Post on 11-Apr-2017
Keeping the DOL, IRS and Others AwayKarin M. Smith, MBA, SFO, CFE
Trouble!
USCIS
DOLIRS
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Alphabet Soup Group
DOL
• Wage and Hour
• Classification of Employees
IRS
• Taxes
• Employee vs. Contractor
USCIS
• Legal work status
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US Citizen and Immigration Services
US Citizen and Immigration ServicesCompleting the I-9 formSection 1 – the employee must fill this section out. Section
must be completed in its entirety. Must check 1 of the 4 boxes provided on citizenship
Section 2 – the employer must fill out with documents provided by the employee. Employer must use original, unexpired documents to fill this out
Section 3 – employer must fill out only upon re-hire of employee
NOTE: All documents must be unexpired. Names should appear on Form I-9 exactly as they appear on documents. No nicknames should be used.
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Preparing for an I-9 Audit
Print a roster of all current employees
Employer must have a completed I-9 form on all employees hired after 1986
If the I-9 form needs to be redone, then make sure to use the current date on the form and ensure it is a current form
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Department of Labor
Most Common Reasons for DOL Visit
Complaint from one employee
Low Wage Industries
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DOL Visits
Little advance notice
Seek specific information about audit
Records collection
Identify point person, legal counsel?
Exit interview
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Overtime
Paying Overtime
Recordkeeping system accuracy for all hours worked
Off-the-clock work
Rest and break periods
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FLSA Audit
Familiarity with all job titles maintained
Ability to explain which job categories are being treated as exempt
Ability to explain any shift rates, how time is recorded, how overtime is paid and what rounding rules exist
Knowledge of how employee-wage garnishments are calculated
Knowledge of whether or how new employees are paid for orientation and training time
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Self Audit DOL Risk Areas
Job descriptions
Job classifications
Time worked, time paid
Complete payroll records
Records retention
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Internal Revenue Service
Fringe Benefits – Taxable?
Group-term Life Insurance
Mileage – commuting miles
Company vehicle
Employee discounts
Education assistance
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Group-Term Life Insurance
Exclude cost up to $50K
Must tax above $50K
Rate x Coverage over $50K x months
IRS Publication 15B
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Mileage/Company Vehicle
Personal use of government-owned vehicles
Mileage – Qualified Non-personal Vehicle• Commuting is taxable fringe benefit
• Recordkeeping and substantiation requirements do not apply
$1.50 rule - multiplying each one-way commute (that is, from home to work or from work to home) by $1.50
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Employee Discounts
Services – no more than 20% can be offered without the discount being taxed
Merchandise or other property –generally excludable discount is the profit
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Education Assistance Excludable for any form of educational instruction or training that
improves or develops job-related capabilities of employee
It cannot be for the purpose of helping employee meet minimum educational requirements
Exclude up to $5,250 during calendar year
Education Assistance Program requires a written plan• Sets rules for qualification
• Cannot favor highly compensated employees
• Not offered cash in lieu of benefits
Pay for tuition, fees, supplies, textbooks, equipment
Cannot include supplies or equipment employee is allowed to keep at the end of the course
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Self-Audit
1099-Misc. Errors
Employee vs. Independent Contractor
Wrong Year
Law Firms, Medical Services
Downloading Forms
Due Date
Employee
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W-2 Errors
SS# doesn’t match name
Wrong Year
Box 12 CodesDownloading
Forms
Retirement Block
Due Dates
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1099-Misc. & W-2?
Carefully review work arrangements
Review work assignments
Clearly document the differences between employment and contracted services
Work must be clearly different
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