Post: Jan. 24, 2019
On January 15th, Gov. Andrew Cuomo revealed the details of proposed Cannabis Regulation and Taxation Act, which would restrict access to anyone under 21, automatically seal marijuana offenses on a person’s criminal record. The proposed legislation would impose three taxes on the adult-use of marijuana, which together would generate roughly $300 million in new revenues for the state by the program’s third year. According to Cuomo counties and large cities would be allowed to “opt out” of the retail industry by passing local laws that prohibit marijuana shops from opening within their jurisdictions.
Revenues from the state taxes would go toward administering a regulated cannabis program; data gathering, monitoring and reporting; a traffic safety committee; small business development and loans; substance abuse, harm reduction and mental health treatment and prevention; public health education and intervention; research on cannabis uses and applications; and program evaluation and improvements.
The bill would create a new Office of Cannabis Management (OCM) that centralizes all the licensing, enforcement and economic development functions into one entity. The OCM would administer all licensing, production, and distribution of cannabis products in the adult-use, industrial and medical cannabis markets.
Read the full article from Timesunion.com, by Bethany Bump (click here for full article)
Post: Jan. 23, 2019
From the NY Torch By Bill Hammond (click here for full article)
Health care was the dog that did not bark at Governor Andrew Cuomo’s combined State of State and budget address on Tuesday.
Given the widespread support for a statewide single-payer plan in the Legislature, and the health coverage expansions recently announced by other Democratic governors and Mayor Bill de Blasio, Cuomo might have been expected to respond with a splashy proposal of his own.
Instead, he called for appointing a commission to study “options for achieving universal access” and report back by December – a clear sign that he has no stomach for tackling the issue in this session.
The commission’s mandate, as described near the bottom of his press release, does not mention the concept of single-payer, which has passed the Assembly in each of the past four years, and enjoys broad support in the Senate’s newly installed Democratic majority:
This review process will consider all options for expanding access to care, including strengthening New York’s commercial insurance market, expanding programs to include populations that are currently ineligible or cannot afford coverage, as well as innovative reimbursement models to improve efficiency and generate savings to support expanded coverage.
Cuomo has said he supports single-payer at the federal level, but thinks a state-only plan – conservatively estimated to require a $139 billion tax hike – is not practical.
Also notably missing from his spending plan was any reform of the notoriously dysfunctional $1.1 billion Indigent Care Pool, which theoretically compensates hospitals for charity care but distributes the money with little rhyme or reason.
The health-related proposals the governor did include in his budget were relatively small-bore, such as requiring certain insurers to cover in vitro fertilization, bolstering an existing mandate for coverage of birth control and reinforcing and expanding the state laws that legalize abortion.
Meanwhile, his administration’s efforts to control Medicaid costs – a success story in his early years as governor – show signs of falling apart.
(click here for full article)
Post: Jan. 8, 2019
The Council of Industry has launched a Collaborative Recruiting Initiative, designed to allow HV Manufacturing companies to work together to promote the manufacturing sector, attract candidates and ultimately pace them into manufacturing jobs.
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By Guest Blogger Michaela Ryan, Council of Industry Intern
In the manufacturing industry, one of the challenges that we all face is attracting quality candidates. Have you ever thought about trying to reach veterans through your candidate search? Did you know that jobs can be made searchable by MOS code? MOS codes are a specific code used in the military that identifies a particular job. Each MOS code has its own job description. Active members and veterans typically know their MOS code like the back of their hand. Therefore, when a veteran is searching for a civilian job, they know that they have the qualified skills and experience if it aligns with their MOS code. This information is being implemented in various recruitment strategies when trying to attract veterans for job openings.
The Manufacturing Industry aligns nicely with many of these MOS code job descriptions. Much of the work they do is hands-on work with machines, which fits perfectly into the Manufacturing Industry. Finding information on this is simple. When you search “MOS code job search” in Google, MOS translators for civilian jobs are the first links to pop up. For example, MOS code 44E is the code for a Machinist in the Army. A veteran could type “44E” into the MOS translator and it would present a list of job openings that align with their background as a machinist in the Army. It allows veterans to use their gained experiences and skills from the military and put those skills and experiences to use in civilian jobs.
Recruiters, such as yourselves, can implement MOS code compatibility into your recruitment process by providing applicable MOS codes into your job postings. Multiple MOS codes can align with a single job. You can find a list of MOS codes categorized by military branch, for example, an Army MOS code list and a Marine MOS code list can be found here. There are numerous resources online when trying to figure out which MOS codes could apply to your job openings. This can help veterans find jobs faster that align with their prior experience and it can help you find qualified candidates by reaching a new market. This could open new doors for access to skilled candidates!
The Council of Industry started matching the jobs in our Recruiting Initiative to corresponding MOS codes. We started this to open new doors for our members to try and help solve this problem of finding qualified candidates. All of the applicable jobs will have a list of corresponding MOS code(s) implemented into the job description/posting. This will allow veterans to know that they qualify for that particular job and it will also make the job searchable by MOS code. Anyone can go to our website (Link Here) and search an MOS code and all applicable jobs will appear for candidates to easily apply. Our hope is to reach a broader candidate base for our members, as well as, assist veterans in their job search.
The Council of Industry started this process and implemented a few MOS codes into some applicable jobs already, but we need your help! As you know the jobs and qualifications better than anyone, we encourage you, as our members to follow suit and start thinking about this idea when creating a new job post. You can do this by going to the links above and searching for titles and job descriptions that are most relevant to your openings. Once you do this, you can add those applicable MOS codes into the job description. If you are apart of our Recruiting Initiative and joined iCIMS, once the MOS codes are implemented into the job posting, veterans can go to our website and search for their MOS code. If your job lists their MOS code, it will immediately show up. This will help you reach a new market of qualified candidates, in hope to help with your recruiting process.
Making MOS codes searchable with job openings is a new opportunity for you, as members, to attract veterans. By simply implementing this into your recruiting process, you can increase your likelihood of finding the quality candidate you’ve been looking for. Many other companies within various industries have already started to implement this into their recruitment process and there are a variety of tools readily available to assist in the implementation of this process. If you would like to attract veterans or find a new market of candidates during your recruitment process, this could be what you are looking for. If you have any questions or need help starting this process, feel free to reach out to us! We will be more than happy to help.
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E-Verify—the federal electronic employment eligibility verification service—has expired due to a lapse in funding and will not be available during the partial shutdown of the U.S. government that began Dec. 22, 2018.
The Department of Homeland Security (DHS), which oversees the program, announced that the website www.e-verify.gov will not be actively managed and will not be updated until after funding is restored. The agency reported that “information on this website may not be up to date. Transactions submitted via this website might not be processed and we will not be able to respond to inquiries until after appropriations are enacted.”
