It’s mid-year and there are a few changes that have come into effect now.
Hands-Free Cell Phones While Driving
I’ve discussed this before, but now it’s actual law in California that you cannot hold onto your cell phone while driving. It’s time to make sure you have a policy about this and that all your employees understand your policy.
I’m watching for the next stage of this law, which will probably be amendments about how to dial without using your hands. Early studies have already shown that it’s talking on the cell phone that distracts drivers much more than holding the phone. We’ve probably all experienced that problem … passing our freeway exit or turn because we’re deep into a conversation. I guess the advantage of this new law is that at least we’ll have both hands on the steering wheel when we make those sudden turns!
IRS Mileage Reimbursement
We’ve all been complaining about gas prices so it should come as no surprise that IRS has been listening. IRS has increased their mileage reimbursement rate from $0.505 to $0.585, effective July 1, 2008.
Now here’s a little food for thought about mileage reimbursement for your employees. Most small businesses that I know seem to dislike using the IRS reimbursement rate when it comes to reimbursing employees for business travel. Yes, I know you want to save money but let’s think this through. The IRS rate is the generic, approved rate you know you can claim for your business taxes (otherwise, you have to track actual costs of using the vehicles). The rate is meant to include the wear and tear on the vehicle itself (oil, tires, depreciation, etc.) plus the cost of fuel.
Okay, so if your business can claim the IRS rate as an expense, why are you failing to fully compensate your employees for the business use of their personal vehicles? You do realize that the employees are doing you a favor by adding miles and wear and tear on their personal vehicles so you can avoid purchasing company vehicles, don’t you? Yet, you actually make them pay for the "honor" of providing you with a vehicle for your business purposes. If you’re not paying the IRS reimbursement rate, your employees are probably losing money. Yes, they can actually apply for the "lost money" on their personal taxes if they think of it … but why should they have to go to the extra trouble while doing you a favor?
New Minimum Wage
On July 24, 2008, the new federal minimum wage of $6.55 per hour takes effect. Now, my California readers won’t need to worry about this because our state minimum wage is already much higher at $8.00 per hour. The rest of you, however, need to be prepared.
