What you don't know can hurt you. That's never more true than when handling payroll. The first step to complying with regulations is understanding them.
That's why you'll begin your day with a crash course in payroll's legal basics. You'll find out what areas fall under state, federal, and joint regulation, and learn how to avoid the often staggering penalties and fines of non-compliance.
Handling payroll sounds like a simple proposition. Employees work at a certain rate of pay. You take out taxes and give them the rest of what they've earned. If only it were that clear cut. Regulations regarding special benefits and other payments turn a simple proposition into a legal landmine.
Armed with the strategies you'll gain at this seminar, you'll handle payroll accurately, legally, and with complete confidence.
Every employee's paycheck presents a different challenge. After this seminar, you'll know which forms to use when and, most important, how to keep your company out of hot water with the DOL and state agencies. It's their job to catch you in a mistake. Together, we'll make sure that doesn't happen.
Top FAQs
Even if a check is abandoned, the employer has no right to void the check. The funds from an uncashed payroll check should never be returned to the company's payroll checking account. Employers must keep the funds available to pay the employee or to submit to the state.
Definitely! An audit can be done either by an internal person or outsourced to an expert, with the expectation of fixing or updating any issues to avoid fines, penalties, etc.
You report bonuses as wages and as social security and Medicare wages on Forms W-2 and 941
Yes.
Absolutely!
There are several major and many minor requirements, some federal and some state specific.
Yes. Certain types of Compensation Plans do require a written plan document, plus have certain notice and reporting requirements.
The Form W2 reports an employee's annual wages and the taxes withheld.
In business since the mid-1990's, we have over 25 years of experience delivering high-quality training content via seminar, webinar, online, and other formats. Each of our courses are delivered by an industry expert who will share his or her years of experience to help you be in compliance, smarter, and more productive, and almost all offer SHRM and HRCI credits.
Payroll is much more than just handing out paychecks, and includes a variety of responsibilities such as handling garnishments, travel pay, multi-state taxation, unclaimed paychecks, and much more in a timely and accurate fashion.
Compensation planning is the process of defining and implementing the strategies that will be used to attract, motivate, and retain talent to help an organization meet its operating objectives and employee needs.
Completing forms accurately, knowing when and where to file, and doing so on a timely basis.
It often depends upon which factors - such as pay, tools, equipment, work hours, manner and means of performing services, etc,) the worker has control over.
The company withholds income tax, Social Security, and Medicare from wages paid for employees, but none for Independent Consultants.
Yes. Additionally, there are certain rules regarding what qualifies, status changes, use of funds, and more.
Some of the work involved in developing a Compensation Plan includes analyzing and evaluating jobs, performing market surveys, writing job descriptions, and communicating and evaluating your plan.
While many payroll-related regulations are federally-governed, there also are many state requirements, including those for handling garnishment, final paychecks, and unclaimed paychecks. Each state's requirements differ in the details, so be sure to check your state's requirements by clicking the applicable link(s) at the bottom of this page.
Get trained on what to do! In some instances, fraud may require you to involve the police and/or go to court, so make sure you do things correctly!
Yes. Employers can be fined or penalized if they don't return the check, even if the person can't be found. In these situations, employers are legally bound by state law to return any uncashed paychecks to the state where the person last worked.
In addition to ensuring that employees are paid correctly and on time, "Payroll" has numerous time and reporting requirements. The primary payroll areas include paychecks, reporting, operations, and management.
Payroll Administrators must be able to:
- Properly "classify" workers
- Apply the various exemptions
- Calculate gross pay and properly make deductions
- Correctly identify, pay, and withhold taxes for employees
- Administer deferred compensation, cafeteria plan, sick pay, and other compensation
- Handle stock options, expense reimbursements, relocation, and other "expenses"
- Follow the proper policies, procedures, and documentation requirements for garnishments and levies
- Properly complete and file all required reporting requirements
- Correctly complete year-end requirements and establish year-beginning requirements
- Implement and maintain fraud, audit, disaster recovery, and record retention processes and procedures
Yes. There are also notice and reporting requirements to have a qualified Cafeteria Plan.
Federal and state governments impose a variety or rules, regulations, and reporting requirements, so the hardest parts of payroll recordkeeping is knowing all of the rules, then complying - on a timely basis - with them!
A payroll audit typically occurs because either for many reasons: an employee makes a claim of unfair pay practices
ERISA does not require any employer to establish a retirement plan. It only requires that those who establish plans must meet certain minimum standards.