Follow this link to find out what is unavailable and what policies have been implemented to minimize impact to employers:
https://www.e-verify.gov/e-verify-and-e-verify-services-are-unavailable
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From Ethan Allen Workforce Solutions, a Council of Industry Associate Member
An increase in the minimum wage, intended to eventually bring New York’s state minimum wage to $15 an hour, went into effect on December 31.
As a result of a measure signed into law in April 2016, the state will continue to see minimum wage increases implemented on a regional basis. The state’s current basic minimum wage is $10.40 an hour.
Under this law, New York City employers with 11 or more employees will see the minimum wage go to $15 an hour on December 31. New York City employers with fewer than 11 employees will see the minimum wage increase to $13.50 on December 31 and rise $1.50 next year, reaching $15 at the end of 2019.
Long Island and Westchester counties will see the minimum wage rise to $12 on December 31 and then go up $1 per year, reaching $15 at the end of 2021.
The rest of the state will see the minimum wage hit $11.10 on December 31 and go up 70 cents per year until it reaches $12.50 at the end of 2020. After that, the minimum wage will continue to increase to $15 an hour on an indexed schedule.
The law contains a “safety valve” that will allow state officials beginning in 2019 to consider the effects of wage increases on regional economies before permitting scheduled increases to go into effect.
The minimum salary required for administrative and executive employees to be exempt from overtime pay in New York State is set to increase as well. Beginning December 31, 2018, the salary thresholds are as follows:
NYC employers with 11 or more employees, $1,125 per week.
NYS employers with 10 or fewer employees, $1,012.50 per week.
For Nassau, Westchester, and Suffolk County employers, $900 per week.
For other employers, $832 per week.
We are currently reviewing all employee pay rates and will be in touch shortly to discuss any necessary pay adjustments. If you have any questions, please contact us at 845-471-1200
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By Sean G. Hanagan, Jackson Lewis P.C., a Council of Industry Associate Member
Social Security Administration (SSA) has begun notifying employers that the information reported on an individual employee’s W-2 form does not match the SSA’s records with “Request for Employer Information” letters, known as “No-Match” letters.
SSA started sending these controversial informational requests in 1993, but the practice has waxed and waned in part due to litigation. In 2011, SSA resumed the practice of notifying employers of social security number mismatches. But in 2012, the Obama Administration decided to simply stop the practice.
Now, the letters are back! In July 2018, probably in response to President Donald Trump’s Buy American, Hire American Executive Order, SSA re-started the practice by sending “informational notifications” to employers and third party providers telling them of mismatches on their 2017 Forms W-2 and explaining where to find helpful resources. The plan was to send 225,000 of these notices every two weeks. Starting in Spring 2019, notices will be sent regarding 2018 Forms W-2s, but these letters, unlike the “informational” letters, will tell employers that corrections are necessary.
A mismatch does not necessarily mean that there is any wrongdoing. It can be caused by an administrative error: numbers can be reversed, names might be misspelled or changed, for instance, due to marriage. But once a letter is received, in determining how to respond, employers find themselves caught between agencies. SSA wants to maintain accurate records of earnings. ICE wants to ensure compliance with employment verification laws. And the Immigrant and Employee Rights Section of the Department of Justice (IER) wants to ensure that employers are not discriminating on the basis of citizenship, nationality or by pursuing unfair documentary practices in violation of the INA.
What is an employer to do?
- Don’t take any adverse action against an employee based on a No-Match letter alone.
- Compare the SSA information with the individual’s employment records.
- If the employer’s records match, ask the employee to check the name and number on his or her Social Security card.
- If there is a mistake on the card or the card needs to be changed or corrected, ask the employee to reach out to SSA to resolve the issue.
If the issue is not easily resolved, the employer should contact legal counsel. There are no “safe harbors.” Each case is different and must be analyzed individually to avoid missteps and penalties from either SSA, ICE, or IER.
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By: Jacqueline A. Smith, from Bond, Schoeneck & King PLLC, a Council of Industry Associate Member
Following the trend of other counties and municipalities throughout New York State who have adopted “fair chance” or “ban the box” legislation, the Westchester County Board of Legislators passed a local law on December 3 which would prohibit employers from inquiring about an applicant’s criminal conviction or arrest record in employment applications. The law, which will go into effect 90 days after it is signed by the County Executive, also bans employment advertisements, solicitations, or publications containing any “limitation, or specification in employment based on a person’s arrest record or criminal conviction.”
Earlier this year, County Executive George Latimer signed an Executive Order that banned criminal conviction questions on any applications for employment with the County government. The County Executive’s office released a statement confirming that he intends to sign this legislation that will extend the prohibition to other employers within the County as well.
Unlike New York City’s “ban the box” law that prohibits any inquiries relating to an applicant’s criminal history until after a conditional offer of employment has been extended, the Westchester County law explicitly allows an employer to make such inquiries after the employee submits his/her employment application. However, the Westchester County law reiterates the employer’s obligation to perform an analysis of the applicant’s criminal record and other factors under New York State Correction Law Article 23-A before taking any adverse employment action based on the applicant’s criminal history.
Notably, this law does not apply to applications for employment as a police officer, peace officer, or at a law enforcement agency, as statutorily defined and referenced in the law. The law also does not apply to “any actions taken by an employer pursuant to any state, federal or County law that requires criminal background checks for employment purposes or bars employment based on criminal history.”
Employers located within Westchester County should take this opportunity to review their employment applications to ensure that they do not contain any questions related to an applicant’s criminal conviction or arrest record.
Post: Dec. 19, 2018
This year’s Annual Luncheon & Member/ Associate Member Expo was our largest ever. With 300 people in attendance, 26 expo booths and 24 certificate recipients all at the spectacular Grandview in Poughkeepsie, it was an event to remember. E.J. Mc Mahon from The Empire Center for Public Policy presented those in attendance with a lot to think about relating to the 2019 New York State legislative session, budget, and the new federal tax law. This event was made possible thanks to the following generous sponsors: Allendale Machinery Systems; Bleakley Platt & Schmidt, LLP; The Chazen Companies; Fair-Rite Products Corp.; M & T Bank; Package Pavement; Think Dutchess Alliance or Business.
The Expo was a great mix of manufacturers and the companies that offer products and services to support them. Allendale Machinery Systems brought a robot that played chess and a 3D printer that printed the chess pieces. There were tables with packaging, printing, testing, HVAC, compressed air, carbon and graphite machine parts, high speed internet, restoration specialists, janitorial supplies and a variety of accounting, law, and banking professionals and many more.
The Luncheon was kicked off with a Council of Industry year in review slide show presented by Harold King, CI President. Following this recap Virginia Stoeffel, Dean of Community Services & Special Programs at Dutchess Community College and Rebecca Mazin, Recruit Right and Leadership Instructor assisted Alison Butler, CI Director of Member Programs & Services in presenting the recipients with their Certificate in Manufacturing Leadership. In 2018, the Council ran this supervisor training at DCC and Rockland Community College, with a total of 32 people completing the program, 24 of whom were at the luncheon.
