Vision Payroll

According to the US Department of Labor, in the week ending March 6, the advance figure for seasonally adjusted initial claims was 462,000, a decrease of 6,000 from the previous week’s revised figure of 468,000. The 4-week moving average was 475,500, an increase of 5,000 from the previous week’s revised average of 470,500.

The advance seasonally adjusted insured unemployment rate was 3.5% for the week ending February 27, unchanged from the prior week’s unrevised rate of 3.5%.

The advance number for seasonally adjusted insured unemployment during the week ending Feb. 27 was 4,558,000, an increase of 37,000 from the preceding week’s revised level of 4,521,000. The 4-week moving average was 4,581,000, unchanged from the preceding week’s revised average of 4,581,000.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.170 million.

Many employers have real concerns about avoidable expenses resulting from employee damage to company property. Some employers have specific policies requiring employees to reimburse for the damages often in the form of payroll deductions or a deduction from the employee’s final paycheck. A common question, however, is whether or not such a workplace policy is appropriate.

Does it matter if the damage was accidental or caused by gross negligence, dishonest or willful acts (i.e., theft), or intentional misconduct? Does the employer need written authorization to make the deduction? What is the impact of the federal Fair Labor Standards Act?

To learn the answers to these questions and much more, be sure to read the featured article by the HR pros at MyHRSupportCenter, Making Employees Pay for Damaged Company Property. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

Under recently enacted legislation, contribution rates for Massachusetts employers will remain at Schedule E for 2010. Based on the low level of reserves in the fund, previous law would have required an automatic shift to Schedule G. Contact Vision Payroll if you have any questions on the new law.

Florida Governor Charlie Crist has signed a bill to delay the increase in the unemployment wage base until 2012. Originally, the wage base was to increase from $7,000 to $8,500 in 2010. The new law also adjusts tax rate calculations through 2011 and provides for quarterly installment payments. Contact Vision Payroll if you have any questions on Florida unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

In IR-2010-025, the Internal Revenue Service (IRS) announced that it “has made an administrative determination to accept the position that medical residents are excepted from FICA taxes based on the student exception for tax periods ending before April 1, 2005, when new IRS regulations went into effect.” According to the release, “[t]he IRS will…begin contacting hospitals, universities and medical residents who filed FICA (Social Security and Medicare tax) refund claims for these periods with more information and procedures. Employers and individuals with pending claims do not need to take any action at this time.”

Contact Vision Payroll if you have any questions on the FICA determination.

Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7%, the US Bureau of Labor Statistics reported recently. Employment fell in construction and information, while temporary help services added jobs. Severe winter weather in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures. For more information on the effects of the severe weather on employment estimates, see the box note at the end of the release.

In February, the number of unemployed persons, at 14.9 million, was essentially unchanged, and the unemployment rate remained at 9.7%.

Among the major worker groups, the unemployment rates for adult men (10.0%), adult women (8.0%), whites (8.8%), blacks (15.8%), Hispanics (12.4%), and teenagers (25.0%) showed little to no change in February. The jobless rate for Asians was 8.4%, not seasonally adjusted.

The number of long-term unemployed (those jobless for 27 weeks and over) was 6.1 million in February and has been about that level since December. About 4 in 10 unemployed persons have been unemployed for 27 weeks or more.

In February, the civilian labor force participation rate (64.8%) and the employment-population ratio (58.5%) were little changed.

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased from 8.3 to 8.8 million in February, partially offsetting a large decrease in the prior month. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

About 2.5 million persons were marginally attached to the labor force in February, an increase of 476,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 1.2 million discouraged workers in February, up by 473,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

This week’s question comes from Dawn, an HR manager. We are terminating someone today. I thought the COBRA subsidy expired at the end of February. Now I hear that it’s been extended again. Has the COBRA premium subsidy been extended? Answer: On Tuesday, President Barack Obama signed into law, HR 4691 (PL 111-144), which extended the COBRA premium subsidy to include workers involuntarily terminated in March 2010. Benefits were also extended to certain workers who lost coverage due to a reduction of hours and then were involuntarily terminated. Furthermore, work continues on HR 4213, which would extend coverage to employees who are involuntarily terminated during 2010. Contact Vision Payroll if you need further information on the COBRA subsidy extension.

According to the US Department of Labor, in the week ending February 27, the advance figure for seasonally adjusted initial claims was 469,000, a decrease of 29,000 from the previous week’s revised figure of 498,000. The 4-week moving average was 470,750, a decrease of 3,500 from the previous week’s revised average of 474,250.

The advance seasonally adjusted insured unemployment rate was 3.5% for the week ending February 20, a decrease of 0.1 percentage points from the prior week’s revised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending February 20 was 4,500,000, a decrease of 134,000 from the preceding week’s revised level of 4,634,000. The 4-week moving average was 4,575,750, a decrease of 29,250 from the preceding week’s revised average of 4,605,000.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.186 million.

In IR-2010-022, the Internal Revenue Service (IRS) announced that interest rates for the second quarter of 2010 would remain unchanged from the first quarter. The rates are as follows:

• Four (4) percent for overpayments [three (3) percent in the case of a corporation];
• Four (4) percent for underpayments;
• Six (6) percent for large corporate underpayments; and
• One and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000.

The IRS will publish the rates in Revenue Ruling 2010-9. Contact Vision Payroll if you have any questions on the second quarter rates.

The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-26. 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). Because the letter was apparently never mailed after it was signed, the DOL under new Secretary Hilda L. Solis has decided to withdraw the letter for further consideration. Therefore, this letter may not be relied upon as a statement of agency policy. It is possible that a different conclusion may be reached when the Opinion Letter is reissued.

In this Opinion Letter, the DOL had stated that client service managers (CSMs) at an insurance agency were exempt administrative employees. The general qualifications for an exempt administrative employee are an employee:

1. Compensated on a salary or fee basis at a rate of not less than $455 per week . . . ;
2. Whose primary duty is 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; and
3. Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

It was assumed for the purposes of this opinion letter that the first qualification was met. Since the work the CSMs performed was similar to work performed by employees “ordinarily considered to meet the duties requirements for the administrative exemption” and since “the CSMs primary duty includes the exercise of discretion and independent judgment with respect to matters of significance”, the CSMs were considered to have met the “requirements of the administrative exemption and are accordingly exempt from the minimum wage and overtime requirements of the FLSA.”

State laws may provide rules that are more beneficial to the employee and must be followed. The DOL may come to a different conclusion when it reissues the Opinion Letter after further consideration. Contact Vision Payroll if you have questions about this Opinion Letter.