While it is important to note that this debate is still very much in flux - these resources will hopefully provide some level of understanding of what is being proposed and the potential impact on employers.
Snapshot of House & Senate Health Care Proposals
Summary of House & Senate Language
Worksheet to Calculate New Employer Responsibility
Sharing Your Thoughts
Although the House has already approved a health care bill - the Senate is still at work on their version. In the end, the bills are likely to contain different provisions. So, it will be necessary for the House and Senate to meet in "conference committee" to hash out compromises. Of course, in the end, it's entirely possible that comprehensive health care reform will fail to materialize.
PBA has created a Contact Your Elected Officials page so that you can easily share your thoughts with your Members of Congress. Click Here.
The new law requires cosmetic manufacturers (and/or distributors or packers whose name appears on the label) to report to the DPH if any of their products sold in California contain a chemical ingredient suspected of causing cancer or reproductive toxicity. Such ingredients must be reported even if used at very low levels and even if a determination has been made by government agencies or scientific panels that the ingredient is safe as used in the cosmetic product.
The reporting must be done online, using DPH’s electronic reporting system. Failure to report as required could lead to civil penalties, criminal fines, or even jail. Companies can sign on and create their login name and password at https://www.safecosmeticsact.org/SafeCosmetics/Login.aspx.
The reporting deadline announced by DPH was October 14, 2009. During an October meeting with the beauty industry, the Department noted that it may be prepared to be flexible with respect to the deadline – provided that companies are demonstrating a good faith effort to comply with the law (i.e. have created accounts to log onto the online reporting system). Companies are strongly encouraged to consult with their own legal counsel in determining how best to comply with the requirements of SB 484.
PBA has prepared a detailed memorandum on the SB 484 reporting deadline. This memorandum is available to PBA members only by contacting Sam Leyvas, director of government affairs at 800.468.2274 x3437.
The SSPI – a quarterly composite index that tracks the health of and outlook for the U.S. salon/spa industry – stood at 101.9 in the third quarter, up 0.1 percent from its second quarter level. The SSPI is constructed so that the health of the salon/spa industry is measured in relation to a steady state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.
Salon/Spa Performance Index
- The beauty industry outlook remains positive in the 3rd quarter as the Salon/Spa Performance Index shows modest gain.
- For the first time in 2009, salon/spa owners report net increase in service sales.
Retail sales remain soft.
- Fully seven out of 10 salon/spa owners said they expect to have higher service sales in six months.
- 61 percent are also much more optimistic about stronger retail sales in the months ahead.
Salon/Spa Tracking Survey
- Sales performances differed across sales categories in Q3.
- 57 percent of salon/spa owners in the $500,000-$999,999 sales category reported higher service sales in Q3.
- In contrast, just 30 percent of owners with sales of $2 million or more reported higher service sales in Q3.
- 42 percent of owners with annual sales of less than $250,000 reported lower sales in Q3.
- Salon/spa owners continued to report lower retail sales volume in Q3 with 47 percent reporting lower retail sales.
- Owners in the highest sales volume category reported the softest retail sales in Q3.
- 47 percent of owners in the $1 million - $1.9 million sales category reported higher retail sales in Q3, while 40 percent reported lower sales.
- Salon/spa owners reported a reduction in customer traffic levels in Q3.
- Owners reported slightly higher staffing levels for the second consecutive quarter.
- The also reported a decline in the average workweek of their employees.
- Top challenge for salon/spa owners: “building and maintaining sales volume”.
The full SSPI and second quarter Salon/Spa Tracking Survey Report can be found at probeauty.org/businesstools/research
Two issues of immediate importance to the professional beauty industry are fairness in taxation and access to cosmetology education. H.R. 3724, the Small Business Tax Equalization and Compliance Act, would make it possible for salon owners to claim a tax credit for the FICA taxes they must now pay on their employees’ tips, a benefit that restaurant owners already receive. The legislation will also improve income reporting within the industry.
The Professional Beauty Association’s Serena Chreky of Andre Chreky, the salon
spa, and Bruce Selan, chair of PBA’s Board of Directors and vice president of
Zotos, greet Congresswoman Shelley Berkley (in pink), representing Nevada’s 1st
district, and the sponsor of H.R. 3724, the Small Business Tax Equalization and
In regards to education, the PBF supports recent Congressional efforts to promote and expand access to postsecondary education and enhance students' ability to choose the type of educational program that best meets their own individual, professional career & employment goals. In a $60 billion a year industry where job market demand for qualified applicants exceeds supply by more than three-to-one, it is vitally important to the PBF that Congress preserve a student's ability to enroll in cosmetology institutions of higher education, receive the benefits of a quality postsecondary education, and are prepared to enter the ranks of our professional workforce.
