Normally, my articles address taxation . Today, I will depart from taxes and write about a subject with much greater importance than taxes. That subject is employee behavior, and how you influence that behavior.
I am currently reading a book about coaching. The writer cites work by a noted behavioral scientist, Frederick Herzberg. Herzberg identified certain motivational influences on workers, dissatisfiers and satisfiers. Two of the satisfiers are achievement and recognition, ranked in importance in that order.
These two satisfiers are linked to one another. Any employee can be induced to perform better by giving him some goal to achieve. Once that goal is achieved, the employee should be recognized for that achievement. A top notch producer can be driven to new heights, and someone that is faltering can be induced to falter less. That's right, mediocre and excellent employees can both give you better performance, but you must do your part.
Recently, a good friend told me about the company he works for, how the owner, a "micro-manager" treats the staff. This owner frequently grumbles about cost overruns, staff overtime, the cost of supplies, among other various complaints. I asked this friend, "does your boss ever set goals or recognize achievement at all." The response was a resounding "no." But, everyone is sure to hear about mistakes on the job. One day, the owner exclaimed, "someone is going to get fired for that" when he heard about some seemingly minor error. The morale at this particular business is very low, and workers feel unappreciated.
Just today, I took my daughter to Chik-fil-A for lunch. I noticed the flowers at each table, the smile of each employee with the warm greeting, and the cleanliness of the restaurant. I started to think about their philosophy on workplace management. Have you ever noticed how busy Chik-fil-A is on any given day? Well, every day but Sunday. (A side note: Chik-fil-A is an extremely successful business, even though they don't sell food on Sunday.) I've never had a bad experience at Chik-fil-A. One day, I took a sandwich back that had the wrong bun. Someone immediately brought me out a new sandwich, then the assistant manager gave me a few cards for free sandwiches after apologizing for the error. Finally, the manager came to my table, apologized for the oversight, and he gave me a few cards for more chicken sandwiches. I was impressed.
Nevertheless, today I was even more impressed by the manager at this Chik-fil-A store. As my daughter and I were walking out, I heard the manager ask the crew, "who has the dining area right now?" One of the girls spoke up, "me, sir." The manager replied, "great job. Thank you." It impressed me that he would call out this crew member for something that most folks would think was mundane, even trivial. To that manager, it wasn't trivial at all.
If you manage workers, take the time to set goals for your staff. When a worker achieves that goal, give her praise. Recognize the employee, and be sure to do it in front of other staff members. Your company's success rises and falls on your employees' behavior. You need them a thousand more times than they need you, so influence their behavior for the better. If you aren't sure where to start, stop by the Chik-fil-A in Flowery Branch and observe how they coach their staff. You might learn a thing or two.
Thursday, December 27, 2012
Tuesday, August 7, 2012
Health Care Law Provisions
New Health Care Law Provisions
The Patient Protection and Affordable Care Act (PPACA) is getting a lot of press these days and I thought this would be a good time to review some of the provisions that could affect you. While some of the law's provisions have already taken effect, many of the provisions will begin taking effect in 2013, 2014, and later years. This is a summary of some of the more significant individual provisions that may be of interest to you.
Penalty for Not Maintaining Minimum Essential Coverage
The crux of PPACA is the requirement for almost all individuals to maintain minimum essential healthcare coverage (i.e., the individual mandate). Beginning in January 2014, non-exempt U.S. citizens and legal residents are required to maintain such coverage or be subject to a penalty. Once the penalty is fully phased in, individuals who fail to maintain minimum essential coverage are subject to a penalty equal to the greater of 2.5 percent of household income in excess of the taxpayer's household income for the tax year over the threshold amount of income required for income tax return filing for that taxpayer or $695 per uninsured adult in the household.
The per-adult annual penalty is phased in as follows: $95 for 2014; $325 for 2015; and $695 in 2016. The percentage of income is phased in as follows: 1 percent for 2014; 2 percent in 2015; and 2.5 percent beginning after 2015. If you file a joint return, you and your spouse are jointly liable for any penalty payment.
Premium Assistance Tax Credit
Effective for tax years ending after December 31, 2013, the law creates a refundable tax credit, called the premium assistance credit, for eligible individuals and families who purchase health insurance through an insurance exchange. The premium assistance credit is generally available for individuals (single or joint filers) with household incomes between 100 and 400 percent of the federal poverty level for the family size involved.
Additional Hospital Insurance Tax
Beginning in 2013, the employee portion of the hospital insurance portion of FICA taxes is increased by an additional tax of 0.9 percent on wages received in excess of the threshold amount. This additional tax is on the combined wages of the employee and the employee's spouse, in the case of a joint return. The threshold amount is $250,000 in the case of a joint return or surviving spouse, $125,000 in the case of a married individual filing a separate return, and $200,000 in any other case.
