Vision Payroll

Total nonfarm payroll employment grew by 431,000 in May, reflecting the hiring of 411,000 temporary employees to work on Census 2010, the US Bureau of Labor Statistics reported recently. Private-sector employment changed little (+41,000). Manufacturing, temporary help services, and mining added jobs, while construction employment declined. The unemployment rate edged down to 9.7%.

The number of unemployed persons was 15.0 million in May. The unemployment rate edged down to 9.7%, the same rate as in the first 3 months of 2010.

Among the major worker groups, the unemployment rate for blacks (15.5%) declined in May, while the rates for adult men (9.8%), adult women (8.1%), teenagers (26.4%), whites (8.8%), and Hispanics (12.4%) showed little change. The jobless rate for Asians was 7.5%, not seasonally adjusted.

In May, the number of long-term unemployed (those jobless for 27 weeks and over) was about unchanged at 6.8 million. These individuals made up 46.0% of unemployed persons, about the same as in April.

The number of unemployed reentrants to the labor force fell by 286,000 in May, offsetting an increase in April.

In May, the civilian labor force participation rate edged down by 0.2 percentage points to 65.0%. The employment-population ratio was about unchanged over the month at 58.7%

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 343,000 in May to 8.8 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.

About 2.2 million persons were marginally attached to the labor force in May, unchanged 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 1.1 million discouraged workers in May, up by 291,000 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 1.1 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 Lynn, a business owner. I recently hired my spouse to work in my sole proprietorship. My spouse qualifies using Form W-11, but I’m not sure if my spouse is considered my relative. Can my spouse’s wages qualify for payroll tax forgiveness? Answer: Under the Hiring Incentives to Restore Employment (HIRE) Act, employers may avoid paying social security tax on qualified employees and receive an income tax credit for retaining those employees. Employers are required to obtain a signed affidavit from qualified employees. Certain relatives of the taxpayer, as defined in §152 of the Internal Revenue Code of 1986 (IRC) are not eligible for the payroll tax forgiveness or the credit. They are:

• A child or a descendant of a child.
• A brother, sister, stepbrother, or stepsister.
• The father or mother, or an ancestor of either.
• A stepfather or stepmother.
• A son or daughter of a brother or sister of the taxpayer.
• A brother or sister of the father or mother of the taxpayer.
• A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
• An individual (other than an individual who at any time during the taxable year was the spouse, determined without regard to [IRC] §7703, of the taxpayer) who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the taxpayer’s household.

Since a spouse is not on the list of ineligible employees, wages paid to spouses of sole proprietors who otherwise qualify are eligible for payroll tax forgiveness and potentially the retention credit. Contact Vision Payroll if you have any further questions on HIRE Act.

According to the US Department of Labor, in the week ending May 29, the advance figure for seasonally adjusted initial claims was 453,000, a decrease of 10,000 from the previous week’s revised figure of 463,000. The 4-week moving average was 459,000, an increase of 1,750 from the previous week’s revised average of 457,250.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending May 22, unchanged from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending May 22 was 4,666,000, an increase of 31,000 from the preceding week’s revised level of 4,635,000. The 4-week moving average was 4,654,000, an increase of 9,750 from the preceding week’s revised average of 4,644,250.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.124 million.

In 2010, the US Occupational Safety and Health Administration (OSHA) has increased its budget, the size of its enforcement team, and the number of its enforcement actions, which all point to a big warning for businesses to make sure a proper safety and health program is in place to prevent workplace injuries and illnesses.

• Is your company on OSHA’s hit list?
• What is the impact of OSHA’s Site-Specific Targeting (SST) program?
• How has the level of enforcement changed under the Obama administration?

Get answers to these questions by listening to Responding to OSHA Recent Ramp-up in 3 Steps in this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter. You’ll also learn three steps you can take right now to prepare for an OSHA inspection.

Visit MyHRSupportCenter regularly, not only for our HRCasts, but also to get late-breaking compliance alerts, best practices to implement, and HR tools to use every day. 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 announced the availability of a new tool to help America’s employers ensure their employment policies and practices do not discriminate against qualified individuals with disabilities.

