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Due to the severe storms, flooding, mudslides and landslides in West Virginia beginning March 12, 2010, President Barack Obama declared the following counties a federal disaster area: Fayette, Greenbrier, Kanawha, Mercer and Raleigh. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after March 11, 2010 and before March 30, 2010 as long as the deposits were made by March 29, 2010. In addition, affected taxpayers will have until May 11, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, mudslides and landslides and need further information on the relief provided by the IRS.

Due to the severe storms and flooding in Massachusetts beginning March 12, 2010, President Barack Obama declared the following counties a federal disaster area: Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk and Worcester. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after March 11, 2010 and before March 30, 2010 as long as the deposits were made by March 29, 2010. In addition, affected taxpayers will have until May 11, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms and flooding and need further information on the relief provided by the IRS.

Due to the severe storms and flooding in Rhode Island beginning March 12, 2010, President Barack Obama declared the following counties a federal disaster area: Bristol, Kent, Newport, Providence and Washington. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after March 11, 2010 and before March 30, 2010 as long as the deposits were made by March 29, 2010. In addition, affected taxpayers will have until May 11, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms and flooding and need further information on the relief provided by the IRS.

Nonfarm payroll employment increased by 162,000 in March, and the unemployment rate held at 9.7%, the US Bureau of Labor Statistics reported recently. Temporary help services and health care continued to add jobs over the month. Employment in federal government also rose, reflecting the hiring of temporary workers for Census 2010. Employment continued to decline in financial activities and in information.

In March, the number of unemployed persons was little changed at 15.0 million, 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%), teenagers (26.1%), whites (8.8%), blacks (16.5%), and Hispanics (12.6%) showed little or no change in March. The jobless rate for Asians was 7.5%, not seasonally adjusted.

The number of long-term unemployed (those jobless for 27 weeks and over) increased by 414,000 over the month to 6.5 million. In March, 44.1% of unemployed persons were jobless for 27 weeks or more.

The civilian labor force participation rate (64.9%) and the employment-population ratio (58.6%) continued to edge up in March.

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased to 9.1 million in March. 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 2.3 million persons were marginally attached to the labor force in March, compared with 2.1 million 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 1.0 million discouraged workers in March, up by 309,000 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 Andrew, a company president. We know that we can receive a payroll tax exemption and income tax credit under the HIRE Act if we hire certain unemployed workers. We need qualified employees to sign an affidavit to prove they are eligible. When will the HIRE Act affidavit form be available? Answer: The Internal Revenue Service (IRS) has released a draft Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit. Under the 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. A final Form W-11 is expected to be released by the IRS during the week of April 4, 2010. Contact Vision Payroll with further questions on the HIRE Act.

According to the US Department of Labor, in the week ending March 27, the advance figure for seasonally adjusted initial claims was 439,000, a decrease of 6,000 from the previous week’s revised figure of 445,000. The 4-week moving average was 447,250, a decrease of 6,750 from the previous week’s revised average of 454,000.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending March 20, unchanged from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending March 20 was 4,662,000, a decrease of 6,000 from the preceding week’s revised level of 4,668,000. The 4-week moving average was 4,679,500, a decrease of 12,500 from the preceding week’s revised average of 4,692,000.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.259 million. The increase in this number is attributable to the implementation of new seasonal factors.

Employers must constantly navigate a minefield of state and federal wage and hour laws. Effectively avoiding common employer pitfalls could save your business thousands of dollars every year. How do you determine which workers should be classified as independent contractors and which as employees? What is the difference between exempt and non-exempt? How should employers deal with employees who work without supervisory authorization?

You’ll learn the answers to these questions and much more, including the potential impact of the multi-agency Misclassification Initiative from the 10 Ways to Avoid Wage and Hour Pitfalls in this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter. These tips include information on the impact of state laws on wage and hour pitfalls as well as additional valuable information.

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 publication of a final rule to protect employee contributions deposited to small pension and welfare benefit plans with fewer than 100 participants by providing a safe harbor period of seven business days following receipt or withholding by employers.

“This rule will give employers greater clarity in remitting participant contributions to small pension and welfare plans in a timely manner,” said Phyllis C. Borzi, assistant secretary of labor for the department’s Employee Benefits Security Administration. “We estimate participant accounts could grow by $19 to $44 million as a result of these rules.”

