Vision Payroll

Responding to a request from Senator Richard Shelby (R-Ala.), the IRS stated that there is no dollar limit imposed by law on de minimis fringe benefits. A constituent had written to Shelby and stated that the constituent’s employer required all non-cash gifts valued over $50 to be processed through payroll and all required taxes to be withheld. According to §132(e)(1) of the Internal Revenue Code of 1986 (as amended), “‘de minimis fringe’ means any property or service the value of which is (after taking into account the frequency with which similar fringes are provided by the employer to the employer’s employees) so small as to make accounting for it unreasonable or administratively impracticable.” Setting of a dollar limit would, in of itself, require accounting for items. Therefore, no dollar limit on de minimis fringe benefits is set by law. Treasury Regulations §1.132-6(e) gives examples of de minimis fringe benefits such as “occasional typing of personal letters by a company secretary; occasional personal use of an employer’s copying machine, provided that the employer exercises sufficient control and imposes significant restrictions on the personal use of the machine so that at least 85 percent of the use of the machine is for business purposes; occasional cocktail parties, group meals, or picnics for employees and their guests; traditional birthday or holiday gifts of property (not cash) with a low fair market value; occasional theater or sporting event tickets; coffee, doughnuts, and soft drinks; local telephone calls; and flowers, fruit, books, or similar property provided to employees under special circumstances (e.g., on account of illness, outstanding performance, or family crisis).” Contact Vision Payroll if you have any questions.

The wage base for New Jersey unemployment insurance, temporary disability insurance, and family leave insurance will increase from $27,700 to $28,900 for 2009. Contact Vision Payroll if you have any question on this increase.

This week’s question comes from George, a business owner. We’re planning an end-of-summer party with bonuses for our employees. I’d rather give them live checks for their bonuses. Can I stop an employee’s direct deposit one time only? Answer: You can easily stop direct deposit for any or all employees whether you submit your payroll online or by some other method. If you want to stop direct deposit for one or more employees online, simply check the “Stop Direct Deposit” box for selected employees on the Pay Detail section. If you want to stop direct deposit for all employees online, simply check the “Stop Direct Deposit” box on the Dates section. If you still don’t submit payroll online, indicate on the time sheet those employees for whom you wish to stop direct deposit. You may also contact Vision Payroll by telephone or e-mail to stop direct deposit. Using any of these methods will only stop direct deposit for that paycheck or payroll and direct deposit will become active on the next paycheck or payroll.

According to the US Department of Labor, in the week ending August 23, the advance figure for seasonally adjusted initial claims was 425,000, a decrease of 10,000 from the previous week’s revised figure of 435,000. The 4-week moving average was 440,250, a decrease of 6,000 from the previous week’s revised average of 446,250.

Are you wasting time stuffing checks into envelopes and sealing them? Do you worry that employee pay data is not safe from prying eyes? Have employee paychecks delivered in pre-sealed checks with tamper-evident seals and you can save time and improve security too. Vision Payroll will seal the checks with perforated edges that must be removed to view the check and pay stub. And you save time by having the checks ready to hand to employees without needless time wasted stuffing and sealing. Contact Vision Payroll today to get your checks delivered in our self-seal checks and have more time to do what you do best.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The administrative exemption allows employees who qualify as “administrative employees” to be exempted from both minimum wage and overtime requirements. An earlier post discussed that to qualify for the administrative exemption, an employee must “exercise…discretion and independent judgment” in significant matters. Discretion and independent judgment involve “the comparison and the evaluation of possible courses of conduct, and acting or making a decision after” considering various possibilities. Some factors are “whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval; whether the employee has authority to negotiate and bind the company on significant matters; whether the employee provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances.” The regulations specifically state that other factors may also be considered in making the determination. Discretion and independent judgment generally require an employee to make decisions “free from immediate direction or supervision.” The decisions may, however, be reviewed by upper-level personnel or not followed at all. Neither means that the employee did not exercise discretion and independent judgment. The fact that several employees may perform similar work or work of the same level of importance is not necessarily enough to disqualify the work from requiring discretion and independent judgment. Types of work that do not require discretion and independent judgment “include clerical or secretarial work, recording or tabulating data, or performing other mechanical, repetitive, recurrent or routine work.” The fact that an employer may suffer “financial losses” if an employee fails to properly perform a job does not necessarily mean that an employee who performs that job exercises discretion and independent judgment. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the administrative exemption.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The administrative exemption allows employees who qualify as “administrative employees” to be exempted from both minimum wage and overtime requirements. An earlier post discussed that to qualify for the administrative exemption, an employee’ s primary duty must be “the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.” Therefore “working on a manufacturing production line or selling a product in a retail or service establishment” does not qualify as an exempt administrative function. Examples of work that does qualify include “work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations, government relations; computer network, internet and database administration; [and] legal and regulatory compliance.” The regulations specifically state that other duties not listed above may also be included in the duties of an administrative employee and that such duties may also be performed by employees who qualify under other FLSA exemptions. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the administrative exemption.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The administrative exemption allows employees who qualify as “administrative employees” to be exempted from both minimum wage and overtime requirements. Only employees “employed in a bona fide administrative capacity” qualify for the exemption. Any employee who meets all the following tests shall be considered an “administrative employee” for this purpose: 1) The employee must receive a salary of at least $455 per week, not including board, lodging, or other facilities. 2) The employee’s primary duty must be “the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.” 3) The employee must “exercise…discretion and independent judgment” in significant matters. Future posts will provide further clarification of certain terms in the administrative exemption as well as provide other tests that may qualify an employee as an administrative employee. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the administrative exemption.

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum hourly wage and an overtime premium of one and one-half times the regular rate of pay for hours worked in excess of forty per week. This is the one of a continuing series that discusses FLSA exemptions. The executive exemption allows employees who qualify as “executives” to be exempted from both minimum wage and overtime requirements. The fact that employee may perform both exempt and non-exempt duties does not necessarily disqualify the employee from executive classification under the FLSA. The determining factor is generally whether the employee directs other non-exempt employees and remains “responsible for the success or failure of business operations” or is merely directed by another to perform the exempt function or performs it for a certain period. “An employee whose primary duty is ordinary production work or routine, recurrent or repetitive tasks cannot qualify for exemption as an executive.” Generally, the ultimate deciding factor, based on the facts and circumstances of each case, is whether or not the employee’s primary duty is management. State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about the executive exemption.

This week’s question comes from Mark, owner of an import company. I receive the same salary every week. All year, my Massachusetts income tax withholding has been the same. Now it’s gone up two weeks in a row. Why did this happen? Answer: In Massachusetts, a deduction of up to $2,000 is allowed on the state income tax return for social security and Medicare tax (also known as FICA). Therefore, in calculating the amount of income tax to be withheld, a deduction is allowed for these taxes. Once the combined social security and Medicare tax equals $2,000, the deduction is no longer allowed. Vision Payroll will automatically make this change for you once the limit is reached. The reason the amount changed twice is that on the first check the deduction may be partially allowed. For example, if the combined social security and Medicare was $1,980 and the current withholding was $50, $20 ($2,000 – $1,980) would be allowed as a deduction and $30 ($50 – $20) would be over the limit and not allowed as a deduction for state purposes. In the next week, the entire $50 would be considered excess and none allowed as a deduction. Since the deduction decreased two weeks in a row, the tax withheld must increase each week. Contact Vision Payroll if you have any questions.