Innovative Employer Solutions can administer employer benefit programs. They keep up with all of the changes associated with health care reform. They handle the details of the new mandated requirements for their clients, so that their clients can focus on running their business.

IRS Summertime Tax Tip 2010-20
As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.

Here are seven things every business owner should know about hiring people as independent contractors versus hiring them as employees.

1.The IRS uses three characteristics to determine the relationship between businesses and workers:
Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.
Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
2.If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
3.If you can direct or control only the result of the work done — and not the means and methods of accomplishing the result — then your workers are probably independent contractors.
4.Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
5.Workers can avoid higher tax bills and lost benefits if they know their proper status.
6.Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.
7.You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link. Additional resources include IRS Publication 15-A, Employer’s Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).

Innovative Employer Solutions provides services as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider. Innovative Employer Solutions as a Florida PEO specifically provides Florida Payroll Services, Florida Employee Health Benefits, Florida Workers Compensation, Florida Unemployment Service, and Compliance with Florida Local, State and Federal Laws.

“The rate increase that has been justified would still give Florida the lowest workers’ compensation insurance rates among the large states, the lowest workers’ compensation insurance rates in the southeast, and most importantly — a 58.6% cumulative decrease from the highs prior to the legislative forms in 2003,” stated Commissioner McCarty.

Prior to the 2003 legislative reforms, Florida consistently ranked No. 1 or No. 2 in the country for the highest workers’ compensation rates; however, post-reform Florida rates have become some of the most competitive in the nation.

The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. For more information about the Office, please visit www.floir.com.

Innovative Employer Solutions provides services as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider. Innovative Employer Solutions as a Florida PEO specifically provides Florida Payroll Services, Florida Employee Health Benefits, Florida Workers Compensation, Florida Unemployment Service, and Compliance with Florida Local, State and Federal Laws.

Most private sector employers will be required to post the 11-by-17-inch notice on the new implementation date of April 30. The notice is available at no cost from the NLRB through its website, www.nlrb.gov [4], which has additional information on posting requirements and NLRB jurisdiction.

Innovative Employer Solutions provides services as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider. Innovative Employer Solutions as a Florida PEO specifically provides Florida Payroll Services, Florida Employee Health Benefits, Florida Workers Compensation, Florida Unemployment Service, and Compliance with Florida Local, State and Federal Laws.

The “taxable year” refers to the employee’s taxable year –and in most cases this stipulation means a calendar year. Thus, a calendar year limitation of $2,500 in salary reductions for the health care FSA will become effective Jan. 1, 2013.

Changes to Plan Documents
Plans that currently allow a health care FSA election of more than $2,500, must amend plan documents before Jan. 1, 2013, and change employee communications. Non-calendar plans that amend their plans as of Jan. 1, 2013, mid-plan year, may face some unique challenges or situations due to the changes required.

Be Proactive
To simplify administration of this change, sponsors of non-calendar year plans may want to adopt the new limit as of the first day of the plan year rather than waiting until Jan. 1, 2013. For example, if the current plan year begins May 1 and ends April 30, the plan sponsor may:

Communicate the change to employees.
Amend their plan documents to implement the new $2,500 maximum election
Initiate the changes to the contribution effective May 1, 2012, rather than wait until the mid-plan year in Jan. 1, 2013

Innovative Employer Solutions provides services as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider. Innovative Employer Solutions as a Florida PEO specifically provides Florida Payroll Services, Florida Employee Health Benefits, Florida Workers Compensation, Florida Unemployment Service, and Compliance with Florida Local, State and Federal Laws.

In our home state of Florida, as well as many other states, we continue to experience high unemployment levels. While the United States as a whole experienced a small decrease in the national unemployment rate in 2011, the percentage of unemployed workers in Florida is still more than triple what is was five years ago. Consequently, the state is paying out an unprecedented amount in benefits to our unemployed citizens.

The State of Florida pays unemployment benefits to qualified recipients from the Unemployment Compensation Trust Fund. This fund was kept solvent through the years as a result of the state unemployment taxes paid by employers throughout the state. In August 2009, however, the trust fund balance fell below zero. Our state has been borrowing from the Federal government to pay unemployment benefits ever since. Currently, Florida has borrowed over $1.7 billion to pay benefits to our unemployed workforce.

When the trust fund falls below a certain threshold, state law adjusts the unemployment tax rates to rebuild the balance in the trust fund, which was evidenced in the increase last year in unemployment tax rates. However, even with the last year’s increase, the state has yet not yet paid off the government loan.

Federal law dictates that when a state’s unemployment trust fund loans have been outstanding for two consecutive years, the state experiences an increase in federal unemployment taxes of 0.3% for each additional year the loan remains outstanding. Because this is the third year that Florida has had an outstanding balance, ALL FLORIDA Employers’ FUTA rates will increase from .9% to 1.2% in 2012. Along with higher tax rates for many employers, the state is attempting to balance out the Unemployment Compensation Trust Fund by raising the taxable wage limit from $7,000 to $8,500 per employee.

As an employer funded system, there is no way around the fact that rising unemployment rates are going to impact all employers. However, there are steps you can take to help control costs to the greatest extent possible. Here is where using a PEO can make a huge impact. Documentation and record keeping of employee issues will assist in avoiding unnecessary claims. In addition, as a part of a PEO a business ‘inherits’ the PEO’s State Unemployment Rate which is often times less.

