A new mandated federal regulation will become effective on January 31, 2012 - National Labor Relations Board (NLRB) Posting Requirements

The National Labor Relations Board (NLRB) adopted a rule requiring many private-sector employers to implement new notice-posting requirements regarding employee rights under the National Labor Relations Act. Employers should not expect the requirements to change in any significant way, although the NLRB indicated it intends to clarify the identity of employers subject to the requirements in the intervening months. Most private sector employers will be required to post the 11-by-17-inch notice, which is available at no cost from the NLRB through its website, either by downloading and printing or ordering a print by mail. www.nlrb.gov

On October 5, 2011, the NLRB announced that the date for implementation of the notice-posting requirements has been postponed from November 11, 2011 to January 31, 2012.

Every year, state and Federal agencies make hundreds of labor law changes that directly affect your employees. These changes in regulations impact policies related to minimum wage, anti-discrimination, safety and health protection, child labor laws, workers’ compensation and more. Sometimes the updated government regulations require mandatory new labor law posters… and sometimes they don’t. Failure to display the required workplace posters can result in significant fines and penalties, along with jail time in some instances. So how can you be sure the posters you have are the most current ones?

2011 Minimum Wage Rate Changes Require Updated Posters

The most common change that requires an updated labor law poster is when states change their minimum wage rates. Several states increased their minimum wage rates in January 2011 including Arizona, Montana, Ohio and Washington… just to name a few. And Florida unexpectedly increased their minimum wage rate to $7.31 effective June 1, 2011 which requires an updated labor law notice. So if your business is located in one of those states, make sure your labor law posters are current and display the correct minimum wage rate.

Workplace Policy Changes: A Lot Can Happen in One Year

State minimum wage rate changes aren’t the only reason government agencies mandate updated labor law posters. Sometimes OSHA regulations change and updates to workers’ compensation notices, earned income credit, unemployment compensation and discrimination policies require new workplace posters. How can you tell if a labor law regulation change is mandatory or non-mandatory… meaning a new poster is not required? If your labor law posters were purchased a year ago… prior to June of 2010… and your business is located in one of the following states and you have not received an updated poster, you are most likely out of compliance

Automatic Compliance Updates Keep Your Labor Law Posters Current

The easiest way to make sure your business is compliant and displaying the most current labor law posters is to subscribe to a program which offers a combined Federal and state poster that automatically sends you updates when new notices are mandatory. That way you don’t have to stay on top of all the government changes and worry about what updates require a new poster. It is taken care of for you. All you have to do is replace the old poster when the new one arrives.

On April 14th, President Obama signed H.R. 4, also known as the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, a bill repealing the controversial and unpopular 1099 tax reporting requirement mandated by last year’s health care legislation. It is the first provision of the health care reform law to be repealed.

Without the repeal, the tax compliance provision would have required businesses to report on Form 1099-MISC payments to contractors and vendors that total $600 or more annually, starting in 2012. The repeal of this legislation removes the burden of additional paperwork for small business owners and payroll administrators.

Earlier this year, the United States Citizenship and Immigration Services (USCIS) released an updated version of The Handbook for Employers to help employers better understand the Form I-9 process.

The Handbook has been revised with new information regarding applicable rules and policies, new regulations about electronic storage and retention of I-9 forms, how to process an employee with a complicated immigration status and also addresses public comments and frequently asked questions.
 

Revisions to The Handbook for Employers & Understanding the Form I-9 Process


Some of the many improvements, new sections and tools included in The Handbook for Employers, Instructions for Completing Form I-9 are:

• New visual aids for completing Form I-9
• Examples of new relevant USCIS documents
• Expanded guidance on lawful permanent residents, refugees and asylees, individuals in Temporary Protected Status (TPS), and exchange visitors and foreign students
• Expanded guidance on the processing of employees in or porting to H1-B status and H2-A status
• Expanded guidance on extensions of stay for employees with temporary employment authorization

Verifying Employment Eligibility is Mandatory
The Immigration Reform and Control Act of 1986 (IRCA) prohibits the hiring or continued employment of aliens whom employers know are unauthorized to work in the United States.  Employers who hire or continue to employ individuals knowing that they are not authorized to be employed in the United States may face civil and criminal penalties.

