Vision Payroll

Need to learn more about the changes in COBRA changes mandated by the American Recovery and Reinvestment Act of 2009, but unable to attend next week’s seminar presented by Vision Payroll. Take the next best step by reviewing this month’s featured article by the HR Pros at MyHRSupportCenter, The American Recovery and Reinvestment Act of 2009 (ARRA) and New COBRA Changes.

This month’s article highlights the changes required by the law, reviews some key provisions, and sets an action plan with recommended next steps. One of those steps is to review The American Recovery and Reinvestment Act (ARRA) of 2009 and the Impact on COBRA Guide (the Guide) also produced by the HR Pros at MyHRSupportCenter. The Guide contains more comprehensive information on the changes and series of FAQs to guide you in implementing the required changes. The Guide can be found by searching “arra” from the Essentials, Guides page.

There are still a few seats available for next week’s COBRA seminar presented by John P. McMorrow, Esq. of Mirick O’Connell and the staff of Vision Payroll. Contact Vision Payroll today to reserve your seat.

To learn more, sign into MyHRSupportCenter and read this month’s featured article. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

The US Department of Labor recently issued non-Administrator signed Opinion Letter FLSA2008-14NA. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA). Unlike signed Opinion Letters, unsigned Opinion Letters do not “provide a potential good faith reliance defense for violations of the FLSA.”

This Opinion Letter discusses three points:

1. The restrictions an employer can impose during an on-call period.
2. Whether an employer is responsible for compensation when restrictions are imposed.
3. If the number of call-backs is a factor in determining if the on-call period is compensable.

Compensation for on-call periods is a question of facts and circumstances particular to each case. Generally, however, on-call time is compensable “when the on-call conditions are so restrictive or the calls so frequent that the employee cannot effectively use that time for personal purposes.” Carrying a pager or being required to report to work within a specified time period are usually not restrictions that require compensation.

The number of call-backs is a factor in determining if the on-call period is compensable. One court ruled that four or five calls per week was not enough to require compensation, while another court ruled an average of three to five calls in a twenty-four hour period was enough to require compensation for the on-call period.

Since the only restrictions that the employer in this case imposed were that the “employee must be reachable at all times, abstain from alcohol or other substances, and report to work within one hour of notification” and because call-backs were rare, the restrictions did not require compensation during the on-call period under the FLSA.

State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.

Please join us on Thursday, March 19, 2009 for a seminar on changes mandated by the American Recovery and Reinvestment Act of 2009. These changes affect virtually every employer in Massachusetts and many others nationwide. Attorney John P. McMorrow of Mirick O’Connell will talk on What Employers Need to Know about the New COBRA Rules. Employees of Vision Payroll will then discuss how the COBRA change will be handled mechanically as well as other changes in the payroll and HR area required by the Act.

There is no charge for this seminar, but advanced registration is required. Space is limited so registrations will be accepted on a first-come, first-served basis.

Date:  March 19, 2009

Time:  Registration starts at 8 am, presentation starts at 8:30 am

Place: Woodblock Building Conference Room, 14 Monument Square, Leominster

Free parking is available in the lot behind the building. Entry is in back. Refreshments will be served.

We expect the seminar to run 1½ to 2 hours, but Vision Payroll employees will stay longer to answer questions as necessary.

RSVP to Vision Payroll.

In a response to Senators Richard Durbin (D-IL) and Barack Obama (D-IL), the Internal Revenue Service, in Information Letter 2009-0012, explains why employees who terminate employment are not entitled to receive any remaining balance in their transit reimbursement accounts.

Employees may voluntarily elect under §132 of the Internal Revenue Code of 1986 (IRC) to contribute a portion of their earnings to transit reimbursement accounts. Employees are technically not purchasing the benefit themselves, since doing so would require them to receive taxable compensation. The legal form of the transaction is that the employees are given a choice between cash compensation and the benefit provided by the employer. Once employees elect to have the benefit provided by their employers, employees are “no longer entitled to receive that compensation.” If the employees could choose to receive cash compensation, the entire value of the fringe benefit and cash compensation received would be taxable. Since employees forfeit their right to receive cash compensation when electing the fringe benefit, unused balances at termination of employment are funds of the employer, not the employee.

