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California Assembly Bill (AB) 36 was signed by Governor Jerry Brown on April 7, 2011. This bill brings California into conformity with the Federal government regarding the Health Care Acts of 2010 for state income tax purposes.

Change Is Retroactive To 2010

AB 36 now excludes health insurance premium payments and medical reimbursements for medical care expenses on behalf of adult children, from California Personal Income Tax (PIT) wages/income and PIT withholding, retroactive to the original enact date(s) of the Health Care Acts in 2010.

2010 Amendments May Be Filed on Form DE 678

For 2010, employers who calculated a fair market value benefit amount as imputed income for California Personal Income Tax (PIT) wages for their employees and subsequently withheld PIT on this value should issue Form W-2C to impacted employees that reflect the correct PIT wage amount. Employers can amend their California state payroll tax returns using our Tax and Wage Adjustment Form (DE 678).

2011 Amendments May be Filed on Form DE 9ADJ

For 2011, if employers calculated a fair market value of the health insurance premium and withheld the applicable PIT in the first quarter and have already filed their Quarterly Contribution Return and Report of Wages (DE 9), they can amend the return by using our Quarterly Contribution and Wage Adjustment Form (DE 9ADJ).

Correct 2011 Reports Before Filing, if Possible

For employers who have calculated PIT wages and withheld PIT from their employees for the first quarter but not yet filed the DE 9 and Quarterly Contribution and Wage Adjustment Form (Continuation) (DE 9C), you may choose to file and report the correct wages and withholding amounts while revising your payroll process internally for the over-reporting and withholding.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on the changes to California taxation of health benefits.

The Arkansas Advance Interest Tax took effect April 1, 2011. The purpose of the tax is to pay interest on Title XII advances received from the federal government to pay regular unemployment insurance benefits. The amount of the tax is 0.2% and the tax will remain on until the quarter after all Title XII advances and interest is paid and the Advance Interest fund reaches a balance of five million dollars.

No Separate Line on Contribution and Wage Report

There is not a separate line for the 0.2% tax; rather it has been added to each employer’s rate starting on the 2011 second quarter Contribution and Wage Report. (The total tax rate, including the Advance Interest Tax is shown in Part A, on line 6 of the Employer’s Quarterly Contribution and Wage Report.)

Advance Interest Tax Applies To All of 2011 and Perhaps Later

The tax will be due on taxable wages reported for the second, third and fourth quarters of 2011 and more than likely the tax will remain on, at least, through 2012 and 2013. The tax is due on taxable wages reported each quarter and as such, for the quarter ending June 30th (second quarter) would not apply to an employee who reached the taxable wage base ($12,000) in the quarter ended March 31st (first quarter). If an employee reaches the taxable wage base total at some date during the second quarter, only those wages paid in the quarter up to the total would be subject to the tax. The same principle holds true for the third and fourth quarters.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on the changes to Arkansas unemployment taxes.

Illinois Governor Pat Quinn recently signed HB 1030 into law. The new law adds an unemployment tax surcharge, increases the taxable wage base, and reduces maximum benefits, among other provisions.

Surcharge Is for First Quarter of 2011

For the first quarter of 2011, employers are now required to pay a surcharge of 0.50% of taxable wages. Up to $90,000,000 of this surcharge is to be earmarked for interest payments for interest required to be paid under Title XII of the Social Security Act or for transfers to the state’s account in the unemployment trust fund.

Taxable Wage Base Will Increase in 2012

The taxable wage base will increase from $12,960 in 2011 to $13,560 in 2012.

Further Surcharge May Apply in 2012

If necessary to further interest payments, a surcharge will also apply to the first quarter of 2012 and the 2013 wage base will remain at $13,560. Otherwise, the 2013 wage base is scheduled to revert to the 2011 level of $12,960.