The interactive, online Disability Nondiscrimination Law Advisor helps employers quickly determine which federal disability nondiscrimination laws apply to their business or organization and their responsibilities under them. To do this, it asks users to answer a few relevant questions and then generates a customized list of federal disability nondiscrimination laws that likely apply, along with easy-to-understand information about employers’ responsibilities under each of them.

The Disability Nondiscrimination Law Advisor is one of a series of elaws (Employment Laws Assistance for Workers and Small Businesses) Advisors developed by DOL to help employers and employees understand federal employment laws. Contact Vision Payroll if you have further questions on the Disability Nondiscrimination Law Advisor.

The Internal Revenue Service (IRS) recently released a revised Form 941, Employer’s QUARTERLY Federal Tax Return, to be used by employers to claim payroll tax forgiveness under the HIRE Act for qualifying new hires. Newly added lines on Form 941 include the following:

• Line 6a – Number of qualified employees first paid exempt wages/tips this quarter
• Line 6b – Number of qualified employees paid exempt wages/tips this quarter
• Line 6c – Exempt wages/tips paid to qualified employees this quarter
• Line 6d – Payroll tax forgiveness this quarter
• Line 12c – Number of qualified employees paid exempt wages/tips March 19–31
• Line 12d – Exempt wages/tips paid to qualified employees March 19–31
• Line 12e – Payroll tax forgiveness March 19-31

Lines 12c, 12d, and 12e will be on the Form 941 for the third and fourth quarters, but are applicable only for the second quarter. Contact Vision Payroll if you have any questions on the revised Form 941.

Due to the severe storms, tornadoes and straight-line winds in Oklahoma beginning May 10, 2010, President Barack Obama declared the following counties a federal disaster area: Carter, Cleveland, Creek, Garvin, McIntosh, Okfuskee, Oklahoma, Pottawatomie and Seminole. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after May 9, 2010 and before May 26, 2010 as long as the deposits were made by May 25, 2010. In addition, affected taxpayers will have until July 9, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, tornadoes and straight-line winds and need further information on the relief provided by the IRS.

The recently enacted Patient Protection and Affordable Care Act (the Act) will expand information reporting requirements starting in 2012. §9005 of the Act amends §6041 of the Internal Revenue Code of 1986 (IRC) so that payments to corporations that were previously exempted from reporting will now be subject to reporting on Form 1099. Additionally, information reporting will now be required for purchases of property. Therefore, businesses that pay a single entity $600 or more in a calendar year for purchases of goods and services will be required to report those payments on Form 1099.

Under the law, the IRS was granted the authority to issue so-called legislative regulations to “prevent duplicative reporting of transactions.” Since under a different provision also effective in 2012 payment processors will be required to report gross amounts paid to companies using debit and credit cards, IRS Commissioner Douglas H Shulman indicated in a recent speech that transactions that use credit or debit cards might be exempted from these reporting requirements.

Vision Payroll strongly recommends that businesses begin their implementation plan now to be ready to report under the new requirements and to be ready to reconcile the forms received from their customers. Vision Payroll is ready now to work with businesses on their implementation plan and will assist them in filing the necessary forms.

This week’s question comes from Mike, a small-business owner. We have hired some employees whose native language is Spanish. They are better able to understand forms in Spanish than they are in English. We need them to complete Form W-11 in order to claim payroll tax forgiveness on Form 941. Is there a Spanish Form W-11 available? Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, is used to certify worker eligibility for payroll tax forgiveness under the HIRE Act. At the present time, the Internal Revenue Service (IRS) has not released a Spanish version of Form W-11. Contact Vision Payroll if you have any further questions on Form W-11.

***Please see updated information regarding the release of the Spanish version of Form W-11.

According to the US Department of Labor, in the week ending May 22, the advance figure for seasonally adjusted initial claims was 460,000, a decrease of 14,000 from the previous week’s revised figure of 474,000. The 4-week moving average was 456,500, an increase of 2,250 from the previous week’s revised average of 454,250.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending May 15, unchanged from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending May 15 was 4,607,000, a decrease of 49,000 from the preceding week’s revised level of 4,656,000. The 4-week moving average was 4,637,250, a decrease of 11,500 from the preceding week’s revised average of 4,648,750.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.134 million.