Publication: APA Compliance Update - May 18,2016

Exempt Employee Salary Threshold Goes From $455 to $913 Per Week on December 1 

Today, the U.S. Department of Labor released the final rules governing which executive, administrative, and professional employees (white collar workers) are exempt from the Fair Labor Standards Act's minimum wage and overtime pay protections. The DOL last updated these regulations in 2004. 

Effective December 1, 2016, the final rule raises the salary threshold to $913 a week or $47,476 a year (up from $455 a week or $23,660 a year). 

The final rule focuses primarily on the salary and compensation levels needed for white collar workers to be exempt. Specifically, the rule: 

        • Sets the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers in the lowest-wage Census Region (currently the South).

        • Increases the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers, or $134,004 (up from $100,000).

        • Establishes a mechanism for automatically updating the salary and compensation levels going forward. Future automatic updates to the thresholds will occur every three years, beginning on January 1, 2020.

        • Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level. The amounts must be paid on a quarterly or more frequent basis, but there is a provision allowing a "catch-up" payment to be made during the first pay period of the next quarter.

        • Does not change any of the existing job duty requirements to qualify for an exemption. Both the standard duties tests and the HCE duties test remain unchanged. The final rule, which is scheduled to be published in the Federal Register on May 23, is available for preview. Additional information is available on the DOL's website. 

For more coverage, see the June issue of PAYROLL CURRENTLY. 

How will the increased salary requirement impact your organization, and what steps should you take to ensure compliance? Find out when you attend APA's webinar What Do the New Overtime Rules Mean for Payroll? The webinar will be held on June 10 and will also be offered on demand. Registration information will be available on APA's Payroll Webinars website soon! 

Publication: APA (October 2015)

10/16/2015 - How Payroll Professionals Can Leverage Robert Half’s Salary Guide 
Surely everyone in a payroll position would like to earn more money. But how much more can you reasonably expect today? You may also be wondering what the in-demand skills and certifications are in your field — and how you can you find the answers to these questions.
The most recent Robert Half Salary Guide for Accounting & Finance is a comprehensive resource. It includes the most up-to-date starting salary ranges for more than 400 positions in the industry, including payroll professionals. You can leverage this information when asking for a raise or negotiating salaries with a new employer. Here are some highlights:
Salaries are on the upswing.
Payroll positions are among the 10 hot jobs featured in the current Salary Guide, with starting pay anticipated to rise an average of more than 4 percent in 2016. The sampling that follows shows some sample positions and their U.S. salary ranges, representing the expected base compensation for professionals who are just joining a new company at any level:
·         Payroll manager, large company: $61,000 to $95,500 (4.7 percent increase)
·         Payroll coordinator, large company: $44,500 to 60,500 (4.7 percent increase)
·         Payroll clerk, midsize company: $35,500 to $48,250 (4.7 percent increase)
·         Payroll manager, small company: $43,000 to $61,500 (4.5 percent increase) 
Since salary ranges vary according to geography as well as job title and company size, you can use our Salary Calculator to customize the data for your ZIP code. 
Employers want to see credentials.Want other ways to increase your earnings? A relevant certification can help you add 5 to 15 percent to many standard salary ranges, according to the Salary Guide. Professionals with a certified payroll professional (CPP) designation, for example, have a competitive edge when getting hired 
In-demand skills open doors.Hiring managers look for applicants who are proficient in Microsoft Office, especially Excel, Word and Outlook. It’s also important to have at least a working knowledge of payroll systems such as SAP HR, ADP Tax, UltiPro, Kronos, NetSuite and Intuit. And with more software residing in the cloud, gaining experience in online platforms is vital. 
For more salary and hiring details, download our Salary Guide. The information could help make 2016 the year you advance your payroll career. 
Accountemps, a Robert Half company, is the world’s first and largest specialized staffing firm for temporary accounting, finance and bookkeeping professionals. Accountemps has more than 340 locations worldwide. More resources, including online job search services and the Accountemps blog, can be found at

06/25/15 - Supreme Court Says ACA Tax Credit Scheme Applies in All States 
By a vote of 6-3, the U.S. Supreme Court has upheld the tax credit provisions of the Affordable Care Act (ACA) – codified in IRC §36B. The question addressed by the Court in this case was whether the ACA's tax credits – intended to make health insurance more affordable – are available in states that have a federal Exchange (where people can shop for insurance, usually online) rather than a state Exchange. The amount of the credit depends in part on whether the taxpayer has enrolled in an insurance plan through "an Exchange established by the state." 

