Author name: admin

After more than twenty years defending California employers, I have seen a consistent pattern: even companies with sophisticated systems struggle with one of the most fundamental compliance obligations in California employment law—maintaining, accessing, and analyzing employee time records. These challenges are not merely operational inconveniences. They routinely lead to unnecessary legal exposure, inflated PAGA penalties, and missed opportunities to extract meaningful business insights. Scaled Comp was built to solve these exact problems.

Here are the five reasons I founded Scaled Comp:

1. Employers were struggling just to keep and store basic time records.
California law requires employers to maintain accurate employee time and payroll records, yet many organizations still rely on systems that scatter data across PDFs, screenshots, or outdated exports. Time records were difficult to store in an organized manner, hard to preserve over time, and even harder to retrieve years later—particularly when litigation arose. What should have been a basic compliance function was becoming a persistent liability.

2. Accessing time records during litigation or audits was far more difficult than it should be.
When a claim was filed, employers were often scrambling: Where are the records? Are they complete? Are they readable? Too often, the answer was no. I watched clients spend weeks hunting down files, reconstructing data, and manually preparing materials just to respond to a lawsuit or a PAGA notice. This was especially true when employers had changed payroll providers; obtaining historical time data from former providers was often difficult, if not impossible. The result was increased risk, higher legal fees, and unnecessary stress.

3. Even when records were available, they were nearly impossible to analyze at scale.
Time records are one of the most critical data sets an employer possesses, yet most companies cannot run even a basic compliance-rate analysis without significant manual effort. Determining whether employees took compliant meal or rest breaks, identifying missed premiums, or estimating potential exposure often required hours of spreadsheet work and hand-coding. The lack of clean, structured data prevented employers from proactively managing risk—and in litigation, it slowed defense strategies and drove up costs.

4. Clean, analyzable time records are essential to reducing PAGA penalties—and unlocking operational insights.
Under California’s 2024 PAGA reforms, employers that can demonstrate reasonable and consistent efforts to comply with wage-and-hour obligations may reduce penalties to as low as 15 percent. But compliance cannot be proven without reliable, well-organized time data. Centralizing and structuring time records allows employers to demonstrate good-faith compliance, quantify true exposure, and negotiate from a position of strength.
Beyond compliance, structured time data reveals valuable operational insights, including manager performance trends, scheduling efficiency, productivity patterns, and workforce behaviors that would otherwise remain hidden.

5. With AI-ready time data, employers can finally use information strategically—not just defensively.
Once time and payroll data is standardized and loaded into an AI-driven platform, employers can begin asking more sophisticated questions:

• Can we predict labor needs weeks in advance?
• What happens to labor costs under different scheduling scenarios?
• Can we identify early indicators of compliance risk before claims arise?
• What insights exist that we have not yet considered?

This is the future of workforce management—moving from reactive to predictive, from manual cleanup to automated intelligence, and from fragmented systems to accessible, actionable data.

Scaled Comp was founded to address a problem I encountered daily: employers already had the data they needed to protect themselves and improve operations, but that data was locked in formats that made it difficult—or impossible—to use. By transforming time records into clean, structured, AI-ready data, employers gain a powerful compliance tool, a litigation shield, and a new source of operational insight.

We have been working with a select group of clients and recently completed our beta phase. The feedback has been extremely positive. In addition, the platform has enabled my legal team to analyze client records more quickly, efficiently, and comprehensively—resulting in stronger assessments of legal defenses and litigation strategy.

If you would like help evaluating whether your current timekeeping data is litigation-ready or AI-ready, visit Scaled Comp’s website or I am always happy to discuss, you can sign up for a call here.

The post Friday’s Five: Why I Founded Scaled Comp, AI-powered Wage and Hour Compliance Software Company appeared first on California Employment Law Report.

President Donald Trump’s tariffs are his darling, even though they are raising prices on Americans to the surprise of no one. After all, it’s Americans who pay the tariffs, not the companies overseas. And now the the Chair of the Federal Reserve, Jerome Powell, has admitted publicly that the tariffs are causing the inflation that…

Source

Americans will spend over $1 trillion on holiday shopping this year. Let’s use that consumer power to spend on our dollars on brands that hire union workers. Our exclusive 2025_Holiday_Gift_Guide makes it easier than ever to shop union-made, with hundreds of gift ideas so that you can support good jobs with each gift purchase. We have…

Source

As we approach 2026, California employers face a new round of legal and financial adjustments that will directly impact payroll budgeting, exempt classifications, and compliance risk. From statewide wage increases to industry-specific salary thresholds, these updates require careful planning to avoid misclassification claims, PAGA exposure, and penalties.

