Expected Family Contribution, also known as EFC, tells you what your family should expect to pay for college tuition, fees and room and board. Your family’s financial condition and health help to determine your EFC. EFC uses a formula, created by the federal government to determine how much a family should be able to pay for one year of a child’s college education. Federal, state, and college financial aid programs use the EFC to determine how much financial aid a family and their student are eligible to receive. How EFC is calculated After a family fills out the Free Application for Federal Student Aid or FAFSA, the official EFC is determined. This application asks questions about the student’s and parents’ income, benefits, and assets. The federally established formula takes these into account, in addition to considering family size and the number of family members who will be attending college that year. The financial aid sections of most college websites allow you to estimate your EFC based on a simplified version of the official formula. The information can help give you an idea what to expect when you fill out the FAFSA and get your official EFC. Things that can affect EFC All aspects of your family’s financial situation can affect your EFC. The student’s liquid assets and past tax year income have the most significant impact. The parents’ liquid assets and past tax year income have a lesser effect because parents are not expected to contribute as much of their money as students are. You can appeal to your school’s financial aid office to have your EFC reevaluated due to special circumstances. These may include the loss of a job or a one-time boost in income during the previous tax year. Why you need to know what your EFC is Your EFC will have a significant impact on the amount of need-based financial aid you are eligible to receive. By definition, financial need is the total cost of attending one year of school minus your EFC. Many colleges commit to meeting financial need with a combination of grants, scholarships, student loans, and work-study jobs. Once you know what your EFC is, you can look at the cost of each college and make a guess at how much financial aid you are likely to receive. You can also start planning for how you will pay for college. You can use student savings or income, parent savings or income, or loans to come up with the family contribution.

Expected Family Contribution

View Resource Expected Family Contribution
Most people will need a mortgage to finance the purchase of a home. A mortgage works much like any other loan: You borrow money from a bank, credit union or other lender and then pay it back over time. The main difference? A mortgage is the largest loan that most consumers will take on during their lifetimes. Because of this, it is important for home buyers to understand exactly what goes into a mortgage and what will be required from the prospective home buyer to obtain one. Those buyers who do their research will dramatically increase their odds of obtaining a mortgage that best fits their needs. The basics Once you take out a mortgage, you’ll make monthly payments to pay it back. The duration of your loan varies depending upon what type of loan you took out. Most homeowners go with 15-year or 30-year mortgages. When you send your payment to your lender each month, your dollars will go toward paying off several pieces of your mortgage. There is the principal balance, of course. This is the amount of money you borrowed. If you borrowed $200,000 to pay for your home that $200,000 is your principal balance. You will not only be paying down this balance, though, each time you send in a check. Some of your dollars will go toward paying off your mortgage’s interest. Interest is how lenders make money on your loan. If you take out a 30-year fixed-rate loan of $200,000 with an interest rate of 3.96 percent, you’ll pay $142,080 in interest alone if you pay off the loan at maturity. The reason this figure is so high is that $200,000 is a lot of money, and interest payments add up over time. Part of your payment, depending on the arrangement you made with your mortgage lender, might also go toward paying off your annual property taxes and homeowners insurance premiums. Both of these costs vary. In some parts of the country, homeowners might face yearly property taxes of $10,000 or more. In other parts of the country, that figure might be as low as $2,000. The Federal Reserve Bureau says that the average cost of an annual homeowners insurance policy ranges from $300 to $1,000 depending on the part of the country in which you live and the size of your home. Types of mortgages You can choose from several different types of mortgages. Each comes with its positives and negatives. The two most popular loan types are the 30-year fixed-rate mortgage and the 15-year fixed-rate mortgage. As their names suggest, the interest rate attached to these loans never changes, hence the “fixed rate.” The difference between the two loan types is their durations. In a 30-year mortgage, you’ll make loan payments for three decades to pay off your loan completely. In a 15-year mortgage, you’ll pay for just 15 years. The monthly mortgage payment attached to a 30-year fixed-rate mortgage is lower than it is with a 15-year fixed-rate mortgage because payments are spread out over a longer number of years. However, 15-year fixed-rate mortgages typically come with lower interest rates, which means that homeowners pay less interest during the life of such loans. Homeowners can also choose an adjustable-rate mortgage also. Again as the name suggests, the interest rate on these loans changes during the loan term. Often, the loan will have a fixed rate for a certain number of years, say five or seven. The rate will then adjust based on a host of economic conditions, meaning that the rate can either go up or down. The benefit of an adjustable-rate loan is that the initial interest rate is usually lower than are the ones attached to traditional fixed-rate loans. The risk, though, is that the rate will rise significantly after the fixed period ends. Escrow accounts When you buy a home, you’ll have to pay property taxes. If you are taking out a mortgage, you’ll also need to purchase homeowner’s insurance. Homeowners have the choice to either pay these fees on their own or lump them into their monthly mortgage payments and have their lenders pay them on their behalf. The second option is an escrow account. Consider property taxes: If your property taxes are $6,000 a year, you can either pay this figure in a lump sum or you can add $500 a month into your monthly mortgage payment. Your lender will then put this money into an escrow account — which is an interest-bearing account — and dip into it to pay your property tax bill when it is due. It is a good option for homeowners who do not want to save the large amount of money they’d need each year to cover their property tax bills.

