Blessed are the young, for they shall inherit the national debt.
– Herbert Hoover, US President, 1921-1928
“The health of American children, like their education, should be recognized as a definite public responsibility.”
– Harry Truman, National Health Assembly Dinner, May 1, 1948
For the full text of the speech go to http://www.trumanlibrary.org/publicpapers/viewpapers.php?pid=1612
The [Social Security] Act does not offer anyone, either individually or collectively, an easy life–nor was it ever intended so to do.
-Franklin D. Roosevelt, Radio address on the 3rd anniversary of the Social Security Act, August 15, 1938
The API published a story on September 13, 2013 stating that under federal law employers cannot force employees to take plastic pay and that withdrawal fees also cannot be imposed on them.
For the full story go to http://bigstory.ap.org/article/agency-firms-cant-only-use-debit-cards-pay.
The movement to electronic filing and the increased complexity in the rules governing payroll have resulted in an understandable trend of outsourcing payroll and employment tax. But, when it comes to outsourcing, out of sight does not mean out of mind.
Handing your payroll and employment tax processing to a third party is no different from hiring employees to do the work. The company’s executives continue to be liable for compliance, meaning, oversight of the work is still an inside job.
Occasionally, a big story hits the news about a less than upstanding payroll company absconding with their clients’ tax deposits. When this sort of new breaks, the importance of third-party oversight gets some focus. Recently, for instance, the IRS added a web page (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Third-Party-Arrangement-Chart) explaining the steps employers should take to confirm and review third-party returns and tax payments.
Invest in your internal resources
The job of supervising payroll/employment tax vendors requires substantial internal expertise.
Take earnings and deduction codes for instance. The task of reviewing the plan or policy and choosing a preconfigured template requires an understanding of the federal, state and local employment tax rules. Vendors are not responsible for choosing the wrong configuration templates, or correctly identifying exceptions that may apply.
Payroll vendors are frequently tasked with creating a general ledger interface; however, there are numerous transactions outside of regular pay data that must also be correctly recorded. Analysis of general ledger codes and their balances are required too if there are changes in the company’s organization structure that reach to where and how payroll transactions are booked. Accuracy of general ledger entries is not only important for financial statements–they may also come under close scrutiny for purposes of tax enforcement, workers’ compensation, and other employment related audits.
Having individuals within the organization who have cross-functional knowledge of accounting, payroll and employment tax is key to the effective and efficient management of human resources. The rules governing payroll and employment are routinely evolving, as are the technologies necessary to comply with them. That’s why investing in payroll training and informational resources is also important.
Falling into complacency is tempting when trusted payroll vendors are relied on for the heavy lifting. That’s why the supervisory role should be carefully defined with performance monitored and rewarded.
Do you outsource payroll/employment tax?
Tell us what steps you take to supervise your vendors, and how your performance is measured.
By Josh Davis
There has been a lot of buzz revolving around the payroll card industry after a recent lawsuit that sprung up, negative press articles appeared, and the start of an investigation by New York Attorney General, Eric Schneiderman, began. So, I sat down with Bernie Nolan from Global Cash Card to get both sides of the prepaid payroll card story and offer an overview for payroll providers still interested in or concerned about providing this as an option to clients. To read Bernie’s guest post on our blog about the benefits of providing paperless pay options to your clients, click here.
The Market for Payroll Cards is Growing… Fast
It is important to note as a provider of payroll services that the payroll card industry is continuing to grow at a steady rate. In fact, according to a report by the Aite Group, $34 billion…
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