After the lunch, E.J. McMahon, Founder and Research Director for The Empire Center addressed the crowd with his insight regarding the changes that will take place at the state government level in 2019 and what impact they may have economically. McMahon looked at the employment growth in New York State comparing upstate vs. downstate, migration trends which show a net domestic loss of over 1 million people since 2010 and Governor Cuomo’s budget for 2019. McMahon also explained how the Tax Cuts & Jobs Act will change income taxes and how the Employer Compensation Expensive Tax would affect companies in New York State.
The event drew to a close with reminders that there is still time to register for the 2019 Certificate in Manufacturing Leadership at Dutchess Community College and one more thank you to the sponsors: Allendale Machinery Systems; Bleakley Platt & Schmidt, LLP; The Chazen Companies; Fair-Rite Products Corp.; M & T Bank; Package Pavement; Think Dutchess.
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On December 6th the Council of Industry held an information session for members interested in the New York State Registered Apprenticeship Program. While it was well attended, there maybe be some members that were not able to attend but are interested in receiving more information.
The NYS registered apprenticeship program has two basic requirements. The first, On-the-Job Training (OJT), consists of a journey-level, skilled worker capable and willing to share their experience with an apprentice, in a hands-on manner.
The second, Related Instruction (RI), consists of learning more theoretical or knowledge-based aspects of a trade. This related instruction component requires apprentices to complete 144 hours of classroom or online training per year.
The process to complete an apprenticeship can take between 16 months and 4 years, but exceptions can be made for someone with previous experience.
Available Trades:
Where do the apprentices come from?
Existing Employees – Tools for Retention
An apprentice can be an existing employee who you are seeking to retain or develop for advancement. In this case, your current employee would have access to free online and classroom training to augment the on the job training provided. This model lends itself to the continuous development of employees while backfilling entry-level staff with a clear path for skills development.
New Employee – Career Path Opportunity
Companies can enroll their newly hired employee into an apprenticeship program. This allows new employees a formalized skills development path, access to additional training resources and onboarding assistance.
Searching for New Talent – Recruiting Tool
Job seekers are looking for steady work with the opportunity for advancement. Many job seekers are drawn to apprenticeships and jobs posted as ‘apprenticeable’ traditionally receive more applicants. If you are unsure where to start to recruit potential apprentices, learn more about our recruiting initiative and our candidate pool resources.
Incentives…Incentives and More Incentives
It’s a great time to implement an apprenticeship program. We have partnered with various organizations to offer incentives to registered apprentices.
- SUNY Apprenticeship Grant – Registered apprentices may have the opportunity to receive up $5,000 worth of courses at SUNY Community Colleges.
- WDI, Workforce Development Institute – WDI is offering up to $2,000 per registered apprentice to offset the trainers time.
- NYS Tax Credits – NYS offers $2,000+ tax credit per apprentice; this amount increases each year eventually offer $5,000 per apprentice.
- Free online training – Each registered apprentice receives a Tooling U license to complete online trade specific training. $500+ value.
- Administrative help – The Council of Industry manages the administrative aspects of the program. This includes registration, department of labor requirements and setup.
What’s in it for the apprentice?
Upon completion, the apprentice will be registered with the department of labor as a certified tradesman. For example, an apprentice who completes 8,000 hours as a CNC apprentice will receive a certification from NYS DOL and a pocket card identifying him as a Certified CNC Machinist. The apprentice will also earn foundational knowledge and skills to increase their income and potentially qualify for future advancement.
What’s in it for the company?
Most of our members indicate that workforce is their number one concern. Many of them also indicate they are hiring and training on the job. The apprentice program allows companies to enhance their current training program while creating a clear pathway that makes sense to job seekers and employees alike. Companies participating in the program are always training and developing the skills of their employees, this allows them to fill jobs from within and build the talent they need instead of hoping to find the unique skills necessary to fill positions. It is a retention tool to keep employees engaged and a recruiting tool to help differentiate your company.
The on-the-job training is done with someone from your company that already performs that trade and can be the journeyman for the apprentice to learn from. The program requires between 4,000 and 8,000 hours of on-the-job training dependant on the trade. An internship or previous training in that trade can count towards these hours. Much of this time is not instructional but time that the apprentice practices the skills taught by the journeyman while performing his work tasks. Hours are logged each day by the apprentice in relation to which skill was covered during that day’s labor.
The related instruction portion of the training can be done through an online training program called Tooling U, which is free to registered apprentices or through the local community colleges which also are offering related instruction free to registered apprentices. Time spent on this instruction can be paid or unpaid as determined by the company. The apprentice is required to complete 144 hours of related instruction each year.
There is a wage progression required as the apprentice becomes more skilled, but the company sets the starting wage and the rate of progression. Since this is a government backed program anyone that completes it will have a national certification. This is an excellent tool for companies looking to recruit people into these trades and a good way to keep people that are already showing potential.
The Council of Industry is the only organization in the Hudson Valley able to act as a sponsor and administrate this program. We are also in the process of creating a pipeline of possible apprentices but for now, it is best to consider someone you already have working at your company that has potential and interest in becoming a master of one of the trades above.
Even if you are on the fence about registering an apprentice you can still start the paperwork so that once you are ready to go it is a shorter process. There currently is no charge to register an apprentice but there this is something that may change in the future. There is also no penalty for changing your mind. If an apprentice is not working out, you can discontinue the program or switch to a new person and start over. It is relatively painless to register and just requires meeting with Johnnieanne, the Apprentice Coordinator for The Council of Industry, and signing a few papers. If you still have a question or better yet are ready to sign up, contact Johnnieanne Hansen at jhansen@councilofindustry.org or call (845) 565-1355.
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The Council of Industry has offered quality supervisory training to its members in the Hudson Valley for over 20 years. The Certificate in Manufacturing Leadership is a comprehensive group of courses that prepares supervisors for their challenging positions at manufacturing facilities. The program is designed to offer particular skill sets through day-long courses designed by manufacturers to help participants meet the challenges of the modern workplace. Participants who complete the required courses are presented with the Certificate in Manufacturing Leadership presented by the Council of Industry and Dutchess Community College. In the last few years, a few classes have gone to waitlists so don’t hesitate, register soon.
All courses are full-day classes (from 9 am – 4:30 pm) and are held at Dutchess Community College, Poughkeepsie, NY with morning coffee and lunch included on site. Though participants are encouraged to complete the course series for the most comprehensive leadership education, the Council welcomes individual course registration as well. The Early Bird Special discount ends tomorrow December 21st. Register and pay online or mail a check to receive the substantial saving from this special offer.