Understanding Mortgages

View Resource Understanding Mortgages
You’ve found your dream home in the perfect neighborhood. There’s just one problem: You do not know if you can afford the monthly mortgage payments that will come with the home. Fortunately, there are a series of housing and debt ratios that you can use to determine whether the home you want is also one that you can afford. By studying these ratios, you’ll avoid taking out a home loan that will put you in a precarious financial situation. Housing-expense ratio The first of these ratios is the housing-to-expense ratio, also known as the front-end ratio. This ratio will tell you how much of your gross — or pre-tax — monthly income is available for using for your monthly mortgage payment. In general, you want your monthly mortgage payment — which includes your home loan’s principle, homeowner’s insurance payments, and taxes — to take up no more than 28 percent of your monthly salary. Anything higher than that could place too much of a strain on your household finances, leading eventually even to missed housing payments and foreclosure. Simply put, you cannot afford your mortgage loan payments if they total more than 28 percent of your monthly salary. To determine this ratio, multiply your annual salary by .28. Divide that result by 12 — representing the 12 monthly mortgage payments you make each year. This will show you the highest housing-to-expense ratio that you can afford. For instance, if your annual salary is $50,000, your monthly mortgage payment should total no more than $1,166. Debt-to-income ratio Your debt-to-income ratio, also known as your back-end ratio, is also important. This ratio tells you how much of your monthly salary is eaten up by all of your expenses, not just housing. Your expenses would include any recurring payment, such as your mortgage loan, car payment, student loan payment, credit card debt and child support. You want your total monthly debts to account for no more than 36 percent of your monthly income. To determine your maximum affordable debt-to-income ratio, multiply your annual salary by .36 and divide the resulting figure by 12. For that $50,000 annual salary, the maximum amount of monthly debt obligations you’d be able to afford would be $1,500. Remember, that figure includes your mortgage payment and all other monthly debts. Loan-to-value ratio There’s one more ratio you need to know when buying a home. This one, though, determines whether mortgage lenders will approve you for a mortgage for purchasing or refinancing a home. The loan-to-value ratio spells out exactly what percentage of a home’s value you are asking to finance. When purchasing a home, most private mortgage lenders will want you to put down a down payment of at least 5 percent of a home’s value. This will leave you with a loan-to-value ratio of 95 percent: You are asking the lender to finance 95 percent of your housing purchase. If you want to eliminate the private mortgage insurance requirement that comes with mortgages with down payments less than 20 percent, you’ll need a loan-to-value ratio of at least 80 percent. If you want to refinance your home loan, you’ll typically need a loan-to-value ratio of 80 percent or lower. There are programs though, some offered through the federal government, that allow owners with higher loan-to-value ratios to apply for a refinance.

