.

More states are enacting this federal program to make sure they are in compliance with hiring laws as well as ensuring their employees remain eligible to work in the U.S.  These actions are imperative for all employers to not only be prepared for workplace audits, but also to avoid hefty penalties or fines for unauthorized workers. This is one important reason that Four Point HR cannot stress enough to our clients the importance of accuracy when completing the I-9 Form or Employment Eligibility Authorization when hiring an employee.

Four Point HR will be initiating the E-Verify process for all of our clients that meet the requirements noted above.

**Source: National Conference of State Legislatures and Applicant Insight

Battle Against Bank Debit Card Fees

The Federal Reserve estimates that debit card swipe fees produce $16 billion in annual revenue for banks and credit card companies. On Wednesday June 8th, 2011, despite intense pressure from banks, the Senate failed to delay the Durbin Amendment — new rules that would lower bank fees to merchants for processing debit card transactions. While the vote was 54 to 45 in favor, 60 votes were needed to approve the measure.

As a result, the Fed will be allowed to issue final rules on July 21 to cut the average bank debit card charge from 44 cents to 12 cents per transaction. This is good news for small businesses, like retailers, that handle a high volume of debit card payments. It may pave the way for business owners to grow their businesses and pass savings on to their customers.

But, business owners and consumers must realize that banks may enact new strategies to make up for the lost revenue including increasing fees on checking and saving accounts, raising minimums for free checking accounts, and capping the amount a debit card holder can spend on a single purchase.

Why Aren’t Companies Hiring?

Many wonder why the hiring freeze brought on by the economic crisis two years ago continues. The numbers show the unemployment rate dropping but the increase in head counts has been painfully slow and it’s unclear how soon things will improve.

Some of the trends are telling. Temporary work force expansion, a signal that hiring for permanent jobs will pick up, has not occurred.  Underemployment remains a problem in that the more than 25 million Americans who want to be working full-time, are either working part-time jobs or have given up looking for work altogether. New job creation, often the result of new businesses starting up and adding staff, isn’t happening either.

In past recoveries, home construction would have picked up by this time, adding new jobs in that sector and positions in associated industries.  With the large number of foreclosures dragging down the economy, we have not seen this happen and banks are cautious about their exposure and are not lending. In addition, companies can delay hiring longer than before by using efficiency and technology to make the best use of their current workers until they are confident business is picking up again. Investment in technology seems a better risk than investment in labor.

The top employers — the larger companies — were expected to contribute the highest percentage of employee growth but that has not been the case. Large businesses, with 500 or more employees, hired 17,000 workers in March while midsize companies added 82,000 and small companies added 102,000.  And, much of the increase in head counts at the larger firms has been a result of mergers and acquisitions.

Larger companies have characteristically have been cautious in adding head count when the recession was triggered by over-borrowing and debt trauma.  In our current economic climate, global firms are looking to expand their overseas operations and are spending the money that they are making here in the U.S. elsewhere. These companies are making money, but these earnings do not correlate to a strong U.S. economy.

At the same time, cities and counties have had to cut their work forces to maintain their budgets and the greatest reduction in jobs came in the form of nearly 18,000 education positions lost.

Raise Prices Without Losing Customers

Business owners and managers often face the daunting task of raising prices of their products or services, and risk driving their customers to a lower priced vendor. We’ve compiled a few strategies that might soften the price increase.

First and foremost, be upfront and honest.  If you are genuinely losing money on a customer’s deal, then explain that your pricing model does not work for today’s marketplace.  For example, restaurants are increasing their menu prices because their food costs have increased.  A Wholesale Distribution Company may raise its prices because incoming and outgoing freight costs have gone up dramatically.

Always communicate with customers and prospects in advance to advise that a price increase is coming.  Surprise rate increases are usually met with adverse effects.  Does it make more sense for your business to enforce the price increase in one step, or to stagger the increase by percentage increments over a set time period?

Contact your clients in person if possible.  It is always important to thank them for their loyalty and for their business.  Review the new pricing model with the client and be direct and honest.  Your customer may be experiencing the same type of cost pressures inside their own business.

Stage your space for success.  Clean up your showrooms and offices and project the professional and put together image that reflects your brand.

And last but not least, maintain the highest level of customer service.  A company with impeccable customer service will hold its value to the client, even when forced to raise prices.

Business Disaster Planning – Storm Preparedness

Is your company prepared to recover from a storm and do you have a plan in place? The 2011 Hurricane and Tornado season is upon us and it is proving to be an active and dangerous season. Storms can occur anywhere with little or no warning. Companies should take precautions in advance of a storm by developing an emergency plan, training employees, learning the warning signs, and monitoring area watches and warnings.

Preparedness
Companies should develop an emergency plan, including, at minimum, the items listed below:

  • Company shut down procedures
  • Company warning systems to warn everyone in the building there is an emergency
  • Emergency contact procedures
  • Accountability procedures to insure all management, employees, contractors, vendors and visitors are accounted for
  • Shelter locations and routes
  • Procedures for addressing any hazardous materials used in your operation

Training and Exercising
Once the plan is completed, it should be communicated to all employees.

  • Hold safety-training meetings to communicate the program to the employees.
  • Ensure that all employees know what to do in case of an emergency.
  • Hold practice drills on a regular basis.
  • Update plan and procedures based on lessons learned from practice exercises
  • Encourage employers to discuss and recommend that employees also develop an emergency action plan for their family.

For help developing a Storm Preparedness Plan, please contact the Risk Management Department at Four Point HR.

Payroll Corner

Four Point HR will be closed Monday July 4th in observance of Independence Day. Client payrolls affected will be notified and arrangements made for processing. We at Four Point HR wish you a happy and safe holiday.

It is mid year and the perfect time to remind employees to check their tax withholdings. If unsure whether they are withholding correctly, advise them to check with their tax preparer. Changes are to be submitted on the appropriate forms. Federal and State (if applicable) forms are available in the Client Service Center online or by contacting your payroll representative.