“This important event brings an entire $60 billion industry to Capitol Hill in just one day,” explains Eric Schwartz, president of the PBF. “It provides the perfect forum for our legislators to learn about important small-business and education issues that affect millions of their constituents, while they enjoy the services that are performed by 1.6 million licensed professionals hundreds of times a day in hundreds of salons in each of their districts.”
“King Research, the makers of Barbicide® is a strong supporter and member of the Professional Beauty Association, and it is critical that we support the salon/spa industry as it looks for tools and information on preventing the spread of the H1N1 virus,” said Alan Murphy, President of King Research. “Our contagious disease experts and in-house researchers are key contributors to the tools and programs King Research has launched and we want to share that information with the beauty industry.”
While the initial wave of the H1N1 flu this past spring was relatively moderate - President Obama recently declared a national emergency to deal with the "rapid increase in illness" from the H1N1 influenza virus. For small businesses – particularly salons/spas – employee absenteeism from the flu can be very disruptive to business operations. Federal and state authorities have been urging small businesses to be proactive in flu prevention and preparedness.
“We have seen an increased demand for H1N1 resources and information from salon/spa owners across the country,” said Executive Director of PBA, Steve Sleeper. “The Professional Beauty Association is committed to providing timely and relevant resources to the beauty industry and we are excited to be working with one of our valued members. Their expertise on salon/spa sanitation and disinfection is an invaluable resource as we develop resources and information for the beauty industry.”
The H1N1 education and preparedness effort kicked off with the launch of probeauty.org/flu -a robust online toolkit featuring information and resources geared specifically towards the salon/spa environment. In addition to the online toolkit, the effort will also include a webinar on salon/spa sanitation and disinfection best practices and several workshops during the International Salon & Spa Expo in Long Beach, California January 30 – February 1, 2010.
5:00 pm - 8:00 pm
Capitol Hill - Washington, DC
With complimentary haircuts, mini-manicures, and neck-and-shoulder massages, guests get to personally experience the skills and services of the country's professional beauty industry, while learning more about the issues important our industry.
Who Should Attend?
The success of Welcome to Our World has always been possible because of the generosity of salon industry professionals like you! Salon owners, licensed professionals, distributors, and manufacturers are all invited to participate in this annual event.
To learn more, visit http://www.probeautyfederation.org/
The outlook for the salon/spa industry improved in the second quarter, as the Professional Beauty Association’s (PBA) comprehensive index of salon/spa activity registered a solid gain. The Association’s Salon/Spa Performance Index (SSPI) – a new quarterly composite index that tracks the health of and outlook for the U.S. salon/spa industry – stood at 101.8 in the second quarter, up 0.7 percent from its first quarter level.
“The SSPI rose in the second quarter, and stood above 100, which is a positive sign for the overall health of our industry,” said Steve Sleeper, executive director of PBA. “Salon/spa owners reported a positive six-month economic outlook for both sales and the overall economy, while capital spending plans held relatively steady.”
The Salon/Spa Performance Index is based on the responses to PBA’s Salon/Spa Industry Tracking Survey, which is fielded quarterly among salon/spa owners nationwide on a variety of indicators including service and retail sales, customer traffic, employee/hours and capital expenditures. The Index consists of two components – the Current Situation Index and the Expectations Index.
The Salon/Spa Performance Index is constructed so that the health of the salon/spa industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.
The Current Situation Index, which measures current trends in five industry indicators (service sales, retail sales, customer traffic, employees/hours and capital expenditures), stood at 99.7 in the second quarter – up 0.9 percent from its first quarter level of 98.8. However, the Current Situation Index remained below 100 in the second quarter, which signifies contraction in the current situation indicators.
Salon/spa owners reported an improvement in service sales in the second quarter. Thirty-nine percent of salon/spa owners reported an increase in same-store service sales between the second quarters of 2008 and 2009, up from 35 percent who reported a sales gain in the first quarter. Thirty-nine percent of salon/spa owners reported a same-store service sales decline in the second quarter, down from 44 who reported lower sales in the first quarter.
Although the overall retail sales picture improved somewhat in the second quarter, salon/spa owners continued to report lower retail sales volume. Thirty-three percent of salon/spa owners reported higher retail sales between the second quarters of 2008 and 2009, up from 26 percent who reported a retail sales gain in the first quarter. Forty-four percent of salon/spa owners reported lower retail sales in the second quarter, down from 49 percent who reported similarly in the first quarter.
Salon/spa owners are also decidedly upbeat about the direction of the overall economy. Sixty-three percent of salon/spa owners said they expect economic conditions to improve in six months, while only six percent expect to see worse economic conditions in six months. This sentiment was relatively unchanged from first quarter levels.
“The Professional Beauty Association continues to supply the beauty industry with timely and relevant economic data to help our members and the industry at large make successful and strategic business decisions” said Steve Sleeper “doing so is a core mission of the PBA.”
