On March 25, 2014, the U.S. Supreme Court ruled 8-0 in United States v. Quality Stores, Inc. that severance payments made to involuntarily terminated employees are taxable “wages” subject to FICA taxes. This decision resolved a split among lower federal courts which left some employers uncertain whether to…
If you are a restaurant that charges a mandatory 18% service charge on large parties…or if you charge a mandatory $15 corkage fee for opening a customer’s bottle of wine…or a $3 per slice fee for cutting a customer’s birthday cake…you may want to reconsider this practice. Why?…
In the October 14, 2013 edition of The New Yorker, author James Surowiecki argues that the Affordable Care Act, which is often referred to as “Obamacare,” will have “enormous” benefits for entrepreneurs and small businesses. You can find the article here. One benefit, according to Mr. Surowiecki, is…
Yesterday, California Governor Jerry Brown signed Assembly Bill 10 (AB 10) which raises the state’s minimum wage to $9.00/hour on July 1, 2014 and then to $10.00/hour on January 1, 2016. Unless some other state raises its minimum wage in the interim, the Governor’s signing of AB 10…
Entrepreneurs often ask me questions about startup funding — how and where they go about finding all the money they need to launch their ventures. These questions always lead to a conversation about friends-and-family, angel investors, seed funding firms (or “incubators”), venture capital firms, commercial banks, the SBA,…
On March 11, 2013, San Jose’s Minimum Wage Ordinance went into effect. That law, which was passed by voters in the November 2012 election, requires employers to pay their employees a minimum wage of $10.00 per hour for work performed within the city limits and requires the minimum…
On Monday December 3, 2012 — the first day of the next legislative session — Assembly member Luis Alejo (D-Salinas) introduced a new bill (AB 10) that would significantly raise the state’s minimum wage to $8.25 beginning in 2014. The bill proposes additional increases in 2015 (to $8.75) and…
In California, most employers are required to pay “reporting time pay” to employees who show up for meetings or other work separate from their normal shift. The right to reporting time pay is codified in Section 5 of the Wage Orders, which states — “Each workday an employee…
The financial meltdown that began in 2008 caused a lot of finger-pointing: who was to blame and why? Although the list of potential culprits is long and varied — from bank deregulation, to the increased use of credit default swaps and other hyper-complex financing structures, to a “play…
In Deleon v. Verizon Wireless, LLC, the California Court of Appeal clarified when a commission advance may be “clawed back” by an employer. The answer depends on whether the advance payment was fully earned when advanced (which made the payment a wage which could not be clawed back)…