Minimum Wage in 2015: Are You Entitled to a Raise?

For gavel over money istockemployees in many states, ringing in the New Year also meant seeing an increase to their paychecks. The following 21 states – and the District of Columbia – will see an increase in minimum wage in 2015: Alaska, Arizona, Arkansas, Colorado, Connecticut, Florida, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Oregon, Rhode Island, South Dakota, Vermont, Washington, and West Virginia. While the majority of these minimum wage bumps took effect on January 1, a handful of states have their increases scheduled for later in the year.

With the changes to minimum wage in 2015, 26 states will have minimum wages that are higher than the federal minimum wage (currently $7.25 an hour). Massachusetts and Rhode Island both saw a full dollar increase to their minimum wages, bringing the rates from $8 an hour to $9 an hour. But South Dakota saw the biggest jump of $1.25, increasing the minimum wage from $7.25 an hour to $8.50 an hour.

In general, employees are entitled to the highest of three minimum wages: federal, state, and city. Employees who live in certain, large cities will also reap the benefits of higher local minimum wages in 2015. For example, Oakland’s minimum wage will increase to $12.25 on March 2, 2015, San Francisco’s minimum wage will increase to $12.25 on May 1, 2015, and Chicago’s minimum wage will increase to $10 on July 1, 2015.

As the cost of living increases in many parts of the country, this is welcome news to employees who are struggling just to make it by.  And, employees can look forward to more good news in the next few years. Several states, and some cities, have additional minimum wage increases scheduled for 2016, 2017, and 2018.

To check your state’s minimum wage, select it from the list at Nolo’s Your Right to Minimum Wage page.

If Immigration Law Is Federal, Why Are States Passing Immigration-Related Laws?

visa_imageThink what a mess it would be if every state in the country could decide who may (or may not) receive a tourist visa, a green card, or some other immigration benefit that no one has yet dreamed up.

That’s just one of the many reasons why only the U.S. federal government may set immigration law and policy. Immigration is one of the few areas of U.S. law that is nearly uniform across the 50 states. (Exceptions exist, but let’s not get into those now.) In fact, a lawyer who becomes a member of just one state bar can move to any other U.S. state and practice immigration law there.

So what accounts for the recent news from the Washington Post that “States passed 171 immigration laws last year“?  Only Montana, Texas, Nevada, and North Dakota held back from this flurry of legislating, and apparently only because they weren’t in session at the right times.

Well, none of these states are actually handing out visas or changing existing law. (In fact, I might quibble that the headline should have replaced the words “immigration laws” with “immigration-related laws,” or “laws affecting immigrants.”)

California, for example, authorized drivers’ licenses for undocumented immigrants —  reportedly the tenth state to do so. (California also passed 53 other laws, or in many cases, “resolutions” regarding what Congress should do about immigration matters.)

Attempting to augment federal enforcement of the immigration laws was also a biggie in a number of states, as it always is. And some of these laws will eventually wind up in court and possibly be struck down, as was a 2005 Arizona law that made smuggling immigrants into a state crime. The problem there was that the court  Arizona’s action was viewed as actually conflicting with federal law.

So what’s a conflict, and what’s a complementary law? No easy answers exist. For an in-depth analysis, see “Who is Responsible for U.S. immigration policy?” by Jennifer Chacon. As Chacon concludes, “although there is a uni­form federal immigration law, and although the Supreme Court has declared unequivocally for over a cen­tury that the federal government has the exclusive power to make and enforce that law, the policies and practices of state and local governments throughout the country continue to shape the lived experience of the immigrants within their jurisdiction.”

And lawsuits over state laws, policies, and practices will no doubt be the subject of arguments and litigation into the foreseeable future.

 

New Protections for New Yorkers Against Debt Collection Abuses

The New York Department of Financial Services recently released new regulations that will better protect New Yorkers from the debt collection industry’s rampant abuses. Once the majority of the regulations go into effect on March 3, 2015 (a few of the regulations will begin in August), New York will have some of the strongest laws in the country when it comes to debt collection.

The Scope of the Problem: Debt Collectors Gone Wild

According to Governor Cuomo, in 2014 New York consumers filed more than 20,000 complaints about debt collection practices. Common complaints include harassment, aggressive collection tactics, and trying to collect the wrong amount or from the wrong person.

