HR COMPLIANCE

When does my employer need to send out my W2?

Federal law requires all employers to send employees W-2 statements for all wages earned. These W-2 statements can be sent in either paper or digital form and must be received by employees no later than January 31 of the following year.

What is FMLA?

The Family and Medical Leave Act (FMLA) is a federal law requiring covered employers to provide employees with job-protected and unpaid leave for qualified medical and family reasons. Qualified medical and family reasons include: personal or family illness, family military leave, pregnancy, adoption, or the foster care placement of a child.

Am I eligible for FMLA?

An FMLA eligible employee is an employee who has been employed with their current employer for at least 12 months, has worked at least 1,250 hours over the past 12 months, and works at a location where the company employs 50 or more employees within 75 miles.

Is my employer required to provide vacation/PTO time?

The Fair Labor Standards Act (FLSA) does not require employers to provide payment for time not worked, such as vacations/paid time off (PTO), or sick time. These are additional benefits that an employer can provide.

How does unemployment insurance work?

Unemployment insurance is a state-operated insurance program that provides unemployment benefits to eligible workers who are unemployed through no fault of their own and meet other eligibility requirements of state law. Please visit your specific state unemployment website for more information.

What are the benefits of an Employee Assistance Program (EAP)? What can it do for me?

An Employee Assistance Program (EAP) is an employee benefit program that assists employees with counseling and work-life balance, legal and financial resources. Many EAPs also provide learning and development opportunities as well. Resources are geared toward both professional and personal matters. The EAP is confidential (your employer will not know which employees have used the EAP) and available 24/7.

What are the required documents for completing section 2 of Form I-9? 

The U.S. Citizenship and Immigration Services’ website has a complete list of acceptable documents for completing Section 2 of the Form I-9. Click here to go to this website.

Why do I have to complete an application if I already submitted a resume for a job position?

You may be required to complete an application even though you already submitted your resume, because information that is required to complete a background check is typically missing from your resume.

What is performance management?

Performance management involves ongoing conversations between a manager and an employee to help ensure goals are being met and the individual is performing to the standards of the job. At times, an employee may be asked to sign a warning/corrective action form. The signature does not mean that the individual agrees with the content on the warning but is acknowledging that the conversation took place and the employee is receiving a copy of the document.

Define exempt status on Form W-4?

To qualify for exempt status on a Form W-4, you must have had no tax liability for the previous year and must expect to have no tax liability for the current year. The exempt status is only valid for the calendar year in which the employee filed.

 

PAYROLL

How long do I need to keep payroll records?

The Department of Labor requires employers retain payroll records for three years. Payroll tax records should be retained for four years. Some states, such as California and New York, require records to be retained for six years. Check your specific state laws.

What qualifies a contractor as a 1099 and an employee as an employee?

1099’s are considered contractors hired to assist with designated work. A 1099 has the ability to designate their own schedule, refuse certain jobs, finish assignments using their own methods, and use their own tools. Once the job is completed for the 1099, the contract is ended and no further work is needed. An employee is one who reports to a supervisor, is designated to be at the office at a required time, training is provided by the company, and benefits are offered.

Why are my taxes higher in the beginning of the year than at the end of the year?

Depending on your annual gross salary, tax wage base limits start over again at the first of the year. The wage base limit for Social Security in 2019 is $132,900. Once an employee has earned this much in gross pay for the year, Social Security taxes are no longer withheld.

I received a notice from the state regarding an Unemployment rate change, what does this mean?

The unemployment rate change means the state has updated the taxable rate for state unemployment tax. These rate changes are sent out each November. Forward to your payroll provider for accurate state unemployment tax withholdings.

Which payroll deductions are taken out pre-tax and which are taken out post-tax?

Pretax deductions are deductions taken out of your pay before tax is calculated on your gross wages. Types of pre-tax deductions include Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), retirement contributions, and health insurance. Post-tax deductions are deductions taken after tax is calculated on gross pay including uniform deductions, Roth 401(k), Post-Tax health insurance, and garnishments.

Which payroll taxes are the employee’s responsibility and which are the employer’s responsibility?

Payroll taxes that are the employee’s responsibility include state taxes, federal taxes, local taxes (where applicable), the employee’s portion of Social Security tax, and the employee’s portion of Medicare. Employer payroll taxes include Federal Unemployment tax (FUTA), State Unemployment tax (SUTA), the employer’s portion of Social Security tax, and the employer’s portion of Medicare.

What happens if I process payroll late? Can I be fined?

Employees can report employers that do not pay on time to the Department of Labor to request an investigation.

What payroll forms need to be filed?

Forms required to be filed for payroll include 941 (Employers Quarterly Federal Tax Return), state unemployment returns (quarterly filing), and state income tax returns (quarterly filing). Forms W-2 (Employee Tax Statement), W-3 (Employer Tax Statement) and 940 (Federal Unemployment Return) should be filed annually.

Who regulates payroll companies?

Payroll companies are not regulated by any agency. The reporting of taxes is mandated by the IRS and the reporting of employee wages is mandated by the Department of Labor.

Are there any laws on how often I need to process payroll?

Federal and state laws require employees to be paid at regular intervals. For example, you cannot pay an employee biweekly one month and then monthly the next. Some states do mandate the frequency of payroll. For example, in Arizona an employee is required to be paid every 16 days and Minnesota requires every 15 days. Check your own state’s regulations

When are payroll tax deposits due?

Payroll taxes due dates depend on your depositor type. If you are a monthly depositor, taxes are due on the 15th of the following month. If you are considered to be a semi-weekly depositor, taxes for payrolls paid on Saturday, Sunday, Monday, or Tuesday are due by the following Friday. Taxes for payrolls paid on Wednesday, Thursday, or Friday are due on the following Wednesday.