PEO’s also bring tremendous value to businesses in handling unemployment claims, as well as the payment of taxes due. Through administrative efficiencies and UI system expertise, the PEO model can help businesses control costs, remove the burden of compliance with the myriad of requirements, and help to ferret out unjustified claims.
-Source FrankCrum
Innovative Employer Solutions provides services as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider. Innovative Employer Solutions as a Florida PEO specifically provides Florida Payroll Services, Florida Employee Health Benefits, Florida Workers Compensation, Florida Unemployment Service, and Compliance with Florida Local, State and Federal Laws.

Innovative Employer Solutions provides services as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider. Innovative Employer Solutions as a Florida PEO specifically provides Florida Payroll Services, Florida Employee Health Benefits, Florida Workers Compensation, Florida Unemployment Service, and Compliance with Florida Local, State and Federal Laws.

Innovative Employer Solutions provides services as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider. Innovative Employer Solutions as a Florida PEO specifically provides Florida Payroll Services, Florida Employee Health Benefits, Florida Workers Compensation, Florida Unemployment Service, and Compliance with Florida Local, State and Federal Laws.

The Florida minimum wage applies to all employees in the state who are covered by the federal minimum wage. When Florida’s minimum wage and the federal minimum wage differ, employers operating within the state are required to comply with whichever standard is higher. Accordingly, with the current increase, Florida’s minimum wage exceeds the federal minimum wage and must be applied.

Florida employers of tipped employees who meet eligibility requirements for the tip credit under the Federal Labor Standards Act must pay tipped employees a direct hourly wage of $4.65 per hour effective January 1, 2012. This is an amount equal to the new Florida minimum of $7.67 per hour, minus the $3.02 hourly tip credit permitted under Florida law (assuming that these employees receive enough in tips to generate this credit).

Innovative Employer Solutions as a Florida PEO, Florida Employee Leasing and Florida Payroll Provider will ensure that all Florida employees who are currently being paid minimum wage will be adjusted to the new minimum wage rate effective January 1,2012.

A revised minimum wage notice is now available. Click here for the revised minimum wage notice. The notice is also available for download on the Florida Department of Economic Opportunity website. By January 1, 2012, Florida employers will be required to post the revised minimum wage notice in a conspicuous and accessible place in each establishment where these employees work. This is in addition to the federal requirement to post notice of the federal minimum wage; the federal notice is available on the U.S. Department of Labor website.

The app is available in Spanish and English and tracks regular work hours, break time and overtime for one or more employers. The app also provides a glossary of terms, contacts and links to the DOL’s Wage and Hour Division. Users can add comments to reports and email their summary of work hours and gross pay as an attachment.

According to Secretary of Labor Hilda L. Solis, “This app will help empower workers to understand and stand up for their rights when employers have denied their hard-earned pay.” According to the DOL’s press release, the information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.

A printable version is available for workers without a smartphone. The printable work hours calendar tracks rate of pay, work start and stop times and provides easy-to-understand information on how to file a wage violation complaint.

To download the app or calendar go to ITunes, DOL-Timesheet. “Keeping track of wages: the U.S. Labor Department has an app for that!” www.dol.com (May 9, 2011).
Workers filed a record number of wage and hour lawsuits against their employers in 2010. Approximately 700 more lawsuits were filed in 2010 (nearly 6,800) compared to 2009 and most were class actions according to Seyfarth Shaw, a law firm specializing in labor law.

The DOL has hired about 350 new investigators to follow up on wage and hour violations.

In addition to the new app, the DOL is providing an attorney referral service run by the American Bar Association (ABA) for those wage and hour cases that the Department decides not to take. The DOL defends this measure because they get more than 35,000 calls a year for help and don’t have the resources to deal with every claim. To learn more about the Attorney Referral program, visit the Wage and Hour webpage.

Employers should have a legitimate concern about the new wage and hour app. The information recorded on the app is only as reliable as the users entering the information. There is nothing to prevent workers from entering false information and later challenging their employer’s records against information stored on the app. With a simple push of a button, they can send their independently recorded time sheets to the DOL.

Having one source for determining what hours an employee works is important because it records all employee hours and not just the hours of one employee. The other argument against the new app is that it sends a wrong signal-employees should not trust their employers.

When conflict arises between what an employee records and what an employer records as hours worked, contemporary testimony from other workers about the employee’s hours will determine liability.

Finally, critics argue that the app can only do one thing – increase complaints with the DOL and wage and hour litigation. Another concern is that the app would legitimize time fraud. While the DOL is concerned with employers not recording employee hours correctly, why shouldn’t employers be concerned that employees will do the same using the application to make false or frivolous claims?

These are a few things employers can do to avoid wage and hour violations:

Are your exempt employees properly classified? Too many employers classify employees as exempt when they are really non-exempt.

Are your non-exempt employees receiving their overtime? All overtime, no matter how brief, must be accounted for and compensated.

Are your non-exempt employees receiving proper credit for all their time spent working on your behalf? Employers that hedge employee time, especially when an employee is on an employer’s premise, take a great risk.

Are your non-exempt employees receiving their breaks and other compensated time as required by federal and state laws? Laws differ, but many state laws require mandatory paid breaks during the day.

Are your employees receiving all the wages due to them? Class actions are emerging where employers unlawfully deducted money from employee checks.

Have you had an employment attorney review your wage and hour practices? If not, now is the time.

This informational piece was published on June 6, 2011. ©2008 The McCalmon Group, Inc., all rights reserved. Designated trademarks and brands are the property of their respective owners.