Classes include:
Program Cost
One Day Course Single Member: $200.00 Two or More from Same Company: $175.00 each Single Non-Member: $375.00 Early Bird Discount: $185 (must register and pay before 12/21)
Fundamentals of Leadership Single Member: $400.00 Two or More from Same Company: $350.00 each Single Non-Member: $700.00 Early Bird Discount: $370 (must register and pay before 12/21)
Entire Program Single Member: $1,700.00 Two or More from Same Company: $1,550.00 each Single Non-Member: $2,600.00 Early Bird Discount: $1600 single, $1450 each two or more from the same company (must register and pay before 12/21).
Online registration is available at https://www.councilofindustry.org/training/course-list/?ccat=certificate-in-manufacturing. If you have questions or need help registering contact Alison Butler (abutler@councilofindustry.org) or call (845) 565-1355.
Post: Dec. 18, 2018
The Council of Industry and Marist College’s Bureau of Economic Research and School of Management along with Ethan Allen Workforce Solutions have compiled and analyzed the results from the 2018 Annual Wage and Benefits survey of Hudson Valley manufacturing companies. Twenty-five companies participated in the survey this year with a combined total of 2,869 reported employees.
Wage Trends
2018 wage increases among participating companies averaged 3.1% for the management group, 2.9% for the professional group, 3.2% for the administrative/clerical group, 2.7% for the technical group, 3.2% for the manufacturing/production group, and 3.4% for the sales group. These were in line with the pay increases observed nationally, which came in at 3.1%.
Planned increases for 2019 are 2.9% for the management group, 2.7% for the professional group, 2.8% for the administrative/clerical group, 2.7% for the technical group, 2.7% for the manufacturing/production group, and 2.8% for the sales group. Nationally, pay increases for 2019 are projected to be 3.2%.
Hiring Plans
72% of respondents indicated that they are looking to do new hiring in 2019, and the vast majority (96%) indicated that they are not looking to reduce their workforce in 2019. Most new hires made in 2018 were in the manufacturing and technical groups. Approximately 35% of respondents indicated that they had positions that went unfilled in 2018. Among the positions that were reportedly difficult to fill are: Machinist Positions, Assembler, Entry Level Production, Converting Operator, Machine Operator, CNC/Manual Machinist, Industrial Maintenance Mechanic, and Sales/Product Development.
“Hiring – especially for skilled workers is an ongoing challenge for our members and these survey results confirm that fact,” said Johnnieanne Hansen, Director of Workforce Development for the Council of Industry. “We are hopeful that several initiatives we have undertaken in the past year, including our Collaborative Recruiting Program (www.HVMfgJobs.com) and our Apprentice Program will have a positive impact in 2019. We’re working to help our members find and train the workers they need.”
Hudson Valley Manufacturers are working with the Council of Industry on several initiatives to address the challenge of finding quality candidates to fill open positions. 52% of respondents reported that they utilize the Council of Industry’s Collaborative Recruiting Effort. 48% of respondents do not. This initiative was put in place to help our members who are struggling to fill the previously mentioned positions.
Health Coverage
All participating companies reported providing health care coverage for their employees, and that employee health care premiums are paid on a pre-tax basis. 21 respondents provide Dental Coverage, 20 provide a Vision/Optical Plan, and 21 provide an HSA or HRA.
Council of Industry President Harold King says, “The survey results confirm that manufacturing jobs in the region continue to provide good wages and benefits. We also see some upward pressure on wages most likely resulting from a tight labor market.”
The Council of Industry has been the manufacturer’s association of the Hudson Valley since 1910. Our membership includes manufacturers and businesses related to the manufacturing industry throughout Southeastern New York. We are a privately funded not-for-profit organization, whose mission is to promote the success of our member firms and their employees, and through them contribute to the success of the Hudson Valley Community. We provide access to training, networking opportunities, advocacy and discounts of products and services for our members.
This is the tenth wage and salary survey since a resumption of the collaboration between the Council of Industry of Southeastern New York and Marist College’s Bureau of Economic Research (BER) and the School of Management, and the fifth year that it is being co-sponsored by Ethan Allen Workforce Solutions.
Post: Dec. 6, 2018
By Steven E. Howell, CPA, DABFA – Client Service Partner, and Davide DiGenova, CPA – Tax Partner
RBT CPAs, LLP, a Council of Industry Associate Member
“A provision of the TCJA might benefit Council of Industry member firms organized as pass through entities. This provision “199A,” provides for a deduction of as much as 20% for business activates conducted by these firms.”
On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law by the President of the United States. Many of these tax law changes will apply to individual and business taxpayers commencing with their 2018 federal income tax filings. One of the key provisions of the TCJA provides the ability for taxpayers to receive a deduction for Qualified Business Income, which for simplicity purposes can be referred to as “net income”, generated by a trade or business that is conducted within a partnership, S corporation, or sole proprietorship. One might refer to this deduction as the 20% deduction or, more technically, the 199A deduction.
The amount of the 20% deduction allowed will be based on the taxpayer’s individual taxable income less income which has a preferred federal tax rate such as preferred dividends. This amount will be referred to as “adjusted taxable income”. The 20% deduction allowed in a given year will be limited to the lesser of 20% of the adjusted taxable income or 20% of the qualified business income that flows through to the taxpayer.
Determining whether a taxpayer will qualify for the 20% deduction and to what extent this deduction will be allowed is more complicated than its name may suggest. In order to understand this 20% deduction, one must first understand what types of businesses and income thresholds will disqualify a taxpayer from taking this deduction. The first threshold that must be reviewed is whether the trade or business being conducted is considered a specified service trade or business (SSTB) or if such trade or business is a business of providing services as an employee (generally, referred to as changing from an employee to an independent contractor in order to benefit from this deduction when the taxpayer is truly an employee). A SSTB is any trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial or brokerage services, investing and investment management, trading, dealing in securities, and where the principal asset is the reputation or skill of one or more employees or owners (generally referred to as an endorsement). The second threshold that must be met is that the trade or business being operated is conducted within a partnership, S corporation, or sole proprietorship. This deduction will not apply to trades or business conducted within a C corporation. The third threshold is whether taxable income exceeds $157,500 for a single income tax filer ($315,000 married filing joint).
Once the three basic thresholds have been analyzed, one can begin to determine the amount of the 20% deduction that will be allowed. If a taxpayer conducts a trade or business which generates net income and a taxpayer’s taxable income does not exceed $157,500 ($315,000 married filing joint), regardless as to whether such trade or business is a SSTB, the taxpayer will be allowed a 20% deduction for that specific trade or business.
If a taxpayer’s taxable income exceeds the $157,500 ($315,000 married filing joint) but doesn’t exceed $207,500 ($415,000 married filing joint), then there needs to be an analysis done as to the type of trade or business that the taxpayer is operating. A taxpayer who operates a SSTB and exceeds the lower threshold but not the higher threshold, will begin to lose the 20% deduction based on an income limitation and a wage limitation phase-in. If the taxpayer doesn’t operate a SSTB, the 20% deduction will be reduced by a wage limitation phase-in only.
