PAYROLL LAWGet todays slide show here:

http://slideshare.net/SmithPayroll/payroll-law-2015-april

WELCOME!

Your Facilitator Today is Lisa Smith

You dont know what you dont know until you know. You know?

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

- Chinese Proverb

If you wanna catch the smart fish, you gotta use the Smart Bait!

- Joe Phillips

The Best Practices Policies and Procedures

Rule of 3s

The TruthRegularly, 72% of employers make payroll errors!

HelpDesk for Payroll Professionals via Jackson Lewis

Approximately 1 million workers each week suffer a payroll error = $56,000,000 per week x 52 =

$2.9 Billion/year.- The Payroll Answer Book

Most Errors Come from FLSA Violations2013 Estimated of employers are getting it wrong.

- Department of Labor

Vanburen v. Grubb 2013 also upheld personal liability.- Just in Case by HelpDesk

32

Audit-SecureYour Business!

Have you caught your fish?

1. What made you think you could do it that way?- Reasonable Basis

2. Do you have training records?- Due Diligence and Good Faith Efforts

3. Where are your written policies, procedures, and job descriptions?

- Required to show during audits or lawsuits.

Top Three Questions

EMPLOYEE CLASSIFICATION Common Law Employees Statutory Employees Statutory Non-Employees Independent Contractors

The Cost of Misclassifying Employees is HIGH!!

1

IRS 20 FACTOR TEST

Its All About Control

1. Behavioral

2. Financial

3. Relationship

2-3

4-5

4-5

Audit-Secure Tips Create your own checklist. Conduct an internal audit. Document self-corrections. Create SOP Train Payroll, HR and A/P

Section 530 Safe Harbor 6

W-9 Guidelines 7

W-9 Guidelines 7

Q.E.T.P.Questionable Employment Tax

Practice Initiative

Under QTEP, the IRS and more than three dozen (37) state workforce agencies entered

into agreements to share the results of employment tax examinations.

- Payroll Answer Book, Answer 6:21 section 2(IR-2007-184, Nov.6 2007; FS-2007-25,Nov.2007)

Federal Penalties for Misclassification

Unintentional with 1099s:FITW 1.5 % of wages

FICA 20% of employers portion

Average Penalty = $168.80 / $1000 of wages

Fines DOUBLE if intentional!!Be Careful and DOCUMENT Your Decisions!!

1099 MISC Reporting< $600 or more

< Used for Non-incorporated Businesses

< Always Report Attorney Fees > $600 and Inc.

< Payments Made to Healthcare providers > $600 and Inc.NOT 3rd Party Payers!

< Payments made for the purchase of fish to anyone engaged in the fish catching industry.

BOTTOM LINEIt is better to send too many 1099s than too few!

Sending ZERO 1099s = $10,000 Fine!

9

2015s 1099 K

In January 2016, your Merchant Processor will send a 1099K for all of your credit card income in 2015.

You are NOT required to reconcile their numbers with your own.

If your reported CC income is greatly different from the 1099 K totals, it MAY trigger an IRS audit!

Joe Kristan, writer of Tax Update Blog at Roth & Company writes, The real use of the 1099-Ks will be to identify people in the eBay/Amazon economy who arent reporting their income.

W-4 FORM 10

W-4 FORM10

11

http://www.ssa.gov/

THE NON-EXEMPT EMPLOYEE 26-31

Non-Exempt Audit Tips! 26-31

29-32

2382

Awesome Audit-Secure Package

Build your own pack if you like!4+ items = Special Pricing.

3 Payments

I-9 FORMS

Are your I-9s Compliant?

54

Executive Exempt 16

Science and Learning Exemption

Must have 4 year degree UsuallyMust always need the degree for the job

---------------------------Court in California held:

A receptionist cannot be exempt just because a degree is held in business communications or a person is highly

experienced in public relations.

17

Artistic and Creative 18

Computer Professional 19

Administrative Exempt20-21

Sales Exemptions 25

Exempt Salary Deductions22-23

PERKS AND BENEFITS 34-40

41

12-13

Military Pay

Supplemental Military Pay Compensation paid to employees while on military

duty that represents the difference between employees regular pay and the pay provided by the state or federal government.

Temporary assignment FITW, FICA, Medicare and unemployment taxes

Indefinite assignment - 1099-MISC (over $600)

42

Penalties for Non-Compliance

For amounts not properly or timely deposited, the penalty rates are as follows:

2% - Deposits made 1 5 days late 5% - Deposits made 6 15 days late 10% Deposits made 16 or more days late. 10% - Amounts (that should have been deposited) paid directly to

the IRS or paid with your tax return 15% Amounts still unpaid more than 10 days after the date of the

first notice the IRS sent asking for the tax due Plus interest compounded daily

Penalties for MISSING Deposits can lead to Jail Time.

45

Illustration of Disposable Pay for General Garnishment

Withholdings:FITW $75.00FICA $38.25State W/H $20.00Medical Ins$55.00401(k) $50.00

Disposable Pay:Gross $500.00Taxes (133.25)Disp. Pay $366.7530x $7.25 (217.50) $149.25

Limit 25% $91.69Limit 10% $36.68

Illustration of Disposable Pay for Child Support - Medical Support

Withholdings:FITW $75.00FICA $38.25State W/H $20.00Medical Ins $55.00401(k) $50.00

Disposable Pay:Gross $500.00Taxes (133.25)Medical Ins ( 55.00)

Disp. Pay $311.75

Limit 50% $155.88Limit 60% $187.05

Pro-ration Formula

Employee Owes:

1st - $100.00 = 28.5%2nd - $100.00 = 28.5%3rd - $150.00 = 43%

Total $350.00

Limit = $155.88

28.5% = $ 44.4328.5% = $ 44.4343% = $ 67.02Total $155.88

Answers: Testing Your KnowledgePage 33

1. False2. False3. False4. 30 minutes

Answers: Testing Your Knowledge Workbook Page 46

1. False2. True3. (d) Four years and

as long as valid4. If the IRS requests in

writing5. False

6. False7. False8. False9. True

PAYROLL LAWGet todays slide show here: http://slideshare.net/SmithPayroll/payroll-law-2015-aprilSlide Number 2You dont know what you dont know until you know. You know?Slide Number 4If you wanna catch the smart fish, you gotta use the Smart Bait! - Joe PhillipsSlide Number 6The TruthSlide Number 8Audit-Secure Your Business!Top Three QuestionsEMPLOYEE CLASSIFICATIONIRS 20 FACTOR TESTSlide Number 14Slide Number 15Section 530 Safe HarborW-9 GuidelinesW-9 GuidelinesQ.E.T.P.Federal Penalties for Misclassification1099 MISC Reporting2015s 1099 KW-4 FORMW-4 FORME-Verify and New Hire Reporting HOT TIPSTHE NON-EXEMPT EMPLOYEENon-Exempt Audit Tips!WHAT IS WORK?Slide Number 29Slide Number 30Slide Number 32I-9 FORMS I-9 HELPEXEMPT EMPLOYEES TITLES MEAN NOTHINGExecutive ExemptScience and Learning ExemptionArtistic and CreativeComputer ProfessionalAdministrative ExemptSales ExemptionsExempt Salary DeductionsPERKS AND BENEFITSEMPLOYEE LOANS/ADVANCES3 Types of WithholdingMilitary PayPenalties for Non-ComplianceSlide Number 48Illustration of Disposable Pay for General GarnishmentIllustration of Disposable Pay for Child Support - Medical SupportPro-ration FormulaAnswers: Testing Your KnowledgePage 33Answers: Testing Your KnowledgeWorkbook Page 46