Creating office policies for your small business can be difficult, as most of us are well aware. How do you handle sick time, vacation time, personal time, or a death in the family? Better yet, how do your clients and/or customers handle it when it happens to you?
I was reading a very interesting article yesterday about “Can You Require Sick Employees to Stay Home“? My first reaction was “Wow! Good question” quickly followed by “as a small business owner I should be able to”. After all, it is officially cold and flu season and already every where you go people are coughing and sneezing; do you really want them bring that to work? I know I don’t want that to happen!
Sunburst, like many other small businesses consists of my husband Ben, myself, and Cheryl {who works 2 mornings a week}. It’s a given that if I get sick so will Ben and vice versa – but what about Cheryl? Does she need to come to work and end up with “whatever” we have, take it home and “give it” to everyone that she comes into contact with? Or should she come to work and we end up getting “whatever” it is she has?
Coming to work when you are sick isn’t any fun for anyone – you, the people you work with in your office, or your clients and customers. When we’re sick we just don’t perform our job duties with our usual amount of professionalism, courtesy, or speed – as a matter of fact I know I get downright crabby when I’m sick; mainly when I can’t think as fast as usual and especially if I have to repeat things to the same person multiple times during the same conversation.
There are no federal laws which specifically address whether or not employers can require employees to say home and not come to work; however, the Americans with Disabilities Act {ADA} does prohibit employers from discriminating against the disabled, although having a cold or the flu is not considered being disabled.
Encouraging employees to take a paid sick day and stay home when they have a fever, is often a common practice for larger companies and might be something that you want to consider having in place as an “office policy”. I’m sure many of you are gasping at this point and thinking “I can’t afford that!”, but think about it – which is cheaper – paying a sick employee to stay home so that others don’t get sick OR letting them come to work and you all end up getting ill? Just a thought….
In the ever increasing 24/7 connected world we live in – expectations run high – and sometimes people overlook that fact that people are sick, are away on vacation, at a Doctor’s appointment, or have had a death in the family. When we are connected 24/7 we fall into that immediate gratification or I gotta have it now trap and when those expectations are confronted by someone being unavailable some of us become very intolerant.
When you are the chief cook and bottle washer {or there is only yourself and perhaps a part time person} for your small business, it’s certainly difficult to justify taking time off; I know it is for us. Most years we are hear every day except major holidays, occasionally we are out of town {or out of state} on business, and if we are lucky once a year we take a week in vacation.
How do you handle situations such as sick time, vacation time, personal time, or a death in the family in your business? Do you have written policies in place or do you pretty much just “wing it” and handle it the best that you can at the moment? How do your customers or clients handle your being unavailable or away?
Payroll and holiday pay can be confusing and overwhelming and here we are right at the height of the upcoming holiday season! I found these great tips from HR Matters and wanted to share them with you. These tips provide answers to common questions such as: Do you have to provide paid holidays? What about for new employees? Do you have to pay overtime to employees who have to work on a holiday?
We’re officially heading into the holiday season with Thanksgiving coming up next week and Christmas and the New Year just around the corner. If you are like most employers, you may be dealing with holiday pay issues. To help you out, the HR Matters E-Tips Editors have put together the top seven holiday questions that they answer on a regular basis. (You also can find the answers to these and many more holiday questions in the HR Matters Tools and Resource Center online, Policy Manual, Holidays, Chapter 503.)
1. Do we have to provide paid holidays?
Absent a collective bargaining agreement or other contract providing paid holidays, federal law does not require you to pay nonexempt employees for holidays that they do not work. Most organizations offer a limited number of paid holidays to create employee goodwill. According to the Society for Human Resource Management 2011 Benefits Survey, 97% of responding employers provide paid holidays to their employees.
Note, however, that if you do not provide paid days off for holidays, you should pay exempt employees for any holidays that your organization is closed. (As a reminder, the Department of Labor (DOL) regulations implementing the Fair Labor Standards Act (FLSA) provide that the following categories of employees are exempt from the overtime and minimum wage requirements of the FLSA: (1) bona fide administrative, executive, or professional employees; (2) workers employed in outside sales; (3) highly skilled computer-related employees; and (4) certain “highly-compensated” employees.)
