ConnectPay Employer Central

Board Issues Final Rule to Require Posting of NLRA Rights

2011-09-15T16:34:00.000-04:00

The National Labor Relations Board has issued a Final Rule that will require employers to notify employees of their rights under the National Labor Relations Act as of November 14, 2011.

Private-sector employers (including labor organizations) whose workplaces fall under the National Labor Relations Act will be required to post the employee rights notice where other workplace notices are typically posted. Also, employers who customarily post notices to employees regarding personnel rules or policies on an internet or intranet site will be required to post the Board’s notice on those sites.

Copies of the notice will be available from the Agency’s regional offices, and it may also be downloaded from the NLRB website.

The notice, which is similar to one required by the U.S. Department of Labor for federal contractors
http://www.dol.gov/olms/regs/compliance/EO13496.htm , states that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to refrain from any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints.

The Board received approximately 6,500 comments during the 60-day comment period following publication of the Proposed Rule in the Federal Register, and accepted an additional 500 that arrived after the deadline. In response to the comments, some parts of the rule were modified. For example, employers will not be required to distribute the notice via email, voice mail, text messaging or related electronic communications even if they customarily communicate with their employees in that manner, and they may post notices in black and white as well as in color. The final rule also clarifies requirements for posting in foreign languages. Similar postings of workplace rights are required under other federal workplace laws.

Board Chairman Wilma B. Liebman and Members Mark Gaston Pearce and Craig Becker approved the final rule, with Member Brian Hayes dissenting.The rule will be published in the Federal Register on August 30, and will take effect 75 days later, or on November 14.

Source URL: https://www.nlrb.gov/news/board-issues-final-rule-require-posting-nlra-rights

EMPLOYEE USE OF CELL PHONES FOR BUSINESS IS NOT TAXABLE

2011-09-15T15:58:00.001-04:00

The IRS announced September 14 in Notice 2011-72, that, when an employer provides an employee with a cell phone that is used primarily for "noncompensatory business reasons," then the IRS will treat the employee's personal use of the cell phone as a nontaxable working condition fringe benefit without any further substantiation required.

Paul Altavena of ConnectPay relates that the IRS will also treat the value of any personal use of the business cell phone as a nontaxable de minimis fringe benefit. This new guidance applies to the use of any employer-provided cell phone occurring after December 31, 2009 and benefits both the employer and employee.

The non taxable deminimus fringe also applies to the business use of the employees personal cell phones according to Michael Young of ConnectPay. Michael points out that in a memo from the IRS to its field examiners, the IRS further explained that where employers require employees to maintain and use their personal cell phones for business purposes and reimburse them for the business use of their phones, examiners should use the same approach as that found in Notice 2011-72.

The memo cites an example where an employer requires an employee to use his own cell phone to contact clients outside normal office hours. The employee uses the phone for both business and personal calls. In this situation, if the employer reimburses the employee for the basic plan expense, there would be no additional income to the employee.

This notice by the IRS further defined and clarified the Jobs act of 2010 Section 2043 of the Small Business Jobs Act of 2010, Pub.L.No. 111-240 effective December 31, 2009.

http://www.irs.gov/pub/irs-drop/n-11-72.pdf

IRS Increases Mileage Rate to 55.5 Cents per Mile

2011-06-24T09:45:00.001-04:00

Gasoline price increases has prompted the
Internal Revenue Service to increase the business mileage rate to 55.5 cents per mile for miles driven from July 1, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

"This year's increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices," said IRS Commissioner Doug Shulman. "We are taking this step so the reimbursement rate will be fair to taxpayers."

Paul Altavena and Michael Young of ConnectPay said employers should be careful in calculating the 2011 milage rate when using the optional mileage rate instead of actual costs, pointing out that the increase is only effective for the last 6 months of 2011. January through June of 2011, employers will need to calculate at the current rate of 51 cents per mile. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

The IRS normally updates the mileage rates once a year in the fall for the next calendar year, but made the unuusal exception in recoginitoin of the gasoline price increases. Therefore, warned Paul and Michael, employers should watch for future releases from the IRS on this blog and our twitter account about the ratges for 2012.

The last six-months of 2011 will also see the rate for computing deductible medical or moving expenses increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011.

The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

A chart of the mileage current and new rates can be viewed in IR-2011-69, June 23, 2011.

Employers Find I-9 Help On New Web Site

2011-06-21T09:32:00.002-04:00

An online resource center for employers has been launched by the U.S. Citizenship and Immigration Services (USCIS) called I-9 Central.

Alejandro Mayorkas, director of the USCIS said, “I-9 Central is the latest in our ongoing efforts to better serve the 7.5 million employers who use Form I-9 every time they hire an employee. The new site provides critical information for all employers—whether they hire just one employee or hundreds—in an accessible, intuitive and comprehensive online format.”

Michael Young of ConnectPay states that all employers, no matter the number of employees, are required by law to have a completed and signed I-9 form on file when hiring employees.

Paul Altavena of ConnectPay added that the correct completion of an I-9 form includes verification of documents that show applicants identity and work eligibility. If the applicant is in a non-citizen, proper identification showing their legal access into the United States and right to be work are required.

Mr. Altavena also reccomends (though not required) that the employer make a photo copy of the documents used for verification and attach to the I-9 Form in the event of an audit. “Very stiff financial penalties exist for employers that do not have completed I-9 forms on file for all employees, even if they are citizens of the United States and/or hire someone unauthorized to work in the United States,” he said.

According to USCIS officials, the new website provides employers and workers quick access to information on immigration and employment eligibility regulations and guidance on how to properly fill out and file Form I-9.

Michael Young and Paul Altavena agree that the launch of this site is a great aide to employers in that the I-9 Central web site provides information on employer and employee rights and responsibilities, step-by-step instructions for completing the I-9 form, and a list of the acceptable documents for establishing an employee’s identity and employment authorization.

In addition, I-9 Central includes discussion of common mistakes when completing the form, guidance on how to correct errors and answers to frequently asked questions.

I-9 Central can be found at http://www.uscis.gov/I-9Central or by clicking on the words I-9 Central anywhere is this blog.

FUTA TAX RATE DROPS JULY 1, 2011

2011-06-10T09:34:00.000-04:00

The FUTA tax rate is scheduled to decrease to 6.0% July 1, 2011. Prior to July 1, 2011 the FUTA tax rate is 6.2%. The tax applies to the first $7,000 you pay to each employee as wages during the year. The $7,000 is the federal wage base. Your state wage base may be different.

