California Payroll Report articles from September 2002

California Payroll Report archives from September 2002

IRS releases new designated PDS list.(private delivery services)
September 21, 2002... The IRS has added two new delivery services to its designated PDS list [Notice 2002-62]. The label timestamps of the private delivery services (PDSs) on this list will be considered equivalent to a postmark for purposes of the "timely mailing...

Extra work requires extra pay.
September 21, 2002... Nearly half of the employees in the U.S. take their work home with them, according to a recent survey commissioned by the Employment Law Alliance (ELA). The survey also found that 21 percent of respondents believe that their employer's...

Help protect employees against identity theft.
September 21, 2002... Social Security numbers (SSNs) were established by the federal government in 1936 to help track workers' earnings and eligibility for retirement benefits. Now, however, SSNs are used by the public and the private sectors for myriad record...

SSA expands its online services for TY 2002.(Social Security Administration)(Brief Article)
September 21, 2002... The Social Security Administration (SSA) has renamed--and expanded--its online services for employers. The revamped system is now called Business Services Online (BSO) and is described by the SSA as a "suite of Internet services for...

IRS issues correction notices for recent publications.(Internal Revenue Service)
September 21, 2002... The IRS recently announced that there were errors in two of its newly released publications. IRB Misprints The IRS reports that there were problems with the printer in the publication of a weekly Internal Revenue Bulletin. Copies of...

On-call time: employer restrictions trigger pay requirements.
September 21, 2002... While federal wage-hour laws require that employees be paid for time spent working and time spent "confined to" their work stations, they do not directly address the issue of employees' time spent on call. The lack of specific provisions...

When does "on call" become "on the clock"?(when workers must return to work within 15 minutes)
September 21, 2002... With pagers and cell phones common accessories these days, many companies have to deal with the question of whether they must pay employees for time spent "on call." In general, the primary factor to consider is the restrictions that are...

Reporting procedures qualify credit card reimbursements as an accountable plan.
September 21, 2002... Typically, the IRS views credit card receipts as insufficient substantiation of business expenses to qualify reimbursements as excludable from employees' income. In fact, last year we reported that the Service had rejected one company's plan...

Everything you need to know about qualified tuition plans.(Brief Article)
September 21, 2002... When employees have questions about their paycheck--deductions, reimbursements, retirement plan contributions, overtime, taxes, and even withholding allowances--they come to you. In fact, many employees consider payroll managers the most...

New law could mean more local labor regs.
September 21, 2002... Governor Davis recently signed new legislation that could mean many payroll managers will have to contend not just with federal and state labor laws, but with local laws as well. Under AB 2509, any local jurisdiction--including a city,...

All workers--illegal or not--must be paid for time worked.
September 21, 2002... In your previous issue of California Payroll Report, we noted that despite the U.S. Supreme Court's ruling in Hoffman Plastic Compounds, Inc. v. NLRB, various legal protections still apply to workers regardless of their immigration status. A...

State tax deduction salvaged despite withholding error.
September 21, 2002... Under Section 164(a)(3) of the Internal Revenue Code, individuals who itemize may deduct state income taxes from their federal taxable income in the year they pay those taxes. Appropriate amounts are withheld from employees' paychecks...

New rules for military personnel and thrift savings plans.
September 21, 2002... The Federal Retirement Thrift Investment Board has issued a new rule for Federal Employees' Retirement System (FERS) employees who participate in thrift savings plans (TSPs). The new rule states that an FERS employee who separates or enters...

Legislation halts housing exemption challenge.(Clergy Housing Allowance Clarification Act of 2002)(Brief Article)
September 21, 2002... The U.S. Court of Appeals for the Ninth Circuit in San Francisco has just dismissed a lawsuit that challenged the 80-year-old "parsonage exemption" in the IRS code that gives ministers or other members of the clergy a federal income tax...

Out-of-state contractors subject to special income tax.
September 21, 2002... The California Franchise Tax Board (FTB) is the agency in charge of, among other things, collecting taxes on the wages of nonresident athletes and entertainers who perform in the state. For example, according to The Wall Street Journal, Texas...

Everything you need to know about qualified tuition plans.(Aspen Publisher's guide)(Brief Article)
September 21, 2002... If you have even one employee in your company who is asking your advice on how to save for college expenses, then you need to have Aspen Publisher's Professional Advisors' Guide to Section 529 Plans and Other College Incentives in your...

Service time counts toward FMLA eligibility.(Family Medical Leave Act)
September 21, 2002... The U.S. Department of Labor (DOL) has clarified its position on the rights of returning uniformed service members to family and medical leave under the Uniformed Services Employment and Reemployment Rights Act (USERRA). "Recognition of the...

Part-time faculty member might wind up on full-time payroll.
September 21, 2002... Payroll managers who are expected to help hold the line on headcount should take special note of a case just decided by a California appeals court involving the state community college system. In the case, the court said that if a part-time...

