Table of Contents

The Payroll Source®

Table of Contents pages: 1 2 3 4

• ABOUT THE AUTHOR 33
• ACKNOWLEDGEMENTS 44
• SECTION 1: THE EMPLOYER-EMPLOYEE RELATIONSHIP 55
• • 1.1 Importance of the Determination 66
  • 1.2 Employee vs. Independent Contractor 77
  • • 1.2-1 Common Law Test 88
    • 1.2-2 Reasonable Basis Test 99
  • 1.3 Employment Status Determined by Law 1010
  • • 1.3-1 Statutory Employees 1010
    • 1.3-2 Statutory Nonemployees 1111
  • 1.4 Temporary Help Agency Employees 1212
  • 1.5 Other Third-Party Arrangements—Leased Employees, PEOs, Statutory Employers, Payer Agents 1313
  • 1.6 Employees Under Other Federal and State Laws 1414
  • • 1.6-1 Fair Labor Standards Act 1414
    • 1.6-2 State Wage-Hour Laws 1515
    • 1.6-3 State Income Tax Withholding Laws 1616
    • 1.6-4 State Unemployment Insurance Laws 1717
    • • Table 1.1 1818
    • 1.6-5 State Disability Insurance Laws 1919
  • 1.7 Worker Misclassification: Enforcement and Penalties 2020
  • • 1.7-1 IRS Penalties 2020
    • 1.7-2 IRS Enforcement Efforts 2121
    • 1.7-3 FLSA Complaints Filed With the Department of Labor 2222
    • 1.7-4 State Unemployment Agencies 2323
  • 1.8 Proof of the Right to Work in the U.S. 2424
  • 1.9 New Hire Reporting 2525
  • • Table 1.2 2626
  • 1.10 Review Questions and Exercises 2727
• SECTION 2: FEDERAL AND STATE WAGE-HOUR LAWS 2828
• • 2.1 Fair Labor Standards Act 2828
  • 2.2 Federal/State Relationship 2929
  • 2.3 Employer and Employee Coverage 3030
  • 2.4 Exempt and Nonexempt Employees 3131
  • • 2.4-1 White Collar Exemption 3131
    • 2.4-2 Retail and Service Industry Exemption 3232
    • 2.4-3 Public Sector Exempt Employees 3333
    • 2.4-4 Other Exempt Employees 3434
    • • Table 2.1 3535
  • 2.5 Minimum Wage 3636
  • • 2.5-1 Tips and the Tip Credit 3737
    • 2.5-2 Equal Pay for Equal Work 3838
  • 2.6 Overtime Pay Requirements 3939
  • • 2.6-1 The Workweek 4040
    • 2.6-2 Hours Worked 4141
    • 2.6-3 Regular Rate of Pay 4242
    • 2.6-4 Special Problems in Regular Rate Determinations 4343
    • 2.6-5 Compensatory Time Off 4444
    • • Table 2.2 4545
  • 2.7 Compensable Time Issues 4646
  • • 2.7-1 Unauthorized Overtime 4646
    • 2.7-2 Meal and Rest Periods 4747
    • 2.7-3 Travel Time 4848
    • 2.7-4 On-Call Time 4949
    • 2.7-5 Waiting Time 5050
    • 2.7-6 Time Spent at Meetings and Training Sessions 5151
    • 2.7-7 Preliminary and Postliminary Activities 5252
    • 2.7-8 Receiving Medical Attention 5353
  • 2.8 Child Labor Restrictions 5454
  • 2.9 Enforcement and Penalties 5555
  • 2.10 Public Contracts Laws 5656
  • • 2.10-1 Walsh-Healey Public Contracts Act 5656
    • 2.10-2 Wage Rates for Public Buildings and Works (Davis-Bacon and Related Acts) 5757
    • 2.10-3 Contract Work Hours and Safety Standards Act 5858
    • 2.10-4 Service Contract Act 5959
    • 2.10-5 Copeland ‘Anti-Kickback’ Act 6060
  • 2.11 State Wage-Hour Charts 6161
  • • 2.11-1 State Minimum Wage Rates 6262
    • • Table 2.3 6363
    • 2.11-2 State Tip Credits 6464
