Protecting Your Employees, Protecting Your Business.

In today’s business environment, nearly all of us carry our cellphone at work, which means we probably have it in our cars as we drive from point A to point B. And, believe it or not, studies have shown that a texting driver is 23 times more likely to have an accident than a non-distracted driver, and that the reaction time while texting is twice as long as while legally intoxicated.

Juries across the country have sent clear messages: employers will be hit with large verdicts for damages incurred by accidents their employees caused while talking on cellphones and working.   A Virginia law firm was sued for $25 million after one of its employees allegedly driving while talking on her cellphone killed a 15-yearold girl walking along the road. Likewise, an Arkansas company paid $16.2 million to a woman severely disabled in a car accident caused by one of its employees driving while talking on his cell.

So, how can you protect your organization and your employees?

The best thing you can do is to take preventive measures beyond carrying adequate insurance liability coverage.  It is recommended that you have a policy in place stating that employees who use company-owned or leased vehicles or company-provided phones should not text, talk or otherwise use their cellphones while driving.  Further, employers should prohibit others in their organization from calling or texting employees while they are driving.

Putting the policy in place is the easy part.  The National Highway Traffic Safety Administration and the Occupational Safety and Health Administration have model policies on their websites that an employer may tailor to its individual work force. The hard part is communicating the policy and consistently enforcing it.

If your employees regularly manage phone calls or emails while traveling, it may be time to require such voice-activated dialing, headsets and other technology that can decrease distracted driving. If you’re worried about customers not getting timely communication, it may be wise to inform them of your policies as an explanation for delayed responses.

Finally, the policy should explain when and where cellphone use is permitted. For example, you may require an employee pull off the road into a parking lot to make a call or set a schedule to stop, retrieve messages and respond to calls or texts.

Given the safety and liability risks of not having a policy banning or restricting certain use of electronic devices while driving, doing nothing is not an option. Employers need to incorporate such a policy into their operations for the safety of their employees, themselves and their community.   

2012 / 2013 Bonus Depreciation & Section 179 Summary [TABLE]

The 2010 Tax Relief Act signed in December 2010 provides that qualified property acquired and placed in service during calendar 2012 qualifies for 50% bonus depreciation. For qualified property acquired and placed in service in calendar 2011, the law allowed 100% bonus depreciation. Current law provides that the bonus depreciation provisions will expire on December 31, 2012.

View the table below for a depreciation summary for 2012 and what is expected for 2013.

Related Articles: Bonus Depreciation and Section 179 Depreciation Rules for 2012
Please contact Bergan Paulsen for additional information.

Depreciation Summary
		2012			2013
Description		Section 179	50% Bonus Depreciation		Section 179	Bonus         Depreciation
Amount		$139,000	No Limit		$25,000 (plus inflation adjustment)	Not Allowed
Timeframe		Tax years beginning in 2012	Calendar Year 2012		Tax years beginning in 2013	Not Allowed
Trades		Boot Only	Adjusted tax basis		Boot Only	Not Allowed
Eligible Assets		New or used tangible personal property and computer software	New property with  <20 yr life and Qualified Leasehold Improvements		New or used tangible personal property and computer software	Not Allowed
Qualified Real Property		Not Allowed	Not Allowed		Not Allowed	Not Allowed
Phase-out Threshold		$560K - $699K	None		$200K (inflation adjusted)	Not Allowed
Iowa Depreciation		Same as federal	Not Allowed		Same as federal	Not Allowed
Election		Form 4562	Applies to all assets in class life - must elect out if not using		Form 4562	Not Allowed
AMT		Allowed	Allowed - No AMT difference unless elect out of bonus		Allowed	Not Allowed
Deduction Limitation		Taxable income limit applies	No limit		Taxable income limit applies	Not Allowed

Nonprofit Compensation under Scrutiny: How to Protect Your Organization

Historically, executive compensation for nonprofit organizations has been directed and determined by a committee or board charged with the task. Typically, this group has the responsibility of documenting and determining compensation, as is required under Section 4958 of the Internal Revenue Code and Treasury Regulation Section 53.4958-6. Compensation is considered to be reasonable if it is approved by an authorized body of individuals with no conflict of interest, comparability data was provided prior to making a determination and the authorized body documented the decision concurrently with the determination.

Due to recent budget restraints of various government entities, nonprofits have been feeling the pressure to run leaner and thus need to prove their executive compensation is appropriate. Adding complication to the issue, the media has highlighted instances of excessive compensation practices. New York Governor, Andrew Cuomo, recently created a tax force to investigate the executive compensation of the nonprofit agencies receiving taxpayer support. While the task force data has not yet been released, many believe the highly publicized instances of excessive compensation are the exception instead of the rule.

With this increased pressure, a key to combating scrutiny and ensuring all requirements are met is to take detailed minutes of compensation meetings. Minutes should include, at a minimum:

• Any preparation materials along with meeting notice given to attendees in advance.
• Those in attendance including committee members, staff and consultants. Notes should indicate when any attendees are dismissed for private discussion.
• Issues placed before the committee, a recap of information presented, alternative options considered, and, the discussions of committee members.
• The final decision of the committee.

Many nonprofit compensation committees have also elected to perform annual compensation studies as a tool to not only protect the organization, but also to give benchmark figures for budgetary planning for the retention or succession of key staff.

If you have any questions or would like to determine if your board can improve compensation discussions to meet IRS sanctions, feel free to contact any of our nonprofit specialists at 800.741.7087 or www.berganpaulsen.com.