Although the DOL regulations implementing the FLSA do not specifically address unpaid holidays, they do provide that an employee will not be considered paid “on a salary basis” if deductions are made “for absences occasioned by the employer or by the operating requirements of the business.” Unpaid holidays generally are considered the type of absence “occasioned by the employer.” According to a DOL Wage & Hour Opinion Letter dated 5/27/99, the DOL indicated that an employee will not be considered to be paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer, such as being closed on certain holidays, or the operating requirements of the business. Further, the regulations recognize only a limited number of instances when an employer may make deductions (or “dock”) for absences of a full day or more without jeopardizing the exemption and thus incurring overtime liability. But, holidays do not fall under any of those exceptions.
2. Can we require employees to complete an introductory period before becoming eligible for holiday pay?
You most likely can exclude new nonexempt employees from holiday pay. If there is no collective bargaining agreement or other contract specifying that new employees are eligible for holiday pay, then it is up to your organization’s policy. Many employers exclude new employees from certain benefits granted to longer-term employees until completion of the introductory period.
However, new exempt employees should not be covered by this policy and should receive pay for holidays. As explained in # 1, above, if you do not pay exempt employees, new or old, for holidays they do not work, you may jeopardize their exempt status.
3. Can we require employees to work on holidays?
Since paid holidays are a discretionary benefit, you may require employees to work holidays according to the operating needs of the organization (and assuming no collective bargaining agreement or other contract prohibits this work). We recommend that employers’ holiday policies should include language that indicates employees may be required to work on holidays. For example, our HR Matters Tools and Resource Center, Policy Manual, includes the following provision in the model Holiday policy in Chapter 503: “The Company may schedule work on an observed holiday as it considers necessary. Normally, work on an observed holiday will be paid as if the day were a regularly scheduled work day. Employees will be given the option of receiving additional pay for the day or a “floating” holiday that may be taken, with the prior approval of their supervisor, at another time during the year.”
Note that you generally are not required to pay nonexempt employees for time and one-half for holiday work unless the employee has already worked 40 hours in the week (see # 4, below) or to provide a paid floating holiday at a later point. However, the model policy provides these extra benefits in recognition of the extra burden for employees who work on holidays.
4. Do we owe nonexempt employees overtime if they work on holidays?
The FLSA requires you to pay overtime to nonexempt employees at time and one-half their regular rate of pay for all hours actually worked over 40 in a single workweek. Accordingly, you will owe nonexempt employees who work on holidays overtime only if the employees end up working more than 40 hours because they are working on the holiday.
So, for example, if an employee has worked four 10-hour days (40 hours) and then works on a designated holiday that same week, then the employee should receive overtime for all of the holiday work hours. But, if the employee works four 8-hour days (32 hours) and then works an additional eight hours on the holiday, for a total of 40 hours worked in the week, then that employee is not entitled to overtime for the holiday work hours. (Note, however, that a limited number of states, such as Rhode Island, require payment of at least time and one-half for employees who work on certain holidays, so be sure to check state law, too.)
As an aside, if you voluntarily pay a premium of time and one-half (the equivalent of overtime) for work on a holiday, the FLSA regulations generally allow you to credit this extra compensation towards any overtime that might actually be earned in the same week.
5. If an employee works 40 hours in a week and then takes a paid holiday, do we owe the employee overtime?
No. As discussed in # 4, above, nonexempt employees must be paid overtime only for all hours actually worked over 40 in a single workweek. Thus, in calculating actual working hours for a nonexempt employee, you do not have to count any paid time off in the overtime calculation if the employee did not perform any work during the time off.
So, even if a nonexempt employee works a full 40-hour workweek and also takes a day of paid holiday and is paid for 48 hours that week, the employee is not entitled to overtime pay since he did not actually work more than 40 hours in the workweek.
6. What if an employee is on FMLA leave when a holiday occurs? Should they receive holiday pay?
The answer depends on your policy. You generally do not have to pay an employee for holidays that occur while the employee is out on unpaid FMLA leave if it is not the employer’s policy to provide this benefit during other types of unpaid leave. Similarly, if an employee’s work schedule is reduced for intermittent FMLA leave, you may reduce proportionately the employee’s benefits, such as holiday pay, if the employer’s normal practice is to base this benefit on the number of hours an employee works. However, you may not eliminate the full-time employee’s benefits because the employee is working a part-time schedule if part-time employees normally are not eligible for these benefits.
7. How do we pay nonexempt employees who work a compressed workweek, working four days a week, ten hours a day? Should these employees receive holiday pay if the holiday falls on a day that they are not scheduled to work?
