Don’t Fall Victim to Misclassified Workers: 1099 VS Employee
Many employers find themselves questioning how to properly classify their employees. Often, employers are caught in the trap of trying to cut tax liability costs by paying someone as a 1099 contracted worker but inevitably, they may find themselves audited and fined for misclassifying employees.
Three common rules to remember when classifying contracted or standard workers are:
1) Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2) Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3) Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
In 2011, there will be increased budgeting for additional agents to audit worker classification. To be sure that your company is compliant, it is best to refer to www.irs.gov or to contact them to clarify questionable worker categorization. Visit our website at www.aapayroll.net , click on Worker Classification Audio or Transcript Tutorial for more detailed information and instructions. As well, if you are enrolled in our HR On Demand services, these questions can be easily answered for you by an HR Professional!
*Information contained in this article was retrieved from the IRS website.*
Adding Benefits To Your Business
Slowly, businesses are regaining some momentum this year and areas, such as Major Medical Benefits, are being readdressed. AAP has an established, trusted and competitive partner, Blue Water Benefits. Large companies, small businesses and everything in between can benefit from an audit of your current policy or have them implement a new benefits program according to your budgetary and company needs. Call your sales representative or email us at sales@aappayroll.com to get more details or to schedule an appointment!
HR Tip of the Month
Five Essential Hiring Tips
1 Use a job description to communicate the essential job functions and expectations.
2 Require candidates to complete and sign an employment application instead of using only the person’s resume.
3 Avoid asking illegal interview questions, and focus on those based on successful behaviors.
4 Follow-up with an offer letter noting an RSVP date, a hire date, compensation, and any pre— conditions to employment.
5. Conduct reference and relevant background checks to assess the candidate’s integrity.
Sales Team Addition
We are excited to have Wendy Brock as a new addition to the AAP Sales Team. Wendy joined us in July and will be the new Summerville area representative. Welcome to AAP!
AAP Employee of the Month
Katie Preslar
AAP Employee of the Quarter
Donna Bond
HIRE ACT
We have made great effort through our newsletters, email notifications, and individual contact to educate and assist our clients with the HIRE Act passed in March of this year. If you have not already contacted us for details or for information on how AAP can assist in tracking and reporting for HIRE Act, please call today!
Previously, in our December issue, we addressed the SC Illegal Immigration Reform Act and the use of the E-Verify system to validate employee work authorization. During that time, the E-verify laws were applicable to certain states and companies. After July 1, 2010 all SC public employers will be held compliant to the Reform’s work authorization requirements. Other states have made E-verify enforceable as well.
E-Verify is meant to protect employers from fraudulent employee identification and laws may vary state to state. Employers can become certified through www.irs.gov to E-Verify employees or AAP can be your designated agent. Most importantly, you must maintain a consistent and compliant process in validating employee work eligibility. Once you begin using E-Verify for one employee, the same process must be used on all employees going forward. For any questions, please email us at support@aappayroll.com .
We are always looking for more ways to keep our clients updated and aware of events affecting payroll and their businesses. Email notification and newsletters have definitely been one successful method. Additionally, we are installing a new system called Rapid Announce. One great feature of this service is that it will allow us to automatically send call reminders for payroll submission deadlines, bank and AAP closings, etc. In this way, we can more effectively and more immediately keep you informed on any items affecting your payroll or tax processing, and it will give you opportunity to connect directly to us from the call reminder to ask questions, submit your payroll or handle any other areas you so choose. We hope you find value in the service and look forward to your feed back once we begin!
We are happy to see so many of our clients taking advantage of the Hire Act credit enacted in to law on March 18, 2010. As well, we have remained diligent in helping clients to determine employee eligibility and submitting the proper paperwork.
In our efforts to continue to help you complete your due diligence for receiving this credit, we would like to remind you that not all previously unemployed new hires will qualify, nor should it be a part of your standard “new hire packet” of information. Each person should be addressed individually, and two key components should be asked: 1) Have they been unemployed for sixty (60) consecutive days or longer? 2) If they have worked, did they work less than forty (40) hours during the last sixty (60) consecutive days. This should be step one to determining eligibility for that employee. Other guidelines do apply.
As well, the credit only applies to persons hired after February 3, 2010 and to check dates falling within March 19, 2010 and December 31, 2010. Credits can be retro applied if you believe you have persons that qualify. An AAP Representative will be happy to assist you with proper forms and eligibility questions!
Unless mandated by law, employers cannot make deductions from an employee’s paycheck without the employee’s authorization. This may include medical, uniform or other expenses.
Please note that the AAP offices as well as banking facilities will be closed on Monday, July 5th. Our hours will resume as normal on Tuesday, July 6th
Theresa Stewart
Additional Payroll Services
Accountants
It is hard to believe that we are almost half way through 2010 and 2nd quarter will be ending!
Help AAP to ensure a smooth quarter end processing by alerting us of any COBRA Credits (for those using COBRA) taken April 1 to June 30 and by forwarding your original 941s to us when you receive them.
As well, if you have received any notices regarding rate changes for your company, please be sure to forward those on to AAP, as these are often different per business. This will prevent future notices and/or penalties from those agencies!
Congratulations to the Best Western Mt Pleasant, our Survey Submission Winner! They will start June out with a $50.00 credit just for sharing their feedback!
Thanks again to all who took the time to share their thoughts and opinions with us. We value your input at all times and use it to better build our company policies and procedures around our clients needs.
We encourage you to always keep us informed of what you love and offer constructive advice on where we can improve!! Thanks as always!!!