Understanding Housing and Debt Ratios

View Resource Understanding Housing and Debt Ratios
You know you need a budget. Your household is spending money faster than it is coming in, making bill-paying a monthly adventure. Will you have enough dollars to pay the phone bill this month? How about the car payment? You never know. Fortunately, creating a workable household budget — one that gives you the tools to make sure that you are not spending yourself into debt each month — is less complicated than you might think. All it requires is that you take a honest look at what you spend each month and what you earn. The hardest part is sticking to your budget once you’ve drafted it. Eliminating the Fear From Budgeting The first step is to realize that a budget is not mysterious. As the Website One Money Design says, a budget is nothing more than a financial document that you use to track your income and expenses. You can use electronic budgeting software to create your household budget. Alternatively, you can just use paper and pencil. Choose the method that feels right for you. One Money Design recommends that you set a definite date — one that’s not too far away — to create your budget. If you are married or living with a significant other, you need to include your partner in the budget planning. This is important; a household budget will not work if you are watching your pennies, but your partner is blowing $5 every morning on expensive coffee. When you start to create your budget, you’ll need some necessary paperwork for reference, most notably your most recent bank statements — preferably at least three months’ worth. You’ll also need things like paycheck stubs, rental checks or disability payment stubs that document your monthly income. Income and Expenses To start your budget, list your regular monthly income streams. This will obviously include your monthly salary. It should also include any rental payments you receive, child-support or alimony payments, payments you receive for freelance work, monthly disability payments, and any monthly fees you receive as a result of a legal settlement. Now that you know exactly how much money comes into your household each month, it is time for the trickier part, listing all the money that flows out. A budget typically includes both fixed and variable expenditures. Fixed expenses include your monthly mortgage bill, car loan payment, student loan payment, monthly garbage service and rent. Others vary each month. This includes the money you spend on groceries, electric bills, the phone bill, the money you spend on gas, clothing and the dollars you spend on entertainment. Your budget should also include dollars reserved to build an emergency fund. This way, if an emergency does happen you will not have to add more debt to take care of it. The key to listing expenses is to be realistic. Your budget is not realistic if you do not save any money to go to the movies, eating out or taking short trips. Are you really committed to not having fun for a year or more? You should also adjust your budget regularly. This is especially important. If your company cuts your working hours, shaving dollars off your monthly income, you’ll need to factor that into your budget. If you pay off your car loan, you need to eliminate that expense from your budget. Shoring up Your Budget If you find that you are blowing your budget every month, it might be time to make changes either to your budget or to your spending habits. Maybe you’ve been unrealistic with how much you want to spend on clothing and entertainment each month. Adjust those budget items so they more accurately reflect how you live. Alternatively, maybe you need to change the way you spend. Holidays, for instance, are a terrible time for budgets. It is easy to get carried away on presents and entertaining. Decide exactly how much you are going to spend. Don’t go over that limit, no matter how much advertisers would like you to. You might also adjust your travel habits. It is fun to vacation, but you might want to take shorter trips or stay in less expensive hotels if this would help you meet your household budget goals.

