Hey We All Make Mistakes Most of Us Don’t Devote a Web Page to It

The IRS has announced that it has reissued the Publication 509 due to an error on the deposit schedule on page 11.  So if you have not downloaded the latest version you will need to update your files.  The IRS having to reissue a publication or make a correction is not uncommon. In fact, I, myself, have discovered 4 to 5 errors in publications that I have pointed out to the IRS over the years.  One year, the IRS made a calculation error when demonstrating the percentage method in the Circular E and supposedly received thousands of emails and phone calls from payroll professionals questioning the calculations.  Although payroll professionals know and understand that the errors will occur what many do not know is that the IRS has a webpage devoted to these corrections.  When they update a form, its instructions or a publication they usually publish it on this page http://www.irs.gov/Forms-&-Pubs/Changes-to-Current-Forms-&-Publications .  Then if they have an error or correction they announce it on this page.  It is very handy  and one I recommend checking from time to time.

FUTA Credit Reduction–Just Out

My sources (not the DOL or IRS as of yet) are telling me that the following states will have a credit reduction for FUTA for 2014.  The IRS has not released the Form 940 Schedule A as of this time but the source I have is pretty reliable so I will post just to give you a heads up.  I will also post when the IRS releases the forms.  The states are: California, Connecticut, Indiana, Kentucky, New York, North Carolina and Ohio.  The list also includes the Virgin Islands.  All will have a rate of 1.2% credit reduction for a net FUTA rate of 1.8% except for Connecticut and Indiana.  Connecticut will have a credit reduction of 1.7% with a net FUTA rate of 2.3%.  Indiana will have a credit reduction of 1.5% with a net FUTA rate of 2.1%.  Again I will post the Form 940 and the Schedule A as soon as they are released.

Friday is Round-Up Day

Here is the information that came in this week for our Friday is Round Up Day. Remember to get the information as it comes in sign up for our Facebook page, Twitter or LinkedIn updates.

IRS: Has finalized the Form 8922 Third Party Sick Pay Recap and it is available on the IRS website

California: the state has issued its 2015 withholding tables.

Illinois: voters (over 66%) approved the minimum wage advisory question on the ballot on Tuesday. The measure asked voters whether they supported increasing the minimum wage from $8.25 per hour to $10.00 per hour by January 1, 2015.

Kentucky: 2015 withholding tables have been issued. Available on the Department of Revenue website

New Jersey: Voters in both Trenton and Montclair voted to approve mandatory paid sick leave by employers in their respective municipalities. This brings the total to eight municipalities in the state to mandate paid sick leave. These others are East Orange, Irvington, Jersey City, Newark, Passaic, and Patterson. The new law is modeled after the Newark law that requires employers with 10 or more employees to provide up to 40 hours of paid sick leave per calendar year. Employers with fewer than 10 employees must provide up to 24 hours of paid sick leave.

Oregon: The 2015 SUI taxable wage base will increase to $35,700. This is an increase of $700 over the 2014 wage base of $35,000. However the tax rates will decrease by falling to Schedule 5. 2014 rates were based on Schedule 6.

South Carolina: The SUI wage base for 2015 will increase to $14,000. This is up from $12,000 for 2014. However the tax rates will decrease by 9%.

Welcome Aboard Mr. Secretary

From Tom Perez, the Secretary of Labor: “Hopped across Western Europe and over the English Channel last night and landed in London, where I met this morning with paid leave and living wage advocates who are building innovative partnerships to increase wages in and around London. The United Kingdom already has a paid leave law – I’ll keep repeating this because it’s so astonishing to me: the U.S. is the only industrialized nation without one – but they keep refining the program to try to make it stronger.”

Welcome aboard Mr. Secretary I have been amazed about the fact that this great nation is the only one out of 140 nations without mandated sick leave on a national level for more than five years.

Paid Sick Leave is on the Move–Up Next Massachusetts

The sick pay movement has another notch on its belt for a resounding win in Massachusetts. 60% of the voters approved the measure known as Question 4 on Tuesday making Massachusetts the third state in the union behind Connecticut and California to mandate sick leave. Employers with 11 or more workers have to provide paid sick leave, those with 10 or less do not have to provide paid sick leave but must let the workers take unpaid time off in the same situations. And it is illegal for companies to punish workers for exercising their rights under the new law.

