5 Ways Your HR Department Can Ruin Your Finances

by Shelton on December 20th, 2014

filed under Finances

By Morgan Quinn, Feature Writer

Your human resources department carries huge responsibilities with major legal and financial implications. While most HR departments have proper practices and procedures in place to reduce their liability, that doesn’t stop them from making mistakes. The consequences of these mistakes can be far-reaching and can impact employees’ finances greatly.

Here are five ways your HR department can mess with your wallet.

Related: Can Your Budget Survive the Office Christmas Party?

1. Enrolling You in the Wrong Retirement or Health Care Plan

Human Resources can enroll you in the wrong type of retirement plan, like a traditional instead of a Roth 401(k), which has a major impact on your long-term retirement goals. Also, mistakes in health coverage enrollment can lead to employees overpaying or not having adequate coverage — both have significant impacts.  

Or HR can just fail to enroll you at all. I had a former employer forget to submit the enrollment paperwork for my Flexible Spending Account. Luckily, I regularly submit reimbursement invoices, so the error was caught quickly. I would have been sorely disappointed had I waited until the end of the year to make a claim: I would have missed out on a major reimbursement and payroll tax savings.

2. Misclassifying You

The US Department of Labor and the IRS have very strict guidelines when it comes to properly classifying employees. There are several classifications of workers, depending on the pay and type of work they do: independent contractors, hourly employees, salaried overtime exempt, salaried overtime non-exempt, and others, like interns and volunteers.

These classifications carry important implications of how overtime is paid, income is reported and more. Under the Fair Labor Standards Act, employers must abide by both federal and state classification laws, but employees can also face consequences. For example, you can end up paying back overtime because of a classification error.

Related: 6 Ways Administrative Professionals Save Everyone Money

3. Not Properly Disposing of Sensitive Documents

Employer records are one of the top sources of identity theft. They might not seem closely related, but HR regularly collects, processes and disposes of sensitive materials containing employees’ personal information. The Fair and Accurate Credit Transactions Act and the Fair Credit Reporting Act protect the confident information of a business’ customers and employees.

HR can’t completely protect all employees against ID theft, but it should have processes in place for properly storing and discarding personal documents. 

4. Skipping Your Performance Evaluation

Performance evaluations provide many benefits to you as an employee: Theyre an opportunity to review your skill set, get aligned with your manager, monitor your growth and stay informed on the company’s vision. This is also an opportunity for you and your manager to discuss your future with the company and create a plan that will put you on a track toward a promotion or salary increase.

Human Resources and your manager should have a vested interest in your career growth and they should serve as a coach to help you reach peak performance. 

Related: 10 Things Dunder Mifflin Can Teach You About Finance

5. Not Knowing When Employment Laws Change

Businesses must understand and stay up-to-date on labor laws, wage laws, recordkeeping and licensing regulations. These can frequently change without warning and employers are held responsible for staying informed. If your employer is found to be out of compliance, it might be subject to fines and disciplinary actions, and your paycheck could also take a hit — you can owe for underpayment.

The best way to protect yourself against these mistakes is to stay informed and double check all your documentation. Don’t be afraid to ask questions or respectfully challenge the way something is done. After all, Its your money thats at stake.

Photo credit: Wharton | San Francisco

Afghanistan: The Making of a Narco State

by Shelton on December 20th, 2014

filed under Cash Advances

At a little teahouse on a quiet street, Im ushered into a small back room whose walls and carpets vie in griminess, and I am introduced to a stocky middle-aged man with a skullcap and beard. Ill call him Sami. He tells me that hes from the district of Garmsir, near the Pakistani border. When war with the Soviets broke out, he fled the country, along with millions of other Afghan refugees. He grew up in a camp near the border town of Chagai, in Pakistan. After finishing 11th grade, he got work as a driver and began to ply the route from Garmsir to -Chagai, smuggling opium through the desert wastes. There are more than a hundred ways through the desert, he tells me. The police checkpoints are in one, and the rest of the desert is free for smugglers.

