On Saturday, December 19, 2009, the U.S. Senate passed the Fiscal Year 2010 Department of Defense (DOD) Appropriations Act by a vote of 88-10. This federal spending bill included important provisions to both
- Extend and expand the COBRA subsidy program that was enacted under the American Recovery and Reinvestment Act (ARRA) and
- Extend expanded unemployment benefits through February 28, 2010.
The House also passed this same spending bill on December 16, 2009 by a vote of 395-34. President Obama immediately signed this bill into law after Senate passage on December 19, 2009.
COBRA
The COBRA subsidy program extension in the DOD’s bill will:
- Expand the ARRA’s COBRA premium subsidy period from nine to 15 months
- Change the end date for eligibility for the subsidy from December 31, 2009, to February 28, 2010
- Provide a retroactive period of 60 days (commences upon enactment) for payment of premiums for eligible individuals whose subsidy period expired on November 30, 2009
- Require a special notice outlining these changes within 60 days to all eligible individuals on COBRA on or after October 31, 2009, or those who are terminated after this date
- Clarify the original COBRA subsidy program, noting that eligibility and notice are based on the timing of the qualifying event
Unemployment Insurance
The DOD bill also provides an extension and expansion of unemployment insurance benefits. These changes are outlined below.
- The period during which individuals may file applications for Federal Emergency Unemployment Compensation (EUC) is extended from the current end date of December 31, 2009 to February 28, 2010 and the period during which individuals may claim and be paid EUC is extended from May 31, 2010 to July 31, 2010.
- The period during which individuals may qualify for the Federal Additional Compensation (FAC), the extra $25 weekly benefit amount on state and federal unemployment compensation, is extended from the current end date of January 1, 2010 to February 28, 2010 with weekly payment provided during the phase out period for weeks ending June 30, 2010 to August 31, 2010.
- The period during which 100% federal reimbursement for weeks of regular federal extended benefit payments for states opting to trigger federal extended benefits based on the Total Unemployment Rate is extended from the current end date of January 1, 2010 to February 28, 2010, with the state option to continue the extended period from May 30, 2010 to July 31, 2010.
Working with a variety of clients, I have learned of the numerous challenges their accounting staff has in dealing with inventory shortages, cash shortages and other discrepancies in the thousands of figures that they work with every day. Many of those challenges require the staff to call employees for an explanation or clarification. A situation was shared with me where a credit card payment was not processed timely due to broken equipment. The employee didn’t seem concerned about getting the equipment fixed right away. In the meantime, the bank didn’t give the client their money until the situation had been discovered and resolved. It got me thinking about how employees can often misunderstand their employer and Company’s funds.
You see, it’s easy to see sales transactions, products and company expenses as someone else’s money (and someone else’s problem!). So, one could easily think, “Who cares if I’m short a few [products, cash] or the credit card didn’t go through? It isn’t my money!” The thing is, it IS your employees’ money!! Every sale, every return, every stolen item or fraudulent act that isn’t caught costs THEM earnings in their paycheck because it hits the bottom line. Sometimes it’s a positive figure. Sometimes it’s a negative figure. Regardless, it’s a figure that affects them.
I’ve spent part of my career in retail at some of the finest stores. When a retailer has losses due to missing inventory, cash shortage, theft, or any other “cost” of doing business, it hits the bottom line and that impacts employees’ base pay, their benefits and the company’s success. Do your employees know that, as consumers themselves, they pay more for some of the goods they buy because the retailer has to increase their markup to cover the cost of loss, theft, mishandling of cash, etc? That’s why it is so important for all employees to care about inventory, to be accurate with cash handling, and to follow procedures and make sure that there are no losses of any kind.
I know my clients’ management and owners. I know that they care about their employees and their financial well-being as well as the enjoyment in working at their place of business. I know that this economy is painful for everyone from the President to the most recently hired employee. I encourage employees to change their thinking and see their employer’s business as their business and their money and make sure that they are careful in following procedures, watching for theft, reporting broken equipment, or whatever it takes to make them and their employer succeed!
This just in from the EDD and retroactive for the tax year beginning on or after January 1, 2009…
The Military Spouses Residency Relief Act amends the Servicemember Civil Relief Act to include the same privileges to a military servicemember’s spouse. This Act amends among other tax administrative items, the elimination of the servicemember spouse’s burden of filing multiple part-year and nonresident income tax returns when they earn wages in California under the following conditions:
- The servicemember is in California on military orders; and
- Is legally married to the spouse; and
- The spouse is in California solely to live with the servicemember.
The Act grants several new privileges to the spouses of military servicemembers, including but not limited to, changes to the spouse’s tax domicile for individual income tax purposes. The new law allows a military servicemember’s spouse to keep a tax domicile throughout the marriage, even if the spouse moves into California, so long as the spouse moves into California to be with a servicemember who is in the state because of military orders.
The military spouse employee needs to file a new Employee’s Withholding Allowance Certificate (DE 4) for the income tax exemption, available on-line for employers and military spouse employees at http://www.edd.ca.gov
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