Starting a Budget

View Resource Starting a Budget
Is your debt keeping you awake at night? Do you struggle to make the minimum monthly payments on your credit cards? Are you worried that you’ll never be able to pay back all the debt that you owe? You might be a candidate for a debt consolidation loan. When you take out a debt consolidation loan, you combine all or some of your debt into one loan. Then, instead of making several payments to multiple creditors each month, you make one payment every month until you pay your loan. Debt consolidation loans are the right option for many consumers who are overwhelmed with their debt. However, there are some potential pitfalls to taking out such loans. Credit Counseling Before taking out a debt consolidation loan, you should also sign up with a certified credit counselor. A credit counselor can help you create a realistic budget and understand the reasons for your overspending. You do not want to take out a debt consolidation loan only to run up more debt in the future. Unfortunately, many consumers who takeout these loans do exactly that. Be careful to work with an accredited credit counselor. The U.S. Department of Justice maintains a list of approved credit counseling agencies. You can search for agencies that operate in your state. Debt Consolidation Once you are ready to take out a debt consolidation loan, interview several providers. Different lenders will offer different interest rates and terms with their loans. You want to shop until you find a debt consolidation loan that provides the fees and interest rates with which you are comfortable. Remember, the goal is to pay down your debt as quickly as possible. If you take out a debt consolidation loan that comes with an unnecessarily high interest rate, it will take you longer, and cost you more, to pay down your debt. One of the criticisms of some debt consolidation loans is that consumers can spend more to pay down their debt than they would by just repaying their creditors directly. Of course, the benefits of a debt consolidation loan are three-fold: First, you’ll be making just one payment every month instead of several to a large number of creditors. That simplifies your financial life. Secondly, many debt consolidation providers negotiate with your creditors to lower the amount of money you owe. Finally, when you take out a debt consolidation loan, creditors and collection agencies will no longer harass you. As long you continue to make your monthly payment on time, those intimidating phone calls will stop. The downside of debt consolidation Like most ways to reduce your debt, debt consolidation loans do come with some negatives. First, when you take out one of these loans, your three-digit credit score will fall even further. That is a significant problem. Lenders determine who gets loans and at what interest rates based on their credit score. If your credit score is poor, you might struggle to obtain car or mortgage loans. You might even struggle to get approved for a credit card. So when you do you’ll be paying higher interest rates for the privilege of borrowing money. Secondly, you might lose money when taking out a debt consolidation loan. First, you’ll be dealing with interest rates that are often high. Secondly, lenders usually charge fees — they do vary — to consumers who need debt consolidation loans. This combination means that you might end up paying more money during the long-term to pay off your debt with a debt consolidation loan. Avoiding the pitfalls When taking out a debt consolidation loan, make sure to ask the right questions. You want to make sure that your debt consolidation loan is the first step toward a better financial future. You do not wish it to lead you into further financial difficulties. Ask debt consolidation lenders to provide you a written statement detailing exactly how much your debt consolidation loan will cost. This statement should include your interest rate and any fees associated with the loan. Pay attention to late fees. Make sure they are not exorbitant. You do not want your finances spiraling even further out of control should you make a payment a day or two late. Next, ask your debt consolidation lender how long it will take you to pay back your debt by making your regular monthly payment. You want to remove your debt as soon as you can. If the length of your debt payback seems too long, it might be time to move to a new debt consolidation lender. Ask your debt consolidation lender, too, if they will negotiate with your creditors. You want them to try to reduce the amount of money you owe. Many creditors are open to this. They would rather have some of the money that you owe them and figure that by reducing your debt it is more likely that you will pay them back at least part of what you’ve borrowed. Never agree to a monthly payment that you are not sure you can afford. You do not want a monthly payment that will represent a financial struggle. Before meeting with a debt consolidation specialist, make sure that you know exactly how much money you can afford to spend each month on paying down your debt. Finally, don’t beat yourself up too much. It is not pleasant to admit that you need help paying back your debts. However, in today’s still-challenging economy, you’ll be far from alone. Debt consolidation is not a sign of failure. It is a sign that you are willing to take the steps necessary to rebuild your financial health.

