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The Costs of Employee Absenteeism

The effects of chronic absenteeism on a company over time can take its toll. Three of the most costly are in the areas of morale, productivity and safety. Although separate issues, they all affect each other and they all can lead to monetary loss.

 

Employee Absenteeism

To be fair, we must make a distinction between excused and unexcused absences. Some circumstances cannot be prevented and will be absorbed by the company no matter what. No one really plans legitimate illness and emergencies. Normally, these circumstances are not frequent enough to cause a problem. For the purposes of this article, it is assumed that the absences described are not excusable, or habitual enough to be suspicious.

Morale

Employee morale is something that should not be taken lightly. Business suffers if employees are not happy. In the event that absent employees continue to misuse the PTO system in place, the workers left pick up the slack. This can cause resentment toward co-workers who are not carrying their weight. Eventually, this can build resentment against the company if managers fail to provide consequences for the absent employee’s behavior.

Resentment is not the only factor that affects morale. If company policies are not enforced consistently, disrespect for these policies become the obvious result. One employee that abuses the system is already disrespecting the company’s policies. If no consequences are enforced, other employees may follow suit.

 

Employee Productivity

Productivity

No consequences for offending employees often is coupled with no incentives for hard working ones. If good employees are carrying the load of those not working, as well as witnessing managers who are not providing effective discipline for abuse, productivity suffers. Employees don’t need to work hard if they can slack off and still get paid!

Besides the lack of incentive, there is the very real issue of productive workers being overworked. It may be they continue to do their jobs diligently, but are unable to complete tasks due to an absent employee’s job being added to their daily load.

Deadlines on projects are also hard to meet if there are not enough workers to get the job done. These issues together create a lack of productivity, which is the backbone of any business. If you are not producing, you are not making money.

 

Safety at the workplace

Safety

Some jobs are more hazardous than others but one could argue that all companies perform some hazardous tasks. A good example of this is a convenience store, where the tasks are general retail and not considered dangerous. However, if the store is understaffed, it could make it a target for theft or other crimes that may be deterred by a stronger employee presence.

Large manufacturing plants often deal with injuries no matter how well staffed. Imagine how much more hazardous a job becomes when handling heavy machinery or stock without sufficient employee coverage. A two person job that is reduced to one employee poses a significant risk of injury.

Employees injured at work results in a monetary burden on companies. The cost of medical care is immediate but can also be long lasting. The company also is dealing with yet another absence, which is what caused the problem in the first place.

There is also the unthinkable circumstance in which an employee dies, which proves costly in more ways than one. There is no adequate compensation for this sad situation.

 

Solutions

Solutions

The clues to solving a chronic employee absentee problem are given in the breakdown of the costs. The reasons for the issue stem from lack of communication, lack of discipline, and lack of rewards. If a company is having trouble with PTO abuse, these three areas can be addressed simply enough as follows:

– Communicate Clearly –

Adequate training and refresher courses for employees and managers alike leaves staffers unable to plead ignorance. Keep employees and managers informed and up to date if changes are made.

– Discipline Appropriately –

Habitual offenders need consequences. Give the absent employee a chance to correct the behavior. Other employees will see this and will respect the policies and the managers who enforce them. Consistency is the key. No favorites and no exceptions.

– Reward Hard Workers –

Don’t forget to reward hard workers. They’ve earned it. For example, a company can provide incentive by handing out plaques and a gift card for perfect attendance or a job well done.

Implemented together, these solutions will correct a problem with PTO abuse. Stopping the problem in its tracks helps avoid the costly results of chronic employee absenteeism.

 

 

Article provided by Neches FCU, with locations in Port Neches, Nederland and Beaumont.
Neches FCU is a Texas credit union and has a courteous and attentive team of professionals ready to provide services to our members. When its doors open at any of the several service centers, the mission of “Ultimate Member Satisfaction” becomes the imperative for every employee. They are respected for a personal, dynamic and upbeat work atmosphere, providing a memorable service experience, and where members are known by name.
Neches has approximately $438 Million in assets with over 45,000 members. Neches FCU is considered by members and the business community as one of the best credit unions in Texas and an actively involved partner, helping our Family, Friends and Community!