When a taxpayer’s taxable income exceeds the $207,500 ($415,000 married filing joint), the taxpayer will be disqualified from taking a 20% deduction on the net income generated by a specific trade or business that is considered a SSTB. However, if a taxpayer doesn’t operate a SSTB, the 20% deduction will equal the lesser of 20% of the net income generated by the trade or business or the greater of 50% of wages paid by the trade or business or 25% of wages paid plus 2.5% of the unadjusted basis of assets held by the trade or business (excluding land).
As was mentioned earlier, the 20% deduction is a complex area of the TCJA. It would be worthwhile to consult with your tax advisor as to whether you will qualify for this deduction. The Internal Revenue Service issued proposed regulations during mid-August of 2018 which has provided additional guidance and has answered many questions for tax practitioners, but there are still areas which need additional clarification.
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From Engineered Tax Services
The Research and Development (R&D) Tax Credit is a permanent federal tax incentive meant to stimulate innovation, technical design and manufacturing within the U.S. Most states have a similar tax incentive as well. While the R&D Tax Credit was available since 1981, tax regulations that were finalized in December 2003 significantly increased the types of activities that qualify for the credit.
Manufacturers often do not realize that they are eligible for the Research and Development tax credit. The R&D tax credit allows companies to realize tax savings, increase cash flow and stay competitive in the marketplace. Many of the qualifying activities are considered day-to-day operations for these companies. Manufacturers who develop new or improved products or processes qualify for this incentive. Less than one-third of eligible companies realize they qualify for the R&D tax credit. Also, many of the companies that are taking the credit are not claiming all of the credits to which they are entitled.
The Research Tax Credit can provide a hidden but immediate source of cash for manufacturers from prior years, plus a significant reduction to current and future years’ federal and state tax liabilities.
Typical Qualifying Research and Development Tax Credit Activities:
- Product development using computer aided designing
- Prototyping and 3D modeling
- Designing manufacturing equipment
- Alternative material testing
- Improve manufacturing and production
- Developing new or improved products or processes
- Developing tooling and assembly design solutions
- Designing and developing cost-effective business activities or tasks
- Value engineering
- Improve product performance and manufacturing practices
- Evaluate material or substance flows
- Designing and evaluating process alternatives
- Product design processes – prototype design, development, and testing
Two Significant Enhancements to the R&D Tax Credit Began in 2016
- Companies with less than $50 million in gross receipts (prior 3-year average) can use R&D credits to reduce Alternative Minimum Tax (AMT). This is very significant, especially for flow-thru entities, whose owners are in or close to AMT every year.
- “Start-up companies” (companies with less than $5 million of gross receipts for the year and no gross receipts more than five years ago) can use R&D credits to reduce a portion of their federal payroll taxes going forward – specifically the employer’s Social Security portion of FICA taxes (6.2% of wages up to $127,200 per employee in 2017).
The R&D Tax Credit is one of the most significant tax incentives remaining under current tax law – a substantial tool for maximizing a company’s cash flow and bottom line.
Our R&D Tax Credit practice consists of engineers, CPAs, and attorneys who have extensive experience conducting R&D Tax Credit Studies at both the federal and state level. Our process begins with a free assessment to ensure that the company qualifies for the credit and would be able to utilize them. Each of our studies includes a site visit to help facilitate the study process. We also include audit support for all of our studies. This is a conservative federal and state incentive that was just made permanent by Congress as part of the 2015 PATH Act. Contact ETS for more information at 609-915-1607 or email gkimmel@engineeredtaxservices.com
Post: Dec. 5, 2018
By E.J. McMahon, Founder and Research Director, The Empire Center for Public Policy
New York State’s budget outlook for fiscal 2020 is improving, according to the FY 2019 Mid-Year Update issued today by Governor Cuomo’s Division of the Budget (DOB).
The Mid-Year Update—released 10 days past the Oct. 30 statutory deadline—pegs the budget gap at $3.070 billion for the fiscal year that starts next April 1. That’s down from $4.027 billion as of the end of the first fiscal quarter.
Assuming Cuomo sticks by his pledge to hold annual State Operating Funds budget growth to 2 percent, the state’s projected net revenue shortfall has been cut nearly in half, to $402 million from the previously projected $780 million. And if the 2 percent limit is maintained through FY 2022, the remaining gaps for the following two years would fall to $998 million and $316 million, respectively.
The significant partial gap-closing since the First Quarter Update can be traced primarily to two factors: a $303 million increase in projected miscellaneous receipts and federal grants, and a $579 million decrease in projected disbursements, which in turn stems mainly from reduction in projected debt service.
Notably, DOB hasn’t changed any of its first-quarter projections of state tax receipts—although state Comptroller Thomas DiNapoli’s office this week estimated that taxes will fall short of Cuomo’s previous projections by $116 million in fiscal 2019 and $383 million in fiscal 2020. If DiNapoli turns out to be correct, the gaps will be larger than Cuomo now expects.
An embarrassment of riches
The new numbers cast more doubt on the need to fully extend the state’s temporary higher “millionaire tax” rate, which now raises about $4.5 billion a year.
That tax, boosting the state’s top personal income tax rate from its permanent-law level of 6.85 percent to 8.82 percent, is Cuomo’s twice-extended version of a slightly higher set of temporary surtaxes first enacted under Governor David Paterson to help close budget shortfalls in 2009-10.
The Mid-Year Update, like all DOB financial plans, assumes no change to current state law—which would mean the higher millionaire tax rate expires as scheduled on Dec. 31, 2019, three-quarters of the way through the 2020 fiscal year.
Based on current revenues, this means the gaps projected on the “Adherence to 2% Spending Benchmark” bottom line of the financial plan could be closed with extended millionaire tax rates of roughly 7 percent to 7.5 percent through Dec. 31, 2021. The natural next step in such a phase-down would be to eliminate the tax entirely and revert to the permanent law top rate of 6.85 percent in 2022.
Balancing the budget with no millionaire tax after 2019 would require holding spending growth to 1.6 percent in FY 2020, and slightly below 2 percent in the following two years.
The only way Cuomo could actually spend the entire $4.5 billion raised by the millionaire tax would be to (a) invent a new category of off-budget disbursement, or (b) cut some other tax. In previous years, he’s chosen “b”—other temporary tax cuts, most recently in the form of a temporary “property tax relief credit.”
Then again, New York City Mayor Bill de Blasio, Assembly Democrats, and—last but not least—leading members of the newly elected state Senate Democratic Majority favor raising the millionaire tax even higher, in part to to generate more money for the Metropolitan Transportation Authority (MTA) and city subways.
Proponents of boosting the millionaire tax ignore the impact of the new federal tax law capping state and local tax (SALT) deductions, which has boosted New York’s effective marginal income tax rate to an all-time high.
