Archive for the ‘Payroll and Tax’ Category

2011 Human Resources Updates – Special Report

Wednesday, January 5th, 2011

As we begin 2011, many employers are entering the new year with renewed, yet reserved, optimism. While unemployment remains unchanged, December sales figures beat all analysts predictions, Wall Street is at two-year highs, and the SBA increased small business loans in Q4 2010 to unprecedented records. During the single week of Dec. 18 to Dec. 24, the SBA guaranteed a record high of $1.95 billion in small business loans – the highest amount since the SBA began tracking weekly loan volumes.

On the employment front, many employers hold no hard feelings letting 2010 go. It was one of the most active legislative years on recent record, and while 2011 has many new regulations in store, in won’t compare to the previous year. However, while many business owners may be suffering from “governmental overload”, there are still some significant changes in store of which they should still be aware.

2011 Human Resources Updates

We are proud to announce the availability of our newly published report, 2011 Human Resources Updates. This important report takes a snapshot-view of many timely issues facing employers in 2011. Topics include:

  • New 2011 Employment Laws
  • Staying up to date with Health Care Reform
  • 2011 Payroll and Tax Updates
  • Employee and Management Training
  • Recruiting – what lies in store in 2011
  • Creating a safe work environment
  • Managing in the age of social media.

While most employers would rather look towards new sales revenues and improving financials, it is extremely important to remain aware of legislation that could impact their business in 2011.

Download your free copy of CPEhr’s 2011 Human Resources Update Report today. No registration required!

Employment Legislation Recap – Looking Back at 2010

Thursday, December 30th, 2010

As 2010 comes to a close, we pause to reflect on one of the most active years in recent memory in regards to legislation impacting employers. Earlier this year, CPEhr’s General Counsel Joshua Sable, Esq. conducted a webinar covering many of these changes and how they will affect small businesses. The “2010 Employment Law Updates” webinar covered a wide range of HR topics, including the HIRE Act, Healthcare Reform, Disability Discrimination, Harassment Claims and many more. To hear the webinar in its entirety, please click HERE. Below are excerpts of some of the information presented by Mr. Sable:

HIRE Act.

On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act. The Act provides a wide range of incentives for employers including a tax holiday for hiring “new” workers and a tax credit for retaining such workers. The goal of the plan is to stimulate the economy and bring people back to work.

The key highlights of the “Tax Holiday” are:

* Relieves a “covered employer” of its obligation to pay its 6.2% match for Social Security on the first $106,800 of wages (potential savings of $6,622)
* Applies to those workers hired after 2/3/10 but before 1/1/11 on wages paid between 3/19/10 and 12/31/10

Health Care Reform.

Two bills were signed into law on March 23rd and 26th, 2010 – The Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act, respectively. Both laws have important consequences for employers and group health plans.

Effective 01/01/2014 employers with 200 or more full-time employees must automatically enroll new hires in health coverage. Employers with more than 50 full-time employees that do not offer coverage must pay a penalty of $166/month per employee (excluding first 30).

Disability Discrimination.

Recent California case law has changed the playing field, once again, in regards to disability discrimination. The two key updates are:

In the event an employee has been previously granted special accommodations for a disability, the employer has a continuing duty to inform new supervisors of these accommodations. Failure to do so can place the employer at risk of being sued.

Employers are required to actively identify and offer available positions to disabled employees – it is not sufficient to merely “allow” the disabled employee to apply for a new position.

Harassment Claims.

Attorneys have previously advised managers that “being a jerk” on the job, while impolite and unprofessional, does not violate the law, so long as the negative behavior was work related. However, a recent case made its way to the California Supreme Court (Roby v. McKesson) wherein an employee claimed her manager demonstrated particular hostility towards her, despite the fact that the behavior was in the context of job and performance criticism. The Court ruled in favor of the plaintiff, stating the manager’s behavior created a hostile work environment. The clear message to managers: don’t be a jerk to your staff in the office!

If you have any questions about these, or any other HR related topics, do not hesitate to contact a CPEhr Human Resources Representative.

Important FICA Tax Information for 2011

Tuesday, December 21st, 2010

President Barack Obama on Friday signed into law a bill extending Bush-era tax cuts and said he hoped the bill would help restore Americans’ faith in Washington.