Congratulations to Cambar Solutions on being recognized as a “2010 Supply & Demand Chain Executive 100.” The recognition was given in May by Supply and Demand Executive magazineas acknowledgement for Cambar’s innovative warehouse software management system, and will be featured in the June/July issue.
Located in North Charleston, Cambar Solutions offers resource managemnet solutions that allow companies to track, control, and process warehouse inventory through the use of radio frequency scanning technology and Cambar’s proprietary software.
We wish you continued success!!
Q: What should be done with employee files after they leave the company?
A: To comply with IRS regulations, employers should hang on to employee files for seven years after an employee leaves. To defend the company against possible lawsuits concerning breach of employment, failure to pay overtime, employment discrimination, sexual harassment and any other type of employment issue, employers should keep employee files for four years — the statute of limitations for such claims
HR Tip Provided by HR Answerlink
To find out more business compliancy tips, please visit our website at www.aapayroll.net . Not a service member of HR Answerlink or HR On Demand? Call AAP today to enroll!
For multi-state clients, save yourself the cost of zero return fees by closing out inactive states that you are sure will remain as such. AAP is happy to provide services to close out the withholding and unemployment accounts for you.
Donna Bond
Additional Payroll Services
Accountants
If your company offers and contributes no less than 50% to employee health insurance for 2010, your small business may benefit from a new Government Tax Credit on your annual tax return. The Small Business Health Care Tax Credit has three (3) key qualifiers.*
1)Must have fewer than 25 full-time equivalent employees for the tax year
2)Average annual wages of its employees for the year must be less than $50,000 per full time employee
3) Employer must pay the premiums under “qualifying arrangement,” or at least pays 50% of premiums
*Additional information on qualifying can be found at www.irs.gov or gained through your tax preparer.
If AAP is tracking your benefit contributions through payroll, we can provide any necessary year end reports to assist you in determining your qualifying status.
How much time are you spending transferring payroll information from one report to another or entering information into your accounting software? What else would you rather be doing with that time? We would venture to say….growing your business!
AAP has reports that can sort by departments/branches or even calculate job costing for you. We can also build a general ledger for your company, as well as create an import for most accounting programs. In the instance of a more complicated or specific report requirements, AAP can develop a custom report.
Contact our Support Department at support@aappayroll.com or call 843-851-2289 for more information.
Please note that most reporting functions are free of charge but fees may apply for some custom reporting as this requires creating, customizing and/or validation of information. One fee now could make up for valuable payroll hours in the long run!
Join the many clients who have already dropped the hassle of waiting for delivery of payroll! Put your company on direct deposit* and have your employee pay stubs delivered right to their email through our Virtual Mail Room (VMR). The delivery is password protected and eliminates the need to reprocess lost or damaged paper checks.
Reports are set up to be automatically emailed to you, your payroll contact, your CPA…whomever you choose. We can even delegate which reports go to each person.!
*Direct Deposit is based on credit and/or references.
Thank you to those who have already responded to our surveys! One item that we have gotten numerous inquiries on is our National Criminal Search capabilities. This service is available through our website and offers many affordable and job appropriate options, including an “a la carte” section if you only need a driving record or social security verification.
It is as simple as registering, choosing your desired search package, and entering the required information! There are no recurring fees. You are only charged based on the services that you utilize.
Looking for a formal way to have tipped employees record additional wages for you? We have an easy form that can help. Ask your CSR to email or fax a copy of the Form 4070A.
Don’t lose out on your chance to win $50 in free payroll just by completing our survey.* We have received valuable information from those who have already participated!!
Go to www.aapayroll.net under “NEWS” to print the survey. Fax or email in.
*Winner to be drawn May 31, 2010. Client must be in good credit standing at the time of drawing to qualify. No cash value. One entry only please!
We sadly had to say good-bye to Traci Cutler from our Support Team, but we wish her well!!
We are pleased to announce that we have added Katie Preslar to fill the position! Welcome Katie!
Katie Hassell
AAP Expansion
We are very excited to announce that AAP will be operating in our Columbia region again! As part of our expansion, we have added the knowledge and experience of Scot Townsend to our Business Development team.
Scot began with us in March and will be our Columbia representative.
Welcome Scot!
Easy Report Access for Your Accountants!
Let AAP lighten your work load by supplying reports directly to your Accountant or Bookkeeper. We can email them immediately after your payroll is processed or give your accountant the ability to pull reports at will with Report Viewer through Evolution.
We can also build your company a general ledger and general ledger import report for automatic upload into your accounting software! Ask How!
Take our online survey and enter for a chance to win $50 in free payroll ! **
We work hard to provide our clients with value based services and above standard customer support. Tell us how we are doing. While you are there, find out how many ways AAP can solve all of your business needs!
Click here to print and to take our quick survey. Online Client Performance Summary- Rev
Fax it back to 843-871-8511 or scan and email it to Donna Bond at dbond@aappayroll.com .
**Winner to be drawn May 31, 2010. Client must be in good credit standing at the time of drawing to qualify. No cash value. Survey must be complete. One entry only please.
Employee Self Serve allows a safe and effective way to deliver your company’s pay information via the web. Employees simply log into their password protected link, through the AAP website, and have full and any time accessibility to present and previous pay history, as well as W-2 information.
Bonus! Employees can make changes to their name, address, withholding elections and may even request time off through the E.S.S. service. The change requests are delivered to their supervisors for approval and updates are then made to our payroll software. Read More
Corporate Payroll Office
703 N. Main St., Ste. C
Summerville, SC 29483
sales@aappayroll.com
North Carolina Payroll Office
148 Wind Chime Ct.
Raleigh, NC 27615
sales@aappayroll.com