Maximum Benefits Reduced Starting in 2012

The new law also reduces the maximum total amount of benefits for an eligible individual, for specified benefit years starting in 2012, to 25 (instead of 26) times his or her weekly benefit amount plus dependents’ allowances, or to the total wages for insured work paid to such individual during the individual’s base period, whichever amount is smaller.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on the changes to Illinois unemployment taxes.

This week’s question comes from James, an HR director. We need to track training for multiple employees. How can we track employee training? Answer: The Employee Training Log is a simple way to stay organized when it comes to tracking employee (including management) trainings.

Advantages To the Training Log

The training log can provide employers with the following advantages:

• Written documentation of employer’s workplace compliance efforts;
• Monitoring of employee performance development in terms of knowledge, skills, and abilities; and
• Assessment of employee fulfillment of required or recommended attendance due to corrective/disciplinary action expectations.

Download the Employee Training Log Now

The Employee Training Log can be downloaded from the Forms area in the “Essentials” tab section of the MyHRSupportCenter. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

According to the US Department of Labor, in the week ending April 2, the advance figure for seasonally adjusted initial claims was 382,000, a decrease of 10,000 from the previous week’s revised figure of 392,000. The 4-week moving average was 389,500, a decrease of 5,750 from the previous week’s revised average of 395,250.

Advance Seasonally Adjusted Insured Unemployment Rate Remains Unchanged

The advance seasonally adjusted insured unemployment rate was 3.0% for the week ending March 26, unchanged from the prior week’s unrevised rate of 3.0%.

Advance Seasonally Adjusted Insured Unemployment Decreases

The advance number for seasonally adjusted insured unemployment during the week ending March 26 was 3,723,000, a decrease of 9,000 from the preceding week’s revised level of 3,732,000. The 4-week moving average was 3,745,750, a decrease of 24,000 from the preceding week’s revised average of 3,769,750.

A few employers may be familiar with a recent US Supreme Court ruling on March 1, 2011, regarding the case of Staub v. Proctor Hospital, No. 09-400, and how “cat’s paw” liability played a part. Cat’s paw liability involves an employer being held liable for unlawful discrimination, even though the “motivating factor” in the employment decision-making process stems from an unlawful bias of a supervisor with no employment decision-making authority.

Cat’s Paw Derived from the La Fontaine Fable

Cat’s paw relates to a fable about how a monkey convinces a cat to steal chestnuts from a fire, steals the same nuts from the cat, and then leaves the cat with empty but burnt paws. In the context of the workplace environment, the supervisor is the monkey as the employer is the cat.

Apply Seven Preventive Measures to Minimize Cat’s Paw Liability

To find out seven preventive measures companies can take to minimize cat’s paw liability, be sure to read the featured article by the HR pros at MyHRSupportCenter, Is Cat’s Paw Liability Scratching at Your Door?. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

West Virginia Governor Earl Ray Tomblin recently signed HR 3134, which among other things, requires employers with more than fifty employees to submit the support withheld via electronic means in a manner prescribed by the Bureau for Child Support enforcement.

Other Child Support Changes Implemented

In addition to the requirement of electronic payments by certain employers, HR 3134 also made the following changes:

• Lowered the accrued interest rate;
• Required employers to provide information as to the issuance of a bonus to the Bureau for Child Support Enforcement;
• Extended the time parties may agree to for payment of arrearages under a payment plan from twenty-four to sixty months; and
• Made various technical corrections.

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on processing payroll in West Virginia.

In Connecticut, the average number of workers filing for Unemployment Insurance (UI) benefits since 2007 has grown from 40,000 to approximately 130,000. In 2009 and 2010, UI benefit payouts greatly exceeded UI tax revenues. In 2011, UI benefit payouts will continue to exceed tax revenues by a substantial margin.

Funding Imbalance Has Led to Insolvency

Because of this funding imbalance, Connecticut’s Unemployment Trust Fund became insolvent on October 13, 2009.