Many of those complaints were levelled against debt buyers – companies that buy old debts for pennies on the dollar and then try to collect them. Debt buyers often do little to verify that the debt is in fact owed. As a result, debt buyers often try to collect debts that have already been paid or settled or for which the time period to sue has passed. Debt buyers rarely give consumers any information about the debt – so consumers don’t know when it was allegedly incurred, who the original creditor was, how much the original debt was, and so on. (Learn more about how debt buyers operate.)

The complaints in New York complaints mirror those in the rest of the country; the problem abusive and unfair tactics in debt collection is widespread. The federal Consumer Financial Protection Bureau has taken notice and is attacking the problem in its own way. But it’s particularly heartening to see a state such as New York take the bull by the horns and promulgate such tough regulations. Let’s hope other states follow suit.

The New York Debt Collection Regulations

Here’s a summary of a few of the most important new rules that will soon govern debt collectors in New York.

Required Disclosures

Within five days of first contacting a consumer about a debt, a debt collector or debt buyer must provide the consumer with general information about his or her rights as well as actions the collector cannot take when collecting the debt.

The collector or debt buyer must also give the consumer information about the debt including: the name of the original creditor and an itemized accounting of the debt.

And finally (and this is a big one) if the debt collector knows or has reason to know that that statute of limitations (the time period in which the collector must bring a lawsuit to enforce the debt) may have expired, it must tell the consumer this, along with what this means if the collector sues or the consumer makes a payment anyway.

Substantiation of Debts

If the consumer disputes that he or she owes the debt, the debt collector must provide information on how to request “substantiation” of the debt. Once the consumer requests substantiation, the collector must then provide documents and statements about the debt, such as the judgment, original contract, the charge-off statement, a description of the chain of title from the original creditor to the present owner of the debt, and records of payments and settlements.

The collector must stop collection efforts until it provide substantiation.

Will the debt buyer industry have to change? Because debt buyers often don’t have information about the debts they collect (remember, they often buy them in bulk), it will be interesting to see how they deal with this new regulation. The law makes clear that the collector cannot resume collection until it provides the required documents and statements.  It follows that debt buyers will probably be barred from collecting some of the debts in their portfolios. Does this mean debt buyers start looking more closely at the debts they buy and demand better records and information from the sellers?  Let’s hope so.  Although any such change will probably occur only after a number of debt buyers get slapped by NY prosecutors for violating the regulations.

Written Confirmation of Payment or Settlement

If the collector and consumer agree upon a debt payment schedule, the collector must confirm this in writing. Written confirmation is also required once the consumer pays off the debt.

Email Communications

The debt collector may correspond through email if the consumer consents. This may be a good option for consumers that want to keep track of the debt and the status of collection but don’t want to receive annoying or harassing telephone calls.

Governor Cuomo’s press release characterized this provision as the consumer’s “right” to receive email communications. But the language of the statute says the collector “may” use email, which seems to indicate that the collector can choose not to use email.

Getting More Information

For more detailed information about the regulations, see Nolo’s article New York Laws Regulating Debt Collectors and Debt Buyers. You can also find the full text of the regulations here.

IRS Sponsors “Free File”

IRS and the Free File Alliance have teamed up on software which is available to taxpayers for return preparation, including capability in handling the health care law implications which will be pervasive.  Starting on January 20, folks will be able to take advantage.

The Free File Alliance is a consortium of 14 leading tax software companies which make their branded products available for free.  Says IRS Commissioner Koskinen, “For 12 years, this partnership between the IRS and the Free File Alliance has helped taxpayers save both money and time.”

Folks who earned $60,000 or less last year are eligible to choose from among 14 software products.  Check out IRS IR 2015-4 for more info.

New Considerations for Gift Planning

Recent law changes should cause many folks to rethink which is more important:  estate/gift planning versus income tax planning.  Fewer estates will now be subject to the death tax, and even if it does apply, the top rate of 40% is more favorable than in the past.

Gifting has long been a staple of estate planning — get rid of value during life time, and save the death tax on not only the value as of the gift date, but also the appreciation in value from gift date to death date.  And annual exclusion gifts have been particularly favored for a variety of reasons.

But consider that gifts of appreciated property carry a potential income tax cost to the beneficiary, because the donor’s income tax basis becomes the donee’s basis.  No different than before.  Sale by the donee triggers an income tax liability to him or her right away.  Also, an appreciated asset held by the donor until death allows a stepped up basis to the heir, thus wiping out income tax on pre-death appreciation altogether.

Push a pencil before deciding whether estate tax savings may outweigh income tax cost in each situation.