Yes. For child support orders, the maximum amount that can be withheld runs between 50 (if the employee is supporting another spouse and/or children) and 65% (if the employee is not supporting another spouse and/or children and is at least 12 weeks in arrears in making support payments).
Cafeteria Plans allow employees to pay certain qualified medical expenses on a pre-tax basis.
The answer to when should the last pay check be given is "it depends". Most states have laws mandating how soon a departing employee must receive his or her last pay check. In some, the final paycheck must be given at the time of termination; in others, employers have more flexibility with regard to the timeliness of giving the last pay check.
There are several: employees get beneficial tax treatment on certain expenses, while employers get to cost share health care premiums and save on reduced payroll tax expenses.
Yes. In many cases, state laws conflict with federal laws, so be sure to check both!
The amount of pay subject to garnishment is based on an employee's "disposable earnings", which is the amount left after legally-required deductions are made. Employers should be aware that there are two general types of garnishments, one for child support and one for creditors (commonly referred to as "levies").
Yes. Unclaimed paychecks are subject to escheat laws as unclaimed property. The laws of the state where the employee last worked apply. Employers that have a paycheck for a former employee or employee which has not been claimed for a period of time must follow the same state reporting timeline as for other property.
Employees work directly for the company, which controls their work, pays their taxes, and often provides benefits, whereas the Independent Contractor is hired to do a specific job without the employee perks.
Yes.
A payroll audit is a review of an organization's payroll procedures. It can be done internally for assurance or by an external entity such as the government in reponse to a complaint, lack or inconsistent reporting, etc.
A Compensation Plan consists of the salary, wages, commissions, benefits, and perqs paid to attract and retain employees.
Various states have requirements re how - and when - an employer must pay final wages. For instance, many states allow employers to pay final wages via direct deposit if an employee previously authorized direct deposit for wages, but these states often have rules regarding the timing of such payments. As such, definitely check your state's requirements.
Generally speaking, unclaimed paychecks, employers are required to hand over the amount of the check to their state. This process, called "escheatment", requires abandoned or unclaimed personal property to be submitted to the state after a certain time period (depending upon the state, "unclaimed" means from one to five years).
Depending on the individual state's rules, the final paycheck can be paid via check, direct deposit (if an employee previously authorized direct deposit for wages), payroll paycard, or mailed.
A payroll certification covers all aspects of payroll, making you a better payroll administrator.
Payroll certification programs offer payroll professionals a chance to acquire essential skills, enhance their professional standing, and earn more.
The answer to when should the last pay check be given is 'it depends'. Most states have laws mandating how soon a departing employee must receive his or her last pay check. In some, the final paycheck must be given at the time of termination; in others, employers have more flexibility with regard to the timeliness of giving the last pay check.
The final paycheck should contain the employee's regular wages from the most recent pay period, plus other types of compensation such as commissions, bonuses, and accrued sick and vacation pay. Employers can withhold money from the employee's last paycheck if the employee owes your organization.
You report Medicare taxes on Form W2
Cafeteria Plans offer tax savings on certain health insurance premiums for medical, dental, and vision coverage, plus certain costs for health and dependent care
Generally speaking, an employer might be able to deduct the cost of the equipment from the final pay of non-exempt employees, but employers cannot withhold a terminated employee's paycheck until equipment is returned.
Employers generally have to notify the debtor in writing that a wage garnishment is about to start before sending payments to the creditor. The wage garnishment then typically continues until the debts are paid off or otherwise resolved. Employers are required to provide employees with a copy of garnishment paperwork.
Phantom employees and having a co-worker punch a timecard for an employee who is not present are two common issues of payroll fraud.
You report Social Security info on W-2, W-3, and 941
Our payroll certification programs typically take more than 40 hours to complete, and cover paycheck fundamentals, reporting requirements, operations, and more.
Form 941 is used to report income taxes, Social Security tax, and Medicare taxes withheld from employee's paychecks.
A Cafeteria Plan is an employer-sponsored benefit that complies with Section 125 of the Internal Revenue Code.
The process for earning a "certification" involves taking advanced education, then passing an exam.
Unclaimed paychecks are subject to escheat laws as unclaimed property. As such, the laws of the state where the employee last worked apply. As such, employers should return any uncashed paychecks to the state where the person last worked.