Back-to-school reminder: new tax credit.
September 21, 2002... Before the start of a new school year earlier this month, parents throughout California and around the country trekked to the mall in search of notebooks, planners, calculators, highlighters, book covers, and the latest craze in writing...

News update.(paid family leave in California)(Brief Article)
September 21, 2002... At press time, legislation providing for up to six weeks of paid family leave has officially made it to the desk of Governor Davis, who has until September 30 to make his sign-or-veto decision on this and several other high-profile...

Overtime liability: myth versus reality.(in California)(Brief Article)
September 7, 2002... California has become the focal point for class-action lawsuits for violations of the minimum wage and overtime law. Larger employers in particular are being inundated with legal complaints charging them with misclassifying entire categories...

Enforcement actions put $20 million in state coffers.(California Department of Labor Standards Enforcement)(Brief Article)
September 7, 2002... The state Labor Commissioner's recently submitted annual report to the legislature provides some interesting data about wage-hour enforcement actions taken by the Department of Labor Standards Enforcement. For 2001, the most recent figures...

Back-pay remedies for undocumented workers clarified.
September 7, 2002... In the aftermath of the U.S. Supreme Court's recent decision in Hoffman Plastic Compounds, Inc. v. NLRB, state labor regulators quickly reaffirmed that California workers are protected by state laws regulating wages and working conditions,...

New specs for paper substitutes of W-2 and W-3 forms.(specifications from the Internal Revenue Service)(Brief Article)
September 7, 2002... The IRS has published Rev. Proc. 2002-53 [IRB 2002-32, 8/5/02], which provides the general rules and specifications for paper substitute forms for Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, for...

Living wage update.(in California)(Brief Article)
September 7, 2002... The Oxnard city council has approved a living wage policy requiring city contractors to pay their workers at least $9 an hour plus health care benefits, or $11.25 without benefits, effective October 1, 2002. Although the Ventura County Board...

Simpler backup withholding regs proposed.(regulations from the Internal Revenue Service)
September 7, 2002... The IRS has issued proposed regulations relating to backup withholding on payments made to such non-employees as accountants, consultants, independent contractors, and repairpersons [REG-116644-01]. The proposed regs address certain issues...

Teachers' Association must provide fuller disclosure on dues deductions.(California Teachers Association)(Brief Article)
September 7, 2002... The U.S. Court of Appeals for the Ninth Circuit has ordered California Teachers Association (CTA) affiliates to provide teachers with an "independent verification" by an outside accountant of how dues collected through payroll deductions are...

Partnership tax proposal withdrawn.(in San Francisco, California)(Brief Article)
September 7, 2002... A San Francisco supervisor has withdrawn a controversial proposal that would have imposed a 1.5 percent payroll tax on partnership profits of doctors, lawyers, accountants, and other professionals. The proposal, which would have been placed...

Split-dollar life insurance in IRS sights.(Brief Article)
September 7, 2002... Treasury and the IRS have released Notice 2002-59 to reiterate the standards for valuing current life insurance protection under a split-dollar life insurance arrangement. The notice is part of an agency "crackdown" to stop the spread of an...

Illegal alien workers still have legal rights.
September 7, 2002... Earlier this summer, we reported on a case in which the Supreme Court denied an undocumented worker the back pay awarded to him by a lower court after he was fired in retaliation for his union activities (May 7 and June 7 issues). However,...

Find the safe "middle ground" with I-9 forms.
September 7, 2002... Under the immigration Reform Control Act (IRCA), all new employees have three days from the start of their employment to complete an I-9 form. Employers (i.e., their representatives, such as payroll managers) must also complete part of the...

Benefits' interaction affects HRA's exclusion from income.(health reimbursement arrangements)
September 7, 2002... In your July 21, 2002, issue, we discussed how the IRS had given its blessing to a new hybrid form of health care coverage--health reimbursement arrangements (HRAs). This new form of employer-provided coverage can provide tax-free health care...

Proper resolution of employer's withholding error protects employees' state tax deduction.(Brief Article)
September 7, 2002... Under IRC Section 164(a)(3), individuals may deduct state income taxes from their federal taxable income in the year they pay those taxes (if they itemize). Appropriate amounts are withheld from employees' paychecks throughout the year, and...

Quote to note.
September 7, 2002... The first nine pages of the Internal Revenue Code define income; the remaining 1,100 pages spin the web of exceptions and preferences.

Back-to-school reminder: new tax credit available this year.(tax credits for K-12 teachers)(Brief Article)
September 7, 2002... With the start of a new school year, parents everywhere are trekking to the mall in search of notebooks, planners, calculators, highlighters, book covers, and the latest craze in writing instruments. But in many school districts, it's not...