How does payroll outsourcing work?

Outsourcing payroll can save a company time and money. Instead of manually tracking time, ensuring tax deposits are paid timely, and keeping up with the latest payroll laws, some organizations choose to outsource this administration. These outsource resources assist with gathering employee’s information, obtaining timesheet information, calculating pay for each employee, and issuing payments to the employees. Additionally, they will handle the creation and distribution of Form W-2 and deposit your payroll taxes to the government.

What type of payment options must I offer my employees (i.e. direct deposit, pay cards, hard copy checks)?

Employers can offer to pay their employees in the form of check, pay card, or direct deposit. There are specific states, such as Arizona, which mandate payment of direct deposit. Check your specific state laws.

Are bonuses taxed differently than regular pay?

According to the IRS, bonuses are considered supplemental wages. Bonuses can be taxed by using either the percentage method or the aggregate method. The percentage method is a flat supplemental rate of 25%, while the aggregate method is used when the employer pays the bonus with your regular rate of pay. The percentage of tax withheld is determined by the IRS withholding tables.

 

WORKERS’ COMPENSATION

Who should the injured worker notify?

The employee should inform the employer promptly. The law requires the employee to notify the employer of the date and place of the accident, if known.

Notice may be given orally or in writing. To avoid problems, we recommend the employee give the employer a written notice containing date and place of the accident, a brief description of the accident, injury, or disease; and the employee’s name, address and telephone number.

Notice to a fellow worker who is not a part of management is not considered to be notice to the employer.

What should the employer do after receiving an injury notice?

The employer should promptly take the following steps:

  1. Provide all necessary first aid and medical services;
  2. Inform the insurance carrier or Workers’ Compensation administrator, even if the employer doubts the employee’s claim;
  3. If the employee cannot work for more than three* days (*In IL, but may vary by state) because of the injury, the employer must do one of the following:
  4. Begin payments of TTD (Temporary Total Disability) or
  5. Give the employee a written explanation of the additional information the employer needs before it will begin payments; or
  6. Give the employee a written explanation of why benefits are being denied.

What records must the employer maintain regarding workplace injuries?

Employers must post a notice in each workplace that explains workers’ rights under the Workers’ Compensation Act and lists the insurance carrier, policy number, contact information, etc. Additionally, they must maintain accurate records of work‐related deaths, injuries or illnesses (other than minor injuries requiring only first aid and not involving further medical treatment, loss of consciousness, restriction of work or motion, or transfer to another job).

What injuries should be directly reported to OSHA immediately?

All employers are required to notify OSHA when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye. A fatality must be reported within 8 hours. An in-patient hospitalization, amputation, or eye loss must be reported within 24 hours.

To make a report contact OSHA via their 24 hour hotline at 1 (800) 321-OSHA (6742).

Can a worker be fired for reporting an accident or filing a claim?

Fiduciaries act on the behalf of the 401(k) participants and their beneficiaries. As such, they have strict standards and important responsibilities. These responsibilities include: following the plan documents; diversifying plan investments; acting solely in the interest of plan participants to provide benefits; paying only reasonable plan expenses; and carrying out their duties prudently.

How is the Temporary Total Disability (TTD) benefit calculated?

In Illinois, the TTD benefit is 66 2/3%* (but may vary by state) of the employee’s average weekly wage, subject to minimum and maximum limits.

How is the employee’s average weekly wage (AWW) calculated?

The AWW is based on the employee’s gross (pre‐tax) wages during the 52 weeks before the date of injury or exposure.

Is there a waiting period for TTD?

In Illinois, TTD is not paid for the first three* lost workdays, unless the employee misses 14* or more calendar days due to the injury (*In IL, but may vary by state).

 

401(k)

What is a 401(k) plan?
A 401(k) plan is an employer-sponsored retirement savings plan that allows employees to contribute a portion of their paychecks into an investment account. There are certain tax advantages to contributing to a 401(k) plan.

What is the difference between Pre-tax and Roth 401(k) contributions?

Pre-tax 401(k) contributions reduce an employee’s taxable income in the year they are contributed, whereas Roth 401(k) contributions do not reduce the employee’s taxable income in the year they are contributed.  On the reverse side, Pre-tax 401(k) contributions, and the gains on those contributions, increase the employee’s taxable income in the year the money is withdrawn from the 401(k) account.  Roth 401(k) contributions, and the gains on those contributions, do not increase the employee’s taxable income in the year the money is withdrawn from the 401(k) account.

What is IL Secure Choice?

IL Secure Choice is a state-sponsored retirement program that allows employees to save for retirement through a Roth Individual Retirement Arrangement (IRA).  This program is currently in the pilot phase. It will begin phase 1 for employers with 500+ employees in November 2018, phase 2 for employers with 100-499 employees in July 2019, and phase 3 for employers with 25-99 employees in November 2019.

What is a Multiple Employer 401(k) plan?

A Multiple Employer 401(k) plan allows a number of unrelated employers to adopt to a single 401(k) plan. This method provides a cost-effective way of managing risks related to sponsoring a 401(k) plan. This also provides the adopting employers with access to advantageous pricing on investments and administrative services.

What does it mean to be a fiduciary?

Fiduciaries act on the behalf of the 401(k) participants and their beneficiaries. As such, they have strict standards and important responsibilities. These responsibilities include: following the plan documents; diversifying plan investments; acting solely in the interest of plan participants to provide benefits; paying only reasonable plan expenses; and carrying out their duties prudently.

 

The information provided on this website is for informational purposes only and should not be construed as legal advice. Consult your legal counsel and HR partner in all business compliance matters.