2016 Client Payroll Information Guide

Transcription

1 2016 Client Payroll Information Guide 2 3 ACA Guidance-Notice to Employees of Coverage Options Positive Pay Clients State & Local Tax Forms DOL Delays Proposed FSLA Changes IN THIS ISSUE 4 State Minimum Wage Increases By State 6 5 State Unemployment Taxable Wage Bases 7 Rates & Taxable Wage Base Unemployment Rate Determinations FSA Deferrals Qualified Plan Limits Filing Deposit Frequency Letters Labor Law Posters AN INDEPENDENT MEMBER OF ALLIANCE USA +

2 Page 1 Letter from Paytime As we approach the new year, it is time to start preparing for the many changes that will affect your payroll in This information guide contains valuable material to help you navigate through the payroll process. As always, if you have questions feel free to contact your Client Service Representative. By now you should have received our 2015 Year- End Packet and the 2016 Paytime calendar. For your convenience, the calendar provides a list of bank holidays, Paytime holidays and holidays in general to be used as a resource when preparing your payroll. We extend our warmest wishes for a Happy, Healthy New Year to all of our valued clients and partners and we are grateful for the friendship and confidence you have shown us throughout the years. The Paytime Team January 1 January 4 January 11 January 18 February 1 New Year s Day $250 re-end fee for processing 2015 payroll $500 re-end fee for processing 2015 payroll MLK/Bank Holiday Deadline for W-2 to be distributed to employees A Look Ahead Paytime will be closed in observance of the following holidays in 2016: New Year s Day Friday, January 1 Memorial Day Monday, May 30 Independence Day Monday, July 4 Labor Day Monday, September 5 Thanksgiving Thursday, November 24 Friday, November 25 Christmas Day Monday, December 26

3 Page 2 ACA Guidance - Notice to Employees of Coverage Options Are you in Compliance? 14 days of an employee s start date. Many provisions of the Patient Protection and Affordable Care Act (Affordable Care Act) that became effective beginning in 2014 were designed to expand access to affordable health care coverage. These include provisions for coverage to be offered through a Health Insurance Marketplace (Marketplace), premium tax credits to assist individuals in purchasing such coverage, employer notice to employees of coverage options available through the Marketplace, and other related provisions. Employers were required to provide notice to current employees of health insurance options available through the Marketplace no later than October 1, Employers were required to provide the notice to each new employee at the time of hiring beginning Oct. 1, The Department of Labor (DOL) considers a notice to be provided at the time of hiring if the notice is provided within Paytime Positive Pay Clients Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees. Model Notices The DOL has provided the following model Exchange notices (click on links): Model Exchange Notice for employers who do not offer a health plan; and Model Exchange Notice for employers who offer a health plan to some or all employees. Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements. Each month a report is sent to all Paytime Positive Pay Clients listing checks that were created in 2015, but have not yet cleared. Each state requires employers to attempt to contact any employee who has not cashed their paycheck during the year. If an employer is unable to locate the employee, they are required by law to turn the funds over to the state s Unclaimed Properties Department. If the paycheck is lost, please contact Paytime to find out if the check has been cashed. Paytime can place a stop payment on the missing paycheck and a replacement check can be issued. If you have any questions, please contact your Client Service Representative.

4 Page 3 State & Local Tax Forms At the end of the year you will be receiving state, city and school district forms or coupon books. If you receive forms from an agency in which you are not located, please notify us. This may mean the agency still has you listed as active and a final return will need to be submitted. Also compare any coupon you receive with a recent Payroll Summary to see if the account number and frequency match. Notify our Tax Department if a change needs to be made. DOL Delays Implementation of Proposed FSLA Changes The Department of Labor s ( DOL ) proposed rule amendment to the Fair Labor Standards Act s white collar exemption tests for executive, administrative, and professional employees has been postponed. This rule will increase the salary basis test from $455 per week to $970 per week ($50,440 annually) beginning in The proposed rule will cause many employees that are currently exempt to lose their exemption and will dramatically increase the number of U.S. workers who are eligible for overtime pay. Many have anticipated that the DOL would implement its pending final rule early in According to a recent Wall Street Journal article, the rule will not appear until the end of This delay was issued because the Solicitor of Labor, Patricia Smith recently stated that the DOL needed more time to draft the final regulations due to the sheer volume of comments it received during the comment period. The DOL received 270,000 comments from individuals and organizations during the comment period more than three times what it anticipated. While this is good news for employers, employers should utilize this period to ensure compliance with existing employee classifications and plan for the implementation of the proposed FLSA rule amendment. Questions? Contact Us!

5 Page Minimum Wage Increases By State The chart below lists states that have raised their minimum wage rate for Employers are required to post the minimum wage as determined by the state and federal laws at all times for their employees. Minimum wage rates increase as a result of CPI, federal wage increase or cost-of-living accommodation. The federal minimum wage rate remains $7.25 per hour. Alaska Arkansas California Connecticut DC Hawaii Maryland Massachusetts Michigan Minnesota Nebraska New York Rhode Island South Dakota Vermont West Virginia $9.75 effective 1/1/16 $8.00 effective 1/1/16 $10.00 effective 1/1/16 $9.60 effective 1/1/16 $10.50 effective 7/1/15 $11.50 effective 7/1/16 $8.50 effective 1/1/16 $8.25 effective 7/1/15 $8.75 effective 7/1/16 $10.00 effective 7/1/16 $8.50 effective 1/1/16 Large Employers $9.00 effective 8/1/15 $9.50 effective 8/1/16 Small Employers $7.25 effective 8/1/15 $7.75 effective 8/1/16 $9.00 effective 1/1/16 $9.00 effective 12/31/15 $9.60 effective 1/1/16 $8.55 effective 1/1/16 $9.60 effective 1/1/16 $8.75 effective 12/31/15 Please Note: If you are a Payentry or Remote Client, it is your responsibility to enter the new minimum wage rates before your 2016 payroll is processed.

