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Tuesday, January 22, 2013

Doing business in the Golden State never gets easier

Yesterday from about 3:00 PM to after 6:00 PM I was stuck in one of those endless meetings. Our company is going to have to change the way we do our payroll for California. We're doing business in multiple states and with the exception of the Golden State we have a fairly free hand to keep our own pay schedule. California law now decrees that employees must be paid within seven days of the end of a particular pay period. Our normal routine elsewhere is to pay on Thursday for the pay period ending on the Sunday eleven days earlier. The reasons for taking eleven days to prepare our payroll are various but they all come down to one thing: the incredible complexity of our far-flung system.

For one thing, in most of our client locations there are no time clocks. We assign security officers to more than 300 client location throughout the country. It is thus impossible to centrally and electronically account for their time. We rely on time sheets turned in, client time tracking systems, supervisor log sheets, post-commander schedules, etc. It's complex...very complex. But we've managed to get it done within those eleven days week after week. It's a part of the job I've been doing for the past 16 years.

Time tracking is only a small part of the picture of course. There's also all the other little things that go along with payroll that nobody ever thinks about; all the child support and wage garnishments; all the various state licensing required in order to be a security guard and the tracking of license expiration dates, continuing education, state fees to be deducted from paychecks, etc. In addition to this mandatory complexity we also offer payroll advances. This is a highly popular feature of working at my company. You don't have to go to one of those nearly-criminal check-cashing payday advance fly-by-nights. We don't charge interest because they've already worked the hours and we already owe them that money. They're just getting it a little early. Did I mention our employee taxi service? You say your car is broken down? For a nominal fee we will transport you to your post. All these licensing fees, payroll advances, transports, child support requirements, tax levies, and garnishments in a thousand different flavors are all waiting their turn to be handled within that eleven day window. All-in-all payroll is a rolling nightmare that resets every Thursday.

Except that now ... we have to get California's payroll to them by Sunday night. What a screaming nightmare! It just doesn't ever get better does it? When was the last time that California did something that made it easier instead of harder on employers? They've already got this insane overtime system where if employees work more than eight hours in a single day, hours after eight are paid at time-and-a-half, while hours after twelve are paid at double-time. Moreover there's the seven day rule. If any employee works seven or more consecutive days without a day off—even if that's only one hour a day—the seventh and every day thereafter are paid at time-and-a-half—with hours over eight paid at double-time. Finally last but not least there's still the time-and-a-half after 40 hours in a week rule. In short it's not hard to get paid time-and-a-half or double-time in California.

So do we try to pay everyone in the entire country by Monday and keep one pay-day, or do we have two pay-days? Two payroll tax deposits? Two sets of payroll registers...and on and on and on. I'll save you the suspense it's the latter. It's stuff like this that makes me believe that the entire state of California is likely to go the way of Detroit. So you'll understand my confusion when I stumbled upon this:
SACRAMENTO -- As he prepares to deliver the third State of the State speech of his third term on Thursday, Gov. Jerry Brown will be peering down from a lofty political perch that he may never ascend to again.

Even this late in his political travels, the 74-year-old Brown can safely be called a political phenomenon. He's fresh off producing what many are calling a "miracle" deficit-free budget only two years after inheriting $27 billion in red ink. And the budget came only two months after he shocked the political world with his triumphant tax-hike ballot measure, Proposition 30.

Brown now has a command of the Capitol stage as only a handful of California politicians -- one of them his father, Gov. Pat Brown

Gov. Jerry Brown jokes with reporter during a news conference where he unveiled his 2013-14 state budget at the Capitol in Sacramento, Jan. 10, 2013. (Rich Pedroncelli/AP)-- have enjoyed. And it's a good time for the son to have the wind at his back, as he prepares to push through a slew of major projects, ranging from a bullet train to a huge new water project.

"It's been a long time since any governor has been riding this high," said Ethan Rarick, director of UC Berkeley's Matsui Center at the Institute of Governmental Studies. "I'd say that Jerry Brown 2.0 has disproved skeptics every step of the way. If the economy goes south, they'll come back. But for now, it's hard to see how you could've done better than he's done."
They're touting revenue they haven't even collected yet and proclaiming that their deficit worries are over! What a scream! I don't know why they don't build five or ten bullet trains if all it takes to balance the budget is raising taxes. Why... who knows what they could do if they just raised taxes to one-hundred percent? You know what? That's a funny thing actually, because I found exactly that story recently where the magnificent and sagacious Governor Jerry Brown did exactly that:
Golden state leaders expressed shock and dismay today when the State Treasury announced that income tax revenues for the last quarter had dropped to near zero in spite of a recent increase in the effective income tax rate to 100%.

"This is not possible" said a visibly shaken Governor Jerry Brown as he sunbathed under a full moon at the state capitol. "Before every one of the umpteen-odd times my administration has raised taxes, we've commissioned studies by prestigious universities on the potential effects. Each of those studies concluded people really don't care about tax rates and that quality-of-life issues, like being able to sing Kumbaya on the beach while stoned, are more important to the public. Every single one of those studies predicted revenues would go UP after we increased taxes, but every time they fell. It simply doesn't make sense - studies by prestigious universities are never wrong."

Brown said he would propose commissioning a study by a prestigious university to study the previous studies by prestigious universities.

New state treasurer and former theatrical producer Max Bialystock was particularly alarmed at the latest figures. "Our projections were for one trillion dollars in revenue this quarter and every penny of that has been allocated already: 100% for the teachers pensions, 100% for the state employees pensions, 100% for the governor's pension, etc, etc. Requiring one trillion dollars and collecting zero dollars puts us in a big hole - I don't have the exact figures in front of me but I'm sure it's a lot."

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