2014

* Payroll * The process used by an organization to pay its employees accurately and on time

* Complexity * Monitor and implement federal, state, and local tax laws * FPC Testing is based on Federal Law * Communication * Paychecks, paycards, vouchers – must be timely, accurate, and easily understood – must be clear and concise * Technology * Software, equipment, and web-based applications can automate and enhance payroll processing, timekeeping, and record storage * Accuracy * Required for tax filing, management reports, and paychecks

Worker Status  Employees  Need to provide SSN and W-4  Nonexempt ees subject to FLSA standards  Taxes withheld and paid by the employer  Receive a W-2  Independent Contractors  Need to provide an TIN and W-9  Taxes withholding not required  Receive a 1099-MISC

 Temporary/Leased Employees  Agency and company have a contractual agreement  Workers are employees of the agency but subject to company policy  Agency bears the burden of paying, withholding taxes, reporting, and administering benefits for these workers Worker Status (continued)

* The IRS imposes fines and penalties when employees are mistakenly classified as independent contractors. Treat the worker as an employee to avoid non- compliance and penalties and: * Seek public ruling information * Request private ruling from the IRS

* My new hire is an employee. * What’s the next step?

* Immigration Reform and Control Act of 1986 * I-9 Employment Eligibility Verification * Required to prove identity and right to work * Employers can face stiff penalties for knowingly hiring workers not eligible for employment: from $375 for first offense to $16,000 for third offense, or if a pattern of violations exists, criminal charges

* Form W-4 * Federal Employee Withholding Allowance Certificate * Employee completes W-4 during hire process * Employer can request SS card to verify SSN * SSNVS Social Security Number Verification System & E-Verify

* Hire Date * Employee completes Section 1 * Within first 3 days at work * Employer reviews and completes Section 2 * Retention * 3 years OR 1 year after termination

 W4 – Federal Employee Withholding Allowance Certificate  Requested when hired and for life changes  Default is Single with 0 exemptions  Alterations, flat dollar amounts, and percentages are invalid  Exempt status – filed annually, earns less than tax exemption  No IRS notification unless requested  Retain for 4 years from last 1040 filing or 1 year from termination The “W” Forms

 W4P - Withholding Certificate for Pension or Annuity Payments  Default is Married with 3 exemptions  Additional amount is allowed

 W4S - Request for Federal Income Tax Withholding from Sick Pay  3 rd Party wage payment for illness or injury that is non- job related  Minimum withholding is $20/week  Minimum net pay of $10  Many states require tax withholding