Friday, December 26, 2008

818 Area Code Overlay with 747 Area Code Begins in 2009

The California Public Utilities Commission (CPUC) has forecasted that the 818 area code (San Fernando Valley, California) will run out of telephone numbers in the third quarter of 2009 and has therefore announced an overlay with new area code 747; that is, as is the case with the old 310 and new 424 area codes, both area codes will exist in a single geographic area, with most new telephone numbers assigned receiving the new 747 area code.

Because an 818 and a 747 telephone number may therefore be in the same house or office building, ten-digit dialing (dialing the area code plus the number) will become mandatory in the 818 area code, effective April 18, 2009. The advantage of an overlay rather than a split is that any person or business with an 818 number will be able to keep that number, and no decision has to be made as to what geographic are retains the 818 area code and what area must adapt the new area code. Public hearings showed the public favored the overlay solution.

Cities in area code 818 include Agoura, Agoura Hills, Arleta, Calabasas, Canoga Park, Chatsworth, Encino, Glendale, Granada Hills, Hidden Hills, La CaƱada Flintridge, Lake View Terrace, Mission Hills, North Hills, North Hollywood, Northridge, Pacoima, Panorama City, Reseda, San Fernando, Sherman Oaks, Studio City, Sunland, Sun Valley, Sylmar, Tarzana, Toluca Lake, Topanga, Tujunga, Universal City, Valley Village, Van Nuys, West Hills, Westlake Village, Winnetka, Woodland Hills, and of course "Media Capital of the World" Burbank.

More information: CPUC 818 Area Code Change Information

Wednesday, December 24, 2008

California Scheming: What One-Party Rule Is Doing To Once-Golden State

California Scheming: What One-Party Rule Is Doing To Once-Golden State, Investor's Business Daily editorial, December 22, 2008:
.... As the financial crisis in California gets worse, it's pretty clear the real problem isn't the budget at all, but a political system that has resulted in a dysfunctional one-party state. ....

A reasonable response from a mature group of individuals might be to cut spending — especially since polls show that most Californians don't believe their taxes should be raised. Instead, they've chosen to thumb their noses at the people's will. It shows the danger of what is in effect California's one-party rule. .... Frustrated with their inability to raise taxes, Democrats got creative: They decided they could declare outright hikes in taxes to be "fee increases." This would let them pass a massive $9.3 billion in tax hikes without consulting Republicans in the legislature, in direct violation of state law. ....

California is already the most costly place in America to do business, according to the Milken Institute's business cost index. Its business costs in 2006 were 23% higher than the average for the rest of the states, and well above those of its neighboring states.

Worse, energy costs are already 35% higher than the national average. With California's costly new CO2 mandates about to kick in, the economy could well grind to a halt.

Such business mainstays as Intel, Exxel Outdoors, Toyota and Tesla have already left California. Intel is a particularly alarming example: The world leader in chip technology started in Silicon Valley but no longer makes anything in California.

Since 2001, according to the California Manufacturers and Technology Association, the state has lost 440,000 high-wage jobs. Today, the state's jobless rate of 8.4% is third-highest in the nation.

Even Hollywood feels the pinch. In 2003, 66% of Hollywood's feature films were made in-state; today, it's down to 31%. Increasingly, Hollywood is a state of mind — not a place to do business.

Things are so bad that, just last week, 25 business groups wrote an open letter to the state's legislature begging it to think about the role businesses play in the economy.

We wish them luck. Unfortunately, instead of aggressively addressing these competitiveness problems, California's Democrats think they can simply tax their way back to prosperity. They can't.

California's tax base is so narrow — 1% of the population pay 50% of income taxes — that you can't "tax the rich" and get more revenue, a long-held Democratic fantasy. California individuals today bear the sixth-highest tax burden in the nation. Raising taxes won't do anything but drive off productive workers and kill the economy.

It's already happening. Tired with having their voices ignored and faced with soaring taxes, high housing costs and state fiscal chaos, Californians are leaving in droves. They're voting with their feet.

Last year, 135,173 more people left California than moved in, the fourth straight year of net out-migration. As the Los Angeles Times accurately noted, "the trend remains significant because such declines usually occur when working Californians decide better opportunities lie elsewhere."

Members of California's one-party ruling class better start listening to their businesses and productive, overburdened taxpayers, or pretty soon they won't have an economy to fund their government. ....
See also:

Gas Buddy USA Temperature Map

California Legislature Plans To Increase Taxes Amid Recession

Study: Los Angeles, Santa Monica Among 10 Most Expensive Places to Do Business in United States

Monday, December 22, 2008

California Legislature Plans To Increase Taxes Amid Recession

State Democrats Plan To Increase Taxes, Los Angeles Times, December 17, 2008:
Democratic legislative leaders are planning to use a series of complex legal maneuvers to raise Californians' gas, sales and income taxes over the objection of Republican lawmakers, who have been able to block such proposals in the past.