New House Bill Rekindles Debate on Online Sales Tax

 

Remote Transaction Parity Act

Remote Transaction Parity Act

The Remote Transaction Parity Act

On June 15, 2015, a bill known as the Remote Transaction Parity Act/RTPA, was introduced in the House by Representative Jason Chaffetz. The bill seems set to reinvigorate and intensify the debate about Internet sales tax. It will surely pit lawmaker against lawmaker.

Jason Chaffetz (R-UT) is the chairman of the House Oversight and Government Reform Committee. He anticipates that the bill will modernize the outdated process by which the country collects sales taxes. He wants the new bill to promote the rights of each state.

 

Physical Stores versus Online Retailers

Physical Stores versus Online Retailers

Physical Stores versus Online Retailers

Chaffetz also wants sales tax parity between brick-and-mortar stores and online retailers who operate remotely. A remote transaction is a sale that is conducted in one state and delivered to a consumer in another state. It does not involve the collection of sales taxes.

 

Draft Bill Proviso

Draft Bill Proviso

Draft Bill Provisos

According to a draft of the bill that was obtained from Chaffetz’s website, the following provisos are included:
– Audits, and the collection of remote sales taxes, will be conducted by a designated state administrator.

– Each state will enact a law for the collection of sales taxes. The law will specify what exactly the tax covers.

– Each state will create a publicly-available tax and exemption table that can be downloaded. Rates and boundary databases must also be provided.

– The tables and databases will be accessed by nationally certified software providers. The providers will generate tax returns and respond to audits. They will also remit the taxes from the remote sales to the appropriate states. They will report each transaction to the remote seller whilst protecting consumer privacy.

– Any notice of under- or over-collection of taxes will be subject to time limits. There will also be a statute of limitation.

– Software providers and sellers will not be liable for any incorrect remittance or tax collection in cases where they have been misinformed.

– If sellers gross more than $10 million in the calendar year that precedes enactment of the law, states can collect remote sales taxes in the first year of the law. The gross amount of earnings is reduced to a minimum of $5 million in the second year and a minimum of $1 million in the third year.

– The thresholds given above will be based on sellers meeting certain subsections of the Internal Revenue Code.

– Sellers operating remotely will only be subject to sales and use taxes.

– The act will not encourage states to impose any new taxes.

– The act will not apply to sales within states. It will apply to sales between one state and another.

– States will only be able to collect remote taxes if they have established certification procedures for software providers. In addition, each state must certify a number of national software providers.

 

Supreme Court Ruling

Supreme Court Ruling

Precedence and U.S. Supreme Court Rulings

The issue of remote sales tax rises above political wrangling. Precedence can be found in a number of U.S. Supreme Court rulings that concern remote sellers and sales taxes.

• 1967: The Supreme Court ruled that a state cannot require the collection of use taxes under the commerce clause if the business does not have a physical presence in the state. Use taxes equate to sales taxes imposed on purchases made out-of-state. Even though taxes are due, the onus is on customers to pay them.

• 1992: In Quill Corp. versus North Dakota, the Supreme Court upheld the physical location requirement.

 

Supreme Court Challenges

Supreme Court Challenges

Challenges to the U.S. Supreme Court Rulings

Justice Anthony Kennedy challenged the above rulings in March, 2015. He wrote that the Quill ruling is harmful and unfair to the states. Kennedy noted that the Internet was a fairly new entity in 1992. However, by 2008, online sales were totaling $3.16 trillion each year in the United States.

Kennedy wrote that consumer access to modern technology means that the business model has changed. He pointed out that physical presence should no longer be a requirement for the collection of sales taxes. Kennedy argued that the changes in business operations should herald a reconsideration of the Supreme Court rulings. He called on the legal system to find suitable precedence for requiring the Supreme Court to take a fresh look at its earlier findings.

Conclusion
Kennedy’s challenge to the Supreme Court ruling and Chaffetz’s bill mean that the issue of Internet sales taxes will remain a hot topic. The issue is not likely to be resolved quickly.

 

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Author Bio:

Hi,

I’m a Tax Pro based in Nebraska. I love to cover Tax and Accounting topics. I’m a businessperson, and enjoy chatting with individuals who run companies and help the economy along. I trust you enjoyed my column. Please do not hesitate to send me opinions. As a side note, if you are going to e-File 1099’s and other tax forms this year, give http://www.efile4biz.com a try.

These guys will file 1099 online, along with other docs, including handling printing and posting the paper docs to your sub-contractors. They’re an industry thought leader and are ahead of the pack when it comes down to data safety in the online software market.

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