Whether the nonexempt employees working compressed workweeks qualify for holiday pay depends on the terms of your holiday policy and how it has been implemented. Employers using compressed schedules (such as employees working four days/ten hours a day) generally take three basic approaches to eligibility for holiday pay.
(Download free Holidays model policy including best HR practices and legal background. Will require that you create a free account.)
Some employers pay only for holidays occurring on the employee’s regularly scheduled work day. Another more common approach is to allow compressed workweek employees to take off a day on which they would otherwise be scheduled to work. For example, if the employees normally work four days, they work only three days during weeks with holidays. Still other employers prefer to have compressed workweek employees on the job at least four days a week and pay for the holiday even if the employee is not scheduled otherwise to work that day, giving the employees an extra day of pay. This last practice, however, may lower the morale of employees who work a regular schedule and thus receive less pay for the holiday week.
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About HR Matters:
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© 2011 Personnel Policy Service, Inc. All Rights Reserved. HR Matters is a registered trademark of: Personnel Policy Service, Inc., 159 St. Matthews Ave., Suite 5, Louisville, KY 40207 Tel: 1-800-437-3735 – Fax: 1-800-755-7011
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We hope you’ve found these answers to 7 holiday pay questions to be helpful; if so please take a moment to leave a comment or share this with others on your favorite social networking sites.
This QuickBooks tip explains where you can easily access employee payroll forms; including the Federal I-9, W-4, and W-9′s.
Having used QuickBooks for many years, I can remember when needing an I-9 (Employment Eligibility Verification), a W-4 (Employee’s Withholding Allowance Certificate), or a W-9 (Request for Taxpayer Identification Number and Certification) meant a trip to the appropriate website to obtain the most current form – and depending on how busy I was at the moment, that could be a royal pain!
The I-9, Federal W-4, and W-9 are now available to anyone with a current payroll subscription using QuickBooks Pro/Premier 2009-2012 or Enterprise 9.0-12.0 from the Employees menu -> Employee Forms option; you’ll also find a Direct Deposit and Pay Card Authorization form.
Right click on the image to enlarge it.
NOTE: If you don’t see the Employee Forms menu option; choose the Get Payroll Updates option and get the latest payroll update. Restart QuickBooks after the update has been installed.
The forms open in a “fillable”. pdf format, so employees can type in their I-9, W-4, Direct Deposit or Pay Card Authorization information and it will be legible!
You can easily send W-9′s to your vendors as an email attachment {once the .pdf of the W-9 is open and visible, from the File menu -> choose Attach to email}.
You will still need to obtain the current version of the State W-4 from their website and have that on hand.
These are certainly handy forms to have quick access to and will save you from having to worry about whether or not you have a copy of the form, the most current version of the form, or from having to go searching on the internet to download the most current version that is available.
Critical note: You MUST have a .pdf creator/reader installed on your computer in order to open/use these forms. If you currently don’t have a pdf creator/reader, check out Foxit Reader – it’s free!
We hope you’ve found today’s QuickBooks tip to be helpful; if so please take a moment to leave a comment or share this tip with others via your favorite social networking site using the buttons below.
Employers and employees, be aware that you could be receiving name/SSN no-match letters at home from the SSA {Social Security Administration} – learn what it means and how to respond to such a letter. Information contained in this article is from the General Ledger – the Complete Newsletter for Professional Bookkeepers, published by the American Institute of Professional Bookkeepers.
The SSA started sending out name/SSN no-match letters again in March of this year to employer and employee or self-employed at home. The new notices have one mismatch per letter and are called “Decentralized Correspondence” (DECOR). SSA wants to make sure that a worker’s earnings are posted to the right account. Exception: SSA will not be sending no-match letters for tax years 2007-2009.
SSA recommends responding to a no-match letter as follows:
- check your records to see if there is a discrepancy in the records submitted to SSA,
- ask the employee to check his/her records to determine if the information was accurately recorded/reported,
- instruct the employee to contact the SSA to resolve any discrepancy.
- provide the employee a reasonable amount of time to resolve the discrepancy (“reasonable” is not defined, but the “suggested” period is 120 days, the period used by E-Verify – but circumstances can change this); and
- document your efforts to resolve the matter.
There is no specific guidance on your obligations for responding to a no-match letter from the SSA, Immigration and Customs Enforcement (ICE) or Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC). But OSC offers some general guidance for setting up a response plan:
- Keep in mind that name/SSN no-matches can result from typos, misread numbers, name changes, etc.
- Check no-matches against your personnel records.
