Happy 81st Birthday to Social Security

Over the past weekend Social Security turned 81 and is still going strong and making a difference in peoples lives. According to a report from the Joint Economic Committee of the U.S. Congress, Social Security helpssa logos more than 60 million individuals or almost one-third of the U.S. population. The average benefit in 2016 is $1,350 per month. While it may not seem like a whole lot of money, it is the majority of income for 45% of all seniors. For 22% of seniors it is 90% of their income. Without Social Security income the poverty rate among women age 65 and older would increase from 12% to over 45% according to a 2015 report from the Center on Budget and Policy Priorities. And it will become more important in years to come.  One of the reasons Social Security is becoming more important is the decline in pensions. According to the Employee Benefit Research Institute and Bureau of Labor Statistics, roughly 80% of employees at medium and large firms had pensions in 1985. However less than 30% do today.  So happy birthday Social Security and hopefully you will have many, many more.

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OCSE Redesigns Website with Users in Mind

This is a first for us today.  We have a guest blogger.  Tristan Anderson from the Office of Child Support Enforcement (OCSE). OCSE has redesigned and launched their new website.  Her blog post today will help guide users through this new, redesigned OCSE website with all its great new features.  Welcome Tristan:

Here Today, Gone Tomorrow:

Technology moves fast. What once was new can quickly become old and outdated. Although we redesigned and launched a new website in 2012, by 2014 it no longer fit our users’ needs. In September 2012, only 12 percent of the people visiting our website did so on a mobile device. By September 2013, almost 25 percent were mobile users — a 102 percent increase in just 12 months! Each year we see a steady increase in the number of mobile users.

ocse blog picture 2On average, about 35 percent of our visitors are on their mobile device. To keep up with demand, we decided to redesign our website and make it mobile-friendly. That means our site will re-adjust the content to fit the size of any device, whether it is a desktop computer, a smart phone, a tablet, or something else.

Considerations for developers

  • Define your audience — who needs to know what? Our site must meet the needs of a variety of audiences: from parents to child support professionals, employers, and other partners; all groups need accurate information specific to them.
  • Identify top tasks — why are people visiting our site and what do they need? To answer these questions, we went to frequent website visitors.

User testing with employers

User testing with employers gave us insight into why you visit our website and how you navigate it. Based on feedback, we organized the main menus and submenus to accommodate your top tasks.

Here are examples of the most popular reasons you visit our website:

Understand employer responsibilities

Learn about electronic and online services

Find a complete list of federal forms used by employers

Access state contact information and program requirements

Get answers to frequently asked questions on a variety of topics

As more people visit websites using mobile platforms and as technology moves forward, you will see more updates and refinements. If you’d like to help test our site or have suggestions for improvements, contact Tristan Anderson at tristan.anderson@acf.hhs.gov.

White Paper: Disaster Payments and the IRS

We are always hearing in the news about the latest disaster in the nation. Whether it be wild fires in California or flooding in Texas. Natural disasters do happen and can be annual occurrences in some parts of the nation.  When this happens, it is natural to want to help those individuals who are personally affected especially if it strikes close to home like in the case of a co-worker.  When a co-worker loses a home to a wild fire or must move out due to flood damage even employers want to help out.  But when an employer wants to help, does that change the nature of the disaster grantassistance. In other words,  if co-workers take up a collection it is one thing, but what if the employer gives the employee a grant to help cover the costs not reimbursed by insurance? Is it then taxable income and taxes must be deducted? Actually, it may not have to be. Our white paper this time is on Handling Disaster Relief Payments in Payroll.  It explains how and when these types of payments can be made and the taxation requirements.  We hope you find it useful.

white paper disaster payments 2016

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Sick Leave Reaches Record High

The push for mandated sick leave has been intense in recent years.  But it appears it is paying off for workers. According to today’s U.S. Department of Labor Blog, on July 22nd the Bureau of Labor Statistics released some very interesting news about sick leave.  Over the past year, the share of private industry workers with access to at least one day of paid sick leave increased from 61 percent to 64 percent.  This is the highest on record.  Further, the increase between 2015 and 2016 was almost entirely due to an increase in access among workers in low-wage occupations, that is, workers in occupations with average wages in the bottom 25 percent. This is the result, it appears, of the national momentum on mandated paid sick leave that has taken place in states and in localities. For example, the biggest increase in access to paid sick days over the last year was in the Pacific Census Division, which includes Alaska, California, Hawaii, Oregon, and Washington state. In this set of states, the share of private industry workers with access to paid sick leave jumped up 12 percentage points – from 61 percent to 73 percent – between March 2015 and March 2016, the same period in which both California and Oregon implemented new statewide paid sick time laws.

$7.25 is Now 7 Years Old

An interesting fact, the current federal minimum wage of $7.25 turned seven years old on Sunday, July 24th. But how does our young one compare with the rest of its class?  In other words, is it top of the class, bottom of the class, or floating around in the middle? According to CNN Money the U.S. was ranked 11th out of 27 developed countries that have a nationwide minimum wage.  Australia comes in first, followed by Luxembourg, Belgium,  Ireland, France, Netherlands, New Zealand, Germany, Canada and the United Kingdom. Interestingly enough, Finland, Sweden, Denmark, Norway, Iceland, Austria, Switzerland and Italy are not listed because they have no federal rules on minimum wages.  That does not mean that their workers are low paid. In fact, many of these nations are known for paying relatively high wages because of the strength of unions. So the federal government does not feel the need to intervene to protect workers.

