Know the Major Laws Affecting Employee Benefit Plans

Multiple laws must be considered when implementing, evaluating, and updating employee benefit plans. It is essential to remember that not all laws affect every employer in the same way. Therefore, knowing which laws apply to your benefit plan is the first step toward compliance. Employee Retirement Income Security Act The Employee Retirement Income Security Act[…]

Learn the Difference Between Pretax and After-Tax

Deductions Taken Before Taxes Pretax deductions are subtracted from employees’ wages before taxes are taken out, thereby lowering their taxable wages and increasing their take-home pay. For a deduction to be eligible for pretax status, the employer must have an Internal Revenue Service-compliant plan document on file. For example, you need a Section 125 plan document to[…]

New Disability Claims Rule for Welfare Benefit Plans

On December 19, 2016, the U.S. Department of Labor announced a new rule updating the process for reviewing claims and appeals for disability benefits covered by ERISA. Initially, the final rule was supposed to apply to all claims filed on or after January 1, 2018. But the rule was delayed for 90 days, pushing the[…]

Know the Rules on Classifying Employees

The Fair Labor Standards Act (FLSA) sets guidelines for whether an employee is exempt or nonexempt under federal law. Exempt means that the employee is excluded from the Act’s overtime pay provisions and therefore does not have to be paid overtime for work hours exceeding 40 hours in a week. Nonexempt means that the employee[…]

Establishing Accurate Timekeeping Practices

The Fair Labor Standards Act (FLSA) requires that employers track hours worked by nonexempt employees, who typically are paid by the hour. Although you can choose your own timekeeping system, it’s essential that the records you keep are accurate and complete. System Options The evolution of technology has yielded an increased selection of timekeeping systems,[…]

Grasping the Complexity of Payroll Tax Withholding

The rules for withholding federal payroll taxes are quite straightforward, applying to most employees in the United States, regardless of location. The rules tend to be more complicated on the state side, however, as they are location specific and may even include local tax withholding. Here’s a rundown of the various federal, state, and local[…]

Traditional Leave Plans versus Paid Time Off

Traditional leave plans separate time off into different categories, such as vacation, sick, and personal time. Employees are allotted a specific number of days or hours for each category. The time off, which is based on length of service, must be taken for the allotted purpose. According to a 2016 report by WorldatWork, under a[…]

Terminating Employees the Right Way

The process of terminating an employee should not be taken lightly, as improper handling can lead to unpleasant results, such as the employee suing the company. It’s therefore vital that you follow the law when firing or laying off an employee. “At-Will” Employment Employment is “at will” in most states—meaning, either the employer or the[…]

What Is a Total Rewards Package?

With millennials dominating the workforce and the next generation of workers gearing up to make their mark, employers are being forced to rethink their rewards strategy. When employers think “rewards,” compensation and benefits typically first come to mind—and with good reason. Research shows that compensation is the leading driver of job satisfaction, followed by benefits.[…]

Why Unauthorized Overtime is Bad for Business

If you did not give an employee permission to work overtime but he or she does so anyway, under the Fair Labor Standards Act (FLSA), you must pay the employee overtime wages. As noted in §785.11 of the FLSA, “Work not requested but suffered or permitted is work time.” The FLSA’s reasoning is that if the employer[…]