- Inform the employee of a no-match notice and request and confirm the name/SSN in your personnel records.
- If the employee confirms your records as correct, advise the employee to contact SSA to correct and/or update his or her SSA records.
- Give the employee a reasonable period of time to work out a reorted no-match with the local SSA office.
- Periodically meet with or contact the employee to findout about and document the status of his/her efforts to resolve the no-match.
- If the employee offers to supply a document that may resolve the no-match, review it carefully.
- Submit employer or employee corrections to the SSA.
Follow the same procedures for all employees, regardless of citizenship or national origins. Failure to do so may spark discrimination lawsuits against your company.
OSC also offers some don’ts:
- Don’t use the receipt of a no-match notice alone as a basis to terminate, suspend or take any other adverse action against the employee.
- Don’t try to immediately re-verify the employee’s employment eligibility – e.g., don’t ask the person to hand in a new I-9 solely because of a no-match letter.
- Don’t require specific I-9 documents to deal with the no-match letter.
- Don’t require the employee to provide a receipt of a request for an SSN or name change. (OSC points out that SSA receipts may not always be obtainable.)
Key Point: A no-match letter recipient is not required to respond. But if you don’t, the SSA may share the information with the IRS or Justice Department.
To avoid getting a no-match letter, use SSA’s:
- SSN Verification Services (SSNVS) at www.ssa.gov, click on Business Services Online, second link, far left; or
- Employer Verification (TNEV), an automated telephone service that allows registered users to verify names or SSNs over the phone without talking to an agent – call 800-772-1213 and at the prompt say “Employer SSN Verification”.
Federal law prohibits using SSNVS or TNEV for work authorizations – use it only to verify a current employee’s SSN.
I hope you’ve found this article helpful – if so, please take a moment to leave a comment and feel free to share this information with others on your favorite social media site.
This payroll tip discusses being prepared for Wage & Hour and IRS Audits – what records have to be kept, how long you need to keep them, etc. From the General Ledger, a complete newsletter for Professional Bookkeepers published by the American Institute of Professional Bookkeepers.
Break out the trusty old metal/wooden file cabinets and wipe off the dust — or maybe it’s time to invest in some virtual file cabinets where documents are scanned in and stored off-site but accessible if you need them. Either way you are in for a shock!
We’ve mentioned previously that the U.S. Department of Labor is making a major push on wage-hour enforcements and that the IRS has also beefed up enforcement efforts – but what we didn’t include at that time was a list of documents that you must keep and how long they have to be kept. When October’s issue of the General Ledger arrived, this information was front page news; and I felt I needed to share it with you. I hope you are sitting down and have had your morning coffee!
Even if your company has never violated one IRS or DOL rule, substantial penalties may apply simply for not maintaining required records. Now is the time to gather or seek copies of the records you are required to keep under federal law. Records may be stored at at company offices; or for multiple locations, in a central office.
Keep for at least 4 years:
The IRS requires employers to keep the following for at least 4 years. NOTE: Because the 4-year period begins at different time, keep the following for at least 5 years.)
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The DOL or IRS (or both) require you to keep the following data. If not in hard copy, it should be available to print.
Keep for at least 3 years:
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Keep for at least 2 years:
Documents that support calculations for the following.
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Keep for at least 4 year
From April 15 following the due date of the return; employment related tax forms and data.
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Vendor and non-employee payments:
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All of this adds up to a LOT of paperwork that you have to keep on hand and accessible. Storage is going to be an issue for most businesses as well as making sure that the stored documents are kept safe – I know that these issues are a concern for me, as like most business owners I only have limited space.
We’ve used QuickBooks since we started our business in 2000, so all of the “detail” is housed in our QuickBooks file; we did have to archive our file at the end of 2006 because it was getting too big and running slow, so we have a backup copy that contains all the detail stored in our safe deposit box at the bank. Our current QuickBooks file contains a summary of that archived information, and I keep that backed up and stored in a several locations – locally on an external hard drive, on a remote (cloud based) location that both my husband and I have access to, and a backup which I keep on my laptop – so my QuickBooks file is pretty safe.
But, the hard copy paper payroll related data – well, right now all of that is stored by year in 3-ring binders; and all of the paper copies of business income and receipts are stored in cardboard file boxes in our attic! If there was a fire – well, we’d loose all that paper data! I guess it’s time that I get my act together and do something about electronic storage for at least all of the payroll related data.
How are you storing all of the information that would be required for a wage-hour or IRS audit?