Afghanistan is landlocked, and its borders leak opium like sieves into five neighboring countries. In recent years, the northern route to Russia and Europe via Tajikistan has gained importance, but the southern route through Balochistan still accounts for the largest portion of opium that leaves the country. From there, it is smuggled into Iran, and then onward to the Balkans, the Persian Gulf and Africa. Most of it is destined for Western Europe.

The Balochistan border area between Afghanistan, Pakistan and Iran is one of the most remote and lawless places on Earth. Two hundred thousand square miles of desert and dune seas are broken only by spindly granitic eruptions; the ethnic Baloch and Pashtun tribes that control the area are heavily armed and have been involved in various kinds of smuggling for centuries. Some are nominally cooperative with the state, while others are engaged with a bewildering mix of insurgent groups: secular Baloch rebels who seek independence from Pakistan, Sunni anti-Iranian groups and a wide array of Islamist militants, including the Taliban. Its a natural haven for illicit activities.

At the center of this world is Baramcha, a smuggling hub on the Afghan side of the border in the Chagai Hills, 150 miles to the south and free of government control since 2001. It functions as a kind of switching station for much of the opium trade. The harvest by farmers like Mirza Khan is consolidated by local traders into larger shipments ranging from a few hundred pounds to several tons and sent to Baramcha, where it is purchased by Pakistani and Iranian smugglers who carry it abroad. The big deals are conducted between trusted parties, with money sent via the informal money-trading system known as hawala, which is also a linchpin in global money-laundering circuits. One side pays the hawaladar, who gives you a phone number and a code that, used at a corresponding hawaladar a country or continent away, lets the recipient claim the money. The accounts are settled later.

Baramcha is jointly controlled by the Taliban and a handful of powerful smuggling families, pre-eminent among them that of Hajji Juma Khan, a drug baron who was arrested by the DEA in Jakarta in 2008. Today, his relative Hajji Sharafuddin presides over the smugglers of the town, while the Taliban enforces security. The Taliban has a court there to resolve peoples problems, says Sami. The security situation is good for the people living there.

Baramcha was once just a collection of mud-walled compounds, but these days you can find late-model Land Cruisers driving past concrete mansions this despite sporadic raids and airstrikes by US and Afghan forces. The area is so remote that raiding teams would have to refuel their American helicopters in the desert using fuel bladders parachuted out the back of a cargo plane. Theres an area of town that we used to call Hajji JMK Village, says a member of Afghanistans elite commando units who has hit the area a number of times with Marines and British special forces. Its like a Sherpur in the desert, he says, referring to a neighborhood in Kabul notorious for its gaudy poppy palaces built by the countrys warlords. They had everything out there: generators, appliances, fancy cars. We used to take ice cream out of their freezers.

During the raids, he tells me, Baramchas inhabitants would flee across the border to Pakistan, where Pakistani forces would line up and stand guard until the Americans left. The drug smugglers and the ISI are tight together, he says, referring to Pakistans intelligence service. Sami makes similar claims about Baramchas leadership. They have houses on the Pakistani side, he says. (The ISI denies any connection to smugglers or the Taliban.)

The UN has estimated that the Taliban makes hundreds of millions of dollars from taxing opium and other illicit activities. But thats only a fraction of the $3 billion that Afghanistan earns from the drug trade. To find the biggest beneficiaries of opium, you need to go from the poppy palaces in Baramcha to the ones in Kabul.

The United States alliances with opium traffickers in Afghanistan go back to the 1980s, when the CIA waged a dirty war to undermine the Soviet occupation of the country. Though opium had been grown for centuries in Afghanistans highlands, large-scale cultivation was introduced in Helmand by Mullah Nasim Akhund-zada, a mujahedeen commander who was receiving support from the ISI and the CIA.USAIDs irrigated farmlands were perfect for cash-crop production, and as Akhundzada wrested control of territory from the Communist government, he introduced production quotas and offered cash advances to farmers who planted opium.

When Afghanistan descended into a civil war in the Nineties, the Akhundzadas rose as the provinces dominant warlords, only to be forced out in 1995 by the rise of the Taliban. Though the fundamentalist movement strictly prohibited drug consumption, the support of wealthy opium traders was crucial to its early success.