Payroll24-7

Recently I was asked the following question: we have an employee who is an exempt employee and they have used up all of their PTO. Now the employee is requesting four days off in December for the holidays. But by then the employee will only have accrued one day of PTO. Can I dock for the three days in which they have no leave available?

Is a common enough question and actually one that is simple to answer. The Department of Labor states that when an exempt employee is absent from work for one or more full days for personal reasons other than sickness or disability the employer may make deductions from the employee’s pay. However it must be in one or more full day increments, no partial days. So in the scenario that we discussed above the payroll department will be able to pay one day of PTO and dock for three eight-hour days from the salary. If the employee were requesting two days plus an afternoon off, essentially two and one-half days, the employer would not be able to do anything for the afternoon off other than paying for it as that is not a full day increment.

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One of my pet peeves is that the profession of payroll has not progressed as fast or as far as it should have in the 30 years that I have been practicing it.  When I started out payroll and personnel (yes that long ago) were pretty much on an even keel with each other.  But 30 years later and wow! Payroll is a little further ahead but human resources has progressed by leaps and bounds--going so far as to be able to get Masters and PHD's in the field while you still have to search high and low to find one class for credit in payroll at a major university.  Why?

I think one of the reasons is that payroll professionals are way to busy doing payroll to promote payroll. We have progressed internally as we now have Directors of Payroll instead of clerks but not in the minds of the nation.  If you say you are a payroll professional people will look at you as if you have two heads.  Payroll is not a profession but a job in their minds.  And until we find time to promote the profession that view will never change.

One way to promote payroll is to get involved with anything that deals with our profession so that our opinions are heard.  Currently the IRS is looking for people to join their Information Reporting Advisory Council (IRPAC).  Check it out and help move our profession forward.

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The IRS recently released the instructions for the 2011 Form 941.  The thing that is very annoying is that they always seem to release the form a day or two before they release the instructions for the form.  And, again, it always seems as if one or two items on the form cannot be understood unless you read the instructions.

This time on the Form 941 it was a new line was added, 5e.  This was for section 3121(q) Notice of Demand--Tax on Unreported Tips.  The form itself says see instructions on how to complete this line.  But the instructions are not available yet.

So all we can do is review the form for the changes and wait for the instructions to clarify what the line needs.  Couldn't the IRS just wait three days and release the form with the instructions at the same time?  I mean three days in the middle of March could not have made that much difference.

Just a thought...

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The more things change the more they stay the same.  And that definitely applies to payroll and taxation.  This time around it is what to do about taxing nondependent children's health care coverage. And it is going mean big TROUBLE for payroll! Because we are back to federal not matching the state and waiting for the states to catch up or not.  Do we withhold state income tax or not?

California is the latest state to give advice about taxing this benefit.  And their advice pretty much matches all the other states.  Basically it is taxable for state income tax for 2011 until we tell you it is not.  So in other words, tax it now as you should and then when the state legislature gets around to passing a bill they will retro it back to Jan 1 because they can't just pass it as of that month.  Oh NO! It  has to become nontaxable  as of Jan 1 so we hope you don't mind going back and adjusting all your records for the year!

This type of stuff just gets old after a while.  Having been in payroll for over 30 years I have seen this so many times I can't even count it anymore.  Especially with items like educational assistance.  One year taxable the next nontaxable but you have to go back and adjust the taxable year because Congress finally got around to changing the rule and they wanted to retro it back since it took so long to get around to doing it in the first place.  So hope you don't mind the extra work!

So now the decision becomes do I report the wages and withhold the income tax and wait to make the adjustment (fell for that one a few times with educational assistance already) or do I wait until closer to the year end in hopes that the legislature passes the bill and retros back to Jan 1.

It is an age old dilemma.

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Blogging is a great way to get information across.  But you cannot limit yourself to your own blog.  So in order to reach as many payroll people as possible I do guest blogs from time to time.  One that I do on a regular basis is for Ask CPA Sam. 

This blog is run by Sam Kerch who is a CPA and works for Symmetry Software.  Yes the same software company that I blogged about last week.  So today I am working on my blog for askcpasam.  It should appear in the next few days.  Check it out if you get time.  It's on a great topic--is being penalized for not providing health insurance in 2014 a mandate that employers must provide it?  And if it is how does that apply to calculating overtime and the regular rate of pay?  Never thought of that one I'll bet!  Told you it was a good topic.  But you have to read the blog to find out... link is below.

Ask CPA Sam

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