This rate change is NOT retroactive to January 1, 2011 but picks up on any tax amounts to be paid after July 1, 2011

Michael Young of ConnectPay reminds employers that this is an employer tax and is not withheld from the employees. Michael further stated that the IRS reports an employer can “generally take a credit against their FUTA tax for amounts they paid into state unemployment funds. The credit may be as much as 5.4% of FUTA taxable wages. If you are entitled to the maximum 5.4% credit, the FUTA tax rate after credit is 0.8% (0.6% after June 30, 2011). You are entitled to the maximum credit if you paid your state unemployment taxes in full, on time, and on all the same wages as are subject to FUTA tax, and as long as the state is not determined to be a credit reduction state.”

In some states, the wages subject to state unemployment tax are the same as the wages subject to FUTA tax. However, certain states exempt some types of wages from state unemployment tax, even though they are subject to FUTA tax (for example, wages paid to corporate officers, certain payments of sick pay by unions, and certain fringe benefits). In such a case, you may be required to deposit more than 0.8% (.06% after June 30, 2011) FUTA tax on those wages.

For complete information on how or if your state unemployment taxes might impact your FUTA tax rate, Paul Altavena of ConnectPay recommends seeing the Instructions for Form 940, for further guidance or speaking to your company tax advisor or CPA.

Paul and Mike state that clients of ConnectPay, LLC enjoy the benefits of ConnectPay’s full tax filing service at no additional charge. "ConnectPay will not only monitor and keep track of tax agency changes, but adopts the necessary changes in its processing and tax service as changes take place. For ConnectPay clients, payroll is reduced to simply reporting the hours via a secure web link, phone, fax or email. ConnectPay does all the rest."

For more information on how ConnectPay can provide this and other services to your company call the Massachusetts office at 978-341-0800 or the Michigan Office at 313-331-4595.

You can also visit ConnectPay on the web at www.ConnectPay.us.com.

The US Labor Department has an app for keeping track of wages on smartphones

2011-05-10T10:21:00.000-04:00

The U.S. Department of Labor has announced today the launch of its first application for smartphones, a timesheet to help employees independently track the hours they work and determine the wages they are owed. Available in English and Spanish, users conveniently can track regular work hours, break time and any overtime hours for one or more employers. Glossary, contact information and materials about wage laws are easily accessible through links to the Web pages of the department's Wage and Hour Division.

Additionally, through the app, users will be able to add comments on any information related to their work hours; view a summary of work hours in a daily, weekly and monthly format; and email the summary of work hours and gross pay as an attachment.

Michael Young of Connectpay added that this new app function can be an aide for employers with employees on the road or traveling from job site to job site such as contractors, landscapers, home health care aides, some sales people and cleaning companies. The new app not only allows employees to track their hours at any location wirelessly, but it also allows the empoloyee to email the report from their smartphone directly to the employer at any time.

Paul Altavena of Connectpay adds that this app is a free download but the user must have iTunes also a free download. Paul said this new app is a breaktrhough for both employees and employers who need the ability to track employee wages remotely and inexpensively but warns that the app is currently only compatible with the iPhone and iPod Touch. The Labor Department states it will explore updates that could enable similar versions for other smartphone platforms in the future, such as Android and BlackBerry, and other pay features not currently provided for, such as tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest.

For workers without a smartphone (iPhone or iPod Touch currently), the Wage and Hour Division has a printable work hours calendar in English and Spanish to track rate of pay, work start and stop times, and arrival and departure times.

Both the app and the calendar can be downloaded from the Wage and Hour Division's home Web page at http://www.dol.gov/whd

President Obama repeals 1099 requirements that would have taken effect in 2011 and 2012

2011-04-22T12:00:00.000-04:00

Paul Altavena of ConnectPay reports that President Obama has signed into law the "Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act" repealing 1099 requirements that would have taken effect in 2011 and 2012.

What was repealed?

Beginning in 2011 rental property ownership would have been considered a "business" for 1099 purposes. Therefore, all property owners would have been required to issue 1099s to any unincorporated service provider when payments equaled or exceeded $600. In 2012, property owners would have been required to comply with the 2012 1099 rules.

Beginning in 2012 all businesses would have been required to issue a 1099 when payments equal or exceed $600 in a calendar year regardless of whether payments were for purchases of goods or services, and regardless of the corporate status of the payee.

Michael Young of ConnectPay reveiws the current law:

Businesses that purchase services from unincorporated independent contractors must report on Form 1099-Misc the total amount paid when payments equal or exceed $600 in a calendar year.

Commissions, fees, and other forms of compensation paid to an unincorporated payee when the total amount paid is $600 or more during the year must be reported on Form 1099-Misc.

The total amount paid for legal services, when the amount of payments is $600 or more in a year, must be reported on Form 1099-Misc, even if the payee is incorporated.

What did not get repealed?

Paul Altavena warns that the new 1099 rules includes increased penalties for failing to file a proper 1099 with the government. This portion of the legislation did not get repealed. Therefore, every instance in which a taxpayer was required to, but did not file a 1099 the government can assess a penalty of $200 or more.

If you know that you have compliance deficiencies, the harsher penalties are an encouragement to reevaluate your 1099 procedures. The IRS recommends that all businesses obtain a W9 form from service contractors prior to issuing payment. That way you will have the required information before it is time to file the 1099s. Form W9 can be found on the ConnectPay website by clicking here.

Michael Young states,
"ConnectPay can assist with all your 1099 reporting needs."

For more information call the office closest to you.

Massachusetts: (978) 341-0800

Michigan: (313) 331-4595

Interim Guidance on W-2 Reporting of Employer-Provided Health Coverage

2011-04-06T14:11:00.000-04:00

The IRS has issued interim guidance on informational reporting for employees on form W-2 to see the cost of their employer-sponsored group health plan coverage. This informational reporting is required under § 6051(a)(14) of the Code, enacted as part of the Affordable Care Act to provide useful and comparable consumer information to employees on the cost of their health care coverage.

Michael Young a ConnectPay member cited the IRS Notice 2011-28 as stating that this reporting is for employees information only, to inform them of the cost of their health care coverage, and does not cause excludable employer provided health care coverage to become taxable.

The IRS Notice gives a start date of 2012 W-2 forms provided to employees in January of 2013. Employers can make a voluntary earlier reporting on the 2011 W-2 Forms provided to employees in January 2012 but will not be required to report until the 2012 tax year.

Paul Altavena a ConnectPay member states that Section 6051(a)(14) does not apply to reporting the amount contributed to any health savings account (as defined in § 223(d)) of an employee or an employee’s spouse. Further, Section 6051(a)(14) also does not apply to the amount of any salary reduction contributions to a flexible spending arrangement (within the meaning of §§ 106(c)(2) and 125).

