Inova Payroll Blog

Payroll is an important part of any business that employs workers. Paying your employees the right amount at the right time is essential to maintaining goodwill with your employees, not to mention staying in compliance with employment laws.

While payroll is a basic function of an employer’s daily operation, it can also be difficult to get your arms around. So we’ve identified some of the most frequently asked questions about payroll and provided answers and resources to point you in the right direction.

The Society for Human Resource Management (SHRM) reports that 15 percent of employees who quit a job within the first six months cite lack of proper onboarding as the primary reason they left the new position.

Other reasons these employees gave: no clear outline of responsibilities, insufficient training, lack of a friendly face to help out in their early days on the job, not enough attention from their manager or coworkers, and lack of recognition for their contributions.

All of these issues can be addressed through a well-developed and consistently executed onboarding process. Proper onboarding sets the stage for better employee engagement, which leads to lower turnover, which leads to lower recruiting and training expenses.

Here are a few must-have elements to a modern onboarding process that will help set your relationships with your new employees off on the right foot every time.

In today’s gig economy, more workers are finding themselves classified as independent contractors and fulfilling multiple roles for multiple employers. Freelancers, temporary workers, drivers, and consultants often gain freedom in choosing their own work schedule and how they will complete the work, but often do not enjoy the same benefits as traditional employees.

Independent contractors are not covered by the Fair Labor Standards Act (FLSA); they are treated differently in terms of taxes, benefits, and worker protections and receive a 1099-MISC form instead of a W-2 each year.

For small business owners and human resource specialists, differentiating between employees and contract workers isn’t as simple as it used to be and the risks of worker misclassification are no joke.

A 2015 study by the Society for Human Resource Management reveals that most employees are seeking a meaningful work experience. In an effort to supply it, employers are increasingly moving their HR processes to the cloud. In fact, the Information Services Group (ISG) states that the desire to provide a positive user experience is a chief reason employers shift to cloud HR solutions. 

How popular is cloud HR technology? Stratospheric. ISG’s 2015 survey shows that over 70 percent of respondents have implemented or intend to use cloud HR technology within the next two years. Besides reducing time spent on HR-related tasks, an effective cloud HR system takes an integrative approach to improving employee experience – from the job applicant stage all the way to off-boarding. An ideal integrated solution can transform the employee experience.

Among a number of regulatory changes in 2017, more and more states and municipalities are enacting their own laws and ordinances for paid sick leave, ensuring employees have protected time off for their own illness or to help a family member. These rules are designed to be employee-friendly, and they can come with unique challenges for employers, especially those whose current policies and practices are at odds with the new requirements.

2016 brought some landmark changes to the employment front. Many of these changes are set to take effect in 2017 – such as new ACA reporting deadlines, earlier W-2 filing date, revised I-9 form, state minimum wage increases, and new rules concerning OSHA recordkeeping, payroll cards, and fiduciary duties for retirement plans. Employers must also look out for changes in equal pay laws, paid sick leave, and the new overtime rule which may or may not come to pass.

President-elect Donald Trump has pledged to overturn various legislations enacted by the Obama administration – which makes the fate of workplace policies such as the revised overtime rule and the ACA uncertain. The common agreement is that, meanwhile, employers should abide by current laws.

Update November 29, 2016: The Pennsylvania New Jersey tax reciprocity agreement will remain in effect after December 31. See the Pennsylvania Department of Revenue announcement for more details.

Employers in Pennsylvania are subject to some of the country’s most complex payroll tax laws. Pennsylvania is one of 43 states that have a state income tax and one of 14 states that have local taxes. In addition to withholding state and local income tax from employees’ wages, Pennsylvania employers must also comply with special tax rules.

For example, Pennsylvania is one of the few states that requires state unemployment tax withholding and does not fully follow federal law on pretax deductions. Pennsylvania has also established reciprocal agreements with six other states – which adds another layer of complexity to state withholding.

Here’s an overview of the unique withholding requirements in Pennsylvania and tips for remitting and reporting taxes.

Q4 has arrived and that means it’s time to begin preparing for year-end. Waiting until December to complete all of your year-end tasks is not an option this year. Along with satisfying the typical payroll obligations, this year employers must adhere to fresh rules – including new overtime guidelines and an earlier W-2 filing date. With the flurry of activity surrounding payroll at year-end, starting early and having a checklist of key tasks is vital to gaining direction and reducing stress. Here’s how you can prepare now for a successful year-end.

December 30, 2016, update: The IRS did provide some relief to employers for 2016 reporting. They moved the due date to provide 1095 forms to employees from Jan. 31, 2017, to March 2, 2017.

After years of debate, employers are coming to terms with the Affordable Care Act (ACA). But, the act is a work in progress, so changes are a given. For starters, the IRS extended the reporting deadlines for tax year 2015, but an extension is not expected to be granted for tax year 2016. Also, good faith efforts may no longer prevent fines for noncompliance.

Six years after being passed, the ACA remains one of the biggest challenges for employers to overcome. So, how do you navigate the complexities and minimize any negative financial impact? The answer lies in learning from past mistakes and preparing for what’s ahead.

Despite the declining unemployment rate, many veterans struggle to find jobs matching their education, skills and experience. In an effort to hire veterans and other individuals facing barriers to employment, the federal government established the Work Opportunity Tax Credit (WOTC) program – which rewards employers with a tax credit for each eligible new hire. Employers can reduce federal income tax by up to $9,600 per eligible hired employee, so it’s a good idea for employers to understand how the WOTC applies to their business.

In this Q & A, you will find relevant WOTC information, including target groups, eligibility requirements, how to calculate and claim credits, plus tips for getting the most out of the program.