Under the Democrats' plan, sales taxes would increase by three-fourths of a cent. Gas taxes would go up by 13.5 cents per gallon. And a surcharge of 2.5% would be added to income taxes.
More coverage: California Democrats Devise Plan To Hike Taxes:
By structuring them as fees, they would skirt GOP opponents and raise $9.3 billion; A court fight looms
, Los Angeles Times, Decemeber 18, 2008.

See also:

Study: Los Angeles, Santa Monica Among 10 Most Expensive Places to Do Business in United States

2009 California Employer Payroll Tax Rates

Wednesday, December 17, 2008

2009 California Employer Payroll Tax Rates

The base payroll tax rates for 2009 for California employers have been announced by the Employment Development Department (EDD), and are as follows:
Unemployment Insurance (UI): 3.4% of the first $7,000 of wages per employee, per year (however, an emergency surcharge is also in effect);

Employment Training Fund (ETT): 0.1% of the first $7,000 of wages per employee, per year;

State Disability Insurance (SDI): 1.1% of the first $90,669 of wages per employee, per year (up from $86,698, and up from 0.8% in 2008 and 0.6% in 2007)
Established employers may have a higher or lower UI rate, based on various factors. An emergency UI fund surcharge is in effect for the year.

If you are an employer or prospective employer unsure whether your current or prospective worker is properly classified as an employee or an independent contractor, you should hire an employment law attorney to advise you (I offer these services). Improper classification can lead to costly penalties and interest, as well as the assessment of back taxes.

Additionally, there are a host of legal hoops to jump through - which usually aren't, exposing employers to liability - when hiring a California employee (or an independent contractor). In either case, the relationship should generally be documented in a custom-drafted written employment or independent contractor agreement.

This article, written by a former director of EDD, is a few years old, but provides some general advice for employers on keeping their UI rates as low as possible.

Monday, December 15, 2008

Study: Los Angeles, Santa Monica Among 10 Most Expensive Places to Do Business in United States

And predicted to get worse. Westlake Village rated most business friendly in Los Angeles County. The Daily News reports:
The city of Los Angeles will finish 2008 in familiar company: Among the 10 most expensive places in the country to do business, according to a study released today.

Santa Monica is also on the list compiled by the 14th annual Kosmont-Rose Institute Cost of Doing Business Survey released by the Rose Institute of State & Local Government at Claremont McKenna College.

Los Angeles' placement on the list has remained steady, but at least it hasn't gotten any worse in the past year, according to Larry Kosmont, the survey's founder and president and chief executive officer of Kosmont Companies.

"Cities that charge the highest license fees such as Los Angeles, Philadelphia, and Cincinnati are often those that have a history of uneven relations with the business community," Kosmont said.

But Robert "Bud" Ovrom, Los Angeles' deputy mayor of economic development and housing, said the city is making progress.

For example, next year the city starts the final phase of a five-year plan to reduce the business tax by 15 percent. The final installment, a 3.9 percent reduction, kicks in Jan. 1.

"When I'm talking to companies I almost never hear about business taxes. I don't even hear much about workers' comp," Ovrom said.

"Everything I hear today is (about) the quality of the work force, schools, traffic and affordable housing." ....
On the contrary, the author's clients are more concerned with the high costs of state business taxes,* local business taxes, regulation, and workers' comp. Perhaps Ovrom's conversations are primarily with larger companies...? The article continues:
Los Angeles is challenging for businesses because of its fee and tax structure, it said. And while California cities are more competitive than in the past few years, costs for businesses remain high.

It also noted that Los Angeles County continues to be one of the nation's most expensive places for business and 10 of its cities are among the 50 most costly. The Bay Area is pricey, too.

The situation will worsen next year, Kosmont said, as voter-approved tax and fee increases kick in.

"What is happening in California is the cities are going to the ballot box and winning tax increases," Kosmont said. "Some of these cities were Los Angeles County cities. That makes a bad climate even worse."

Kosmont said that California and many of its cities have been expensive for a long time, but some have tried to compensate with aggressive economic development and redevelopment programs.

But now all are struggling with the state's budget deficit, which is the largest in its history.

The survey compares 402 cities nationwide based on the array of taxes and fees each imposes. They include sales, utility, income, property, and business taxes....

It noted that the highest-cost cities, such as Santa Monica and Oakland, cluster around the aging urban cores, while newer bedroom communities in the outer suburbs charge developers for their growth and pass on the savings to businesses to stimulate their economies.