The details are as follows: Employers must provide their workers with one hour of paid sick leave for every 30 hours they work. It is capped at 40 hours of leave for the year. It is effective July 1, 2015. Workers can use the time when they are ill, injured or need to tend to a medical condition. They may also use it when a spouse, child or parent needs to be cared for. Employees can begin to use their earned sick leave on the 90th day of employment. They can carry over up to 40 hours of unused sick leave in the next calendar year but may not use more than 40 in a calendar year. Employers may require the employee to certify their need for sick time if they use more than 24 consecutively schedule work hours. Employees need to make a good faith effort to give employers advance notification if the need to use the earned sick leave is foreseeable such as doctor appointments.

I have been on my soap box about mandated sick leave for years. Of course I am all for it. But why can’t we do it like other “industrialized nations” and have one federal law that mandates sick leave or just PTO. We are the only country out of 140 leading nations that does not give workers paid sick leave on the national level. Instead we get it either on the state level or even worse on the city level. This is what creates the burden on employers, or as I see it, payroll professionals. Not that I have to track one sick leave law but that I have to track it state by state and city by city.

But those that champion mandatory sick leave (and I am one of them) including labor unions and groups devoted to working women and mothers are on a roll and since they can’t get anything done in Congress they are taking their cause to the “streets” and winning there.

Mark Your Calendar

IRS: Has released the 2015 Publication 509 Tax Calendars. This publication shows the legal holidays for 2015 as well as the general, employer’s and excise tax calendars for the year. It also includes a table showing the semiweekly deposit schedule due dates for 2015.

The legal holidays for 2015 are as follows:

January 1–New Year’s Day

January 19–Birthday of Martin Luther King, Jr./Inauguration Day

February 16–Washington’s Birthday

April 16–District of Columbia Emancipation Day

May 25–Memorial Day

July 3–Independence day is observed

September 7–Labor Day

October 12–Columbus Day

November 11–Veteran’s Day

November 26–Thanksgiving Day

December 25–Christmas Day

 

Remember that a statewide legal holiday does not delay a due date for making a federal tax deposit.

Taking the Time off to Vote

Today is the mid-term elections. And it always puzzles me why we don’t have a better turn-out when it comes to voting in this country. Voting is free, in many places it opens early and stays open late and now we even have early voting as well as absentee ballots. So why doesn’t everyone vote? It is a mystery. But this is a payroll blog not a political one so let’s get on with voting and payroll. By that I mean, what is required of employers when it comes to voting and their employees. Is it mandatory for an employer to allow an employee time off work to vote?

Although most elections are federal in some form or manner there is no federal law that specifies the employer requirements for time off to vote. The federal law protects a person’s right to vote by prohibiting interference with the voting process, including voting, campaigning, or acting as a poll watcher or election official. But actually mandating time off to vote during working hours is another area left up to the individual states. States that have a mandate generally require the employee be given enough time to vote unless there is a certain amount of time available to the employee either before or after the shift to vote. An example of this is for Nebraska which states that the employee must have up to 2 hours unless polls open 2 hours before or after work. This is actually the most common mandate. 15 states require the two hour window. These states include: AK, CO, GA, HI, IL, KS, MD, MA, NE, NM, OK, SD, TX, UT and WA. Six states require a 3 hour window. An example is Arizona which requires up to three hours, unless polls open three hours before or after work. Other states that require the three hour window include IA, MO, TN WI and WV. Two states, AL and WY require only a one hour window and KY and NY have the longest requirements with a four hour window.

But some states are not quite as clear cut on their requirements. For example, NV, mandates “sufficient time” from one to 3 hours depending on the distance from or to the poll. Some states, including AR and CA just state that work hours must be scheduled to allow employees the opportunity to vote. MN requires time necessary to appear at the employee’s polling place, cast a ballot and return to work on the day of the election. MS just requires necessary time to cast a vote. ND encourages employers to provide voting leave when the employee’s regular work schedule conflicts with times polls are open. OH just states “reasonable time”. However many states do not have any provisions concerning voting. These include: CT, DE, DC, FL, ID, IN, LA, ME, MI, MT, NH, NJ, NC, OR, PA, RI and SC. The law in VT permits an employee to be entitled to take an unpaid leave from employment to attend his or her annual town meeting. While VA does not specify a time limit but looks to the starting and ending times of the workday on voting day.

It is important to determine and follow the requirements when it comes to allowing employees time off to vote.

Friday is Round Up Day!