By law, U.S. employers must verify the identity and employment authorization for every worker they hire after November 6, 1986.  To comply with the law, all U.S. employers must verify the employment eligibility and identity of every worker hired by completing Form I-9, Employment Eligibility Verification, regardless of the employee’s immigration status.

Despite the walkout designed to stall legislative advances, House Bill 1450 was signed into law last week. The Bill decreases the tax increase that was to take effect this year, decreases the average benefit amount claimants receive, and reduces eligibility for seasonal employees. It’s hard to be happy about a tax increase, but this bill is a big win for employers because, unlike previous attempts at fixing the problem, this Bill includes logical reductions in benefits and eligibility rather than forcing employers to shoulder the full cost of the problem with tax increases.

ELIGIBILITY PROVISIONS

The Department has estimated that the changes to seasonal eligibility could reduce the cost of the program by 25-30%, so these changes should mean major changes in the costs for some employers. However, the burden of proving an employee is ineligible remains on the employer, so employers should act now to make sure they have the documents necessary to defend future unemployment claims.

The following employers should review their documentation to ensure they are prepared to take advantage of the new provisions:

• intermittent, part-time, or as needed work force;
• seasonal employers;
• regularly scheduled shutdowns;
• head start organizations.

Under Indiana’s unemployment law, the employer has the burden of proving an individual is ineligible for benefits, so these employees will likely continue drawing unless you present evidence to show they are ineligible.

TAXES:

Taxable Wage Base Increases to $9500.

Tax Rates Increase Less Than Expected.

• Minimum Tax Rate: .5% ($47.50 Per employee per year)
• Maximum Tax Rate: 7.4% ($703 per employee per year)

Under H.B. 1450, all employers will see a lower tax than they would have under the tax increase that was scheduled to take effect this year and some will actually see a tax cut. In 2010, the minimum tax per employee was $77 and the maximum was $392. Under the bill that was passed in 2010, minimum tax would have been $71.25 and the maximum tax would have been $969 per employee per year.

The Department has already sent out merit rate notices for this year. Those notices are now inaccurate, but it’s not clear whether the Department will have time to send out new merit rate notices before the first quarter contributions are due.

SURCHARGE:

2011: Employers will pay a quarterly surcharge equal to 13% of their quarterly contributions.

After 2011: The Department of Workforce Development is authorized to set the rate of the surcharge each year that the state owes interest on loans from the federal unemployment account. The statute is intended to permit the Department to collect enough money to pay interest in light of potential changes in Federal law, but sets no limit on the amount of revenue the Department can collect with the surcharge.

BENEFITS AND ELIGIBILITY

• Maximum Benefit: $390 per week (no change)
• Average Benefit: $220 per week (down from $283 per week)
• Seasonal workers: Significantly reduces eligibility for seasonal workers.

For additional information about these changes or for assistance preparing to take advantage of these provisions, contact Dustin Stohler at dstohler@stohlerlaw.com or (317) 937-7323.

We all say it: “If I could just have another hour in the day I could get THIS done.” The problem is that time management takes work and discipline! We need a process to get all the things done, so here are some simple ideas to consider as you prepare to tackle what’s in store for you and your business in 2011

Have Homeroom Each Day

Hey, having homeroom each day worked in school, why would we NOT do it in the office? The best way to get your day off started on the right foot is to get your team together for 15 minutes at the beginning of each day, making sure everyone knows and understands their priorities for the day, and has no obstacles in getting them done. This typically will alleviate late day fires (for you and for them), and makes sure everyone knows what needs to be completed before the end of the day. If your team is just you, this is still a good exercise to prevent disappointment and problems at the end of the day.

Batch

The most unproductive time is spent doing bits and pieces of projects throughout the day. This is most obvious with email and phone calls. Pick 2-3 times per day where you check and respond to your emails. Do the same with phone calls. You will find that batching these tasks will give you enormous amounts of time back into your day.

Delegate

For business owners this is one of the hardest things to do because we do everything better than others, right? Well even if that is the case, that doesn’t mean we should. As a business owner, we should be doing the things that only we can do as business owners. A great test is if you find a task that you are doing multiple times in a week (maybe even in a month), you can typically find someone to do that for you. Be creative with this. You don’t have to look just inside your office for the solution. You can outsource many tasks to resources better equipped and better trained to handle your needs.