For example, Kosmont said the least costly city in the county is Westlake Village.

"It has no business tax, no utility tax and very low property taxes.

So it is one of the bargains," Kosmont said.

That's by design, said City Manager Raymond B. Taylor.

"We have strived to be one of the most business-friendly cities in California since our inception in 1981," Taylor said.

About 8,800 people live in the city that abuts the Ventura County line. But there are 850 businesses in the village that generate 11,000 jobs.

"The city recognizes the value and the role that businesses play in terms of job development and the vibrancy of the community," Taylor said.
* A domestic corporation in Utah costs a minimum of $100 in annual franchise tax payable to the state for the privilege of doing business as a corporation in the state; in California, $800, among the highest cost in the nation.

See also:

California Legislature Plans To Increase Taxes

2009 California Employer Payroll Tax Rates

Thursday, December 11, 2008

Proper (Business Attorney Assisted) Set Up and Maintenance Crucial to Limited Liability Protection of Corporations and LLCs

Couldn't agree more with this excerpt from today's article by fellow Southern California WealthCounsel attorney Alexis Martin Neely:
You'll recall from last week, that I said the purpose of your business entity is to limit your liability as a business owner. This is to encourage business owners to take risks that they would not take if they had unlimited personal liability.

Here's the thing though, the shield is only intact if certain formalities are maintained, such as proper filings with the State, annual meetings of the shareholders (for corporations), and separation of all financial activities between you and the entity.

Far too often, I've come across business owners who used an incorporation service, a shoddy lawyer, or a CPA to incorporate their business and when I asked these business owners where their operating agreements, bylaws, annual meeting minutes and state filings were kept, they couldn't tell me.

Why is that? Because they didn't realize that merely filing articles of incorporation with the State does not provide liability protection.
Your corporate entity must be established correctly from the beginning with governing documents and then maintained on a yearly basis.

If you don't do that, you may come to find out too late that your business entity doesn't provide the protection you thought it did.

So, make sure that once you decide what kind of an entity to use, you set it up right and then maintain that entity.
While I'm open to a pleasant surprise one day, thusfar I have yet to review one corporation or limited liability company that was properly set up and maintained by a do-it-yourselfer (including those who used online incorporation services, paralegals, CPAs, non-business attorneys).

Friday, December 5, 2008

Holiday Parties: How Businesses Can Avoid Sexual Harassment Lawsuits

Guest Post by Jessica Hawthorne

As holiday decorations start to go up around the office and everyone is full of seasonal cheer, many businesses may find that work parties, along with a more relaxed environment, can lead to sexual harassment claims.

Much too often – especially if the event is off-site and the alcohol flows freely – the office holiday party becomes a breeding ground for this sort of behavior. It seems that some employees can get the impression that professional behavior isn’t necessary at the festivities.

But that’s not the case. If it’s a work-sponsored event, workplace etiquette applies. And unfortunately for employers, liability can be the unexpected Christmas delivery if things aren’t handled properly.

Every year, claims and lawsuits over sexual harassment problems cost companies millions of dollars. In 2007, for example, the Equal Employment Opportunity Commission received nearly 25,000 sex-discrimination complaints and fined businesses more than $135 million for violating these workplace protections, the highest level since 2002.

But businesses can protect employees against legal turmoil by taking simple steps to prevent harassment from occurring at the office holiday party – or anywhere else:
  • Advise employees of all relevant policies, such as harassment, dress code and appropriate workplace behavior.
  • Make sure all supervisors have received sexual harassment training.
  • Make sure everyone knows how to report unwanted or unwelcome behavior.
  • Remind all employees that the company's sexual harassment policies will be in full force and effect during the event.
Despite training and preparation, sexual harassment claims could arise, so employers should also be aware of how to mitigate the situation. It’s important to act swiftly if there are any complaints to determine what happened and how best to deal with the claim. That way, you will have done your harassment prevention due diligence if any legal situation arises later.

The best way to accomplish this – and follow California law – is to conduct proactive employee training and awareness against all forms of harassment.

All organizations, and that includes businesses, government agencies and non-profits, with 50 or more employees are required to train all supervisory personnel in sexual harassment prevention. Employers must prove that all of these employees take an interactive, two-hour harassment prevention course within six months of hire and every two years thereafter.

So keep in mind that while sexual harassment prevention is relevant all year round, now is a good time to give your office a refresher course. Your business should enjoy this festive time of year by keeping employees aware and preventing sexual harassment before it starts.

Jessica Hawthorne is an employment attorney the California Chamber of Commerce. More information on sexual harassment prevention training and many other workplace issues can be found at