Consolidating Your Debt

View Resource Consolidating Your Debt
It’s natural for your children to be eager to open their presents on Christmas, but it might not come as naturally for them to want to give gifts to others. It takes time, energy, and perhaps even their own money to buy or make gifts that will be well received. As a parent, you’re well aware of the joy giving to others brings. Teaching your children how to give meaningful gifts that bring smiles to others will allow them to share in this important aspect of the holiday season. Gift Giving Values to Teach Rather than diving right in to take your kids to the store, you should first take the time to lay a foundation of gift giving values. These underlying principles can help children understand why they are going to give gifts and will help them to develop genuine enthusiasm for the activity. Considering the feelings of others: Start by reminding your children how they feel after they receive a gift they really enjoy. You can guide them to think about a specific gift they received from someone, and then ask how the gift giver probably felt after giving such a special gift. Guide your children to consider who they might want to give gifts to and to think about how those people might feel when they receive the gifts. Choosing appropriate gifts: Talk to your children about money and how the best gifts are not always the most expensive. Help your children brainstorm a few of the things that the people in their life might enjoy receiving from them. A question your kids can answer is, “What could I give this person to show them I care about them?” This can help your children think of meaningful gifts that will truly bring delight to the recipients. Ideas of Gifts Children Can Give You should encourage your children to brainstorm gift ideas, and they might surprise you with their creativity. However, it can help to have some ideas to suggest to get them started or to help them think of new categories of gifts if they get stuck. Purchased gifts
  • Potted plants or flowers
  • Book or movie
  • Mug and cocoa packets or tea bags
  • Christmas tree ornaments
Homemade gifts
  • Photo in a decorated frame
  • Homemade card with a handwritten note
  • Cookies or fudge
  • Woven or beaded bracelet or necklace
  • Votive candle holders
  • Painted refrigerator magnets
  • Fabric or paper bookmarks
When they are done buying or making gifts, help your children wrap the gifts and write out gift tags or cards to go with them. Being involved in each stage of the process helps them feel more ownership and get more joy out of seeing the recipient open the gift.

Teaching Your Children about Gift Buying

View Resource Teaching Your Children about Gift Buying
As an employer and small business owner, you undoubtedly understand the importance offering your employees benefits. For many employees, salary is not the only factor in their decision to accept or refuse a job offer. With their health needs, a family to provide for, and planning for their future, it is understandable that benefits are of the utmost importance to employees. Employee benefits fall into two categories. First, there are benefits which the law requires every employer to offer their employees. Secondly, there are optional benefits an employer can choose to offer in addition to required benefits. This article provides a thorough overview of required employee benefits, which include social security taxes, unemployment insurance, workers compensation, disability insurance, and leave benefits. Tax Requirements First, as an employer, you are required to withhold taxes from employee wages in line with the Federal Insurance Contributions Act. These withholding include both social security taxes and Medicare taxes. As their employer, you are legally required to withhold a certain amount from employee wages and deposit these with the Internal Revenue Service. Additionally, employers are required to match their employees’ social security and Medicare deposits. The official Social Security website provides resources to business owners including guidelines, filing instructions, and social security number verification. Also, the Internal Revenue Service website provides instructions for paying social security taxes and due dates for payment. Insurance Requirements Next, employers are required to make certain insurance benefits available to their employees. According to the U.S. Small Business Administration, some business are required to provide unemployment insurance to their employees. Each state decides its laws concerning unemployment insurance. However, the U.S. Small Business Administration maintains a listing of each state’s unemployment laws that you can access at the SBA’s website. Additionally, every state requires employers to carry workers’ compensation insurance, which can be obtained either through the state or a commercial provider. This information is also available through the U.S. Small Business Administration. Also, a few states require employers to use disability insurance to partially replace employee wages in the case of a disabling injury or condition. The states required to offer disability insurance are California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico. Employers may choose to offer health insurance benefits, retirement benefits, and incentive benefits to their employees. Leave Benefits Lastly, there are certain leave benefits that employers are legally required to offer employees. You may choose to provide jury leave, sick leave, bereavement leave, vacation leave, and personal leave. Those leave benefits are not required. However, employers are required to offer leave qualified under the Family Medical Leave Act, or FMLA. The United States Department of Labor clearly outlines the guidelines for leave under FMLA. This leave is an unpaid leave, and employees can qualify for up to 12 weeks of leave. Individuals qualify for leave under FMLA under any of the following circumstances:
  • the employee has given birth to a child in the last year and needs time off to care for the child.