Contact Vision Payroll if you have any questions on qualified transportation fringe benefits under IRC §132.

Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6% to 8.1%, the Bureau of Labor Statistics of the US Department of Labor reported recently. Payroll employment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors.

The number of unemployed persons increased by 851,000 to 12.5 million in February, and the unemployment rate rose to 8.1%. Over the past 12 months, the number of unemployed persons has increased by about 5.0 million, and the unemployment rate has risen by 3.3 percentage points.

The unemployment rate continued to trend upward in February for adult men (8.1%), adult women (6.7%), whites (7.3%), blacks (13.4%), and Hispanics (10.9%). The jobless rate for teenagers was little changed at 21.6%. The unemployment rate for Asians was 6.9% in February, not seasonally adjusted.

Among the unemployed, the number of job losers and persons who completed temporary jobs increased by 716,000 to 7.7 million in February.  This measure has grown by 3.8 million in the last 12 months.

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 270,000 to 2.9 million in February. Over the past 12 months, the number of long-term unemployed was up by 1.6 million.

This week’s question comes from Greg, a plant manager. We have a third shift that works from 11 pm to 7 am the following day. Some of the workers will work this Saturday night into Sunday. Do we need to pay for eight hours of work on the third shift Saturday night? Answer: Since Daylight Saving Time begins in most parts of the country at 2 am, Sunday, March 8, 2009 many workers on a third shift will only work seven hours. At 2 am on that day, clocks are turned ahead to 3 am. The Fair Labor Standards Act does not require employers to pay employees for the hour not worked. Contact Vision Payroll if you have any further questions on the switch to Daylight Saving Time.

According to the US Department of Labor, in the week ending February 28, the advance figure for seasonally adjusted initial claims was 639,000, a decrease of 31,000 from the previous week’s revised figure of 670,000. The 4-week moving average was 641,750, an increase of 2,000 from the previous week’s revised average of 639,750.

The Internal Revenue Service (IRS) has released Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables (For Wages Paid Through December 2009). Publication 15-T contains revised withholding tables to implement changes mandated by the American Recovery and Reinvestment Act of 2009 (the Act) as well as information on other changes required by the Act such as increased commuter exclusion amounts and changes required to the adjustment to taxes withheld on nonresident aliens.

The IRS recommends making a copy of the notice provided on page 73 of Publication 15-T available to all employees so that they may understand the change in withholding. Employees are not required to file a new Form W-4, Employee’s Withholding Allowance Certificate or its Spanish equivalent, Formulario W-4(SP), Certificado de Exención de la Retención del Empleado to see the impact of the tax law change, but may wish to do so to ensure the correct amount of tax is withheld.

Vision Payroll implemented the revised withholding tables last week and eligible employees should notice an increase in net pay with their current paycheck.

Over the next several days, Vision Payroll will be posting additional articles on changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.

According to the California Employment Development Department (EDD), employers statewide directly affected by damage resulting from the drought may request up to a 60-day extension of time from EDD to file their State payroll reports and/or deposit State payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC). Written request for extension must be received within 60 days from the original delinquent date of the payment or return to file/pay. Contact Vision Payroll if you’ve been affected and need to file the extension request.

The American Recovery and Reinvestment Act of 2009 (the Act) made changes to continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA. Employers are required to pay sixty-five percent of the premiums for certain eligible individuals, but may claim a credit on Form 941, Employer’s QUARTERLY Federal Tax Return, for these premiums.

If you need to claim a credit for COBRA premiums paid, contact Vision Payroll and we’ll update your payroll with the appropriate tax codes so that you will receive proper credit on your Form 941. If your credit exceeds your liability, no tax deposit will be due for that period and you may receive a refund when you file your Form 941.

Over the next several days, Vision Payroll will be posting additional articles on changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.