At this point, said the Court, "16 states and the District of Columbia have established their own Exchanges; the other 34 states have elected to have HHS [the Department of Health and Human Services] do so." Also, the IRS has published regulations making §36B tax credits available on both state and federal Exchanges. Four individuals living in Virginia, which has no state Exchange, challenged the IRS rule. 

Saying that the meaning of the disputed language was ambiguous, the Court looked at the overall statutory scheme and concluded that the disputed tax credit scheme was meant to apply everywhere. "Section 36B allows tax credits for insurance purchased on any exchange created under the Act. Those credits are necessary for the federal Exchanges to function like their state Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid." 

The Court's decision means that all the compliance requirements related to the ACA's employer shared responsibility and reporting provisions remain in place for 2015 and heading into 2016 [King v. Burwell, No. 14-114 (U.S. Sup. Ct., 6-25-15)]. 

For more coverage, see the next issue of PAYROLL CURRENTLY, due July 3. 

House Passes Mobile Workforce Bill

Bill Would Simplify Employer's Tax Withholding Obligations

By William Dunn, CPP

On May 15, the U.S. House of Representatives passed the Mobile Workforce State Income Tax Simplification Act of 2011 (HR 1864). If enacted, the bill will simplify the tax obligations of workers who travel out of state on business by providing a 30-day threshold under which no taxes will be assessed on income earned in that other state.

The bill will also simplify the obligations of employers who will not need to withhold taxes of other states for short-term assignments lasting 30 days or less per year. Employees working in another state for more than 30 days will be subject to taxation on all income earned in that other state.

APA supports the bill and its effort to reduce the administrative burden placed on employers, employees, and the states.

Currently, most businesses with employees who travel out of state on short-term assignments do not comply with the withholding requirements of the other states, raising the risk of severe penalties. Many, if not most, employees are ignorant of the fact that they may have a tax obligation in that other state.

While most states do not aggressively seek to collect the taxes of business travelers, New York happens to hold a particularly hard line on the issue. If the bill passes, the state is expected to lose more revenue than all other states combined from its inability to tax short-term business travelers.

Employment Laws Assistance-

The Department of Labor has developed a series of online advisors that help employees and employers understand their rights and responsibilities under federal employment laws such as pay and overtime, workplace poster requirements, health benefits, and more.

NY Changes Personal Income and MTA Payroll Tax Rates-

On December 9, New York Governor Andrew Cuomo signed a tax reform bill into law that will create new personal income tax (PIT) rates and brackets, effective for wages paid on or after January 1, 2012.

Obama Signs Payroll Tax Cut Extension Into Law-

On February 22, President Obama signed the Middle Class Tax Relief and Job Creation Act of 2012 into law (Pub. L. 112-96), extending the 4.2% employee social security tax rate for wages paid through December 31, 2012.

APA Updates Comments on Temporary Payroll Tax Cut Continuation Act-

APA earlier this year submitted updated comments to Congress on P.L 112-78, the Temporary Payroll Tax Cut Continuation Act of 2011. The APA requested member feedback on two questions:

*If required, how much time is needed to reprogram payroll systems to allow for two different employee social security rates (6.2% and 4.2%) in the same year?
*If the extension is only temporary again, would it be easier to implement the change if it ended at the end of a quarter (March 31, June 30, September 30) or a non-quarter ending month (i.e. April 30, May 31)?

Read APA's comments.