  • the employee adopts a child or has a child placed with them through foster care within the last year, and the employee needs time off to care for the child.

  • the employee needs time off to care for a child, spouse, or parent with a health condition.

  • the employee has a health condition that disables them from performing their job duties.

  • a qualifying event relating to a spouse, child, or parent being a covered military member.

  • if an employee has an injured or ill service member in their family that requires care, they may qualify for up to 26 weeks up unpaid leave each year.
One requirement of leave under FMLA is that employees maintain their group health insurance plan during their leave. All public business owners are required to offer their employees leave under FMLA. Private business owners with more than 50 employees are required to offer FMLA leave as well. Because employee benefits are an important part of the life of your employees and their family, they should be important to you as their employer as well. As a small business owner, beginning with ensuring you are compliant with legal benefits requirements is a great place to start. Seeking the help of an accountant, attorney, financial advisor, or payroll specialist for both required and optional employee benefits is recommended.

Required Employee Benefits

View Resource Required Employee Benefits
Compensation is the combination of salaries, wages and benefits that employees receive in exchange for them doing a particular job. It can include an annual salary or hourly wages combined with bonus payments, benefits, and incentives. These could include group health care coverage, retirement contributions, and short-term disability insurance. A total compensation package usually includes several of these components. Assembling a comprehensive compensation and benefits package can be daunting. Not only do you have to comply with legally regulated employee benefits, but you also have to ensure that you are offering a competitive package that attracts and retain talented employees that can help your business thrive. Components of Employee Compensation Salary and Wages In a compensation package, these typically make up the single largest component. This comes as no surprise since they are what potential and current employees use as a common point of comparison. The person’s experience and skills should determine the salary, with subsequent increases in the future depending on the employee’s value, performance level, and contribution to the company. Bonuses Employee bonuses are one common way employers provide performance incentives and are usually paid out annually, often at the end of the year, in a single lump sum. A formal way of doing this is through profit-sharing plans. However, these are often tied to the company’s success versus for rewarding and compensating employees for their individual performances and meeting goals. Federal/State Pay Requirements State and federal laws are in place for protecting employees from bad employment practices that could negatively affect the employee’s paycheck. There are minimum standards set via federal labor laws that employers are required to follow; state laws expand this protection in some cases. Employers are required by many states to pay the state minimum wage, which when compared to the federal wage, is a little more per hour. The Fair Labor Standards Act (FLSA) requires employers to pay overtime (one-and-one-half times the hourly rate) to certain employees. Overtime is often due to employees who work over 40 hours in a week since it is measured not by the day, but rather by the week. Providing a Competitive Package Many employers offer a competitive package of employee benefits to attract and retain employees. Along with a competitive wage or salary, additional benefits are usually provided. Smaller companies might offer fewer components in the package; however, the majority of larger corporations, as well as most all public sector government employers, offer a competitive and extensive employee benefits package. Long-Term Incentives Part of a competitive package could include stock grants or stock options to serve as a long-term incentive. Health Insurance Health insurance is fairly standard with medium to large-size companies and some small businesses. Health insurance offers great value to the employees and saves them money since it is employer-sponsored. This offers employees with peace of mind since they know they have coverage; even with existing health issues. Life and/or Disability Insurance This type of insurance will usually cost the employee less if purchased through the employer and is an option. Retirement Plan A common practice for employers is to offer a 401(k) plan since it is less expensive than regular pension plans and fairly easy to administer. Employees have more control over how much they contribute and invest which is why they like these plans. Many employers match the amount invested or at least contribute in some way. Smaller companies will still try to have a plan in place for their employees but might not contribute any money to them. Time Off Time off includes vacations, holidays, personal days, bereavement, and sick days. For employers who are unable to offer competitive wages and salaries, they usually seal the deal by offering more time off. Some employers might not make any distinction between vacation, personal, or sick days which allows the employee schedule time off when needed through the year at their discretion. Miscellaneous Compensation This type of compensation can include things like employee assistance programs that may offer anything from legal assistance to psychological counseling or company cars to company discounts. Overall, a competitive salary, 401(k), and health insurance are standard practice for attracting and keeping talent in a company. Companies can offer a more competitive employee package to bring in and retain the higher caliber staff that can add extra profit to their bottom line.

