Starting in January the IRS is changing its definition of “service charge” to include automatic gratuities. What does that mean for payroll tax compliance? It means that these services charges are now considered regular wages and subject to payroll tax withholding instead of standard tips that an employee has to report. This also means that these wages have to be considered when when employers calculate overtime, and hourly rates for employees could vary from day to day based on the number of large parties served where automatic gratuity is charged. For more specifics follow this link to IRS website
Many businesses have stated their plans to reduce employees hours to less than 30 hours per week as a way to take shelter from some of the new provisions of the Affordable Care Act. Is it possible that this cost saving strategy could violate federal law? This article gives some incite to the potential ramifications of this strategy.
How cutting employee’s hours may violate federal law.
The Department of Labor Wage & Hour Division has recently released a smart phone app that allows employees to track their hours on their phone. This allows them to be readily aware of whether or not they should be receiving over time and how much. In addition to putting this wage calculator in the employees hand (which isn’t a bad thing as employees deserve over time if they qualify for it), 20% of the app is dedicated to how to contact the department of labor if they have any questions. This give businesses one more reason to need to make sure they are fully compliant with all the current wage and hour rules and regulations. This is one of the great benefits of using a Professional Employer Organization, they assist business owners in keeping up with the ever changing laws to help protect them from potential financial hazards they may not know exist, and allow them to focus on growing their business.
Department of Labor
Employers, below is a link to the new Employment Eligibility Verification Form I-9 issued by the Department of Homeland Security.
Several changes to the form have been made in order to reduce errors and provide cleared instructions to both employers and employees. Employers should begin using the new form effective 03/08/13 but may still use the two previous revisions up until May 7th, 2013. After May 7th, 2013 employers must only use Form I-9 (Rev. 03/08/13)
CLICK HERE TO DOWNLOAD Form I-9 (Rev. 03/08/13)
Changes to the required Family Medical Leave Act workplace poster go effective March 8th, 2013. The changes relate to the definition of Veteran and the definition of “Serious Injury or Illness” & “Serious Health Condition” as the relate to veterans and service members. Continue reading