Cuomo’s next financial update is due with the first Executive Budget of his third term, next February 1. In the meantime, he’s approaching another deadline that he has gotten into the habit of casually ignoring: Nov. 15, when representatives of the governor, comptroller and legislative leaders are required to meet publicly “for the purpose of jointly reviewing available financial information to facilitate timely adoption of a budget for the next fiscal year.”
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A captive insurer is an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer’s underwriting profits. Single-parent captives have only one owner. Group captives, on the other hand, are formed when a group of individuals or entities comes together to jointly own a captive insurance company. Sometimes they are sponsored by industry associations for the benefit of their members, hence the alternative name “association captive.”
Why Join a Group Captive?
Like single-owner captive insurers, group captive insurers offer the key benefits of pricing stability, insurance coverage stability, and improved services. However, the use of group captives is feasible for organizations that do not have adequate capital resources to form their own single-parent captive. Other benefits of the group captive approach are examined below.
- Improved Loss Forecasting and Greater Risk Retention Potential – Given the law of large numbers, overall claim experience can be predicted with a higher degree of confidence for a group captive insurer than if a single organization’s exposures were being covered.
- Mass Purchasing Power – Group captives can obtain services and reinsurance more cost-effectively than if each member of the group attempted to obtain such services and reinsurance by itself.
- Reduced Overhead – General management overhead is reduced in a group captive insurer due to economies of scale. The per-member cost of administering a group captive is decidedly lower than if the identical coverage is obtained in a single-owner arrangement.
- Increased Loss Control Emphasis – The group captive structure imposes a sharing of losses on its members. This ultimately produces peer pressure and healthy competition among the members to enforce safety practices and control claims. No member wants to feel as if it is generating more than its “fair share” of claim expenses. Participants in a group captive might find themselves voted out, nonrenewed, or canceled if they cannot live up to the group’s loss control standards.
- Retention and Return of Profits in a Cost-Effective Manner – The majority of group captive insurance companies pay dividends or otherwise distribute underwriting profits and interest to their owners or insureds. Depending upon how the captive program has been set up, the group captive can be financially advantageous, as compared to a noninsurance risk retention program or commercial insurance.
Problems Inherent in Group Captives
Because they have multiple owners, group captives are subject to a number of potential difficulties that do not plague their single-owner counterparts. These disadvantages are noted under the following headings.
- Formation/Capitalization Delays – As the number of potential members of a group captive increases, the time required to form and capitalize the venture will increase proportionately.
- Decision-Making Problems – Once a group captive has been established, the differing needs of its members may make it difficult to reach consensus on operational issues.
- Rating and Cost Allocation Controversies – Honest differences of opinion may arise between members as respects the rating process. Depending on the rating plan that is devised, some members will fare significantly better or worse than others.
- Potential Higher Costs – A group captive insurer’s initial costs are usually higher than traditional loss funding alternatives. Further, participation in a group captive might require an initial capital contribution from each member. Captive participants must keep the long-term goals of stable pricing and availability of coverage in mind. Their commitment should not be swayed by swings in the insurance market cycle.
- Profits and Earnings Distribution Conflicts – Another major area of potential disagreement pertains to the distribution of underwriting profits and earnings that accumulate on those profits. Many problems are avoided when a predetermined earnings distribution plan is in place before the captive begins to operate.
- Reduced Degree of Confidentiality – Potential group captive members are required to divulge a substantial amount of financial information. Most small business owners prefer to keep this information confidential.
- Additional Management Time – Volunteer management on boards and committees is one of the reasons group captives’ costs can be kept low, but in exchange, this requires the volunteers to expend their time and effort to manage the captive.
- Different Growth Rates of Owners – When a group captive is initially created, the members/owners arrive at a consensus on the retention levels and amount of risks insured. Over time, different members may grow much larger and desire higher retentions and/or coverage amounts.
- Potential Withdrawal of Participants – Group captives face the threat of potential large-scale capital withdrawal by their members. Of course, this could severely impair the captive’s continued financial well-being. Accordingly, when group captives are formed, clear and unambiguous procedures must be developed for dealing with these circumstances.
- Potential Tax Problems – When comparing group captives to conventional loss funding programs, captives may appear to represent the better opportunity to deduct the premiums from federal income taxes. This is especially true when comparing a group captive to a typical large deductible plan. However, unless the captive is able to withstand the Internal Revenue Service’s test regarding risk shifting and distribution, premium tax deductibility could be in jeopardy. Group captives also present additional tax issues.
Is Participating in a Group Captive Right for You?
A number of crucial factors should be considered when deciding whether to participate in a group captive. If you are interested in learning what for factors are and learning more about the Group Captive endorsed by the Council of Industry contact Owen McKane at the Reis Group.
- Who controls the facility, and are there any conflicts of interest?
- Are there any provisions for the withdrawal of participants and the entry of new participants?
- What is the minimum required participation time?
- How are premiums determined?
- What, if any, risk control efforts does the facility require of participants?
Once these and other questions are answered and the decision to participate in a captive is made, each member/owner must continue its commitment to ensure the captive remains truly workable.
Post: Nov. 15, 2018
Council of Industry friend and partner the Manufacturing and Technology Enterprise Center (M-TEC) is offering cyber security assessments to Hudson Valley manufacturers. Risk assessments are the best way for organizations to lay a solid foundation for an effective cyber security strategy. It is an ideal starting point for any business looking for guidance as to what they should focus their resources on and commit to going forward.
These assessments cost $5,600 but for a limited time a $3,000 grant is available to defray that cost.
What does a Risk Assessment Provide?
MTEC’s risk assessment is based on the standards for cyber security assessment developed by the National Institute of Standards and Technology (NIST), and can address:
- Risk identification and management
- Comprehensive understanding and awareness of current cyber security industry standards
- External vulnerability testing in regard to firewall protection and internal network exposure
- Review of current policies related to information security, data protection, and access control
- A detailed description of the vulnerabilities found through the assessment with prioritized security risks to focus on and maintenance procedures
- Assessment of current anomaly and event monitoring, as well as response planning for future
- Follow-up assessment upon completion of the initial assessment to ensure compliance with industry standards and provide documentation of such
Most small businesses believe they do not store customer information that is of value, while more than half store email addresses, phone numbers, and billing addresses.
Any company connected to the internet can expect to fall victim to cyber security as criminals expand their ability to steal money directly and turn stolen data into money. If you are a company that is connected to the internet, you have something that can be exploited.
According to the US National Center for Manufacturing Sciences (NCMS), 39% of all cyber attacks in 2016 were against the manufacturing sector, up from 33% the year before, with breaches costing between $1m and $10m.
If you think you may be at risk consider this low cost assessment from M-TEC. to find out more contact:
Phyllis Levine
Manager of Marketing & Administration
phyllis.levine@hvtdc.org
(845) 391-8214 ext.3001
Post: Nov. 1, 2018
Statewide Manufacturing Association’s Political Action Committee Releases Endorsement of Pro-Business Candidates
MIPAC, The Manufacturing & Industry Political Action Committee and the political action committee arm of MACNY, The Manufacturers Association and The Manufacturers Alliance of New York State today announced their 2018 candidate endorsements.