Compensation Basics

View Resource Compensation Basics
As an employer and owner of a growing small business, good communication between yourself and your employees is of utmost importance. As you are growing, and hiring employees to accommodate your growth, you’ll want to take steps to ensure that everyone is on the same page concerning company policies. Providing your employees with an employee handbook is an excellent way to accomplish this goal. The purpose of an employment handbook is to provide clear details on the way things work at your company. This should include the expectations you have of your employees, and what they can expect from you as well. There are no hard-and-fast rules for employee handbooks, but here are a few suggestions to help you get started. Things to Include in Your Employee Handbook First, you should decide what you want to include in your employee handbook. The U.S. Small Business Administration suggests most employers include the following topics:
  • Employers are required to follow laws put in place by the U.S. Equal Employment Opportunity Commission. These laws are designed to prevent harassment and discrimination in the workplace. Outlining these laws in an employee handbook is very important because it communicates how employees are expected to behave in compliance with these laws.

  • Use your employee handbook to outline company policies concerning compensation. Provide a detailed explanation of required tax deductions as outlined by the Internal Revenue Service, as well as optional deductions related to employee benefits. Additionally, inform your employees of company policies regarding overtime pay, scheduling, performance appraisals and raises, bonus and incentive programs, and employee breaks. Likewise, it is important to clearly communicate any rules in your company concerning computer and Internet use as well as policies focused on maintaining security of private or classified information.

  • As an employer, it is your job to communicate to your employees your expectations for their behavior to maintain a peaceful and well run workplace. In your handbook, list rules concerning dress code, conduct, ethics, and any legal regulations about their field of work.

  • Include company policies regarding leave. This section should include information about vacation and holiday time, sick leave, family medical leave, bereavement leave, and personal leave.

  • All businesses are required to follow laws provided by the Occupational Safety and Health Administration. These laws require workplaces to report all injuries and illnesses resulting in the workplace as well as following certain safety guidelines to achieve a safe work environment. By providing your employees with this information in their employee handbook, you should see more employee compliance and a safer workplace as a result.

  • Many employers choose to offer their employees certain optional benefits in addition to the employee benefits that are required by law. Clearly explain to your employees what is available to them and the process they should follow to take advantage of these benefits.

  • Any additional information about employment at your business. Include things like job descriptions, termination and resignation procedures, employee eligibility, employee referrals, transfer and promotion policies, non-disclosure agreements, conflict of interest statements, and expectations for handling media inquiries.
Style Tips for Your Employee Handbook Next, employers should format their handbook in a clear and concise manner. As you compile your employee handbook, keep in mind that your goal is for your employees to read and understand all the information provided to them. Create a table of contents in the front of the handbook as a resource for quickly finding the various topics covered. Additionally, organize the handbook with subheadings and bullet points, increasing the readability of the content. You may choose to use bolded or underlined text to place emphasis on important information. Using correct grammar and spelling throughout the handbook will establish it as a professional and important document. If you feel you need assistance with writing the handbook, you may choose to take advantage of online grammar guides, or hire someone to proofread and edit the content. Final Tip Many employers find it beneficial to present their employee handbook in orientation or a staff meeting. This provides employers with the opportunity to point out the most important information and answer any questions their new employees may have. A well-compiled employee handbook is not only essential to managing the workplace; it is one of the best ways to assist employees in starting on the right foot in their new position.