Mr. Altavena explains that the term “applicable employer sponsored coverage” means coverage under any group health plan made available to the employee by an employer which is excludable from the employee’s gross income (that portion of coverage for an employee or an employee spouse’s insurance premiums paid by the employer.)

The notice provides answers for employers on how to report on Form W-2, what coverage to include and exclude, and how to determine the cost of the coverage. All is provided in a Question-and-Answer format. Click here to see the actual IRS Notice 2011-28.

Department Of Labor recovers more than $934,000 in overtime back wages for 479 employees of United Healthcare in Hartford, Conn. [02/07/2011]

2011-02-08T14:45:00.001-05:00

The U.S. Department of Labor has recovered a total of $934,551 in overtime back wages for 479 employees of United Healthcare and $104,280 in civil money penalties after an investigation by the department's Wage and Hour Division determined that the employees had been incorrectly classified as exempt from the Fair Labor Standards Act and consequently denied compensation for all hours worked. (Click here for complete article from the DOL.)

Paul Altavena and Michael Young of ConnectPay state that misclassification of workers as exempt from minimum wage and overtime because of a title or just paying them on a salary basis can be costly as it was for United Healthcare

Michael Young said that job titles alone do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

The DOL provides more specific information about the FairPay Initiative which specifically defines and addresses what qualifies for an exemption form minimum wage and overtime pay. (Click here for the DOL FairPay Overtime Initiate web site.)

Paul Altavena said that employers can view and even download a free video Seminar by the DOL on this subject at http://www.dol.gov/whd/regs/compliance/fairpay/seminar.htm

ConnectPay encourages employers to review all employees currently being paid on a salary basis with the standards of the FairPay Initive to insure that employees are classified correctly and those salaried employees that do not meet the exemption status as defined by the FairPay Initiative are paid minimum wage and overtime.

Michigan’s Revised Payroll Disbursement Law Now Allows Paperless Payrolls.

2011-02-04T15:54:00.000-05:00

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Paul Altavena from the Michigan office of ConnectPay LLC, reports that the Michigan Legislature recently changed Michigan’s payment of wages and benefits law so that employers may now require their employees to accept compensation in a paperless form; through either direct deposit or by using a payroll debit card. The former version of the law required an employee’s consent for the use of a payroll debit card.

Through this method, employees may receive their cash at an ATM or by getting cash back from a purchase at the store. They can also use the debit card to make purchases.

Paul cited how payroll debit cards have the potential to benefit both employers and employees. For employers it decreases the cost of payroll by eliminating the cost of paper checks, which can cost upwards of two dollars apiece. Payroll debit cards benefit employees without bank accounts (about 17% of all workers).

If your business is looking to decrease payroll costs here are some key aspects of the new law. Your business may elect to pay its employees using only direct deposit or a payroll debit card so long as you provide your employees with a form to choose either direct deposit or a payroll debit card; and all information regarding fees, terms and conditions, determining balance of card, and the way to change method of payment.

Additionally, in order to use a payroll debit card, the card must meet the following requirements: (1) allow one withdrawal per pay period without charge; (2) no changes in fees without 21 days’ notice to employees; and (3) provide a method for employees to check their balances an unlimited amount of times either by phone or electronically.

Overall, through a combination of legislation and administrative decision, 27 sates now allow employers to eliminate the use of paper paychecks.

For more information on how you can save on payroll costs, contact Paul Altavena in our Michigan Office of ConnectPay at 313-331-4595.

January 2011 Tax Relief Act

2011-01-10T13:57:00.006-05:00

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Paul Altavena and Michael Young of ConnectPay inform employers that most employees will see a net change in their take home pay beginning in January of 2011. This is a result of the Tax Relief Act of 2010 explained below. They said that most will see a net increase while some will see a net decrease.

Those that experience a change in their net take home pay will do so because of the reduction in employee social security withheld in 2011, and also because of the elimination of the Making Work Credit ($400 for single and $800 for a married couple filing jointly).

In 2010, the credit was accounted for in employee’s paychecks through reduced withholding. The removal of this credit from the tax tables in January of 2011 increased the amount of Federal Income Tax withheld, mostly in lower wage earners even though the actual tax did not increase. Those employees will see a net decrease in their take home pay.

For employees making more than $20,000, or $40,000 if married, the savings on the reduction of social security will offset the change of removing the Making Work Credit and they will see a net increase.

Michael Young reports what happened.

On December 17, 2010, President Barack Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 also known as Tax Relief Act of 2010.

This law reduces the social security tax rate paid by employees from 6.2% to 4.2% for wages paid in 2011 only. Employers share of Social security remains at 6.2%. For the employee however, this law provides a 1 year net increase of 2% of their gross wages. The Tax Relief Act of 2010 also extended the Bush-era tax rates, which were set to expire on December 31, 2010, for two years, through December 31, 2012, thus avoiding a sharp increase in income tax withholding for most employees. But, the Making Work Credit also expired December 31, 2010 changing the federal income tax withholding from wages paid in 2011.

Paul Altevena reports that in a news release, the IRS said it recognizes that the late enactment of the Tax Relief Act makes it difficult for many employers to update their withholding systems for the first payroll of 2011. Therefore, the IRS is asking employers to update their payroll systems as soon as possible, but not later than January 31, 2011.

Paul and Mike state that in a continuing effort to keep our tax calculations current and accurate, ConnectPay had its tax calculations completed for the first payroll in January 2011.

Michael Young says that employees may wish to complete a new W-4 form for 2011. The IRS has released the 2011 W-4 form in order to adjust their withholdings. He also said employers can get the 2011 version in the Resource section of our web site. Current I-9 forms and other useful links can be found in the same section. (Click on this message to go to our Resource Page.) Current I-9 forms and other useful links can be found in the same section.

Paul Altavena and Michael Young also point out that ConnectPay offers a FREE Human Resource Service to it's clients.

ConnectPay also offers a Human Resource Premium service that provides an employer with 24/7 access to our labor law attorneys at the law firm of Epstein, Becker & Green for all Human Resource and Labor Law Questions for just a few dollars a day.

Contact ConnectPay for more information on this and all of ConnectPay's services and offerings.

The IRS Releases Form W-11 To Claim Payroll Tax Exemptions for Hiring New Workers in 2010

2010-06-09T09:14:00.022-04:00

ConnectPay Partners Michael Young and Paul Altavena report that the IRS has released Form W-11 for employers use in order to be eligible to claim payroll tax exemptions for hiring new workers in 2010.