    • • Table 2.4 6565
    • 2.11-3 State Overtime Pay Requirements 6666
    • • Table 2.5 6767
    • 2.11-4 State Meal and Rest Period Requirements 6868
    • • Table 2.6 6969
    • 2.11-5 Directory of State Wage and Hour Agencies 7070
  • 2.12 Review Questions and Exercises 7171
• SECTION 3: TAXABLE AND NONTAXABLE COMPENSATION 7272
• • 3.1 Gross Income and Wages Under the IRC 7272
  • • 3.1-1 Income and Employment Taxes Defined 7373
    • 3.1-2 Fair Market Value 7474
  • 3.2 Fringe Benefits Under the Internal Revenue Code 7575
  • • 3.2-1 Nontaxable Fringe Benefits 7575
    • 3.2-2 Personal Use of Employer-Provided Vehicles 7676
    • • Table 3.1 7777
    • 3.2-3 Personal Use of Employer-Provided Aircraft 7878
    • 3.2-4 Free or Discounted Commercial Flights 7979
    • 3.2-5 Discounts on Property or Services 8080
    • 3.2-6 Club Memberships 8181
    • 3.2-7 Emergency Responder Benefits 8282
  • 3.3 Additional Employer-Provided Benefits 8383
  • • 3.3-1 Life Insurance 8383
    • • Definition of split-dollar life insurance arrangement. 8484
      • Taxation under the economic benefit regime. 8585
    • 3.3-2 Moving Expenses 8686
    • 3.3-3 Educational Assistance 8787
    • 3.3-4 Group Legal Services 8888
    • 3.3-5 Employee Business Travel Expense Reimbursements 8989
    • • Table 3.2 9090
    • 3.3-6 Employer-Provided Meals and Lodging 9191
    • 3.3-7 Adoption Assistance 9292
  • 3.4 Other Payments 9393
  • • 3.4-1 Advances and Overpayments 9393
    • 3.4-2 Awards and Prizes 9494
    • 3.4-3 Back Pay Awards 9595
    • 3.4-4 Bonuses 9696
    • 3.4-5 Commissions 9797
    • 3.4-6 Conventions 9898
    • 3.4-7 Death Benefits 9999
    • 3.4-8 Dependent Care Assistance Programs 100100
    • 3.4-9 Directors’ Fees 101101
    • 3.4-10 Disaster Relief Payments 102102
    • 3.4-11 Employer-Paid Taxes (Grossing-Up) 103103
    • 3.4-12 Equipment Allowances 104104
    • 3.4-13 Gifts 105105
    • 3.4-14 Golden Parachute Payments 106106
    • 3.4-15 Guaranteed Wage Payments 107107
    • 3.4-16 Jury Duty Pay 108108
    • 3.4-17 Leave-Sharing Plans 109109
    • 3.4-18 Loans to Employees 110110
    • 3.4-19 Military Pay 111111
    • 3.4-20 Outplacement Services 112112
    • 3.4-21 Retroactive Wage Payments 113113
    • 3.4-22 Security Provided to Employees 114114
    • 3.4-23 Severance or Dismissal Pay 115115
    • 3.4-24 Stocks and Stock Options 116116
    • 3.4-25 Strike Benefits 117117
    • 3.4-26 Supplemental Unemployment Benefits 118118
    • 3.4-27 Tips 119119
    • 3.4-28 Uniform Allowances 120120
    • 3.4-29 Vacation Pay 121121
    • 3.4-30 Wages Paid After Death 122122
  • 3.5 Withholding and Reporting Rules for Employer-Provided Benefits 123123
  • • 3.5-1 Withholding on Cash Fringe Benefits 123123
    • 3.5-2 Withholding and Reporting on Noncash Fringe Benefits 124124
  • 3.6 Review Questions and Exercises 125125
• SECTION 4: HEALTH, ACCIDENT, AND RETIREMENT BENEFITS 126126
• • 4.1 Health Insurance 126126
  • • 4.1-1 Affordable Care Act Health Insurance Requirements 127127
