Fourth Quarter 2008 Volume 1, Issue 4
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2009 Updates
The new year inevitably brings many changes. Of course, the federal and state governments keep the wheels of change moving. Following are highlights of some key changes from the federal government that may affect your payroll. Please take careful note of those that will so you are prepared for those changes. Be sure to check with your state government for any local changes. Don’t forget to visit the Tools & Forms section of our website for a quick link to many updated forms.
- Social Security Administration raises the wage base from $102,000 to $106,800. ~Please note that when the wage limit is reached only the Social Security portion will cease to be withheld—Medicare will continue to be withheld.
- 401(k), SEP, 403(b) & 457 maximum deferrals will change from $15,500 to $16,500.
- 401(k), SEP, 403(b) & 457 catch-up contribution will change from $5,000 to $5,500.
- SIMPLE IRA maximum deferrals will change from $10,500 to $11,500 ~Please note the catch-up contribution will remain the same at $2,500.
- Standard mileage rate effective 1/1/2009 will be 55 cents per mile.
- Review W4’s—by February 15, 2009 any employee who is claiming exempt must re-submit his/her W4, otherwise the exemptions will revert to single –0– on February 16th. ~Please note that employees should be submitting new W4’s to you within 10 days of important changes such as name change, marriage, or dependant status changes.
- Check the calendar—look ahead to see when important holidays fall and see how they may affect your work schedule and payroll. Remember,if a bank holiday falls on a payroll week, we will need your payroll a day early to ensure the direct deposit goes out on time.
Don't Let This Happen to You: A True Story of Overtime Miscalculation and What Went Wrong
The Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid at least the federal minimum wage. It also determines the overtime standard—one-half times the regular rate of pay for hours worked beyond 40 per week. Accurate records must be maintained for every employee’s wages, hours, and conditions of employment. If any company, large or small, is in violation of this act, the U.S. Department of Labor (DOL) can and will sue to protect the employees and recover lost wages.
Wal-Mart Stores Inc learned this lesson the hard way, to the tune of nearly $4 million. From February 2002 through January 2007 Wal-Mart had seriously miscalculated base and overtime pay.
The company notified the federal government and the state of California that in some instances it did not include all of the employee’s earned income when determining the regular rate of pay, resulting in inaccurate records and pay rates that were not equal across the board.
Wal-Mart also did not adhere to the overtime standard. Their payroll calculated overtime in some instances based on the biweekly schedule, not the FLSA rule of over 40 hours worked per week.
Be aware of your employees’ timesheets and make sure you understand the FLSA overtime rule. If you violate the FLSA you will not only owe all back wages but you may be subject to steep penalties and interest.
Product of the Quarter: Encore Online
Radcliffe Payroll Services is very happy to announce the latest addition to our service offerings. We now have an alternate method of payroll input—Encore Online. Encore Online allows you to interact with our system and control your payroll information directly. You will be able to enjoy convenient access anytime, anywhere, to your payroll information. On vacation or sick at home, but still want to send in thepayroll? No problem. Just connect to the internet, hop on to our website and log in. It’s that easy!
Encore Online provides more than just access to a timesheet. You can manage your employees’ information all within the same interface. You can add or terminate employees, change their withholding exemptions and change their direct deposit information. You can change company deductions as well. Received new insurance premiums? You can make that change online.
We are dedicated to helping you streamline the payroll process. The less time and hassle it takes to pay your employees, the better. After all, the more time you can devote to generating profits means more profits are generated!
With Encore Online you can also view your reports from any location. You are simply a few clicks away from your employee and payroll information. You can also generate reports that were not originally processed with the payroll. For example, if you want a report listing all of the addresses of your employees for a mailing, you can generate the report from Encore Online and send it to Excel. From there, you can create your mailing.
Received a “Request for Separation Information” from Maryland’s DLLR? You can run a check history report, view employment statistics and respond to the form, all in one sitting. All reports can be saved as an Excel file, to help with financial calculations or other database functions. Reports can also be saved in Adobe Acrobat format, for easy file-sharing.
Encore Online is getting rave reviews from current users. They love the open access and input control. Transition is painless and the learning curve is quick. Make the most of your time and think about moving to Encore Online. Contact your payroll representative for more information on how to get started.
Notes From Randy's Desk...
As you all hear daily, the economic news for 2009 is that we will all be facing major challenges in running our businesses. Layoff notices are dominating the headlines and earnings announcements are all in decline. Although these are all very large businesses, we will all be feeling this impact on our own smaller businesses as well. I urge all of you to pay close attention to your own financial statements and monitor the health of your business frequently. It’s not enough to know that “things are a little slow”. All of you should be actively planning and preparing forecasts of the New Year and make regular adjustments to make sure that you are tracking your budget for revenues and expenses.
Pay close attention to your customers and be ready to adjust to their needs as they change. It’s always better to have time to prepare for change than it is to be caught by surprise. Look for trends in your business. Over the weekend, I saw that McDonalds’ business is increasing during these times, but many high end restaurants are closing, or adjusting their menus according to the economic climate. Try to be creative and positive with your business. There are always new opportunities during periods of adjustment.