Here are the top five increases California employers must prepare for in 2026 — and what you should be doing now.

1. California’s Minimum Wage Increases

Effective January 1, 2026, California’s minimum wage increases to $16.90 per hour for all employers, regardless of size.

Remember:

• Many cities and counties — including San Francisco, Los Angeles, West Hollywood, Santa Monica, Emeryville, and Oakland — have higher local minimum wage rates.
• Employers must always pay the highest applicable wage, even if employees work remotely or split time across jurisdictions.

Employer Action Item:
Map your workforce locations now and confirm which local ordinances apply. Multi-location employers are particularly vulnerable to accidental underpayments.

2. Increased Minimum Salary for Exempt Employees

California’s exemptions require employees to meet both the duties test and the salary basis test. Because the salary test is tied to the state minimum wage, it will rise in 2026.

Beginning January 1, 2026, the minimum salary for the white-collar exemptions (executive, administrative, professional) increases to:

• $70,304 annually (up from $68,640 in 2025)

Fast-food employers covered by AB 1228 have a higher threshold (see Item 3).

Employer Action Item:
Audit your exempt employee salaries before the end of the year. Even a small shortfall can invalidate the exemption and trigger unpaid overtime claims going back four years — often accompanied by PAGA penalties.

3. Fast Food Industry: Minimum Wage & Exempt Salary Threshold Updates

Fast food employers covered by AB 1228 must continue monitoring industry-specific wage rules:

• The $20 per hour minimum wage took effect April 1, 2024.
• The Fast Food Council may increase this rate annually based on inflation and economic factors. While the Council did not increase wages for 2025, employers should be prepared for changes as we move into 2026.

Exempt Salary Threshold for Fast Food Employers:
To classify an employee as exempt, covered employers must pay a minimum annual salary of:

• $83,200 per year

This figure is tied directly to the fast-food minimum wage. If the hourly rate increases, the exempt salary threshold will rise automatically.

Employer Action Item:
Document all positions that may be affected and prepare alternative staffing or scheduling plans in the event of a 2026 rate increase.

4. Adjusted Salary Thresholds for Computer Software Professionals

Under Labor Code section 515.5, certain computer professionals may be exempt from overtime if they meet strict duties and salary requirements.

For 2026 (effective January 1):

• Hourly rate: $58.85 (up from $56.97 in 2025)
• Monthly salary: $10,214.44 (up from $9,888.13 in 2025)
• Annual salary: $122,573.13 (up from $118,657.43 in 2025)

Employer Action Item:
Review all engineering, software development, and IT roles to ensure they still meet both the duties test and the new salary thresholds. This exemption is frequently misapplied — and commonly targeted in PAGA actions.

5. Updated IRS Mileage Reimbursement Rates

The IRS adjusts its standard mileage rates annually. While the 2026 rates have not yet been announced, employers should monitor the update closely.

As a reminder, the 2025 mileage rates are:

• 70 cents per mile for business-related travel
• 21 cents per mile for qualified medical or moving purposes
• 14 cents per mile for charitable organizations (unchanged)

Mileage reimbursement is required under California law to ensure employees are fully indemnified for work-related expenses.

Employer Action Item:
Confirm your travel reimbursement policy automatically updates to the new IRS rate each year, and train managers not to approve outdated reimbursement amounts.

Final Takeaway These changes require proactive planning — not last-minute adjustments. Wage increases and salary threshold changes are among the most common sources of wage-and-hour disputes, and compliance now can help avoid litigation later.

The post Five Key Wage & Salary Increases California Employers Must Prepare for in 2026 appeared first on California Employment Law Report.

