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Monthly Archives / October 2015

  • Oct 29 / 2015
What's New

Year End Check List

Audit, Audit, Audit (Employee Addresses, Social Security #s, W-4s)
Prepare Holiday Schedule for 2016
Prepare Payroll Schedule for 2016, keeping in mind Bank & Company Holidays (attach a copy to last paycheck for all employees)
Fix all Wage & Tax Errors before the last payroll of the year
Remind employees to update changes to their address, if needed
Updated new limits for 401k/401k catch-up  – (Remains unchanged for 2016)
Verify & update new Benefit Deduction amounts for 2016
Verify & update new Workers comp premium rates
Order Labor Law Posters for 2016, for all states
Schedule/Prepare YE Bonuses
Update out of state Unemployment Tax Rates
If you have Self-Service/Company Intranet, update all forms
Create new files for 2016, Taxes, Benefits, Work Comp, Invoices
Prepare YE reports such as 401k Census, Work Comp audit reports
Review/Add/Delete Earnings & Deduction codes
Review Fringe Benefits & Taxability
Review GTL (Group Term Life) amounts & add to W2
Reminder: Employers with 250 + EEs must add Healthcare costs to W2
Audit outstanding payroll checks

ALE (Applicable Large Employers), nonprofits, government, employers with 50-99 full-time equivalent employees, ALE that do not offer coverage, small ERs that self-fund must prepare new ACA (1094–C/1095-C) Forms for all employees (2015 data), due no later than January 31, 2016

  • Oct 29 / 2015
What's New

A Word From our President

Wow, is it that time of the year already?  It is time to get out our Year-End Checklist and review/audit/process all of our 2015 Payroll items.  Payroll Professionals across the nation will be planning for W-2 season, reviewing tax edits/audits/changes, creating 2016 Payroll Calendars and spending many hours with the rest of our payroll staff.  OCCAPA will provide as much information possible to help you get through Year-end.

Thank you for all who attended our October Meeting, our speaker shared valuable information on our new reporting responsibilities for ACA.

It is time to vote in a new set of Board Members for the OCCAPA term 2016 – 2018!  Please take time to review & send your nominations to election@occapa.com!

— Denise Jacques, OCCAPA, President

  • Oct 24 / 2015
What's New

California Labor Chief Rules Uber Driver Is an Employee – Lia Coniglio

A recent ruling by the California Labor Commissioner’s Office says that a driver for Uber Technologies, Inc. (Uber) should be classified as an employee, rather than an independent contractor, and is therefore entitled to reimbursable expenses. Uber has appealed the ruling.

What Is Uber?
Uber is a smart-phone application (app) that private vehicle drivers and passengers use to facilitate private transactions. Uber provides administrative support to the passengers seeking a ride and the drivers providing transportation. A driver uses the app to notify passengers that he or she is available to transport them. A passenger uses the app to request a ride. When the driver accepts the request, photos of the car and driver appear on the passenger’s phone so that the passenger can identify his or her ride. Basically, it allows someone to use a smart phone to hail a taxicab.

Driver Claims She Was Owed for Expenses
Barbara Berwick worked as a driver for Uber under a written agreement from approximately July 23, 2014, to September 18, 2014. She claimed that she was entitled to reimbursement for expenses associated with all of the miles she drove as an Uber driver, along with charges for tolls, use of her cell phone, and parking violation fines. Uber argued that they did not exert any control over the hours Berwick worked, so she was an independent contractor.

Drivers Are Integral Part of Business
Pursuant to prior case law, the employer has the burden of proving that the persons whose services it has retained are independent contractors rather than employees. There is a presumption of employment (see Cal. Lab. Code §3357).

Uber argued that it exercised very little control over Berwick; however, prior case law establishes that complete control over a worker’s activities is not necessary for a worker to be classified as an employee. According to the 1989 California Supreme Court decision S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, “The modern tendency is to find employment when the work being done is an integral part of the regular business of the employer, and when the worker, relative to the employer, does not furnish an independent business or professional service.” Here, Berwick’s work was integral to Uber’s business. Uber is in business to provide transportation services to passengers, and Berwick did the actual transporting. Uber’s business would not exist without drivers.

Issue of Control
Though Uber claims it is a neutral platform, the Labor Commissioner found that it is involved in every aspect of the operation. Uber vets prospective drivers, and drivers cannot use the Uber app unless they pass required background and DMV checks and also submit certain personal information. Uber also controls the tools the drivers use. Cars cannot be more than 10 years old, and Uber monitors drivers’ approval ratings from passengers. A driver’s access to the app is terminated if his or her rating drops below a certain level. Passengers pay Uber a set price for the trip, and Uber pays the drivers a non-negotiable service fee. Uber discourages drivers from accepting tips.

According to the Labor Commissioner, Berwick’s car and labor were her only assets. Her work did not involve any managerial skills that could affect profit or loss. Berwick did not have any investment in the business (aside from her car). But for the app, provided by Uber, Berwick would not have been able to perform the work.

Therefore, Berwick was classified as an employee, and was due to be reimbursed by Uber for all of the miles she drove and tolls she paid, as required by state law (see Cal. Lab. Code §2802). Because Berwick did not establish that she incurred cell phone charges or a parking ticket due to Uber, she was not entitled to be reimbursed for those expenses.

