Vision Payroll

Do you reimburse employees for travel and meal expenses? Reduce paperwork and substantiation requirements through the use of a per diem reimbursement. By using a per diem that does not exceed the applicable federal per diem rate for the area of travel, the amount of the expenses need not be substantiated although the employee must still substantiate time, place, and business purpose. There are two parts to the per diem allowance: the lodging portion and the meals and incidental expenses portion. Employees who incur expenses less than the per diem allowance are not required to return the excess amounts. Furthermore, ten percent or more owners and their relatives are ineligible to use the per diem method. Contact Vision Payroll if you have questions on per diem reimbursements.

The Oregon Supreme Court recently ruled in Necanicum Investment Co. v. Employment Department, SC S055231, July 24, 2008, that directors’ fees paid to a company’s board of directors are not wages for unemployment tax purposes, since the “directors are not ‘employed by’ the corporation in the same sense as other persons who perform ‘service for an employer * * * for remuneration.’” The court noted that under Oregon law, shareholders elect the directors and “there is no employer-employee relationship between a corporation and its directors when the directors are performing the duties imposed on them by statute.” Since no employment relationship exists, payments to directors could not be considered wages for this purpose.

California Governor Arnold Schwarzenegger recently signed into law SB 940 which clarifies when temporary agencies must pay their employees. Under the law employees of temporary agencies must generally be paid on a weekly basis. If the temporary employees are assigned to a client on a “day-to-day basis” or as replacement workers in a strike, they would be required to be paid daily. Unless the temporary workers are paid weekly in compliance with the bill, it would not apply to such workers assigned to a client for over ninety consecutive calendar days. In conjunction with existing laws, terminated employees would still be required to be paid on the day of discharge or within seventy-two hours if they quit without notice. Since other provisions and exceptions apply, we strongly recommend that all California temporary employers review their wage payment policies and consult with their attorneys if they have any questions.

The US District Court for the District of Columbia granted summary judgment to the defendants in a lawsuit by two lifeguards seeking overtime pay. In Miroslav Ivanov, et.al., v. Sunset Pools Management, Inc., et.al., DDC, 07cv410 RJL, July 29, 2008, the two plaintiffs, Bulgarian citizens, alleged violations of the Fair Labor Standards Act (FLSA) among other complaints. Plaintiffs and defendants agreed that the Ivanov brothers worked in excess of forty hours per week and were not paid an overtime premium. Defendant Sunset Pools Management, Inc. (Sunset) argued that it was exempt from the FLSA overtime requirement under the amusement and recreational exemption. The court found conflicting opinions within the Department of Labor as to whether a pool operator qualified under the instant exception, but ruled that the “undisputed evidence in this case demonstrates that Sunset is an amusement and recreational establishment.” The court also ruled that International Training and Exchange, Incorporated, “an international staffing firm that recruits foreign citizens for ‘work-travel’ opportunities in the United States,” was not the plaintiffs’ employer and therefore not liable under the FLSA. Contact Vision Payroll if you have questions on the FLSA and the amusement and recreational exemption.

This week’s question comes from Crystal, an office manager. I have an employee who wants to have his paycheck direct deposited into his account. How long will it take for the direct deposit to become active? Answer: Vision Payroll will prenote all Automated Clearing House (ACH) transactions and wait ten business days after the date of the payroll for which the prenote was sent before activating the direct deposit. A prenote is a zero dollar transaction sent through the ACH system in order to detect invalid routing and account numbers. Although a prenote will not detect all errors, prenotes help in detecting invalid routing and account numbers, checking accounts classified as savings accounts and vice-versa, and sometimes, name and account mismatches. This will help to prevent incorrect postings before they happen. Remember, that although most prenotes will become live ACH transactions for the second weekly or first bi-weekly payroll after the prenotes, federal holidays may delay the activation for one additional payroll. Contact Vision Payroll if you have questions on the ACH or prenote process.

The unemployment rate rose from 5.7 to 6.1 percent in August, and nonfarm payroll employment continued to trend down (-84,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In August, employment fell in manufacturing and employment services, while mining and health care continued to add jobs. Average hourly earnings rose by 7 cents, or 0.4 percent, over the month.

The number of unemployed persons rose by 592,000 to 9.4 million in August, and the unemployment rate increased by 0.4 percentage point to 6.1 percent. Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points, with most of the increase occurring over the past 4 months.

In August, the unemployment rates for adult men (5.6 percent), adult women (5.3 percent), whites (5.4 percent), blacks (10.6 percent), and Hispanics (8.0 percent) rose, while the jobless rate for teenagers was little changed at 18.9 percent. The unemployment rate for Asians was 4.4 percent in August, not seasonally adjusted.

Among the unemployed, the number of persons who lost their last job rose by 417,000 to 4.8 million in August, with increases occurring among those on temporary layoff and those who do not expect to be recalled to work. Over the last 4 months, the number of unemployed job losers has increased by 810,000.

In August, the number of long-term unemployed (those jobless for 27 weeks or more) rose by 163,000 to 1.8 million, an increase of 589,000 over the past 12 months. The newly unemployed—those who were jobless fewer than 5 weeks—increased by 400,000 over the month.

According to the US Department of Labor, in the week ending August 30, the advance figure for seasonally adjusted initial claims was 444,000, an increase of 15,000 from the previous week’s revised figure of 429,000. The 4-week moving average was 438,000, a decrease of 3,250 from the previous week’s revised average of 441,250.

Identity theft is a problem that’s not going away. At Vision Payroll, we offer and pay for LifeLock protection for all our employees. And while no one can offer 100% protection against identity theft, LifeLock also helps prevent the problems that arise if someone fraudulently obtains your personal data. LifeLock’s guarantee is that they “will pay up to $1,000,000 to cure the failure or defect in our service, per member, per lifetime for all incidents in the aggregate, regardless of circumstance.” If you act now, you can save 10% off LifeLock by simply entering “Vision” in the promotion code box on the enrollment screen. Use this code for yourself, your family, your employees, your friends, or anyone that needs identity theft protection. Act today, before you become a victim.

A New York City garment contractor was cited by the New York Department of Labor with wage and hour violations that resulted in underpayment of almost $3 million to more than 100 workers. Jin Shun Incorporated, which was reported to have produced women’s garments for several notable retailers, required employees to use two sets of time cards per week. Therefore, even though employees routinely worked six or seven twelve-hour days per week, no set of timecards would show more than forty hours worked per employee. Employees were provided with false answers to memorize and recite to investigators in the event of an audit. “This factory paid sweatshop wages, kept fake records, and coached employees to lie, even though it had signed retailer codes of conduct to comply with the law. The Department of Labor will use all legal tools to stop this mistreatment of workers,” said New York State Labor Commissioner M. Patricia Smith.

Alaska Governor Sarah Palin recently signed Senate Bill 120 into law. Under the new law, for new unemployment insurance benefit years beginning after December 31, 2008, the maximum weekly benefit will increase from $248 to $370 and the qualifying amount for unemployment insurance benefits increases from $1000 to $2500. The new law also shifts a portion of the tax responsibility away from the employer to the employees. Contact Vision Payroll if you have any questions on recent changes to the Alaska unemployment insurance law.