Paul Altavena states that The Hiring Incentives to Restore Employment (HIRE) Act signed by President Obama on March 18 is designed to encourage employers to hire and retain new workers by providing a payroll tax exemption and the related new hire retention credit.Employers who hire unemployed workers this year (after Feb. 3, 2010, and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, exempting them from the employer's share of Social Security tax on wages paid to these workers after March 18, 2010. The employee's 6.2 percent share of Social Security tax and the employer and employee's shares of Medicare tax still apply to all wages.

In addition to this tax, employers could also be eligible for a retention credit for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year. The new hire retention credit of up to $1,000 per worker can be claimed by employers on their income tax return. (See IRS frequently-asked questions for more details.)

Mr. Altavena further notes that this reduction will have no effect on the employee's future Social Security benefits.

Employee Requirements to Be Eligible To Claim the Credits.

Employers will use new Form W-11 to get a signed statement from each eligible new hire, certifying under penalties of perjury, that he or she was not employed for more than 40 hours during the 60 days before beginning employment with that employer. Employers do not file these forms with the IRS but must retain them along with other payroll and income tax records.

Employees That Qualify:

Michael Young explains that new hires filling new positions qualify. But, employees filling existing positions if they are replacing workers who left voluntarily or who were terminated for cause also qualify. He notes that family members and other relatives do not qualify for either of these tax benefits.

Which Employer Types Qualify?

Household employers and federal, state and local government employers, other than public colleges and universities, are not eligible. Tax-exempt organizations, agricultural employers, tribal governments and public colleges and universities all qualify to claim the payroll tax exemption for eligible newly-hired employees.

ConnectPay can help!

Employers using the ConnectPay services simply provide a copy of the completed and signed W-11 to ConnectPay and we do all the rest.

Eligible employees with a signed Form W-11 submitted to ConnectPay will be tagged for the credit. Employers taxes will be collected and paid accordingly under the guidelines of the HIRE Act. Second Quarter 941’s have been revised by the IRS and will be completed with the correct information for second quarter along with a credit for first quarter (if applicable). Contact us today for more information on how to let ConnectPay be your complete payroll, time and attendance, HR , Workers Comp and benefit service provider.

The Health Care Reform Act(s) and Projected Timelines For Employers.

2010-06-01T11:15:00.002-04:00

Summary:

What has become known as “The Health Care Reform Package” was passed by both houses and signed into law by President Barack Obama. The package consists of the Patient Protection and Affordable Care Act (H.R. 3590) signed into law March 23, 2010 and the Health Care and Education Reconciliation Act of 2010 (H.R. 4872) singed into law March 30, 2010. Following is a projected time line for the start of events in the legislation.

2010

The health care reform package includes a tax credit for small employers. The credit will become effective around the end of June (beginning of July). The credit will be available on a sliding scale to small employers with less than 25 employees and average annual wages of less than $50,000 the full tax credit will be available to employers with 10 or fewer employees and annual wages less than $25,000. To qualify, the employers must also purchase and contribute at least 50% of the total premium costs of a health insurance plan for their employees.

2011

A cafeteria plan similar to the Simple Retirement Plan will be available and will provide a safe harbor with nondiscrimination requirements.

Employers will be required to report the value of health benefits provided to employees on their 2011 W-2 that will be issued to employees in January of 2012 for the 2011 calendar year.

Employers that provided a wellness program on March 23, 2010 with less than 100 employees will be eligible for wellness grants for up to years.

2012

By March 23, 2012 employers will be required to provide a Uniform Explanation of Coverage to its employees. This document will be in addition to the Summary Plan Description required by ERISA currently. Insurance carriers will be required to provide the summary document. Employers who self-fund however will still be required to create the same document each year meeting the guidelines established for the document. This requirement will be on-going and the document must be provided to employees each year no later than March 23.

Business will now be required to file a Form 1099 for all payments of over $600 to any payee. This will be for payments made after 2011 each calendar year.

2013

The employer Medicare Part D subsidy deduction will be eliminated for the amount that is excluded from the employer’s income. Basically, employers will lose the tax deduction for subsidizing Medicare Part D-eligible retirees prescription drug plans.

The Medicare payroll tax will increase from 1.45% to 2.35% on wages in excess of $250,000 for joint filers or $125,000 for those claiming married filing separately.

2014

Employers will now be required to offer coverage to their employees if they have 50 or more employees. Failure to do so will result in an annual $2,000 penalty per employee if at least one of their employees receives a tax credit. Further, employers who offer coverage but their employees elect not to take the company group plan(s) due to inadequate coverage or employee expense and receive tax credits for health care, those employers will pay penalties equal to $3,000 for each full-time employee receiving a tax credit or $2,000 times the total number of full-time employees, which ever is less.

Employers may offer a 30% premium discount or other reward for employees that participate in wellness programs that meet certain requirements.

Employers and insurers will be required to report to individuals and the IRS the name, address and social security number of all insured individuals covered under an insurance plan.

IRS Announces 2010 Limits

2009-10-16T15:54:00.025-04:00

The IRS has released the 2010 limits with little changes from 2009 because the Consumer Price Index remained flat over the past year.

Social Security Wage Base
The Social Security Wage Base remains at $106,800 for 2010. The maximum social security tax employees and employers will each pay is 2010 also remains at $6,621.60.

Qualified Transportation Fringes
The amounts that may be excluded from gross income for employer-provided "qualified transportation fringe benefits" remains unchanged from 2009. The 2010 limits are $230 per month for "qualified parking", and the "qualified transportation pass" is $230 per month.

NOTE: This is not an aggregate over several months as long as the YTD does not exceed $2,760. It is a monthly amount to be determined per month. In example, an employee has nothing reported in January, but wants to report $360 in February, the employee cannot do so. The employee can only report $230 per month in each month to meet the guidelines.

Pension Plan Limits
While the cost-of-living index actually decreased from 9-30-08 to 9-30-09, the IRS said that the 2010 limits will be the same as those in effect for 2009 [IR-2009-094, 10-15-09].

• The limitation on the exclusion for elective deferrals under §402(g)(1) (e.g., §401(k) and §403(b) plans) is unchanged at $16,500.

• The compensation amount under §408(p)(2)(E) regarding elective deferrals to SIMPLE retirement accounts is unchanged at $11,500.

• The limitation under §457(e)(15) concerning elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations (§457(b) plans) is unchanged at $16,500.

• The limitation under §416(i)(1)(A)(i) concerning the definition of "key employee" in a top-heavy plan is unchanged at $160,000.

