Smith Payroll Law 2014

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 Payroll Law 2014 July

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  • PAYROLL LAW 2014 WELCOME! Your Facilitator Today is Lisa Smith
  • Todays Slide Presentation New Curriculum! Extra information Page numbers on the slide No number = no page Quiz answers are at the end of this presentation. Download this presentation at slideshare.com XX
  • Ish Time Breaks 10:15 / 2:30 ish Lunch 12:20 1:30 ish Home 3:55 ish
  • All the Laws
  • If you wanna catch the smart fish, you gotta use the Smart Bait! - Joe Phillips
  • Who is An Employer? FLSA defines and employer as any person acting directly or indirectly in the interest of an employer in relation to an employee. 29 USC 203 (d). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Penalties can be assessed against the employer or a person acting on behalf of an employer. 2011-2013 the courts re-defined employer in all employment law issues. States also followed. 38
  • 38
  • The Truth Regularly, 75% of employers make payroll errors! SHRM Approximately 1 million workers each week suffer a payroll error = $56,000,000 per week x 52 = $2.9 Billion/year. - The Payroll Answer Book Most Errors Come from FLSA Violations 2013 Estimated 80% of employers are getting it wrong. - Department of Labor
  • Maybe
  • Audit-SecureYour Business! What will the Auditors find swimming in YOUR waters? Have you caught your fish?
  • Payroll Department Audit-Secure Checklist 1. Reasonable Basis File Professional Resources Government Resources Desk References/Software/Templates Training Resources Consultant/Attorney advice in writing 2. Payroll Standard Operating Procedures Step by step guidance for each position Follow a Rule of 3 + and reference your Reasonable Basis Must contain update and revision dates Include employee training dates 3. Internal Audit Documentation*KEY* Annual audit documentation for each area Must include corrective action plan and outcome 4. Employee Handbook Policies/Procedures Must reflect federal and state laws Must include specific company policies when law is silent Must include documentation of review and updates annually 5. Job Descriptions Not optional Must detail Essential Functions and BFOQs Must detail Exempt qualifiers - especially duties Must be accompanied by interview checklists for EEOC compliance Review annually minimum document
  • The Best Policies and Procedures Rule of 3s
  • Payroll Department Audit-Secure Checklist 1. Reasonable Basis File Professional Resources Government Resources Desk References/Software/Templates Training Resources Consultant/Attorney advice in writing 2. Payroll Standard Operating Procedures Step by step guidance for each position Follow a Rule of 3 + and reference your Reasonable Basis Must contain update and revision dates Include employee training dates 3. Internal Audit Documentation*KEY* Annual audit documentation for each area Must include corrective action plan and outcome 4. Employee Handbook Policies/Procedures Must reflect federal and state laws Must include specific company policies when law is silent Must include documentation of review and updates annually 5. Job Descriptions Not optional Must detail Essential Functions and BFOQs Must detail Exempt qualifiers - especially duties Must be accompanied by interview checklists for EEOC compliance Review annually minimum document
  • FLSA FUN FACTS FLSA was created in 1938 Wage was .25/hr Created Out of Need During Depression States May Set Their Own Minimum Wage 4 States have a LOWER Minimum Wage Seattles wage is $15.00 The NEW Federal Contractor Minimum Wage is $10.10 #1 violation area for Wrongful Termination Suits/Settlements
  • Non-Exempt Audit Tips! 32
  • THE NON-EXEMPT EMPLOYEE 32
  • Tipped Industries 33 Mandatory Tips and Service Charges are WAGES not Tips effective January 2014. IRS looks for a 2% difference in credit card and cash tips. Employers are often required to make up the difference when the gap is wider.
  • 34-36
  • Pay Policies that Cause Trouble (or lack there of) Voting Policy Jury Duty Policy Bereavement Leave FMLA 2013 Changes Military Family Leave 2013 Changes Pregnancy Disability 2014 Changes Lactation Policy 2013/2014 Changes State to State PTO Time and Attendance Policy Discipline and Standards of Conduct
  • W-4 FORM 11
  • W-4 FORM 11
  • 12
  • I-9 FORMS # 3 AUDIT AREA Nationally! Are your I-9s Compliant? 13
  • EMPLOYEE CLASSIFICATION Common Law Employees Statutory Employees Statutory Non-Employees Independent Contractors The Cost of Misclassifying Employees is HIGH!! 1
