The Daily Rundown: Classifying Workers in California and Financial Wellness Programs

Welcome to the Small Business Run Down. Each day we bring you stories and trends that impact small business owners and their workforce. On today’s agenda: California construction worker classification, small business cyber security vulnerability, and President Trump’s plan to cut former inmate unemployment. California construction industry subject to new law for classifying workers A […]

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new california law and financial wellness programs

Welcome to the Small Business Run Down. Each day we bring you stories and trends that impact small business owners and their workforce.

On today’s agenda: California construction worker classification, small business cyber security vulnerability, and President Trump’s plan to cut former inmate unemployment.

California construction industry subject to new law for classifying workers

A proposed state law could make it more difficult for California contractors to misclassify workers as independent contractors. If the legislation is approved, California will join New Jersey, Massachusetts, and Connecticut in using the “ABC” test to determine employee vs. independent worker classification, impacting rate of pay, benefits and payroll taxes–among other things. This law would codify a ruling by the California Supreme Court from April of last year.

The Number: 300,000. The United Brotherhood of Carpenters estimates that there are approximately 300,000 misclassified workers across the country, resulting in a loss of at least $2.6 billion in combined local and federal taxes.

The Quote: They [contractors] often count on not having to pay for things like workers’ compensation coverage, health insurance, federal and payroll taxes, figuring those savings into their bids.”

Small businesses vulnerable to cyber attacks to the tune of $50,000

A 2019 report on the State of Small Business Cyber Security indicates that small businesses pay, on average, over $50,000 each time their company is breached. 62% of small businesses do not have an in-house expert on cybersecurity and many managed service providers leave companies vulnerable to attack, resulting in significant unexpected expenses. The survey found the larger organizations, the more money lost when breached.

The Number: $53,987. On average, small businesses paid $53,987 to deal with cybersecurity breaches. Companies with between 10 and 49 employees lost $41,269, while companies with between 250 and 1000 employees paid $64,085.

The Quote: “The cyber threat landscape is getting worse.”

President calls on businesses to hire more former federal prisoners

President Trump announced yesterday his plan to cut the unemployment rate among former inmates to single digits in the next five years, urging employers to hire Americans with criminal records. This announcement follows up on the First Step Act, passed by Congress last year with broad bipartisan support, which aims to improve prisoner rehabilitation programs across the country.

The Number: 5X. The unemployment rate for Americans with criminal records is five times higher than the national unemployment rate.

The Quote: “When we say ‘hire American,’ we mean all Americans, including former inmates who have paid their debt to society.”

Employer-based financial wellness programs may help alleviate employee stress

Finances cause stress for approximately 57% of US employees, which in turn causes problems for employers. Stress can cause a decrease in productivity and an increase in health problems and some companies are combating the negative effects by offering financial wellness programs as a benefit to their employees.

The Number: $300 billion. Studies indicate that employee stress can cost employers at much at $300 billion each year.

The Quote:Stressed employees statistically lose about an hour of productivity per day by distractions from trying to solve financial woes.”

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