Creating an Employee Handbook

View Resource Creating an Employee Handbook
In 1977, Congress enacted the Fair Debt Collection Practices Act (FDCPA) as a way to protect consumers from harassment, deceit, and unfair tactics by debt collectors. The FDCPA applies to personal and household debts collected by third parties, which happens when the lender you owe either sells the debt to another company or hires another individual or company to collect the debt from you on their behalf. It’s important for you to understand your rights under the FDCPA and know what to do if a collector has violated your rights. Consumer Rights Under the Fair Debt Collection Practices Act Confidentiality: Debt collectors are not allowed to discuss your debt with anybody else, except your spouse, your parents if you are a minor, and your attorney if you have one who is representing you. While debt collectors can provide information about debts to credit bureaus, they cannot publish names of people who owe debts. All mail you receive about debts must be in envelopes that do not state they are from a debt collector. Debt collectors are allowed to contact other people to ask for your address, home phone number, or place of employment, but they cannot discuss your debt with these people. Verification: All debt collectors must send you a validation notice within five days of when they first contact you, and this notice must state the amount of the debt and the name of the original lender. After you receive this validation notice, you have the right to request verification that a debt belongs to you, but you must request this verification within 30 days. If you do not request verification, this is an automatic acknowledgment that the debt is valid. Limit communication: Debt collectors are never allowed to contact you between 9 pm and 8 am unless you agree to contact during these times. If you tell them not to contact you at work, they must stop contacting you at work. Also, they are not allowed to harass you by making excessive phone calls. Once you tell them that an attorney is representing you concerning this debt, they must only communicate with your attorney. End communication: At any time, you can request that a debt collector ceases all forms of communication with you. To do this, you must send a letter to the debt collector telling them not to contact you at all about this debt. Send it through certified mail with a return receipt so you have proof the collector received the letter. After receiving the letter, the only reasons a debt collector can contact you again are to acknowledge receipt of the letter or to inform you that they are going to take a specific action, such as filing a lawsuit against you. Honesty: Debt collectors are never allowed to provide false, deceitful, or misleading information in their communication with you. They can’t pose as government officials or people who work at the companies that originally lent you the money. They must not threaten you with actions they cannot take or do not intend to take, such as arresting you, selling your property, or causing physical harm to you or your family. Debt collectors are also not allowed to claim that documents they send are legal court documents if they are not. What to Do if a Debt Collector is Violating Your Consumer Rights Because of the Fair Debt Collection Practices Act, you have several courses of action you can take if a debt collector is using unfair practices or is harassing you. If the debt collector violates any of the rights outlined above, you can take one or more of three potential actions:
  1. Send a cease communication letter to end all forms of harassment by the debt collector. In this letter, specify that you would like the debt collector to stop contacting you by any method, including home phone, cell phone, work phone, text message, postal mail, and in person. As soon as the debt collector receives this letter, they are not legally allowed to contact you except to acknowledge receipt of the letter or to inform you about specific action they will be taking.

  2. File complaints with your state Attorney General’s office and the Consumer Financial Protection Bureau. In your complaint, specify who the debt collector is, which of your consumer rights were violated, and what the debt collector did that violated your rights. These groups can help follow up to resolve the issues on your behalf, and can also pass along the information you provide to law enforcement agencies that may take direct action against the debt collector.

  3. Bring a lawsuit against the debt collector. Monetary compensation can be awarded for lost wages or medical bills that result from the debt collector’s behaviors, in addition to money to cover your court costs and attorney fees and up to $1,000 in cash for general damages. If you are planning to file a lawsuit, you need to document the specific ways in which your rights under the FDCPA were violated. Save copies of all the mail you have received from the debt collector and sent to the debt collector. Also, log the date, time, and content of all phone communication.

The Fair Debt Collection Practices Act

View Resource The Fair Debt Collection Practices Act