View, Print, and Share full SSPI:
PBA Salon-Spa Performance Index - 2009 Q2
The Professional Beauty Industry (PBA) joined with several hundred other trade associations to oppose card check – and salon industry professionals from across the country have sent over 1,000 letters to members of Congress opposing this legislation.
Because of the overwhelming response from small business owners and workers, card check legislation appears to have stalled in Congress. As reported in a recent article by the New York Times, moderate Democrats in the Senate were becoming increasingly alarmed by the overwhelming number of letters and phone calls from constituents opposed to card check - and essentially put the brakes on the legislation for now.
While this is welcome news for the business community – including the salon industry – making your voice heard on this issue continues to be very important. You can learn more about this issue and send a letter to Congress by visiting PBA’s Advocacy Center at www.probeauty.org/advocacy.
Watch YouTube Video on Card Check
View, Print, and Share Background Document:
Card Check and the Salon Industry Background
PBA has prepared a snapshot of the key provisions of the Stimulus Bill that touch COBRA continuation coverage, and how employers may be affected.
With the March 1st effective date just around the corner, read, share, and download the following document:
PBA Business Alert on COBRA Feb 2009
Below is a snapshot of some of the small business tax breaks included in the Stimulus bill:
- Extension of Accelerated Depreciation
Businesses are allowed to recover the cost of capital expenditures over time according to a depreciation schedule. Last year, Congress temporarily allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write-off fifty percent of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2008 for use in the United States.
How you might benefit: The bill would extend this temporary benefit for capital expenditures incurred in 2009. PBA previously reported on how the salon industry can take advantage of this provision. Click here to see a detailed example.
- Extension of Enhanced Small Business Expensing
In order to help small businesses quickly recover the cost of certain capital expenses, small business taxpayers may elect to write-off the cost of these expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Until the end of 2010, small business taxpayers are allowed to write-off up to $125,000 (indexed for inflation) of capital expenditures subject to a phase-out once capital expenditures exceed $500,000 (indexed for inflation).
How you might benefit: Last year, Congress temporarily increased the amount that small businesses could write-off for capital expenditures incurred in 2008 to $250,000 and increased the phase-out threshold for 2008 to $800,000. The bill would extend these temporary increases for capital expenditures incurred in 2009. PBA previously reported on how the salon industry can take advantage of this provision. Click here to see a detailed example.
- 5-Year Carryback of Net Operating Losses for Small Businesses
A net operating loss occurs when a taxpayer's business deductions exceed business income. Under current law, net operating losses (“NOLs”) may be carried back to the two taxable years before the year that the loss arises (the “NOL carryback period”) and carried forward to each of the succeeding twenty taxable years after the year that the loss arises. For 2008, the bill would extend the maximum NOL carryback period from two years to five years for small businesses with gross receipts of $15 million or less.
How you might benefit: The procedure of turning net operating losses into cash is the net operating loss carryback. A carryback is more complicated than a carryover because it involves prior years' tax returns. If a 2008 net operating loss is carried back to 2006, the deduction will decrease the amount of tax due for 2006, and the excess taxes are refunded. The refund puts immediate cash in the hands of the struggling business owner. Unlike a loan, a tax refund does not have to be repaid because it represents an overpayment of tax rather than a liability. In contrast to a carryback, a carryover saves taxes in future years, which does not provide the relief needed immediately. Click here for a more detailed explanation on NOLs.
- Temporary Small Business Estimated Tax Payment Relief
The bill reduces the 2009 required estimated tax payments for certain small businesses.
Under present law, the income tax system is designed to ensure that taxpayers pay taxes throughout the year based on their income and deductions. To the extent that tax is not collected through withholding, taxpayers are required to make quarterly estimated payments of tax. The required annual payment is the lesser of 90% of the tax shown on the return or 100% of the tax shown on the return for the prior taxable year (110% if the adjusted gross income for the preceding year exceeded $150,000).
How you might benefit: This bill provides that the required annual estimated tax payments (of a qualified individuals) for taxable years beginning in 2009 is not greater than 90 % of the tax liability shown on the tax return for the preceding year.
- Incentives to Hire Unemployed Veterans and Disconnected Youth
Under current law, businesses are allowed to claim a work opportunity tax credit equal to 40 percent of the first $6,000 of wages paid to employees of one of nine targeted groups. The bill would create two new targeted groups of prospective employees: (1) unemployed veterans; and (2) disconnected youth.
How you might benefit: An individual would qualify as an unemployed veteran if they were discharged or released from active duty from the Armed Forces during the five-year period prior to hiring and received unemployment compensation for more than four weeks during the year before being hired. An individual qualifies as a disconnected youth if they are between the ages of 16 and 25 and have not been regularly employed or attended school in the past 6 months. The credit is available to an employer for qualified wages paid to members of all targeted groups. Click here to learn more.
For a more detailed summary of business tax breaks included in the Stimulus bill, please contact Sam Leyvas, PBA's director of government affairs, at 800.468.2274 x3437 or email@example.com.