If we took into account the state or local minimum wage rates our ranking would increase since many states as well as local cities and counties have increased the minimum wage far above $7.25 per hour. But you would still have to take into account those states who have no minimum wage such as Alabama or Mississippi or those that are below the federal minimum wage such as Wyoming which is still at $5.15 per hour.  So there are those who are calling for the federal minimum wage to be raised. Historically this is usually a bipartisan issue. Since 1938 when the minimum wage was created it has been raised 10 times under both republican and democratic presidents. It started out at $.25 per hour under FDR, rose to $1.00 per hour under Eisenhower in 1956, to $1.15 an hour under Kennedy, $1.60 an hour under Nixon, $3.35 an hour under Reagan, $3.80 an hour under George H.W. Bush, $5.85 an hour under George W. Bush and finally to its present level of $7.25 under Obama.  But what is amazing is that its buying power has really varied over the years. For example, under Nixon it had the buying power of $9.28 in 1970 if comparing it to 2012 prices. But it has fallen over 25% since then.

So should we increase the minimum wage on the federal level or not?  If yes, by how much? These are questions that will weigh heavy on the upcoming election. But there is wide-spread support. A Hart Research Associate poll in 2015 showed most Americans (75%) support an increase in the federal minimum wage up to $12.50 per hour. 53% of those in the poll identified themselves are registered republicans. In addition, according to the federal Department of Labor, support is high for increasing the minimum wage even among business owners.  A survey of 1,000 executives was conducted by LuntzGlobal which is run by a republican pollster.  The survey results were leaked to a liberal watchdog group called Center for Media and Democracy.  It appears that 80% of respondents supported raising their state’s minimum wage.

So happy 7th birthday to our federal minimum wage!  But will it see 10? Who knows?


I Am Voting…If I Can Get the Time Off

It is finally in full swing…the 2016 presidential election. One candidate is nominated and one is waiting to be nominated.  Not only is this a presidential election year but also we are voting for the entire House and 1/3 of the Senate.  So how does this affect payroll (other than we need to vote, just like anyone else)?  Why time off to vote, of course.  The questions always comes up each election cycle, do I have to give my employees time off to vote?  If I do, then how much time? The answer falls under wage and hour laws.  And as usually happens, it is left up to the individual state to make the regulations. It is amazing to me (a bit on my soapbox) that the largest democracy in the world does not have a federal law requiring employees time off work to vote.  But we don’t, simple as that.  So the employee’s right to have time off to vote depends on where they are voting, in what state.  Some states do not address the issue or have no laws or provisions requiring that an employee get time off to vote.  These include: District of Columbia, Delaware, Florida, Idaho, Indiana, Louisiana,  Maine, Mississippi, Montana, North Carolina, New Hampshire, New Jersey, Oregon, Pennsylvania, Rhode Island, South Carolina, Virginia and Vermont.  Connecticut currently does not have a provision but will have effect October 1, 2016.

States that do address the issue usually allow between two and four hours to vote.  The employee usually has to give advance notice to the employer.  However, usually if the employee has sufficient period of time to vote in their off hours, they then do not need to get time off to vote during working hours.  For example Illinois states that “the employee is to get up to two hours if the employee’s working hours begin less than two hours after the polls open and end less than two hours after the polls close”.

There are many websites that give voting rights information but I found one that concentrates just on time off to vote laws.  Check out FindLaw at http://www.findlaw.com/voting-rights-law.html for all the latest info on giving employees time off to vote.  I decided to blog on this today so my followers will have time to begin research and preparing their voting time procedures for the fall.  We will, of course, be providing a white paper on this topic in the fall to be sure to catch all the latest updates to the time-off rules for the November election.


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FLSA & Independent Contractors: DOL Provides Handy Tool

The subject of who is an employee and who can be classified as an independent contractor is a hot topic right now.  Both the IRS and the Department of Labor (DOL) are actively auditing employers to locate misclassified employees.  But how do you know if you are doing it correctly, when you classify a worker as an independent contractor?  The IRS has, of course, their 3 factor control tests that you can apply.  They also have the Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Employers can use this form to help themselves determine worker status or even submit it to the IRS and let them make the determination (not usually anyone’s first choice!).  But what about the DOL and the FLSA?  What do they offer to help determine a worker’s classification?

elaws is the main assistance program that helps employers navigate the complexities of the Fair Labor Standards Act requirements.  These interactive web pages answer various questions on things such as calculating overtime and who should be exempt.  Now the DOL has a elaws on Independent Contractors that give some simple but efficient information to help employers determine if the worker should be an employee or not. It explains the background of how the determinations are made as well as the six areas that are investigated to determine the worker’s status. Though a simple one-page elaws it does provide good information for employers.