Ascentis Blog

Information to help HR and payroll managers, recruiters, and compliance officers become more effective.

Tag Archives: Legislation

SWOT Away your Labor Issues

When you put together your annual business plan, you probably do a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis to determine how your company is different from your competition and what actions will keep your business going and growing. But, the biggest threat to your business may be the one thing to which you are paying the least attention.

Based on recent regulatory and court activity, wage and hour litigation is the single greatest threat to your continued business success according to this article on compensationcafe.com.  Misclassification, wage theft and other issues require as much attention from businesses as product, pricing and promotion.

Wage and hour litigation is expensive – costing companies up to double and triple damages plus fines plus attorneys fees. While income from operations usually comes in incrementally, wage and hour settlement payouts are a large sum hit on the bottom line. This can not only devastate an organization it can bankrupt it, affecting every single member of that company.

So, how much attention are you paying to your employment practices? Have you performed a SWOT analysis? What are your strengths? Your weaknesses? Where do you have opportunities? What issues pose the greatest threat?

Conducting a compliance audit is a great opportunity to identify and eliminate your unwritten employment policies and practices. Research best practices through discussions with human resources professionals and your legal counsel and make a plan to implement them.

Stay informed about the latest in HR and payroll news, trends, best practices and evolving legislation. Sign up for the monthly Ascentis HR, Benefits and Payroll News.

New Walking-Working Surfaces and Personal Protective Equipment Standards

The U.S. Department of Labor’s Occupational Safety and Health Administration has proposed a rule to require improved worker protection from tripping, slipping and falling hazards on walking and working surfaces. A public hearing on the revised changes will be held after the public comment period.

The proposed rule describes revisions to the Walking-Working Surfaces and Personal Protective Equipment standards to help prevent an estimated annual 20 workplace fatalities and more than 3,500 injuries serious enough to cause people to miss work.  According to OSHA, the current walking-working surfaces regulations allow employers to provide outdated and dangerous fall protection equipment such as lanyards and body belts that can result in workers suffering greater injury from falls. Construction and maritime workers already receive safer, more effective fall protection devices such as self-retracting lanyards and ladder safety and rope descent systems, which these proposed revisions would also require for general industry workers. The current walking-working surfaces standards also do not allow OSHA to fine employers who let workers climb certain ladders without fall protection. Under the revised standards, this restriction would be lifted in virtually all industries, allowing OSHA inspectors to fine employers that jeopardize their workers’ safety and lives by climbing these ladders without proper fall protection.

Comments on the proposed rule can be submitted through regulations.gov.  To view the proposed rule in the Federal Register, please click here.  To view the press release, please click here.

The Long Road to Compliance

On March 18th, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act. The act allows employers to hire qualified employees and not pay the employer part of the social security tax. As a payroll professional you may dread the new complications that will be inflicted on you but saving 6.2% may be worth the effort. So “Who qualifies?” you ask.

President Obama Signing Bill

Qualified employees are those hired after February 3rd, previously unemployed for at least 60 days and of course not replacing existing employees. It sounds relatively simple, right? Just track these employees as they are hired and don’t pay the social security tax on their wages.

Not so fast. For starters, the bill is retroactive so unless you were politically prescient, you probably don’t have a list of qualified employees. Once you have assembled that list, you need to determine the portion of the wages that will be exempt from employer tax. To make things more complicated, only wages paid after March 19th are exempt and only up to the maximum $106,800. The 19th was a Friday, so with a little luck, if you have weekly or bi-weekly employees, this will match the end of a pay period and will make it easier to determine eligible wages. If not, tough luck! Be prepared to do some manual prorating or just forego a few days of tax exemption and start counting at the beginning of the next pay period. The latter is a good solution especially if you consider the time it will take for the seemingly small benefit you will get.

You now have a list of employees and you know the exempt amount of wages. So what’s next? Well at this point no one knows exactly: that is while the IRS works on the issue. It will probably come in the form of a change of the 941 to adjust what you’ve paid in excess in the second quarter. In all cases, don’t change anything for your first quarter payments!

Hey Ascentis said it would be easy, what’s in store for me?

We hear you. All this may sound complicated, but really at the moment your job comes down to determining who’s eligible* so that when the time comes adjustment will be a breeze. Ascentis Payroll will be updated soon to let you track qualified employees. We will then provide you with ways to compute eligible wages. As usual, your client support rep will be the most helpful contact if you have any questions.

The healthcare reform just signed into law will add many other challenges. We’re following that closely to be sure you always have tools to stay compliant. This will be the same process again:

  • Read the law and prepare for change
  • Wait for the IRS (in most cases)
  • Implement changes in the system
  • Explain changes to our clients and make sure everyone is happy.

Next time you hear that a law has 1,990 pages, keep us in your thoughts!

*Eligible employees will have to sign an affidavit stating that they haven’t worked more than 40 hours during the 60-day period preceding employment. IRS is working on a form just for that, stay tuned.

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