When it comes to updates to payroll not all are created equal but all are important–Some, just not right now. Updates to pension plans or the social security wage base—those we want and need to know right now. But other items, I need them but in the next week or so will do. These include items like SUI wage bases and rates, minimum wage updates for next year, and withholding tax tables for next year being released just to name a few. I have already blogged on the fact that I was holding on to the SUI wage bases and doing a once a week blog on them only. But as for the others, well let’s face doing a blog on “the minimum wage increased in Arizona” results in a very short blog. So I am expanding. What will now be known as our Friday is Round Up Day (yes those of you whose childhood goes that far back will remember that from a “certain mouse’s club’s” daily afternoon show) I will list the roundup from the states of such items as withholding tables, SUI wage bases, minimum wage increases or changes, filing electronically changes, same sex marriages updates, etc. I hope you find it informative. If you want these faster than weekly please sign up for our Facebook, Twitter or LinkedIn updates as it will be posted daily there as they come in.

 

Alabama: Just a reminder effective October 20, 2014 all employers submitting 25 or more Forms W-2 must submit such information and Form A-3 electronically through the Department’s website. This is down from 50 in past years.

Arkansas: 2015 Withholding tax tables issued and available on the Department of Finance and Administration website

Florida: The minimum for 2015 will be $8.05.

Maryland: The withholding tables will not change for wages paid on and after January 1, 2015. For 2015 employers will use the same fourteen withholding brackets.

Missouri: 2015 SUI wage base and rates will remain the same as 2014, $13,000. The voluntary contribution deadline is January 15, 2015.

New York: Yonkers is revising the income tax withholding tables for wages paid after 1-1-15. The supplemental rates will be:

Yonkers resident: 1.61135%

Nonresident: .050%

The resident rate decreases from the 2014 rate of 1.84704%

copy of rule making

North Carolina: As the result of recent court rulings that overturned the state’s ban on same-gender marriage, the North Carolina Department of Revenue issued a directive providing for new income tax filing procedures for affected individuals. Employers should note that the directive states that North Carolina employees who have entered into a same-gender marriage must furnish to you a new Form NC-4 or NC-4 EZ.

2015 Inflation Adjusted Items from the IRS

The IRS has finally released Revenue Procedure 2014-61. This is the one we have been waiting for that gives us the items that are adjusted for inflation each year but are not pension plan related. This includes such items as transportation fringe benefits, adoption credit, and the foreign earned income exclusion amount. Here are the 2015 rates in the order they appear in the procedures:

Adoption credit: $13,400

Cafeteria Plans: FSA limit $2,550. This is up from $2,500 for 2014

Qualified Transportation Fringe Benefits: These rates are not changed from 2014. Parking remains $250 and transit passes remain $130.

Medical Savings Accounts:

 

Type of Coverage MinimumAnnualDeductible MaximumAnnualDeductible MaximumAnnualOut-of-Pocket

Expenses

Self-only $2,200 $3,300 $4,450
Family $4,450 $6,650 $8,150

 

Foreign Earned Income Exclusion: $100,800

There are many other items listed in the revenue procedure that may be of interest to payroll professionals that we don’t cover here. To review the procedure itself click here.

Overtime Rules: Some are still working on the basics

When I decided to start blogging I had to make a decision. Do I just blog the updates or do I take on issues that I feel are important.  I made the decision that I would from time to time, when I had a slow news day, take on issues that I feel are important from a payroll point of view.  And today is one of those days.  Overtime is a basic right for the workers of this country and has been for over 75 years. Yet, it still never ceases to amaze me how many companies in this country still do not understand the basics of calculating overtime and paying employees properly. The law (FLSA) currently requires that an employee must be paid 1 1/2 times their regular rate of pay for all hours worked in excess of 40 hours in a workweek. When Secretary of Labor Francis Perkins worked on getting the FLSA passed back in 1938 she basically created the term regular rate of pay.  It never actually meant the rate at which you are normally paid–but was a combination of many different factors to arrive at the rate.  For example if an employee is paid $10 an hour normally and gets a bonus or a sales commission the overtime is not going to be based on $10.00 an hour but a calculated rate that takes this type of payment into account. That portion of the law has not been altered or changed in any way since 1938.  And according to the latest press release from the Department of Labor (DOL) another company–in this case AT&T Prime Communications LP has also gotten a public lesson on how to calculate overtime. And after this math lesson the company paid $122,254 in back wages to 255 employees.  In their press release on the investigation the DOL wrote: “This was a systemic, corporatewide issue that affected workers throughout the country,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “The FLSA has been in effect for 75 years, and employers are responsible for knowing and following the laws that apply to their businesses.”

And that is the way I feel.  Overtime is not some new law that we are still working out the nuances of and it will take a while.  I would find it remarkable if there were still a lot of people working in a company or in charge of one that was alive and working  prior to the FLSA going into effect. We all grew up working under it. So come on employers out there–get the basics of overtime right.  It is the least you can do for your workers and for yourselves.  Remember along with those back wages can come penalties, fines and interest!