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September 2015 Tip of the Month

We Still See A Tougher Than Expected Job Market

We're putting this email alert together two days before Labor Day 2015 and on the heels of just reading the U.S. Department of Labor's September 4, 2015 employment figures. The Bureau of Labor Statistics told us that total non-farm payroll employment increased by 173,000 in August, and the unemployment rate edged down to 5.1%.  Alas, we at Abo and Company still find a disconnect between "Wall Street", who thrive on this data, and what we see down here on "Main Street". 

Candidly, we still see many having difficulty finding new and replacement positions. We found it curious the footnotes stating that..."In August, 1.8 million persons were marginally attached to the labor force, down by 329,000 from a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 624,000 discouraged workers in August, down by 151,000 from a year earlier.  Discouraged workers are persons not currently looking for work because they believe no jobs are available for them." We're not sure if that's the good news or the bad news or just what to take from it.

Still, we at Abo and Company always like to "dig for the tax angle". You may not realize it, but the tax law allows people who have lost their job or who are threatened with a job loss, to deduct costs of looking for a new job even if their job search is unsuccessful. Deductions are even available if you are working and looking for a better job. To be eligible to take deductions, the position you are seeking must be in your current line of work. Expenses that are deductible include the cost of advertisements, career counseling, resume typing and printing, telephone calls, local transportation, travel, lodging and meals in some cases, and other expenses related to the job search. The deduction for job-hunting expenses is a miscellaneous itemized deduction, and is only available to the extent that the itemized deductions exceed 2% of your adjusted gross income. Job hunting deductions are not permitted for taxpayers who are seeking their first job or trying to land a first job in a new career. People frequently incur outlays in connection with a job search but fail to take deductions because the search was unsuccessful.

On the other side of the equation (that be the employer), we've found flexibility has certainly found its way into the workplace of our clients and many of the businesses Abo and Company comes in contact with. While our offices are some 2 hours from Manhattan, we recall noticing the 9/11 terrorist strike induced more workers to try to telecommute. Some employers also favored the idea and still do. However, before agreeing to a telecommuting arrangement, we think employers need to make sure it will not entail any extra liability for them, and that the workers actions and performance are carefully controlled. While a call to us may be a good idea, Abo and Company has recommended some of the following ideas (okay, okay, some we picked up from proper interaction with employment and business attorneys as well as clients' insurance professionals):

  • The employer visit the off-site location to determine its suitability.
  • The employer prescribe work hours and the work week.
  • Specific telephone contact procedures are established.
  • Expense reimbursement (telephone calls, supplies, etc.) arrangements are worked out in detail.
  • Termination arrangements, including return of company equipment and data are specified.
  • Special insurance requirements be reviewed and established.
  • Telecommuters be made aware of their responsibility for any tax consequences stemming from the arrangements.
  • Employees are made aware of confidentiality of file content and data, and that procedures are established for protecting the information.

One of the greatest sources of failure of telecommuting arrangements is haste in their establishment, and resultant failure to establish precise detailed directives for carrying out the operation.

Hope you enjoyed your Labor Day!