Lia Coniglio, Esq., is Manager of State Payroll Information Resources for the APA. Paytech Oct 2015

  • Oct 24 / 2015
What's New

Employer Reporting: Final 2015 Instructions and Forms Issued

Employers with at least 50 full-time employees (“FTEs”) (including full-time equivalent employees) in the prior calendar year (referred to as Applicable Large Employers (“ALEs”)) must comply with new reporting requirements under the Affordable Care Act (“ACA”) beginning with calendar year 2015.

Recently, the final Forms 1094-C and 1095-C were issued along with instructions. While the final Forms are substantially similar to the draft versions issued earlier this year, the final instructions provide some helpful clarifications. Notable changes include:

§ Reporting on HRAs (Form 1095-C Part III). The final instructions make it clear that an ALE with an insured group health plan and a self-insured HRA is not required to report the HRA coverage on Part III of Form 1095-C as long as the individual with the HRA coverage is also enrolled in the employer’s insured group health plan. The same is true with a self-insured group health plan with an HRA. However, reporting on the HRA is required in Part III if the individual with the HRA coverage is not enrolled in the employer’s group health plan (because, for example, he or she is enrolled in the group health plan of a spouse).1 Also, reporting on a retiree-only HRA that does not include other major medical coverage would be required. Employers may use either the Form 1095-C or Forms 1094-B and 1095-B to report this information.
§ Reporting COBRA offers (Form 1095-C Line 14). The instructions clarify that:
¬ An offer of COBRA made to a former employee upon termination of employment should not be reported as an offer of coverage on Line 14 of Form 1095-C. Instead, Code 1H (no offer of coverage) in Line 14 should be used for any month in which the offer of COBRA coverage applies.

An offer of COBRA made to an active employee as a result of a reduction in hours that resulted in a loss of health plan eligibility is reported using the same code in Line 14 as an offer of that type of coverage to any other active employee.

§ Determine monthly employee contribution (Form 1095-C Line 15). An employer may, but is not required to, divide the total employee share of the premium for the plan year by the number of months in the plan year to determine the monthly employee contribution for the plan year. This monthly employee contribution would then be reported for any months of that plan year that fall in the 2015 calendar year.
For example:
¬ If the plan year begins January 1, the employer may determine the amount to report for each month by taking the total annual employee contribution for all 12 months and dividing by 12.
¬ If the plan year begins April 1, the employer may determine the amount to report for January through March, 2015 by taking the total annual employee contribution for the plan year ending March 31, 2015, and dividing by 12, and may determine the amount to report for April through December, 2015 by taking the total annual employee contribution for the plan year ending March 31, 2016, and dividing by 12.

§ Plan Year Information Requested on Form 1095-C. In Part II there is a place for an employer to indicate the plan year start date by entering a two digit start month (01 through 12). For calendar year 2015 this is optional. Employers that do not offer group health plan coverage may use “00”. An employer that changes the plan year during the calendar year (i.e., runs a short plan year) will use the earliest applicable month. For CY 2016 reporting, it is anticipated that the IRS will require ALEs to complete this plan year information.

§ Multiemployer interim rule relief (Form 1095-C Line 16). If the employer qualifies for the multiemployer interim relief (Code 2E), then 2E will trump any other code, including 2C.

As a reminder, the Forms 1095-C for CY 2015 must be provided to all FTEs (if self-insured, to any covered individual) no later than February 1, 2016. Employers who file electronically have until March 31, 2016 to submit Form 1094-C and all Forms 1095-C to the IRS.2 Otherwise, the due date for paper delivery to the IRS is February 29, 2016.

For the final Forms and Instructions visit:
Form 1094-C http://www.irs.gov/pub/irs-pdf/f1094c.pdf
Form 1095-C http://www.irs.gov/pub/irs-pdf/f1095c.pdf
Instructions   http://www.irs.gov/pub/irs-pdf/i109495c.pdf

  • Oct 08 / 2015
What's New

Rhode Island Summarizes Status of Payroll Cards

On July 15, 2015, the State of Rhode Island enacted Public Law No. 2015-267 to make clear that payroll cards are a permissible means of wage payment. The new law establishes a number of consumer protections for employees who choose this method of wage payment. The law is effective immediately.

Consumer Protection Requirements

For an employer to offer payroll cards as a method of wage payment, their payroll card program must:

  1. Allow the employee to make at least one withdrawal each pay period for any amount up to and including the employee’s full net wages for that pay period without cost.
  2. If the employee is paid more frequently than weekly, the employee must be allowed to make at least one withdrawal each week for any amount up to and including the employee’s full net wages for that week without cost.
  3. Employees must be provided a means of checking their payroll card account balance, either through an automated telephone system or online, without cost, irrespective of the number of inquiries an employee makes.

In addition to the new requirements established in the law, payroll card programs are required to comply with Federal Regulation E (29 C.F.R. Part 1005). “Reg E” provides payroll cardholders with several protections, such as:

  • providing that employees must affirmatively consent to receive wages by payroll card,
  • disclosure of fees associated with use of the card,
  • error resolution procedures,
  • periodic statements,
  • limited liability protections for fraudulent transactions, and
  • advanced notice of changes in terms.
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