This year, MIPAC looked to endorse pro-manufacturing and reform-minded candidates from all areas throughout New York State, focusing their attention on key issues, including corporate tax reductions for pass through manufacturers, strengthening the State’s workforce development platform, workers compensation issues, and the increasing regulatory burdens in New York State. This year, MIPAC recognized its growing statewide presence, and is actively participating in races from across the State.
MIPAC member Nathan Andrews stated, “This year we were pleased to review responses and voting records from a number of statewide candidates. We looked for those who would best represent issues important to the state’s manufacturers. We have always maintained and understood that we will not always agree with our representatives on every issue. What is most critical is that issues important to manufacturers are heard and understood, that the lines of communication always remain open, and that good policy and open government remain priorities first and foremost to those candidates we support.”
Andrews continued, “Our sector has a number of policy driven concerns, to include costly and burdensome areas such as Paid Family Leave and the Bereavement Bill. Another area of concern is Single Payer Healthcare bill which passed in the Assembly last session. The manufacturing sector has also been actively engaged in advocating for corporate tax elimination for pass through manufacturers. As we move forward with our endorsements and the support of those candidates we think will best serve our sector’s wellbeing, we will continue working with those members elected into office on addressing these policy areas for our members.”
Based on the candidates’ responses and interviews, MIPAC is proudly endorsing and weighing in on the following Senate races:
Senate Endorsements (13)
- Elaine Phillips (R) Senate District 7
- James Skoufis (D) Senate District 39
- Terrence Murphy (R) Senate District 40
- Sue Serino (R) Senate District 41
- George Amedore (R) Senate District 46
- Joe Griffo (R) Senate District 47
- Patty Ritchie, (R) Senate District 48
- Robert Antonnacci (R) Senate District 50
- James Seward (R) Senate District 51
- Fred Akshar (R) Senate District 52
- Pamela Helming (R) Senate District 54
- Rich Funke, (R) Senate District 55
- Tom O’Mara (R) Senate District 58
Based on the candidates’ responses and interviews, MIPAC is proudly endorsing and weighing in on the following Assembly races:
Assembly Endorsements (15)
- Mark Walczyk (R) Assembly District 116
- Ken Blankenbush (R) Assembly District 117
- Will Barclay (R) Assembly District 120
- Cliff Crouch (R) Assembly District 122
- Donna Lupardo (D) Assembly District 123
- Chris Friend (R) Assembly District 124
- Gary Finch (R) Assembly District 126
- Al Stirpe (D) Assembly District 127
- Pamela Hunter (D) Assembly District 128
- Bill Magnarelli (D) Assembly District 129
- Bob Oaks (R) Assembly District 130
- Brian Kolb (R) Assembly District 131
- Phil Palmesano (R) Assembly District 132
- Robin Schimminger (D) Assembly District 140
- Ray Walter (R) Assembly District 146
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The Manufacturing-Industry Political Action Committee (MIPAC) is the political arm of the Manufacturers Association of Central New York and the Manufacturers Alliance of New York State. MIPAC is a group statewide manufacturers and businesses concerned about the status of New York’s manufacturing and business climate.
Post: Oct. 31, 2018
The Business Council of New York State’s Political Action Committee (PAC) announced its support of Governor Andrew M. Cuomo for a third term as governor of New York State. Click below for a statement from The Business Council’s President and CEO, Heather C. Briccetti, Esq.
Business Council Gubernatorial Endorsement
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E.J McMahon takes a look at the economic recovery in New York State, specifically how upstate vs. downstate has fared. Mc Mahon is the Empire Center’s founder and research director and will be the keynote speaker at our upcoming Annual Luncheon & Member / Associate Member Expo on November 30th at the Grandview in Poughkeepsie.
New York’s Uneven Economic Recovery
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Election Day is Tuesday, November 6th and our associate member Jackson Lewis PC recently shared some important law requirements regarding employee voting time off.
New York Election Law § 3-110 states that an employee is entitled to a sufficient amount of leave time that, when added to the employee’s available time outside of working hours, will enable the employee to vote. Four hours is considered sufficient time. An employee is excluded from leave if the employee has 4 consecutive hours in which to vote either between the opening of the polls and the beginning of the employee’s work shift or the end of the employee’s work shift and the close of the polls.
- Notice: The employee must provide notice of leave at least 2, but not more than 10, days prior to the election.
- Hours: The employer may specify the hours. Leave must be given at the beginning or end of the work shift, as the employer may designate, unless otherwise agreed.
- Paid: Not more than 2 hours may be without loss of pay.
- Posting Requirement: Employers must also conspicuously post a notice for employees about the law not less than 10 working days before every election. The notice must be kept posted until the close of the polls on election day. Employers that have yet to post such a notice can find a copy here: http://www.elections.ny.gov/nysboe/elections/attentionemployees.pdf
To read the entire article click here
Post: Oct. 24, 2018
Job openings hit a record in August while the total number of hires also reached a record number. Of those job openings, manufacturers are creating a historic number of new jobs. Unfortunately, the manufacturing industry faces a workforce crisis that could leave millions of lucrative jobs unfilled in the years to come. The number of unfilled manufacturing jobs is projected to continue to grow in the coming years, which could have a dampening effect on both manufacturing in the United States and broader economic growth in our country. Below are links to two articles that explore this topic in more depth.
From NAM (National Association of Manufacturers):
There Are Still 488,000 Unfilled Manufacturing Jobs in the U.S. Manufacturers Are Working to Fix It.
From CNBC:
Another great sign for the economy: Job openings hit an all-time high in August
Post: Oct. 23, 2018
Workforce has been one of the top issues for our members recently. The Council of Industry has put together an HR Network meeting to help with recruitment and we are conducting our annual Wage & Benefit Survey to help members see where their numbers fall in comparison to others in the Hudson Valley.
We have set up a presentation to help you update and upgrade your recruiting process with Recruitment Reboot a presentation by Rebecca Mazin from Recruit Right. Rebecca is also the instructor of some of our most popular Certificate in Manufacturing Leadership classes: Fundamentals of Leadership, Business Communication, and Positive Motivation & Discipline. She will identify tools and tips to change your approach to recruitment with the potential to attract the talent you are looking for. The meeting is free for all Council of Industry Members and will be held on November 2, at our offices at The Desmond Campus of Mount St. Mary College in Newburgh. Please register online so we know who will be attending: https://www.councilofindustry.org/event-seminar/hr-network-recruitment-reboot/
The CI Wage & Benefit Survey is well underway but there is still time for you to participate. With the help of Marist College’s Dr. Ken Sloan, Ethan Allen Personnel Group, The Council of Industry has developed a Wage and Benefits survey which provides meaningful results while at the same time is easy to complete. Email Johnnieanne Hansen at jhansen@councilofindustry.org for a survey link or questions.