Unearned Income Medicare Contribution Tax
Beginning in 2013, in the case of an individual, estate, or trust, an additional tax is imposed on income over a certain level. This tax is referred to as the "unearned income Medicare contribution tax." Others have referred to it as a tax on investment income, although it can apply to individuals, estates, and trusts that do not have investment income. For an individual, the tax is 3.8 percent of the lesser of net investment income or the excess of modified adjusted gross income over a threshold amount. The threshold amount is $250,000 in the case of taxpayers filing a joint return or a surviving spouse, $125,000 in the case of a married individual filing a separate return, and $200,000 in any other case.
In the case of an estate or trust, the tax is 3.8 percent of the lesser of undistributed net investment income or the excess of adjusted gross income over the dollar amount at which the highest income tax bracket applicable to an estate or trust begins.
The new tax does not apply to items that are excludible from gross income under the tax rules, such as interest on tax-exempt bonds, veterans' benefits, and any gain excludible from income when you sell a principal residence.
Increase in Medical Expense Deduction Threshold
For 2013 and later years, the floor for taking a deduction for medical expenses is increased from 7.5 percent of adjusted gross income (AGI) to 10 percent of AGI. However, for any tax year ending before January 1, 2017, the floor will be 7.5 percent if the taxpayer or the taxpayer's spouse has reached age 65 before the end of that year.
FSA Limitation
Beginning in 2013, for a health flexible spending arrangement (FSA) to be a qualified benefit under a cafeteria plan, the maximum amount available for reimbursement of incurred medical expenses of an employee, the employee's dependents, and any other eligible beneficiaries with respect to the employee, under the health FSA for a plan year (or other 12-month coverage period) must not exceed $2,500.
The Patient Protection and Affordable Care Act (PPACA) is getting a lot of press these days and I thought this would be a good time to review some of the provisions that could affect you. While some of the law's provisions have already taken effect, many of the provisions will begin taking effect in 2013, 2014, and later years. This is a summary of some of the more significant individual provisions that may be of interest to you.
Penalty for Not Maintaining Minimum Essential Coverage
The crux of PPACA is the requirement for almost all individuals to maintain minimum essential healthcare coverage (i.e., the individual mandate). Beginning in January 2014, non-exempt U.S. citizens and legal residents are required to maintain such coverage or be subject to a penalty. Once the penalty is fully phased in, individuals who fail to maintain minimum essential coverage are subject to a penalty equal to the greater of 2.5 percent of household income in excess of the taxpayer's household income for the tax year over the threshold amount of income required for income tax return filing for that taxpayer or $695 per uninsured adult in the household.
The per-adult annual penalty is phased in as follows: $95 for 2014; $325 for 2015; and $695 in 2016. The percentage of income is phased in as follows: 1 percent for 2014; 2 percent in 2015; and 2.5 percent beginning after 2015. If you file a joint return, you and your spouse are jointly liable for any penalty payment.
Premium Assistance Tax Credit
Effective for tax years ending after December 31, 2013, the law creates a refundable tax credit, called the premium assistance credit, for eligible individuals and families who purchase health insurance through an insurance exchange. The premium assistance credit is generally available for individuals (single or joint filers) with household incomes between 100 and 400 percent of the federal poverty level for the family size involved.
Additional Hospital Insurance Tax
Beginning in 2013, the employee portion of the hospital insurance portion of FICA taxes is increased by an additional tax of 0.9 percent on wages received in excess of the threshold amount. This additional tax is on the combined wages of the employee and the employee's spouse, in the case of a joint return. The threshold amount is $250,000 in the case of a joint return or surviving spouse, $125,000 in the case of a married individual filing a separate return, and $200,000 in any other case.
Unearned Income Medicare Contribution Tax
Beginning in 2013, in the case of an individual, estate, or trust, an additional tax is imposed on income over a certain level. This tax is referred to as the "unearned income Medicare contribution tax." Others have referred to it as a tax on investment income, although it can apply to individuals, estates, and trusts that do not have investment income. For an individual, the tax is 3.8 percent of the lesser of net investment income or the excess of modified adjusted gross income over a threshold amount. The threshold amount is $250,000 in the case of taxpayers filing a joint return or a surviving spouse, $125,000 in the case of a married individual filing a separate return, and $200,000 in any other case.
In the case of an estate or trust, the tax is 3.8 percent of the lesser of undistributed net investment income or the excess of adjusted gross income over the dollar amount at which the highest income tax bracket applicable to an estate or trust begins.
The new tax does not apply to items that are excludible from gross income under the tax rules, such as interest on tax-exempt bonds, veterans' benefits, and any gain excludible from income when you sell a principal residence.
Increase in Medical Expense Deduction Threshold
For 2013 and later years, the floor for taking a deduction for medical expenses is increased from 7.5 percent of adjusted gross income (AGI) to 10 percent of AGI. However, for any tax year ending before January 1, 2017, the floor will be 7.5 percent if the taxpayer or the taxpayer's spouse has reached age 65 before the end of that year.
FSA Limitation
Beginning in 2013, for a health flexible spending arrangement (FSA) to be a qualified benefit under a cafeteria plan, the maximum amount available for reimbursement of incurred medical expenses of an employee, the employee's dependents, and any other eligible beneficiaries with respect to the employee, under the health FSA for a plan year (or other 12-month coverage period) must not exceed $2,500.
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