    • • Part I—Employee and Employer 128128
      • Part II—Employee Offer and Coverage 129129
      • Part III—Covered Individuals 130130
      • Part I—Applicable Large Employer Member 131131
      • Part II—ALE Member Information 132132
      • Part III: ALE Member Information—Monthly 133133
      • Part IV: Other ALE Members of Aggregated ALE Group 134134
    • 4.1-2 Tax Treatment of Contributions and Benefits 135135
    • • Definitions 136136
    • 4.1-3 Medical Savings Accounts 137137
    • 4.1-4 Long-Term Care Insurance 138138
    • 4.1-5 COBRA Health Insurance Continuation 139139
    • 4.1-6 Health Reimbursement Arrangements 140140
    • 4.1-7 Health Savings Accounts 141141
  • 4.2 Family and Medical Leave Act 142142
  • 4.3 Sick Pay 143143
  • • 4.3-1 Sick Leave Pay 144144
    • 4.3-2 Sick Pay Under a Separate Plan 145145
    • 4.3-3 Permanent Disability Benefits 146146
  • 4.4 Workers’ Compensation Insurance 147147
  • • 4.4-1 Benefit Payments 147147
    • 4.4-2 Premium Payments 148148
  • 4.5 Cafeteria Plans 149149
  • • 4.5-1 What Benefits Can Be Offered 150150
    • 4.5-2 How Cafeteria Plans Are Funded 151151
    • 4.5-3 What the Cafeteria Plan Document Must Contain 152152
    • 4.5-4 Benefit Elections 153153
    • 4.5-5 Who Can Participate in the Plan 154154
    • 4.5-6 Nondiscrimination Testing 155155
    • 4.5-7 Flexible Spending Arrangements 156156
    • 4.5-8 Tax Treatment of Cafeteria Plans 157157
    • 4.5-9 Reporting Requirements 158158
  • 4.6 Retirement and Deferred Compensation Plans 159159
  • • 4.6-1 Qualified Pension and Profit-Sharing Plans (IRC §401(a)) 160160
    • 4.6-2 Cash or Deferred Arrangements (IRC §401(k)) 161161
    • 4.6-3 Tax-Sheltered Annuities (IRC §403(b)) 162162
    • 4.6-4 Deferred Compensation Plans for the Public Sector and Tax-Exempt Groups (IRC §457(b)) 163163
    • 4.6-5 Employee-Funded Plans (IRC §501(c)(18)(D)) 164164
    • 4.6-6 Individual Retirement Accounts 165165
    • 4.6-7 Simplified Employee Pensions (IRC §408(k)) 166166
    • 4.6-8 Savings Incentive Match Plans for Employees of Small Employers (SIMPLE Plans) 167167
    • 4.6-9 Employee Stock Ownership Plans 168168
    • 4.6-10 Nonqualified Deferred Compensation Plans 169169
    • • Treatment of payments or losses of deferred amounts after they are included in income. 170170
  • 4.7 State Taxability of Cafeteria Plan and §401(k) Salary Reductions 171171
  • • Table 4.1 172172
  • 4.8 Review Questions and Exercises 173173
• SECTION 5: PAYING THE EMPLOYEE 174174
• • 5.1 Pay Frequency 175175
  • • Table 5.1 176176
  • 5.2 Payment on Termination 177177
  • • Table 5.2 178178
  • 5.3 Payment Methods 179179
  • • 5.3-1 Cash or Check 179179
    • 5.3-2 Direct Deposit (Electronic Funds Transfer) 180180
    • • Table 5.3. 181181
      • Table 5.4 182182
    • 5.3-3 Electronic Paycards 183183
  • 5.4 Pay Statements Provided to Employees 184184
  • • Table 5.5 184184
  • 5.5 Unclaimed Paychecks 185185
  • • Table 5.6 186186

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