Currently, employers of all sizes must transmit employee contributions to pension plans as soon as they can reasonably be segregated from the general assets of the employer, but no later than the 15th business day of the month following the month in which contributions are received or withheld by the employer. The latest date for forwarding participant contributions to health plans is 90 days from the date on which such amounts are received or withheld by the employer.

The final rule amends the participant contribution rules to create a safe harbor period under which participant contributions to a small plan will be deemed to comply with the law if those amounts are deposited with the plan within seven business days of receipt or withholding. The final rule is consistent with the proposed rule. The department did not expand the safe harbor to cover plans with 100 or more participants due to a lack of information and data sufficient to evaluate current practices of such employers and assess the costs, benefits and risks to participants associated with extending the safe harbor to large plans.

The final rule was published in the January 14, 2010, edition of the Federal Register and was effective on the date of publication. Contact Vision Payroll if you have further questions.

The Massachusetts Division of Unemployment Assistance (DUA) has released the 2010 employer contribution rates for unemployment taxes. Employers may check their rate using QUEST. Rates were determined using Schedule E, the same schedule as was used in 2009. Even though the rate schedule remained the same, individual employer rates generally changed based on activity in their account during the measurement period of October 1, 2008 to September 30, 2009. Since the rates were released late in the quarter, some employers may have significant overpayments or underpayments of tax because the rate differential must be applied to all subject wages for the entire first quarter.

Employers who received their rate decrease before the last payroll of the quarter will receive a credit in the last payroll of the quarter for the difference between the tax collected and the tax now due using the new rate. Employers who received their rate decrease after the last payroll of the quarter will receive a refund check for the difference between the tax collected and the tax now due using the new rate.

Employers who received their rate increase before the last payroll of the quarter will need to pay the additional tax equal to the difference between the tax collected and the tax now due using the new rate in the last payroll of the quarter. Employers who received their rate increase after the last payroll of the quarter will need to pay the additional tax equal to the difference between the tax collected and the tax now due using the new rate in an additional end-of-quarter payroll.

The adjustment in the last payroll or additional payroll should be the only adjustment required to correct the tax liability for 2010. Contact Vision Payroll if you have further questions on the 2010 employer contribution rates for unemployment taxes.

The Massachusetts Division of Unemployment Assistance (DUA) has released the UHI contribution rates for 2010. According to MGL c. 151A, §14G(f):

There shall be a rate review board composed of the commissioner of medical assistance or his designee, the deputy director of employment and training or his designee and the commissioner of insurance or his designee. The rate review board shall determine if the unemployment health insurance contribution rate and the unemployment health insurance contribution wage base established in this section shall be adequate to provide for the estimated costs for the subsequent year of unemployment health insurance programs established pursuant to subsection (j) provided by said division of employment and training. If in the opinion of said board the unemployment health insurance contribution wage base or the unemployment health insurance contribution rate as established above would be inadequate to properly fund the unemployment health insurance program, said rate of health insurance inflation or the unemployment health insurance contribution rate shall be appropriately adjusted in order to properly fund said unemployment health insurance program.

On or before November 30 of each year, the deputy director of employment and training shall certify to said board the estimated costs for the subsequent year of health insurance programs provided by the division of employment and training for individuals and their families who are eligible for the health insurance program established by subsection (j) for individuals receiving unemployment insurance compensation. Such estimated costs shall be exclusive of amounts to be covered by premiums, co-payments, deductibles and co-insurance to be paid by covered individuals and any anticipated appropriations. The rate review board shall further adjust such estimated costs to reflect prudent levels of reserves sufficient to carry out the responsibilities of the division of employment and training for said unemployment health insurance program. If in the opinion of said board the rate of health insurance inflation on the unemployment health insurance contribution wage base as established or calculated above would be inadequate to properly fund said unemployment health insurance program, said rate of health insurance inflation or the unemployment health insurance contribution rate shall be appropriately adjusted in order to properly fund said health insurance programs.

According to the DUA, for 2010 rates will be as follows:

The health insurance contribution rate is a flat rate of 0.24% for calendar year 2010 for all subject employers—except for those meeting the exempt or reduced rate criteria. (Employers operating within two calendar years following the “newly subject” status pay at rates of 0.04% and 0.08%, respectively.)

Contact Vision Payroll if you have any questions on the 2010 UHI contribution rates.