• The limitation under §414(v)(2)(B)(i) for catch-up contributions to §§401(k), 403(b), and 457(b) plans for individuals age 50 or over is unchanged at $5,500.

• The limitation under §414(v)(2)(B)(ii) for catch-up contributions to an employer's SIMPLE plan for individuals age 50 or over remains unchanged at $2,500.

• The limitation used in the definition of "highly compensated employee" under §414(q)(1)(B) is unchanged at $110,000.

• The compensation amount under federal regulation §1.61-21(f)(5)(i), concerning the definition of "control employee" for fringe benefit purposes, is unchanged at $95,000. The compensation amount under §1.61-21(f)(5)(iii) is unchanged at $195,000.

Minimum Wage Increases July 24, 2009

2009-07-21T15:56:00.004-04:00

Under the Fair Labor Standards Act (FLSA), the federal minimum wage for covered nonexempt employees will be $7.25 beginning Friday July 24, 2009. This is an increase in the federal minimum wage of $.70 per hour.

Many states also have minimum wage laws. Click on the word "states" to go to an interactive map. Then click on the state of interest to see what that state's current minimum wage is.

Currently, Massachusetts minimum wage is $8.00, New Hampshire is $7.25, Connecticut is $8.00 and Rhode Island is $7.40.

Michigan is $7.40 and Ohio is $7.30. All are above the new federal minimum wage and therefore no change is needed in those states.

Indianna will follow the federal change and move to $7.25 Friday the 24th as well.

Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate.

Where state law requires a higher minimum wage, that higher standard applies.

Michael Young says that the rule of thumb is that the wage rate that benefits the employee more is the wage that should be followed.

Various minimum wage exceptions apply under specific circumstances to workers with disabilities, full-time students, youth under age 20 in their first 90 consecutive calendar days of employment, tipped employees and student-learners.

How often does the federal minimum wage increase?
The minimum wage does not increase automatically. Congress must pass a bill which the President signs into law in order for the minimum wage to go up.

Who makes sure workers are paid the minimum wage?
The Wage and Hour Division of the U.S. Department of Labor is responsible for enforcing the minimum wage. Using both enforcement and public education efforts, the Wage and Hour Division strives to ensure that workers are paid the minimum wage.

Paul Altavena reminds employers that the Wage and Hour Division has offices throughout the country. The phone numbers and addresses for these offices may be found by on the Internet by clicking on the link above.

The New Employee Verification Act

2009-04-24T10:23:00.005-04:00

U.S. Congressman Sam Johnson (3rd Dist. Texas) - the Ranking Member of the Subcommittee on Social Security, Committee on Ways and Means, re-introduced the New Employee Verification Act (NEVA), H.R. 2028, with Congresswoman Gabrielle Giffords (8th district.-Ariz.) Thursday April 23rd.

Employers currently are required to verify new hires citizenship and/or eligibility to work with a paper I-9 Form. Also available to employers is an E-Verify program where an employer can match the information provided on the I-9 form with the Department of Immigration for an employment eligibility status on the new hire. E-Verify will expire on September 30, 2009. NEVA will extend E-Verify until November of 2013 but with three major changes; then, E-Verify will be repealed when NEVA is fully implemented, which is 36 months after the date of enactment of the bill.

Michael Young of ConnectPay reports that the E-Verify process has not been widely used, partly because it is cumbersome to get registered and hasn’t been promoted publicly well. Under the "new" NEVA (H.R. 2028), employers would be able to verify employment eligibility, would rely on the use of fewer, more secure identity documents and would build upon the new hire reporting process already in place and in use in each state. This program is already used by 90% of employers and was put in place a dozen years ago to track down dead beat dads.

To impress upon Congress the need for the “new” Act (H.R. 2028) that U.S. Congressman Sam Johnson has re-introduced, Congressman Johnson states that under the current E-Verify process, employers can play by the rules and try to do everything right, yet they can still end up hiring illegal immigrants by accident.

He cites the following two incidents:

In April 2008, Homeland Security agents raided Pilgrim’s Pride chicken-plucker plants in five states in the South, including Texas. The federal agents took 400 employees into custody and charged the illegal immigrants with document fraud and selling stolen Social Security numbers. The poultry producer voluntarily participates in the employment verification system, E-verify.

In December 2006, nearly 1,300 workers in six states at Swift and Company were arrested, including many in Cactus, Texas. A Swift and Company human resource official testified before a House panel that Swift had willingly participated in the government’s voluntary verification program, E-verify, for Social Security numbers since 1997.

"The immigrations raids showcase the growing practice by illegal immigrants of using authentic documents - borrowed, rented, purchased or stolen - to avoid detection in the hiring process. Clearly we must create new solutions to prevent illegal immigrants from taking American jobs,” concluded Johnson.

Under Congresman Johsnon's "new" NEVA (H.R. 2028), American citizens work authorization would be confirmed only through the Social Security Administration. For non-citizens, work authorization would be confirmed through the Department of Homeland Security that maintains relevant databases on visa and immigration status.

Through the current pilot program on employee verification, E-Verify, the Department of Homeland Security currently checks the work authorization of all newly hired employees of employers who choose to participate. Johnson believes that the DHS has no business keeping tabs on the work records of law-abiding citizens and considers this the fundamental job of the Social Security Administration (SSA).

The new bill if passed would also help to safeguard worker’s identities and would help protect the integrity of the Social Security system.

For more detailed information, see Congressman Johnson’s News Release by Clicking here .

The Society for Human Resource Management, the American Council on International Personnel, and the Human Resource Initiative for a Legal Workforce (http://www.legal-workforce.org/ ) also back the New Employee Verification Act.

Michael Young encourages employers to contact our MA U.S. Congresswoman Niki Tsongas and encourage her to vote in favor of the New Employee Verification Act (NEVA), H.R. 2028.

Capitol Office Information:

Address: 1607 Longworth House Office Building
Washington DC 20515
Phone: (202) 225-3411
Fax: (202) 226-0771
Web Site: http://tsongas.house.gov/

District Office Information:

Address: 11 Kearney Square
3rd Floor
Lowell, MA 01852
Phone: (978) 459-0101

Michigan Initiates RAPID RESPONSE to assist Employees of Plant Closures.

2009-04-20T12:50:00.008-04:00

Paul Altavena of ConnectPay wants to inform employers and employees facing imminent plant closings that the Department of Labor and Economic Growth has established a coordinated system called Rapid Response. Rapid Response is made up of several key DLEG agencies working together to strategically and proactively deal with issues that arise with plant closures or mass layoffs.