  • #1 Most Audited Area!
  • How Do You Know? -------------------------------------------------------------------------------- Although the IRS offer no bright-line test to determine whether a worker is an employee or an independent contractor, the IRS takes the position that the more control the employer has over the worker, the more likely it is that the worker is an employee rather than an independent contractor. Payroll Answer Book, answer 6-16 ----------------------------------------------------------------------------------
  • IRS 20 FACTOR TEST Its All About Control! 1. Behavioral 2. Financial 3. Relationship 2-3
  • ABC TEST A. Control or Direction of the Work B. Outside Service C. Independent Business or Trade 4 Audit-Secure Tips Create your own checklist. Conduct an internal audit. Document self-corrections. Create SOP Train Payroll, HR and A/P
  • 5 TARGETED INDUSTRIES -------------------------------------------------------------------------------- 1. Construction Broadly defined! 2. Maintenance 3. Technology / Consulting 4. Transportation / Delivery 5. Hospitality Payroll Answer Book, Answer 6-21
  • Let the IRS Decide!? HOT TIP! Forms SS-8 & 8952 Use with Care.
  • W-9 Guidelines 6
  • W-9 Guidelines 6
  • Section 530 Safe Harbor 8
  • 1099 MISC Reporting < $600 or more < Used for Non-incorporated Businesses < Always Report Attorney Fees > $600 and Inc. < Payments Made to Healthcare providers > $600 and Inc. NOT 3rd Party Payers! < Payments made for the purchase of fish to anyone engaged in the fish catching industry. BOTTOM LINE It is better to send too many 1099s than too few! Sending ZERO 1099s = $10,000 Fine! 9
  • 14
  • 18-19
  • Executive Exempt 20
  • Administrative Exempt 21-22
  • Science and Learning Exemption Must have 4 year degree Usually Must always need the degree for the job --------------------------- Court in California held: A receptionist cannot be exempt just because a degree is held in business communications or a person is highly experienced in public relations. 23
  • Artistic and Creative 24
  • Computer Professional 25
  • Sales Exemptions 26
  • Check Points!
  • Exempt Salary Deductions 27-28
  • 38
  • PERKS AND BENEFITS 40-45
  • 46
  • Military Pay Supplemental Military Pay Compensation paid to employees while on military duty that represents the difference between employees regular pay and the pay provided by the state or federal government. Temporary assignment FITW, FICA, Medicare and unemployment taxes Indefinite assignment - 1099-MISC (over $600) 47
  • Penalties for Non-Compliance For amounts not properly or timely deposited, the penalty rates are as follows: 2% - Deposits made 1 5 days late 5% - Deposits made 6 15 days late 10% Deposits made 16 or more days late. 10% - Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return 15% Amounts still unpaid more than 10 days after the date of the first notice the IRS sent asking for the tax due Plus interest compounded daily Penalties for MISSING Deposits can lead to Jail Time. 48-50
  • Big Boss Me 2 Years Later!
  • Seminar Disclaimer This seminar is from an auditors point of view. It is possible your company attorney may disagree with our interpretation. That is okay. It does not mean we are right or that we have given you wrong information. You may have an exception to the rule that your attorney knows about. IRS CIRCULAR 230 Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.
  • Answers: You Be the Judge Work Book Page -10 Case One Employee Case Two - Employee Case Three - Employee
  • Answers: Testing Your Knowledge 1. Backup withholding 28% 2. Yes 3. Yes 4. Depends on the amount - Keep to the end of the year A/P reports on 945 cannot be deposited with P/R 5. Single and zero 6. No WB-16
  • Answers: Testing Your Knowledge WB-Page 30-31 1. False 2. False 3. Maybe 4. False 5. True 8. True 9. Depends 10. True 11. Full-day off for personal reasons; safety violation; FMLA; week of hire/termination 12. Jury duty; military leave; partial day 13. True 14. False 15. C - $455 per week
  • Answers: Testing Your Knowledge Page 39 1. False 2. False 3. True 4. 30 minutes
  • Answers: Taxable or Nontaxable Income? Page 45 1. Yes 2. Fair Market Value 3. No 4. Yes 5. No 6. No
  • Answers: Testing Your Knowledge Workbook Page 51 1. False 2. True 3. (d) Four years and as long as valid 4. If the IRS requests in writing 5. False 6. False 7. False 8. False 9. True

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