Connecticut Borrowed from the US Department of Labor

In order to continue paying UI benefits to unemployed workers, as required by law, Connecticut began borrowing funds from the US Department of Labor (DOL). To date, Connecticut has borrowed approximately $650 million and the Labor Department projects that total borrowing could approach $1 billion over the next two to three years.

ARRA Waived Interest Through 2010

Generally, federal loans carry interest, but the American Recovery and Reinvestment Act of 2009 (ARRA) contains a provision waiving interest on UI trust fund loans through 2010. Connecticut will still have substantial loan balances outstanding in 2011 and beyond. Under federal law, employers are required to pay interest to the federal government beginning in 2011.

Interest Collected Through Special Assessments

Under Connecticut law, interest payments from employers are collected through annual Special Assessments, excluding those entities that reimburse the state dollar-for-dollar for the costs of benefits paid to former employees. The first annual Special Assessment date for Connecticut employers is August 1, 2011 with the payment due by August 31, 2011.

Special Assessment Estimated at $40 Million

Connecticut’s total Special Assessment for 2011 is estimated to be approximately $40 million. Based on this estimate, the average cost per employee will be roughly $40. For example, a business that employs ten workers can expect a Special Assessment bill of approximately $400 in August 2011. The 2011 Special Assessment figures are estimates and, therefore, subject to change based on variables such as the actual amounts borrowed and the total number of active employers as of August 2011.

FUTA Tax Rate Expected to increase for 2011

In addition to interest costs, Connecticut and other states with federal loans outstanding for two consecutive years must make additional payments into the Federal Unemployment Tax Act (FUTA) system to pay down the loan principal. Therefore, the effective FUTA tax rate for calendar year 2011, payable in January 2012, will increase from 0.8% to 1.1%.

Additional FUTA Tax to Be Applied To Loan Principal

The additional FUTA tax collected, approximately $21 per employee, will be applied to the state’s outstanding loan balance – thereby reducing the loan principal.

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on Connecticut payroll processing.

Governor Gary Herbert recently signed SB 34, Uniform Interstate Family Support Act. Highlights of the bill include:

• Provision of procedures for recognizing foreign support orders;
• Definitions of “convention”, “foreign country”, “foreign support order”, and “foreign tribunal; and
• Incorporation of provisions for filing, modification, and enforcement of support orders issued by foreign countries that have comity with the United States.

SB 34 Effective July 1, 2013

The legislation is effective July 1, 2013.

Contact Vision Payroll Today

Contact Vision Payroll today if you have questions on payroll processing in Utah.

Nonfarm payroll employment increased by 216,000 in March, and the unemployment rate was little changed at 8.8%, the US Bureau of Labor Statistics reported recently. Job gains occurred in professional and business services, health care, leisure and hospitality, and mining. Employment in manufacturing continued to trend up.

Household Survey Data

The number of unemployed persons (13.5 million) and the unemployment rate (8.8%) changed little in March. The labor force also was little changed over the month. Since November 2010, the jobless rate has declined by 1.0 percentage point.

Among the major worker groups, the unemployment rates for adult men (8.6%), adult women (7.7%), teenagers (24.5%), whites (7.9%), blacks (15.5%), and Hispanics (11.3%) showed little change in March. The jobless rate for Asians was 7.1%, not seasonally adjusted.

The number of job losers and persons who completed temporary jobs, at 8.2 million, was little changed in March but has fallen by 1.3 million since November 2010. The number of long-term unemployed (those jobless for 27 weeks or more) was 6.1 million in March; their share of the unemployed increased from 43.9% to 45.5% over the month.

In March, the civilian labor force participation rate held at 64.2%, and the employment population ratio, at 58.5%, changed little.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in March, at 8.4 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

In March, 2.4 million persons were marginally attached to the labor force, up slightly from a year earlier. (These 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 921,000 discouraged workers in March, little changed from a year earlier. (These 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 1.5 million persons marginally attached to the labor force in March had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.