The Michigan Employer Advisor states:

"For dislocated workers, Rapid Response provides critical information and services as soon as possible to enable them to assess their individual needs as they seek to make a successful transition. For companies, the program coordinates services for the company itself, and even provides options or solutions which may avert a closure or mass layoff. The Rapid Response team involves workforce consultants from the Unemployment Insurance Agency, the Department of Energy, Labor and Economic Growth, the local Michigan Works! Agency (MWA), and representatives from the Michigan Economic Development Corporation.

Under the Rapid Response process, when word is received of any type of plant closing or mass layoff notification, the RR Workforce Consultant notifies and coordinates with these state and local agencies. The team then works together to ensure that both companies and workers have seamless, barrier-free access to state resources."

For more information on How This Works see the Michigan Employer Advisor .

Also found on page 2 of the same Michigan Employer Advisor, Stephen Geskey, Director Unemployment Insurance Agency explains how

Michigan's Adoption of the Stimulus Provisions, will Save Michigan Employers Millions.

Michigan Employer Advisor

Revised I-9 Form Must Be used by All Employers - Effective April 3

2009-03-31T10:23:00.011-04:00

What is an I-9 Form? Employment is often the magnet that attracts individuals to reside in the United States illegally.The purpose of the employer sanctions law is to remove this magnet by requiring employers to hire only individuals who may legally work here: citizens and nationals of the United States, lawful permanent residents, and aliens authorized to work. To comply with the law, you must verify the identity and employment authorization of each person you hire, complete and retain a Form I-9 for each employee, and refrain from discriminating against individuals on the basis of national origin or citizenship.

Do I have to complete an I-9 Form for all employees, even if I know they are citizens of the United States? Yes

Many more questions such as these are answered in the (USCIS Handbook for Employers for Completing Form I-9.)

Summary:

All employers must complete a Form I-9 for all newly hired employees to verify their identity and authorization to work in the United States. Effective April 3, 2009, a new revised version of the I-9 form and instructions will be law.

There are several changes that employers should be aware of including a rule that stipulates that employees cannot use expired identification documents to verify their work eligibility.

Where Can I get the new Revised I-9 form?

The revised I-9 (form) is available by clicking on the word "form" in this sentence.

You can obtain a copy of the Employers Handbook which answers all of the questions an employer should know about the new law by clicking on this link. (USCIS Handbook for Employers for Completing Form I-9.)

Both of these documents can be downloaded along with more information found on this topic by going to the USCIS (United States Citizenship and Immigration Service web site (www.uscis.gov).

Massachusetts DOR allows employers to correct mis-classification or filings and deposits annonymously.

2009-03-06T08:23:00.012-05:00

Massacusetts Voluntary Disclosure

Program Established.

Overview:

The goal of the Department's Voluntary Disclosure Program is to ensure that all taxpayers living in Massachusetts or doing business in Massachusetts are registered, collecting and paying the taxes they are obligated to pay.

In an effort to further increase compliance and foster cooperation, the Massachusetts Department of Revenue has a Voluntary Disclosure Program for taxpayers who wish to correct misclassifified employees as indempendent contractors and/or who have failed to file withholding or wage and information returns. The lookback period is up to 3 years.

Employers can come forward anonymously and in some cases a waiver of penalties will be granted for qualified taxpayers. The MADOR says it is an opportunity for taxpayers to come forward voluntarily in a user-friendly and informal process.

Contact Information:

Click here for the MA DOR Web Site Article:

Massachusetts Department of Revenue
Voluntary Disclosure Unit
200 Arlington Street, Room 4300
Chelsea, MA 02150
Attn: John Lordan

John Lordan, Supervisor
PHONE: (617) 887 - 6725
FAX : (617) 887 - 6792
E-mail : lordan@dor.state.ma.us
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COBRA changes in the 2009 stimulas package.

2009-03-03T16:54:00.032-05:00

COBRA: FAQ’s and Answers for Employers

Michael Young and Paul Altavena of ConnectPay want employers to know that the Internal Revenue Service has posted information to help employers understand the new regulations regarding COBRA as required by the American Recovery and Reinvestment Act (ARRA), the stimulus package that became law on Feb. 17, 2009.

Under the new COBRA law (the Consolidated Omnibus Budget Reconciliation Act) eligible former employees, enrolled in their employer’s health plan at the time they lost their jobs are required to pay only 35 percent of the cost of COBRA coverage. Employers must submit the entire COBRA premium to the insurance carrier, but the employers are entitled to a credit for the other 65 percent of the COBRA cost on the new quarterly payroll tax return (941)

The IRS has provided new information on its web site that includes an extensive set of questions and answers for employers about claiming credit for the COBRA premiums they've paid.

ConnectPay has provided a direct link to the IRS and DOL pages in this article. Click on any phrase of interest in this article highlighted in blue to go directly to the web site referenced.

In the Questions and Answers section of the IRS web site, employers will find many of their questions about this new law, such as:

Q: Can an employer decide only to claim the credit at the end of the quarter rather than reducing its tax deposits during the quarter?
A: Yes. The employer can decide either to offset its payroll tax deposits or claim the subsidy as an overpayment at the end of the quarter.

Many other questions are answered as well. Following is a sample of the types of questions employers can find on the IRS web site:

Q: When does the law become effective?
Q: Will the COBRA premium subsidy be taxable income for the individual?
Q: What if the employer’s group health plan is self-insured? Do the subsidy requirements apply?
Q: How will an employer be reimbursed for the COBRA subsidy that it has provided to eligible individuals?
Q: How does an employer claim the credit for the COBRA subsidy?

The United States Department of Labor has also provided much helpful information about this topic on their web site.

Questions and FAQ’s about COBRA in general that are important to employers are answered on the COBRA Continuation Assistance Coverage web site such as the following samples:
Q: What is COBRA continuation health coverage?
Q: What does COBRA do?
Q: Who can answer other COBRA questions?
Q: Which employers are required to offer COBRA coverage?
A: Employers with 20 or more employees are usually required to offer COBRA coverage and to notify their employees of the availability of such coverage.

Questions and FAQ’s specific to the changes in the American Recovery and Reinvestment Act (ARRA) stimulus package are also found at the DOL web site.

A sample of the questions and answers found here include:

Q: My health coverage was terminated when my employer shut down and laid off all its workers. Can I get the premium reduction to pay for new health coverage?
A: The premium reduction is available to help qualified individuals pay for COBRA continuation health coverage. If there is no longer a health plan, there is often no COBRA coverage available, unless another related or successor employer sponsors a group health plan responsible for providing coverage to you.

