UNEMPLOYMENT INCREASE DEMANDS MORE EMPLOYEE SCREENING

If Chicken Little lived today, no doubt he would be running through streets screaming, “the economy is falling.” The sudden and unexpected rise in unemployment has populated applicant pools with eager, and in many cases, desperate applicants, willing to say and do about anything to get a job. At very least, applicants needing work may be willing to take jobs they don’t like or aren’t cut out for until they can find something better. Employers who don’t identify best applicants for available positions, first time, will have to pay price of doing it over, and over, and over!

That’s bad news to employers lacking effective assessment and selection processes. Employers should utilize as many employment screening options as are legally available. Pre-employment skill, attitude, personality, and drug testing, are necessities as well as reference checks, background checks, trial periods, and interviews.

SIMPLE Retirement Plans

A relatively new type of retirement plan is now available to businesses with less than 100 employees. The new plan is called “SIMPLE” and it is easy addition to employee benefits for almost any small business. The Small Business Protection Act of 1996 first made this plan available and name stands for Savings Incentive Match Plan for Employees. It can be designed as either an IRA or a 401(k) plan and is much less expensive for an employer than other types of plans. . Here are key provisions: 1.Employees can contribute any amount up to $6,500 of pay. 2.One-person businesses are eligible. 3.Part-time and hobby businesses are eligible. 4.The money can go into any type of self-directed accounts titled as IRAs or 401(k) accounts for each participant. This includes stocks, mutual funds, banks, annuities, etc. 5.All accounts are 100% vested immediately. This means that all of money belongs to employee; employer cannot touch it under any circumstances. 6.Employers may contribute in any of following three ways: a) Match each employee’s voluntary contribution dollar for dollar up to first 3% of employee’s pay. No employer contribution is required if employee does not voluntarily contribute. b)Match 1% of pay in 2 out of 5 years after notifying employees (if using an IRA account). c)Contribute 2% of pay for each employee, regardless of whether employee makes voluntary contributions or not. 7.Normal retirement distributions will be handled in a manner similar to current IRA rules. 8.Premature distributions during first two years of participation in plan will be taxed at 25% instead of usual 10% tax penalty. 9.This plan cannot be combined with any other employer sponsored retirement plan. 10.Any form of business entity or non-profit organization may establish a SIMPLE plan, except state and local governments. 11.Plans can be established at any time of year before October 1. Plans may not be started in October, November or December. 12.Administration requirements are minimal, averaging about one hour per employee.