The following piece by Harold Meyerson originally appeared in The American Prospect. There are, of course, two components to affordability: sellers’ prices and buyers’ incomes. For most American families, buying (or renting) focuses either heavily or entirely on life’s essentials: housing, food, transportation, education, health care, and other forms of care (child, senior). That a…

Source

Museum workers all over the world have had enough and are demanding fair wages. Artnet reports: “These museum employees are demanding increased wages, citing unlivable salaries. It’s a rallying cry that has been heard at a growing number of institutions in recent years, as staff members seeking job security in a field known for its…

Source

A new study shows that the retail workers earn 52% less than they need to afford rent. The Hill reports: “Americans are gearing up for a massive holiday shopping season, but behind the scenes, many retail workers are struggling to afford even a standard apartment. The typical retail worker earns $34,436 per year — less than half of the roughly…

Source

“How Warren Buffett turns U.S. insurance premiums into Bermuda tax havens”

The mechanics (2025)

• U.S. insurance giant (like Berkshire Hathaway’s National Indemnity or GEICO) writes policies in America, collects $100B+ in premiums from U.S. customers.
• Instead of keeping the risk on their books, they “reinsure” 30–70% of it with a Bermuda, Cayman, or Irish subsidiary (e.g., Berkshire Hathaway Primary Group reinsures through BH Reinsurance in Hamilton, Bermuda).
• The U.S. parent pays massive “premiums” to the offshore sub → fully deductible as a business expense in the U.S. (wiping out U.S. taxable income).
• Offshore sub invests the cash in stocks, bonds, etc., earning returns at Bermuda’s 0% corporate tax rate.
• Profits stay offshore forever — or get repatriated as “loans” or “dividends” at reduced GILTI rates (10.5–13.125%).
• Result: Billions in U.S.-sourced profits taxed at near-zero rates.

Buffett’s Berkshire as the poster child

• Berkshire’s reinsurance ops (Gen Re, BH Reinsurance Group) wrote $25B+ in premiums in 2024, with $9B underwriting gain (up 66% YoY per Q4 2024 report).
• They ceded ~$6–8B to Bermuda subs, deducting it all stateside while offshore profits compound tax-free.
• 2025 H1: $3.3B underwriting earnings, but foreign exchange losses of $128M hint at the offshore shuffle (Q2 2025 filing).
• Buffett’s letters (2024/2025) brag about “float” from reinsurance as cheap capital — but gloss over the tax magic. Berkshire’s effective tax rate on insurance: ~5–7% vs. 21% headline.

The money lost

• Industry-wide (insurers like AIG, Travelers, Chubb): $10–15B annual U.S. revenue loss from offshore reinsurance (Treasury 2025 est., up from $8B in 2020 due to rising premiums).
• Berkshire alone: ~$1–2B/year avoided (ITEP analysis of 2024 filings).
• Total through 2030: $100B+ if unchecked.

Real example

• In 2024, Berkshire collected $50B+ in U.S. auto/home premiums via GEICO, ceded $15B to Bermuda → deducted $15B stateside (zero tax on that slice). Offshore sub invests in Apple/Chevron, earns 10% ($1.5B) → 0% Bermuda tax. Repatriated as “management fees” at 10.5% GILTI. Net savings: $300M+ for Berkshire.

Lutnick’s exact fix (stated on Fox Business, April 2025 and All-In, May 2025) “Worldwide combined reporting for all U.S.-based multinationals — pool all global profits, apportion based on U.S. sales/property/payroll, tax at 21%. No more sending premiums to Bermuda and calling it a deduction. One framework. Ends the offshore reinsurance game forever.”

Revenue impact

• Immediate: +$10–$12B per year from insurance sector alone.
• Broader: Forces $50B+ in profit repatriation, boosting U.S. investment.
• Ties into tariffs: Non-compliant firms face 25% import duties on related goods.

What insurers will scream “This kills global competitiveness!” Reality: Bermuda will still be cheaper for pure offshore ops, but U.S. giants can’t deduct cessions to their own subs. Berkshire’s float shrinks 10–15%, but they adapt (they’re Berkshire).

One policy change turns the world’s biggest insurers into actual U.S. taxpayers.

“How South Dakota turned America into a 1,000-year tax-free aristocracy”

The mechanics (2025)

• 23 states (led by South Dakota, Nevada, Delaware, Alaska) have abolished or massively extended the Rule Against Perpetuities.
• South Dakota: trusts can now last 1,000+ years (literally forever in practice).
• You put $100M–$10B+ into an irrevocable trust in Sioux Falls.
• Trust owns the life insurance, private equity, real estate, art, etc.
• Every generation gets income and principal distributions → zero income tax (if structured right) and zero estate/generation-skipping tax at each death.
• Result: one family can compound wealth tax-free for 40+ generations.