2009 Stimulus Package – Employer Payroll Changes

2009-02-27T13:30:00.096-05:00

The American Recovery and Reinvestment Act (ARRA) of 2009 was signed into law on February 17, 2009 with changes to the Withholding Tables for Federal Income Taxes and to COBRA payments that will be funded by payroll taxes.

MAKING WORK PAY provision:
While previous “stimulus” tax incentives have resulted in one time checks being sent to qualified tax payers, this “stimulus” package will provide the tax break by reducing the amount of Federal Income Tax withheld in employee’s pay checks. New tax tables have been released by the IRS http://www.irs.gov/pub/irs-pdf/n1036.pdf .

Paul Altavena and Michael Young announce that

ConnectPay will be using the

new withholding tables
beginning in March.

To be eligible for the credit, an individual must provide a valid social security number issued by the SSA, not a taxpayer identification number (TIN or ITIN) issued by the IRS.

If an individual is currently unemployed, the credit can be claimed on their income tax return for 2009 and 2010.

A couple affected by the phaseout risks the chance that they might hit the limit of $75,000 for an individual filer, or $150,000 for married couples filing jointly and therefore have tax due when they file thier income tax return at eyars end.

Michael Young therefore suggests that couples may wish to review the impact of the MAKING WORK PAY provision with their tax preparer and consider filing at least one new Form W-4 if applicable. Employees are NOT required to complete new W-4 forms under this stimulus package, but employees with multiple jobs or married couples whose combined incomes place them in a higher tax bracket may elect to submit a revised W-4 to ensure enough withholding is held to cover the tax for combined income.

COBRA PREMIUM SUBSIDIES:

An “assistance eligible individual” that suffers the loss of employment unvoluntarily between September 1, 2008 and December 31, 2009 will be able to pay a reduced premium of 35% of the COBRA continuation premium. The remaining 65% will be paid by the employer, but will be reimbursed to the employer by treating the amount that is reimbursable as a credit against its liability for the payroll taxes. The IRS has published a question and answer document to assist employers. http://www.irs.gov/newsroom/article/0,,id=204708,00.html The United States Department of Labor has also published a FAQ’s sheet for employers. http://www.dol.gov/ebsa/faqs/faq_compliance_cobra.html

MASS TRANSIT FRINGE BENEFITS:
The ARRA is making the exclusion from gross income for employer-provided parking and commuter transportation benefits equal in amount. Employer-provided transit benefits will be $230 per month March 1, 2009 through December 31, 2010 and will be equal to parking benefits for 2010.

Paul Altavena warns this change effects exclusion amounts in the calculation of Federal Income Tax calculations and may not represent exclusion amounts for state withholding. Employers should check with their individual states which may have a different exclusion.

EARNED INCOME TAX CREDIT:
The Earned Income Tax Credit (AEIC) for families with three of more qualifying children is increasing to 45% for 2009 and 2010 under the ARRA. New tax tables for Advance Earned Income Credit will be released soon. The Maximum amount of the AEIC for 2009 will remain at $1,826. The finance office of the Senate has published a summary of the entire ARRA. http://finance.senate.gov/press/Bpress/2009press/prb021209.pdf

INCREASE IN UNEMPLOYMENT BENEFITS:

U.S. Department of Labor announces that the final bill includes a nine-month extension of a program that offers an additional seven weeks of unemployment benefits. Benefits would be increased by $25 per week. The proposal would exempt the first $2,400 of unemployment benefits from federal income taxes. http://www.dol.gov/opa/media/press/eta/ETA20090196.htm

Worker's Comp Insurance in MA - Required or Elective?

2008-12-26T14:49:00.009-05:00

Is Worker's Compensation Insurance required in Massachusetts?

Every Massachusetts employer is required to provide workers' compensation insurance coverage for their employees. Refer to M.G.L. Chapter 152, Section 25A.
An employer may be an individual, partnership, joint venture, corporation, limited liability company, association, or a fiduciary such as a trustee, receiver or executor, or other legal entity. Refer to M.G.L. Chapter 152, Section 1 [5] for a definition of employer.

Since a sole proprietor, partner or member of an LLC are not considered employees for payroll and payroll tax purposes, can they be covered under MA Worker's Comp Insurance?

Sole proprietors, partners of a legal partnership, and members of an LLC may elect to be treated as employees and obtain coverage for themselves under a workers' compensation insurance policy.

Since an officer or director of a corporation is considered an employee of the company, are they required to be covered by MA Workers Comp Insurance?

Workers' compensation coverage is elective for an officer or director of a corporation who owns at least 25% of the issued and outstanding stock of the corporation.

For more information of Massachusetts Worker's Compensation regulations, go to the WCRIG (The Worker’s Compensation Rating and Inspection Bureau for Massachusetts) web site - https://www.wcribma.org/mass/default.aspx .

Worker's compensation regulations vary by state. Check your state insurance commission for clarification of your states regulations.

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Michael D. Young warns Massachusetts Employers to BE AWARE of a New Law providing TRIPLE Damages to employees.

2008-11-19T16:49:00.008-05:00

Michael D. Young, a founding partner of ConnectPay, LLC warns Massachusetts employers to be aware of a new law that could award employees triple damages plus attorney and court fees.

In contrast to federal law under the FLSA, Massachusetts passed a new law on April 14, 2008 which became effective on July 15, 2008. The new law states all employers that violate MA wage and hour laws will be subject to treble (triple) damages regardless of good faith and realistic measures to conform to the laws.

Previously under a decision in 2005 by the Massachusetts Supreme Judicial Court (SJC) entitled Wiedmann v. The Bradford Group, Inc. which allowed courts the discretion to award triple damages on a case-by-case-basis, this new law strips the courts from being able to make any discretion in determining damages and requires treble (triple) damages for any violation of wage and hour laws, regardles of employer intent or court discretion.

The new law provides employees motivation to file claims for pay practices including, but not limited to overtime pay, minimum wage, vacation pay, pay to independent contractors, prompt payment of wages for current and terminated employees, Sunday/holiday pay under Massachusetts “blue laws,” and tip pooling.

Because these laws are so complex, Michael Young suggests that you review your payroll policies and procedures to guarantee conformity with Massachusetts and federal law.

ConnectPay offers an HR service where employers can have unlimited access by email or phone to labor attorneys from the law firm of Epstein, Becker & Green P.C. for only $125 a month. For more information on this service, please follow this link: http://www.hrhelpline.com/connectpay/marketing/

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New Family and Medical Leave Act Regulations

2008-11-18T11:55:00.004-05:00

The U.S. Department of Labor (DOL) has issued an update to the Family and Medical Leave Act (FMLA) regulations that will become effective January 16, 2009. This update addresses various issues raised in court cases interpreting the FMLA, as well as implementation of the new military leave law.

