Payroll
Payroll can be a complicated undertaking for any business. As one of the largest payroll providers, CompuPay is committed to providing helpful and timely payroll and related information to our clients, partners and small businesses. The below issues of our monthly newsletter, Insights & Innovations, offer information on various payroll topics including tips, garnishments and escheatments.
New topics are added each month. In addition to payroll, other categories of topics include business resources, employer resources, legislation, organization types and tax resources. Sign up below to receive new issues of Insights & Innovations via e-mail.
Tipped Employees
Posted on November 30, 2011
Payroll can be a unique challenge for businesses that employ tipped workers. Complex regulations that change from federal to state and local levels make handling payroll for tipped employees a complicated undertaking for many small businesses. By understanding government regulations concerning tipped employees, employers can take appropriate steps to reduce risk and ensure compliance.
Minimum Wage for Tipped Employees
Federal law determines the minimum wage rate at which employees can be paid. Although individual states set their own minimum wage rate, unless the state rate is higher, employers must pay their employees based on the federal minimum wage. This is true for tipped employees as well.
As of July 24, 2009, the federal minimum wage rate is set at $7.25 per hour. However, federal law also allows employers to count employee tips as part of their wages by taking a credit against the minimum wage requirement. The maximum amount of credit that the employer can apply is $5.12 per hour resulting in a tipped employee federal minimum wage of $2.13 per hour when the maximum credit is applied. This credit applies only to tipped employees, and many states have regulations concerning these credits. The Wage and Hour Division of the U.S. Department of
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Preparing Payroll for Year-End
Frequently Asked Questions
Posted on October 27, 2011
December and January are very busy months for payroll processing. As one year comes to a close and the new year begins, several payroll-related tasks need to be accomplished by employers. Some activities need to occur prior to the new year and others after the new year has begun.
In an effort to organize payroll activities and plan for the new year, several questions may arise:
What do I need to do before my last payroll of the year?
- Confirm accuracy of current data - It is important that all employee information is checked for accuracy and updated if necessary. Employee names, addresses and Social Security numbers (SSN) are information required on Form W-2 that must be updated prior to the final payroll processing for the year. Incorrect or mismatched employee names or Social Security numbers can result in penalties imposed by the Internal Revenue Service (IRS) as well as some states. (If an employee does not have an SSN, information on how to apply for a Social Security number is available through the Social Security Administration’s website.) It is recommended to have each of your employees verify that their SSN is recorded correctly in your system. SSNs can also be verified online through
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Payroll Management for Small Business: Part 2 - Paying Employees
Posted on July 27, 2011
Every business owner or manager faces a multitude of challenges on a daily basis. In addition to the day-to-day operations of the business, the processes involved with paying workers can often be overwhelming, and mistakes made can result in sizeable financial penalties and fines. In the second of a two-part series on managing payroll for small businesses, Jean Domaingue, area director of sales for CompuPay, outlines essential information that every employer should know when paying employees.
Minimum Wage
As of July 24, 2009, the minimum wage that employers are required to pay their employees was set by the federal government at $7.25 per hour. However, each state has its own minimum wage requirement. If the state minimum wage is set below the federal rate, employers in that state must use the federal minimum wage amount. If the state minimum wage exceeds the federal rate, employers in that state must pay their employees at the state minimum wage. A list of state minimum wage information contacts is available on the U.S. Department of Labor’s website.
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Payroll Management for Small Business: Part 1- Preparing for Payroll
Posted on July 11, 2011
Every business owner or manager faces a multitude of challenges on a daily basis. In addition to the day-to-day operations of the business, the processes involved with paying workers can often be overwhelming, and mistakes made can result in sizeable financial penalties and fines. In this first of a two-part series on managing payroll for small businesses, Jean Domaingue, area director of sales for CompuPay, has outlined some essential information that every employer should know when preparing for payroll processing.
Proper Classification of Workers
Employers must decide if each worker is an employee, an independent contractor, a statutory employee or a statutory nonemployee, based on the business relationship they have with that worker:
- Generally, an employee is a worker with whom the employer maintains a continuous relationship, that the employer has the right to terminate from employment and for whom the employer provides a workplace and tools with which to perform his or her job. Additionally, the employer determines the work to be performed as well as how it will be done. Payments to workers classified as employees require employers to withhold taxes and report
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Seven Key Ways to Avoid Payroll Fraud
Posted on June 08, 2011
In their 2010 Report to the Nations on Occupational Fraud and Abuse, the Association of Certified Fraud Examiners (ACFE) found that payroll fraud comprises 8.5% of occupational fraud worldwide, costing businesses an average of $72,000 per payroll fraud case.1 They also determined that “small organizations are disproportionately victimized…these organizations are typically lacking in anti-fraud controls…which makes them particularly vulnerable to fraud.”2 So, what actions should businesses take to make themselves less susceptible to payroll fraud?
Tom Heinzmann, executive vice president at CompuPay, has advice for any size business on best practices that can be put in place to avoid falling victim to payroll fraud.
Background Screening
Before hiring anyone who will be responsible for payroll or who will have access to bank accounts, a full background check should be performed on the candidate. A thorough preemployment screening will help to ensure that the person hired will be trustworthy, qualified and fit for the position. Background checks should include federal and state criminal checks, a credit check, an alias search, motor vehicle report, Social Security number trace as well as education and employment verifications.
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