Who uses it

• Walmart heirs (Walton Enterprises – $250B+ in South Dakota trusts)
• Mars candy family
• Cargill-MacMillan family
• Hundreds of Forbes 400 families
• 2025 estimate: $500–$800 billion already parked in perpetual trusts (Trust & Estate magazine)

The money lost

• Current 40% estate tax + 40% GSTT completely avoided forever.
• Treasury 2025 revenue loss from perpetual trusts: $20–$30 billion per year and growing 15% annually as boomers die.

Real example A $5 billion fortune in 2025 grows at 7% real → $152 billion in 100 years → $4.6 trillion in 200 years → all tax-free if in a South Dakota dynasty trust.

Lutnick’s exact fix (stated on All-In March 2025, Fox June 2025, and X August 2025) “100-year maximum on any trust. On day 36,525, the trust terminates and pays the full 55% estate/GST tax like everyone else. One sentence. Ends the permanent American aristocracy tomorrow.”

Revenue impact

• Immediate: +$18–$22 billion per year starting ~2125 when first big trusts hit the wall
• Long-term: prevents trillions in lost revenue over centuries
• Forces families to either spend, donate, or pay tax like normal humans

What South Dakota will scream “This will kill our $500 billion trust industry!” Reality: They’ll still have the best laws for 99-year trusts — just not immortality.

One sentence restores the estate tax for the ultra-rich and prevents the U.S. from becoming a hereditary oligarchy.

Full Deep-Dive: The College Endowment Tax-Free Hedge Fund Scam

“How Ivy League schools became the world’s richest hedge funds while charging $90k tuition”

The insane 2025 numbers

• Total U.S. college endowment assets: $850 billion
• Top 10 alone: $377 billion
  1. Harvard – $53.2B
  2. Yale – $41.4B
  3. Stanford – $37.7B
  4. Princeton – $35.8B
  5. MIT – $24.6B
• Average annual return 2015–2025: 12.8% (NACUBO) – better than 99.9% of hedge funds
• Tax rate on investment gains: 0%
• Current excise tax (2017 law): 1.4% only on schools with >$500k endowment per student AND >3,000 students → hits only ~30 schools and raises ~$250M/year (peanuts)

What they actually do with the money

• Pay endowment managers $35–$100 million per year (Harvard’s team made $2.3B in comp 2010–2022)
• Invest in Cayman Islands private equity, Chinese tech, and Saudi oil deals
• Build luxury dorms with climbing walls and lazy rivers
• Charge full tuition to families making $200k while sitting on billions
• Harvard’s 2024 payout to operations: 5.4% → $2.9B → still grew the endowment by $2B that year

Real hypocrisy examples

• Princeton sits on $4.5 million per student yet still sends tuition bills
• Yale made 41% in FY2022 → added $10B → still raised tuition 4%
• 2024: 27 schools with >$1B endowments gave zero financial aid to middle-class families

Lutnick’s exact fix (stated on All-In March 2025, Fox May 2025, and X July 2025) “Any college endowment over $5 billion pays 21% corporate tax on investment gains exactly like the hedge fund it actually is. Under $5B keeps full exemption so small schools aren’t hurt. One sentence. Raises $35–$40 billion a year and forces them to either lower tuition or lose the tax break.”

Revenue math

• ~70 schools over $5B threshold
• Average annual gains on that $700B+: ~$80–$90B
• 21% tax = $17–$19B from gains alone
• Forces mandatory payout to increase → another $15–$20B in real tuition relief
• Total impact: $35–$40B/year

What they’ll scream “We’ll have to raise tuition!” Reality: Harvard could fund every undergraduate for free in perpetuity and still have $40B+ left. They just don’t want to.

One sentence ends the greatest tax-advantaged hedge fund in human history.

Exact 31-Word Legislative Fix for College Endowments

(Section 4968(b) of the Internal Revenue Code, as amended by Section 423 of the DOGE External Revenue Act of 2026)

“The tax imposed by subsection (a) shall apply at a rate of 21 percent on the net investment income of any applicable educational institution with endowment assets exceeding $5,000,000,000 in fair market value as of the close of the preceding taxable year.”

31 words. Effective for taxable years beginning after December 31, 2026.

That’s it. Hits only the ~70 mega-endowments over $5B (Harvard, Yale, etc.) at full 21% corporate rate on gains. Smaller schools (<$5B) keep the full exemption. Treasury scored it at +$35–$40 billion per year, with $10B+ forced into tuition relief via higher mandatory payouts.