Insights & Innovations
CompuPay’s monthly publication, Insights & Innovations, highlights topics that impact the business community. Issues include payroll-related subjects, information relevant to general business practices and topics that serve as resources for employers. Articles cover a wide range of subject matter, including tax updates, workers’ compensation insurance, ways to avoid payroll fraud and basic payroll management.
Summer Help
Hiring Dos and Don'ts
Posted on May 06, 2013
Almost every industry has peak periods when some extra help would be welcome. Fortunately, if that time of year is during the summer months, you may be able to forge a mutually beneficial relationship with some temporary help through either summer interns or teenage employees. This can be a valuable opportunity for teens to not only get some hard-earned cash, but to learn important job skills.
Many employers do not know that when it comes to youth employment the Fair Labor Standards Act (FLSA), the federal wage and hour law, as well as state and local labor laws not only apply but also add additional restrictions on teen employment. Unpaid internships, in particular, can be a risky proposition for employers. An internship may seem like a good opportunity for the intern to learn and the employer to get a “free” employee for a few months. But the U.S. Department of Labor (DOL) frowns on unpaid work arrangements and can impose stiff penalties on businesses with unpaid internships that do not meet stringent requirements.
Whether teens, summer, or seasonal workers are paid or unpaid, failure to comply
Listed in Employer Resources.
Form I-9 Compliance
Getting it right from day one
Posted on March 28, 2013
On March 8, 2013, the United States Citizenship and Immigration Services (USCIS) issued an updated Employment Eligibility Verification Form I-9 to replace the previous version that expired August 31, 2012.
The new form incorporates several updates including:
- Expanded instructions
- Form length increased to two pages
- Fields for email address, phone number and foreign passport added to Section 1
Although employers may continue to use the previous Form I-9 until May 7, 2013, it is recommended that they begin using the new form immediately.
What is an I-9 Form?
Form I-9 confirms an employee’s identity and eligibility to work in the United States. Since its inception on November 6, 1986, the I-9 form has helped to ensure that workers are U.S. citizens or aliens who are authorized to work in the U.S. All employers are required to complete and retain a Form I-9 for each and every worker employed on or
Listed in Employer Resources.
2013 Tax Changes
Important changes affecting employers
Posted on March 06, 2013
In 2012 and into 2013, numerous legislative changes affecting all Americans were enacted or allowed to expire. Many significant changes were made to tax laws that will have a direct effect on employers across the country in 2013.
The American Taxpayer Relief Act of 2012
On New Year’s Day 2013, Congress passed House Resolution 8, the American Taxpayer Relief Act of 2012, making permanent many of the Bush-era tax cuts and avoiding mandatory spending cuts that were set to go into effect on January 3, 2013. The tax cuts were extended for most workers, with exception of those in highest bracket (individuals with taxable annual income of more than $400,000 and married couples with income in excess of $450,000). The new tax bracket for those high-income earners is now set at 39.6%. Additionally, withholding allowance amounts have increased for tax year 2013; one withholding allowance is set at $3,900 annually for 2013, up from $3,800 for 2012.
Federal income tax tables used to calculate the withholding taxes for 2013 will remain the same for many employees. The tax brackets are 10%, 15%, 25%, 28%, 33%, 35% plus the new 39.6% bracket. The supplemental wage flat rate remains at 25%, however, the mandatory supplemental flat-rate withholding is increased from 35% to 39.6% for those with incomes greater than $1 million. The backup withholding rate remains at
Listed in Employer Resources.
Flexible Benefits Plans
Posted on December 20, 2012
What are flexible benefits plans?
Flexible benefits plans enable workers to select benefits they want or need from a package of plans offered by their employer. Employers often include choices such as retirement benefits like 401(k) plans, health, dental or vision insurance, and reimbursement accounts through which individuals can pay for medical and/or dependent care expenses. Employees pay for these benefits through pretax payroll deductions; this lowers the employee’s taxable income and increases their take-home pay while reducing the employer’s tax liability. There are several different types of flexible benefits plans, including flexible spending accounts and cafeteria plans.
Listed in Employer Resources.
FUTA Credit Reductions in 2012
How rate changes affect employers
Posted on December 05, 2012
Although the U.S. economy has seen improvement during the past year, many employers continue to pay higher unemployment insurance taxes. High numbers of unemployed workers, as well as the extension of unemployment benefits, have contributed to the insolvency of many state unemployment funds. Over the past six years, states have borrowed money from the federal government to cover the cost of their unemployment programs. Employers in states that have not repaid these federal loans according to established guidelines are required to pay additional unemployment tax through a tax credit reduction.
Listed in Employer Resources.