The new regulation provides guidance on implementation of the new military leave benefit that was enacted as part of the 2008 National Defense Authorization Act earlier this year.

Changes found in this new update include changes such as:

Employee Notice – The new regulation requires employees to follow the employer’s usual and customary call-in procedures for reporting an absence, except under unusual circumstances.

Employer Notice Requirement – The final rule extends the time for employers to provide pertinent and related notices from two business days to five business days.

Medical Certification Process – The new rule specifically allows HR professionals to contact an employee’s health care provider for the sole purpose of clarifying a medical certification under the Health Insurance Portability and Accountability Act privacy rule relating to communication between employers and employees’ health care providers.

(To see the complete text of the FMLA rule click on this link.) http://edocket.access.gpo.gov/2008/pdf/E8-26577.pdf.

New Hampshire Minimum Wage Increases $.70

2008-09-02T09:43:00.004-04:00

The New Hampshire Minimum Wage incrased 70 cents to $7.25 from $6.55 effective September 1, 2008. The New Hampshire minimum wage is automatically replaced with the Federal minimum wage rate if it is higher than the State minimum.

For more infomration, visit the United States Department of Labor Minimum Wage site at http://www.dol.gov/esa/minwage/america.htm .

Massachusetts Employers Fair Share Contribution Requirments Changed August 8, 2008.

2008-08-20T16:36:00.009-04:00

On Friday, August 8, 2008, some important changes/proposed changes to the Fair Share Contribution (FSC) requirement took place with little fanfare.

First, the Governor signed Chapter 302 of the Acts of 2008 containing the provisions of the FY 2008 supplemental budget. These provisions change the FSC requirement in the health care reform statute (by amending M.G.L. c. 149, § 188) in two ways:

· Section 58 of the Act provides that all FSC liability for the period October 1, 2007 to September 2008 (the current FSC fiscal year) must be paid to the Commonwealth no later than June 30, 2009.

Comment: The practical effect is that the maximum time to pay the FSC assessment for the current FSC fiscal year ending September 30, 2008 has been shortened by 46 days.

· More importantly, however, Sections 18 and 19 of the Act change the FSC testing from an annual test to a quarterly test beginning with the new FSC fiscal year on October 1, 2008.

Comment: Those employers failing the quarterly test will pay 25% of the $295 per employee assessment (or $73.75) per employee for the quarter. The timing for quarterly testing and payment will need to be ironed out by DUA, perhaps by regulation or administrative bulletin. There is no hidden agenda here. This change is intended to get FSC assessment amounts to the Commonwealth as quickly as possible.

Second, the Division of Health Care Finance and Policy (DHCFP) issued proposed amendments to its FSC regulation, 114.5 CMR 16.00, to be effective October 1, 2008 and notice of a public hearing on the proposed amended regulation to be held Friday, September 5, 2008 at 10:00 AM in Boston. The proposed amendments:

· Change the FSC test to determine if an employer makes a fair and reasonable premium contribution. Under the proposal, employers would be required to meet both the primary AND secondary tests to be exempt from the FSC requirement: (1) at least 25% of full time employees are enrolled in an employer-sponsored group health plan, AND (2) the employer offers to contribute at least 33% to the premium cost for its group health plan for its full time employees that work at least 90 days. The current regulation exempts an employer if it meets just one of the two tests.

Comment: The proposal also clarifies the secondary test by providing that the group health plan for which the employer offers to pay at least 33% of the premium cost must be in effect and available to full-time employees for the entire quarter (or if the employer was not in operation for the entire quarter, for the portion of the quarter that the employer was in operation).

· Reflect the provisions of Chapter 302 of the Acts of 2008 (discussed above) that change the FSC requirement from an annual FSC liability determination to a quarterly FSC determination.

Comment: Under the proposal, the 11+ FTE threshold determination period for FSC purposes will also be a quarterly determination, beginning October 1, 2008. (11+ FTEs for the quarter would mean at least 5500 payroll hours for the quarter with no more than 500 hours attributed to an employee who worked more than 500 hours in that quarter.)

· Include language to make the regulation consistent with current FSC collection regulations promulgated by the Division of Unemployment Assistance, and incorporate policy clarifications that had been promulgated by administrative bulletin.

Written comments may be sent to Division of Health Care Finance and Policy, Two Boylston Street, Boston MA 02116. For copies of the current and proposed DHCFP FSC regulations, access the following link: http://www.mass.gov/?pageID=eohhs2modulechunk&L=4&L0=Home&L1=Government&L2=Departments+and+Divisions&L3=Division+of+Health+Care+Finance+%26+Policy&sid=Eeohhs2&b=terminalcontent&f=dhcfp_government_regs_related_pubs&csid=Eeohhs2#114

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My Massachusetts Income Tax Has Gone Up - Why?

2008-08-14T15:19:00.008-04:00

Massachusetts allows an employee to receive a deduction equal to the amount of FICA withheld from their check reducing their Massachusetts taxable gross UNTIL the employee has paid $2000.00 in FICA tax that year.

After that, the employee loses the deduction and is taxed the remainder of the year on the full gross amount. This is usually recognized on salaried employees in the last two quarters of a year.

i.e.
Gross wage = $200.00
FICA (7.65%) = 15.30

MA Taxble Gross = $184.70 until the EE has paid $2000.00 in FICA tax.

Then the EE is taxed on $200.00 the remainder of the year.

My State Income Tax Has Gone Up For The Last Two Paychecks - WHY?

This is the same answer as above except that the employee crossed over the $2000.00 limit in the middle of a paycheck. Therefore, the full FICA deduction did not disappear until the second check.

As an example, check #1 receives the full FICA deduction of $10.31. Check #2 received a reduction to their taxable MA income tax of only $10.00 in FICA because the employee reached the $2000.00 dollar threshold after the first $130.71 of the total $200.00 gross pay. Then there is no deduction on the remaining $69.29 of the first check.

The third check would not have any deduction in MA taxable gross because the employee hit the $2000.00 threshold in the previous check. Therefore, the MA state income tax in this scenario would have been higher in both the 2nd and 3rd checks until the entire $200.00 of gross wages was taxable by Massachusetts income taxes.

To learn how you can have your employees Massachusetts Income Tax calculated correctly and automatically each pay period, feel free to Contact Us.

Section 125 Premium Tax Savings Plan

2008-08-14T14:54:00.009-04:00

Click on the title above for all the details then Contact Us for more details or to get started saving tax dollars on your employees medical premium deductions today.