1 / 20

CHAPTER 1

0. Payroll Accounting 2009 Bernard J. Bieg and Judith A. Toland. CHAPTER 1 . THE NEED FOR PAYROLL & PERSONNEL RECORDS. Developed by Lisa Swallow, CPA CMA MS. Payroll Profession. Positions within payroll profession Range from payroll clerk to senior payroll manager

fola
Télécharger la présentation

CHAPTER 1

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 0 Payroll Accounting 2009 Bernard J. Bieg and Judith A. Toland CHAPTER 1 THE NEED FOR PAYROLL & PERSONNEL RECORDS Developed by Lisa Swallow, CPA CMA MS

  2. Payroll Profession • Positions within payroll profession • Range from payroll clerk to senior payroll manager • Salaries range accordingly • Professional membership – American Payroll Association [APA] • Certified Payroll Professional exam • Code of Ethics sets direction for profession

  3. 0 Many Laws Affect Payroll • Fair Labor Standards Act of 1938 • State minimum wage and maximum hour laws • Federal Insurance Contribution Act (FICA) • Income tax withholding laws • Federal, state and local • Unemployment tax acts • Fair employment laws • Other federal and state laws

  4. 0 FairLabor Standards Act • Federal Wage & Hour Law of 1938 • Minimum wage until 7/24/09 = $6.55/hour • Then $7.25/hour by end of 2009 • Always get overtime • Equal pay for equal work provisions • Sets law for companies involved • in interstate commerce or • in production of goods/services for interstate commerce • Requires payroll records be maintained

  5. 0 StateMinimum Wage & Maximum Hours Laws • Established minimum wage rates for specific industries • Employees covered by both federal and state laws receive the higher hourly rates • State minimum rates and regulations vary

  6. 0 Federal Insurance Contribution Act (FICA) • Comprised of two taxes paid by employers (ER) and employees (EE) • OASDI (Old Age, Survivors & Disability) • 6.2% with a cap that changes each year • ER and EE pay • HI (Hospital Insurance, part of Medicare) • 1.45% with no ceiling • ER and EE pay • SECA (Self Employment Contributions Act) applies to self employed people

  7. 0 Income Tax Withholding Laws • Federal income tax • Levied on earnings of employees • Income tax is withheld from paychecks • State and local income tax • Income tax is withheld from paychecks • Different in each state

  8. 0 UnemploymentTax Acts • FUTA (Federal Unemployment Tax Act) • ER tax –paid on $7,000 per EE per year • Taxes used to pay state and federal administrative expenses, not used to pay unemployment benefits • SUTA (State Unemployment Tax Act) • Mandatory unemployment insurance – • each state has different laws • SSA outlines what kinds of standards each state’s unemployment compensation law must follow • Used to pay unemployment benefits

  9. 0 Fair Employment Laws • Title VII of the Civil Rights Act of 1964 • EEO (Equal Employment Opportunity) • Can’t discriminate in hiring, firing, promoting or compensating based on • color • race • religion • national origin • gender • Gender orientation added in certain states See http://www.eeoc.gov/ for more information

  10. 0 TheAge Discrimination in Employment Act (ADEA) • ADEA states employers cannot use age to discriminate in hiring firing or promoting • applies to employers with 20+ employees • Exception to rule is • Executives aged 65 or over and • Who hold key strategic decision-making positions for prior two-year period • Can face mandatory retirement if annual pension from ER will be at least $44,000

  11. 0 Americans with Disabilities Act [ADA] • Prevents employers with 15 or more employees from discriminating against disabled employees and job candidates based upon disability • ‘Reasonable accommodation’ must be provided • This is a very vague term and subject to court interpretation

  12. 0 PersonalResponsibility & Work Opportunity Reconciliation Act • Requires employers to report all new hires within 20 days to state agency • Records coordinated through Office of Child Support Enforcement (OCSE) • Fines of $25/hire levied for failure to report • A few states now require same from independent contractors

  13. 0 ImmigrationReform and Control Act [IRCA] • Bars hiring and retaining aliens unauthorized to work in U.S. • Accomplished by employee completing I-9 within 3 business days of employment • Or termination may result • U.S. Citizenship & Immigration Services may audit and levy penalties • Criminal penalties if discriminatory practices found

  14. 0 FamilyMedical Leave Act [FMLA] • Covers companies with 50+ employees within 75 mile radius • EE guaranteed 12 weeks unpaid leave for • Birth, adoption, critical care • Can use for child, spouse or parent • Leave may be used all at once or at separate times – but must be within 12 months of qualifying event • ER continues health care coverage • Right to return to same/comparable job and continue health coverage in absence

  15. UniformedServices Employment & Reemployment Rights Act • Military personnel given right to take leaves of absences from civilian jobs • Right to return to prior jobs with seniority intact • Health benefits must be started without a waiting period • Doesn’t apply if dishonorably discharged

  16. 0 EmployeeRetirement Income Security Act [ERISA] • Trustees must monitor pension plans • Vested 100% in 3-6 years • Example of a vesting plan Years of % Vested in Service Pension Plan 2 50% 4 75% 5 100% • Provides for PBGC • PBGC (Pension Benefit Guaranty Corporation) is a federal agency which guarantees benefits to employees • Stringent recordkeeping required including financial statements

  17. 0 State Laws • Workers’ Compensation • Most states require employers to pay workers compensation premiums • Can self insure if state approved • Different premiums based upon job class • State Disability Benefit Laws • Five states plus Puerto Rico have established laws requiring employers to provide disability benefits • This applies even if the disability did not arise due to employment!

  18. 0 Human Resource System • FLSA requires stringent personnel record- keeping • Pre-hire inquiries like application/screening document design and retention also critical • No questions alluding to religion, gender, race, age or national origin allowed • Unless implicates ability to perform job (for example, bilingual capabilities) • If application asks age/birth date, should contain ADEA language notifying candidate of anti-discriminatory provisions

  19. 0 Human Resource System (continued) • Reference Checks • Due to amount of litigation in this area, respondents should only verify facts • **not offer subjective information** • Really diminishes credibility of reference inquiries • Prospective ER may require applicant to sign “Employment Reference Release” • Interview records should be written/retained • Employee history record contains performance evaluations, compensation adjustments, disciplinary issues, etc. Critical area – employment related litigation is very expensive and often times avoidable

  20. 0 Payroll Accounting System • Payroll Department documentation • Change in payroll rate form notifies proper departments of rate change • Payroll Register compiles data per paycheck • EE Earnings Record outlines earnings per period, quarter-to-date and year-to-date for each EE • Paycheck • Paycheck or direct deposit • Outsourcing Payroll • Many small- to mid-sized businesses hire a payroll company to do their processing • This independent company responsible for compliance and can quickly and efficiently process payroll

More Related