Prioritize

Make sure you get the most critical things done each day. Sometimes tasks are small but critical and get lost in the shuffle as a result. Use one of our tips above and batch those together as well. There is nothing more satisfying than quickly crossing off important things you have gotten done each day.

At The Payroll Department, Inc. we see it as our purpose to give time back to you each month by handling the issues of your payroll for you. Even if you are using another company, typically you or your employees are still addressing issues that we handle for our clients. We make payroll simple for you - because payroll is all we do.

On behalf of our staff at The Payroll Department, Inc. we want to wish you a very Happy Holiday and a safe and prosperous 2011.

The IRS announced a reduction in 2010 FUTA (Federal Unemployment Tax Act) credit for Michigan, South Carolina and Indiana, resulting from unpaid federal loans. This reduction means an overall increase in the FUTA taxes for these states.

Employers are required to pay a flat rate of 6.2% on the first $7,000 of each employee’s annual wages; however, a credit of 5.4% is received for paying state unemployment on time. The Social Security Act requires a reduction in the FUTA tax credit when a state has outstanding federal loans for two consecutive Januarys. The reduction in the FUTA tax credit is 0.3% for the first year and an additional 0.3% for each succeeding year until the loan is repaid.

South Carolina: An additional $21 per employee ($7,000 × 0.3% = $21) this first year. 
Indiana: An additional $21 per employee ($7,000 × 0.3% = $21) this first year.
 Michigan: An additional $42 per employee ($7,000 × 0.6% = $42) this second year.

The FUTA credit reduction will become elective retroactive to January 1, 2010 and will be due on federal IRS Form 940 by January 31, 2011.

Often times businesses start processing payroll internally to save money, and as the number of employees increase, so do the complications and the time they themselves or their employees spend on payroll. Not only can the owner put himself/herself at risk doing payroll on their own, he/she may also be needlessly hurting their bottom line. Often times it’s much more cost effective to outsource. One of the phrases we hear most is “I didn’t realize how inexpensive it is to outsource payroll.”

Here are 3 questions to ask yourself to see if you are helping or hurting your bottom line by NOT outsourcing your payroll.

Is an employee spending over half their time on payroll tasks?

If this is the case, it would be much cheaper to outsource and either reassign that person to other tasks or eliminate the position altogether. Payroll processing companies that focus on payroll only are much more efficient - dealing daily with the procedures necessary to effectively process payroll for you.

Do you have a process to collect, interpret, and modify when the IRS makes changes?

Often times, in-house payroll personnel cannot track or even understand the implications of many of the IRS changes that affect payroll. If you do in-house payroll, you need a system to collect all of the changes, analyze how/if they affect your business and implement a process to adjust to the changes. Often this in and of itself can be a frequent and timely exercise for businesses.

Do you have confidence that mistakes aren’t being made?

With changes in withholdings (both initiated by the government AND the employees) as well as pay changes, payroll means a lot of moving parts for a company. It’s so much more than just writing payroll checks. Employers need to stay updated on state and local as well as federal changes. Employers set themselves up for unhappy employees as well as IRS and state challenges.

If you answered no to any of these questions above, now is a great time of year to look to make a change with your payroll. Contact The Payroll Department, Inc. today to set up a free consultation and see for yourself how easy a switch can be to improving your bottom line.

If you are a shareholder of 2% or more of an S-Corporation, the amount of any health and accident premiums paid on your behalf MUST be reported as wages on the W-2.  They are considered taxable wages, but they are not subject to Social Security or Medicare (FICA) or Unemployment (FUTA/SUTA).  They MUST be included in Box 1 of the W-2, but they will not be included in Box 3 or 5.  They will then qualify as a deduction on the 1040 as an above-the-line deduction.   DO NOT INCLUDE LIFE INSURANCE PREMIUMS. 

What this means to you is that you MUST have those amounts reported to us prior to December 31, 2010 in order to get them included on your W-2 at no extra charge.  For all amounts that come in after that time, they may be subject to a fee for an amended form.

If you have any questions, please don’t hesitate to contact our office.

Teresa Ray, owner of the Payroll Department was recently featured in an article in HR News Magazine. Click here to read that article.