Participation in the survey is critical to its usefulness. The more companies that participate the more valuable and reliable the data will be. As the market for manufacturing workers at all levels becomes tighter the data generated from this survey becomes increasingly important.
- Position Descriptions can be downloaded and contain the benchmark descriptions to use in matching your positions to the proper survey entry.
- Wage data should be reported as of September 30, 2018 (or as close to that date as is possible) to insure comparability of reported statistics. Wage data can be entered as hourly, weekly, monthly or annually.
- The survey is set up so that you can save and complete later so that you do not need to finish the entire survey at one time.
- Completed surveys should be submitted by November 9th.
- Results should be available early December.
*NEW THIS YEAR*
Help Us – Help You… Join our ad-hoc Survey Committee to help restructure and plan the 2019 wage and benefit survey and explore other survey topics to help meet YOUR needs. Click here to learn more and sign up for our committee meeting.
Full Results will be shared only with Council member companies that submit surveys.
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The final model of the sexual harassment policy and training guideline for employers to be in compliance with the new legislation was released on October 1st and became effective on October 9th . The final training guidelines no longer require employers to have all employees trained by January 1, 2019, they now have until October 9, 2019, a full year to complete the training. In addition, they no longer require that all new employees complete the sexual harassment training within 30 calendar days of starting their new job but instead encourage new employees to be trained “as soon as possible” after commencing employment.
Other changes include the time frame for an investigation into sexual harassment complaints no longer must be completed in 30 days but “as soon as possible” and “commenced immediately”. The statement that the employer must have a “zero -tolerance policy” for any form of sexual harassment was eliminated as it was inconsistent with federal guidelines on sexual harassment policies.
Employers are still required to have a compliant sexual harassment policy in place as of October 9, 2018, and while they are not required to use the model policy, but it must meet or exceed the state’s minimum standards and it must include the following:
- Prohibit sexual harassment in a manner consistent with the guidance issued by the Division of Human Rights;
- Provide examples of prohibited conduct;
- Include information regarding the federal and state statutory provisions concerning sexual harassment, remedies available to victims of sexual harassment, and a statement that there may be applicable local laws;
- Include a complaint form;
- Include a procedure for the timely and confidential investigation of complaints that ensures due process for all parties;
- Inform employees of external administrative and judicial remedies for addressing sexual harassment complaints;
- Clearly state that sexual harassment is a form of employee misconduct, and that sanctions will be enforced against individuals who engage in sexual harassment and against supervisory and management personnel who knowingly allow sexual harassment; and
- Clearly state that retaliation is unlawful.
Below are helpful links
Toolkit for employers: https://www.ny.gov/sites/ny.gov/files/atoms/files/SexualHarassmentPreventionToolkitforEmployers.pdf
The New York State Final Model Sexual Harassment Policy:
https://www.ny.gov/programs/combating-sexual-harassment-workplace
Guidelines: https://www.ny.gov/sites/ny.gov/files/atoms/files/SexualHarassmentPreventionModelPolicy.pdf
Post: Oct. 2, 2018
US, Mexico, and Canada Reach agreement to Update NAFTA: Here’s what’s in the “New NAFTA”
After more than a year of intense negotiations, the United States, Canada, and Mexico reached an agreement to update the North American Free Trade Agreement, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations. Congress and the legislatures in Canada and Mexico have yet to approve it, a process that is expected to take months, so most of the key provisions don’t start until 2020.
Here’s what’s in the “new NAFTA.”
New name. The new deal will be known as the United States-Mexico-Canada Agreement, or USMCA.
Big changes for cars. The goal of the new deal is to have more cars and truck parts made in North America. Starting in 2020, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.
There’s also a new rule that a significant percentage of the work done on the car must be completed by workers earning at least $16 an hour, or about three times what the typical Mexican autoworker makes. Starting in 2020, cars and trucks should have at least 30 percent of the work on the vehicle done by workers earning $16 an hour. That gradually moves up to 40 percent for cars by 2023.
Dairy Canada opens up its milk market to U.S. farmers. Canada has a complex milk and dairy system. To ensure Canadian dairy farmers don’t go bankrupt, the Canadian government restricts how much dairy can be produced in the country and how much foreign dairy can enter to keep milk prices high. In the end, Canada is keeping most of its complex system in place, but it is giving a greater market share to U.S. dairy farmers. U.S. negotiators say they got a major victory by forcing Canada to eliminate the pricing scheme for what are known as Class 7 dairy products. That means U.S. dairy farmers can probably send a lot more milk protein concentrate, skim milk powder and infant formula to Canada (and those products are relatively easy to transport and store).
Dispute Resolution Chapter 19, allowing for a special dispute process, stays intact. Chapter 19 allows Canada, Mexico, and the United States to challenge one another’s anti-dumping and countervailing duties in front of a panel of representatives from each country. This is generally a much easier process than trying to challenge a trade practice in a U.S. court. Over the years, Canada has successfully used Chapter 19 to challenge the United States on its softwood lumber restrictions.
Side Letters Mexico and Canada get assurance the US won’t pound them with auto tariffs. Along with the new trade deal, the administration signed “side letters” allowing the two nations to mostly dodge Trump’s auto tariffs. The side letters say Canada and Mexico can continue sending about the same number of vehicles and parts across the border free of charge, regardless of whether auto tariffs go into effect down the road. Only parts above that quota could face tariffs.
Steel and Aluminum These tariffs stay in place (for now). Canada wanted the US to stop the 25 percent tariffs on Canadian steel. That didn’t happen — yet. The two countries are still discussing lifting those tariffs, but a senior White House official said Sunday that process is on a “completely separate track.”
Improved labor and environmental rights. The USMCA makes a number of significant upgrades to environmental and labor regulations, especially regarding Mexico. For example, the USMCA stipulates that Mexican trucks that cross the border into the United States must meet higher safety regulations and that Mexican workers must have more ability to organize and form unions. Some of these provisions might be difficult to enforce, but the Trump administration says it is committed to ensuring these happen — a reason U.S. labor unions and some Democrats are cheering the new rules.
Increased intellectual property protections. The new IP chapter is 63 pages and contains more-stringent protections for patents and trademarks, including for biotech, financial services, and even domain names. Many business leaders and legal experts believed these updates were necessary given that the original agreement was negotiated 25 years ago.
NAFTA Chapter 11, Is (mostly) gone. Chapter 11 is eliminated entirely for Canada and mostly for Mexico, except for some key industries such as energy and telecommunications. Chapter 11 gave companies and investors a special process to resolve disputes with one of the governments in NAFTA. The idea was that if investors put a lot of money into a project and then the government changed the rules, there was a clear dispute process — outside the court system — where investors could get their problem resolved.