One of the provisions states that every employee will benefit from a one year, 2% reduction in Social Security Taxes.  The rate for 2011 will decrease from 6.2% to 4.2% on the first $106,800 of taxable Social Security income.  This translates to the maximum tax decreasing from $6,621.60 to $4,485.60, a reduction of $2,136.00.  The Employer will continue to pay the rate of 6.2%.

If you have any questions regarding this new tax information, please contact CPEhr’s Director of Tax & Compliance Toby Kruger at 424.230.5602.

IRS Releases Draft W-2 Form for 2011; Announces Relief for Employers

Wednesday, October 20th, 2010

The IRS today issued a draft Form W-2 for 2011, which employers use to report wages and employee tax withholding. The IRS also announced that it will defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011.

The draft Form W-2 includes the codes that employers may use to report the cost of coverage under an employer-sponsored group health plan. The Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS will be publishing guidance on the new requirement later this year.

Although reporting the cost of coverage will be optional with respect to 2011, the IRS continues to stress that the amounts reportable are not taxable. Included in the Affordable Care Act passed by Congress in March, the new reporting requirement is intended to be informational only, and to provide employees with greater transparency into overall health care costs.

Source: IRS.gov

H.R. 5297 – The Small Business and Jobs Creation Bill

Thursday, October 14th, 2010

The small business community is  abuzz  regarding the new legislation signed into law last month by President Obama. H.R. 5297, otherwise known as the Small Business and Jobs Creation Bill, is a package of enhanced business tax incentives, as part of the larger Small Business Jobs Act of 2010.  H.R. 5297 creates three separate programs designed to increase small business lending and increase jobs. We wanted to simplify and briefly review highlights of the bill.

  1. The Small Business Loan Fund Act in Title I creates a small business loan fund that is designed to boost bank lending to small businesses struggling to gain access to credit due to the financial crisis. The legislation will establish a $30 billion fund to boost lending to small businesses looking to hire and expand their operations by providing additional capital to community banks.
  2. The State Small Business Credit Initiative Program provides $2 billion in funding for new or existing state lending programs. These programs already exist in around thirty states, and use small amounts of public dollars to generate substantial private bank financing. By supporting existing expertise in states around the country and using an easy to replicate model, this program will be able to quickly increase small business lending and create jobs.
  3. This program would establish a new program under the purview of the Small Business Administration (SBA) to provide $1 billion in financing to support early stage small businesses in the form of true equity financing. This program has twice passed the House of Representatives, in the Small Business Financing and Investment Act – H.R. 3854 – and again in the Small Business Early Stage Investment Act of 2009 – H.R. 3738, with strong bipartisan support.

For more detailed coverage of the Act, click here.

Source: http://majoritywhip.house.gov

“Clothing” Now Defined Under FLSA

Thursday, July 29th, 2010

In 1937, President Franklin D. Roosevelt passed the Fair Labor Standards Act (commonly referred to as the “FLSA”). The purpose of the Depression era legislation was to protect the individual employee against abusive employers and to ensure a minimum standard of living to the American worker. FLSA guarantees workers a federal minimum wage and overtime pay for employees who work over 40 hours a week.

Expanding FLSA Over the Years

Over the years, FLSA has been expanded to include other areas of employee protections, such as restrictions on employing children, and employee documentation and recordkeeping. In recent months, the US Department of Labor released an “Administrative Interpretation” (AI) to clarify the definition of “clothes” under the FLSA.

The Definition of “Clothing”

Currently, the FLSA excludes time spent “changing clothes or washing” at the start or end of a workday from compensable time, and the vague exemption has led to many lawsuits and conflicting court decisions on what constitutes ‘clothes.’ The AI provides clarity by stating that the time spent changing into or out of protective gear or equipment required by law, the employer, or the nature of the job, is indeed compensable.

The AI further clarifies that even if ‘changing clothes’ does not fall under a compensable activity or time, it may still trigger the ‘continuous workday rule’ if the subsequent activities after changing clothes would be compensable under FLSA, activities such as walking, waiting, or other travel time. Employers should review their compensation policies or practices to reflect this change to remain compliant with the law.

The guidelines covered by the FLSA can be confusing, and costly, if not adhered to. Speak with a CPEhr HR Consultant for an audit of your FLSA practices.

Source:  EPLI Pro News, July 2010