6 Page State Unemployment Taxable Wage Bases This information is obtained from the American Payroll Association The states in BOLD have changed their rates for 2016 States/Territory States/Territory Alabama 8,000 8,000 Nebraska 9,000 9,000 Alaska TBA 38,700 Nevada 28,200 27,800 Arizona 7,000 7,000 New Hampshire 14,000 14,000 Arkansas 12,000 12,000 New Jersey 32,600 32,000 California 7,000 7,000 New Mexico 24,100 23,400 Colorado 12,200 11,800 New York 10,700 10,500 Connecticut 15,000 15,000 North Carolina 22,300 21,700 Delaware 18,500 18,500 North Dakota TBA 35,600 Dist. Of Columbia 9,000 9,000 Ohio 9,000 9,000 Florida 7,000 7,000 Oklahoma 17,500 17,000 Georgia 9,500 9,500 Oregon 36,900 35,700 Hawaii TBA 40,900 Pennsylvania 9,500 9,000 Idaho TBA 36,000 Puerto Rico 7,000 7,000 Illinois TBA 12,960 Rhode Island TBA 21,200 Indiana 9,500 9,500 South Carolina 14,000 14,000 Iowa 28,300 27,300 South Dakota 15,000 15,000 Kansas 14,000 12,000 Tennessee TBA 9,000 Kentucky 10,200 9,900 Texas 9,000 9,000 Louisiana 7,700 7,700 Utah 32,200 31,300 Maine 12,000 12,000 Vermont 16,800 16,400 Maryland 8,500 8,500 Virgin Islands TBA 22,900 Massachusetts 15,000 15,000 Virginia 8,000 8,000 Michigan TBA 9,500 Washington 44,000 42,100 Minnesota 31,000 30,000 West Virginia 12,000 12,000 Mississippi 14,000 14,000 Wisconsin 14,000 14,000 Missouri 13,000 13,000 Wyoming 25,500 24,700 Montana 30,500 29,500 *Michigan - Effective third quarter 2015, the taxable wage base decreases to $9,000 for contributing employers that are not delinquent on UI payments (i.e., most employers). **Rhode Island - The 2015 taxable wage base for employers in the highest UI tax rate group is $22,700.

7 Page Rates & Taxable Wage Base FICA rate will be: Social Security 6.2% Medicare 1.45% 2.35% (wages over 200k) Social Security Wage Base $118, Social Security Tax Limit $7, Medicare Wage Base Federal Income Tax Rate Unlimited 2016 Fed.Tax Table Federal Unemployment Wage Base $7, Ohio Unemployment Wage Base $9, Other States UWB see chart on page 5 401(k) 403(b) Annual Employee Deferral $18, (k) 403(b) Catch-up Contribution $6, Supplemental Tax Rate 25% Unemployment Rate Determinations It is very important that all state unemployment rate determinations for 2016 be forwarded to our tax department as soon as they are received. Most state unemployment rates change every year and Paytime will be using last year s rate until the 2016 rate is received. Paytime will not be responsible for penalties and interest related to new rates not being received in a timely manner. If you do not receive a rate determination, contact your taxing agency. In addition, please forward all 1st quarter state unemployment returns to Paytime. Some states only issue the new rate with the 1st quarter returns. FSA Deferrals For plan year 2016, the dollar limitation under 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements (FSAs) is $2,550. (Same as 2015) The use-or-lose rule on the Healthcare FSAs has been modified to give employers the option to allow employees to carry over up to $500 of unused contributions. (see Notice , )

8 Page Qualified Plan Limits Type of Limitation 2016 Elective Deferrals 401(k), 403 (b), etc. Defined Benefit Plans Defined Contribution Plans Annual Compensation Limit 457 (b) (2) and 457(c) (1) Limits Catch Up Contribution (401k) (403b) (457) Highly Compensated Key Employee Definition Limit SIMPLE Retirement Accounts SIMPLE Catch Up Contribution SEP Coverage SEP Compensation IRA Limit IRA Catch-Up 18, ,000 53, ,000 18,000 6, , ,000 12,500 3, ,000 5,500 1,000 Filing Deposit Frequency Letters Near the end of the year you will receive a letter from the IRS informing you of your 2016 tax frequency for any federal payments. If your tax liability from July 1, 2014 to June 30, 2015 was over $50,000.00, you are required to make your payments semi-weekly. If the liability of all your taxes owed to the Federal government are over $200, you are required to make your payments via EFT (electronic funds transfer). Failure to follow this regulation will cost you penalty and interest. It is important that state frequency letters are also forwarded as soon as they are received. Labor Law Posters Have you ordered your 2016 Labor Law Posters yet? Check it off your list of things to do for 2016 and order your posters today. We are offering this service to you, our client. It s simple, just click here to order online, or call Sarah Lunato directly at (440) or Slunato@paytime. com. Sarah will be happy to help you with this process. You can visit our website to read more about Labor Law Posters. Paytime works hard to keep you compliant!