Employees will continue to see a reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. The two percentage point payroll tax cut, in effect for 2011, was temporarily extended by the Temporary Payroll Tax Cut Continuation Act of 2011. This reduced Social Security withholding will have no effect on employees' future Social Security benefits.

According to the Internal Revenue Service (IRS), employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers' pay as soon as possible but not later than March 31, 2012.

Additional Income Tax May Apply to Certain Higher Income Employees
Employers should note that the law includes a new "recapture" provision, which applies only to those employees who receive more than $18,350 in wages during the two-month extension period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount).

• This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).
• This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year.
• With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.

The IRS will issue additional guidance as needed to implement the provisions of this new two-month extension, including revised employment tax forms and instructions and information for employees who may be subject to the new "recapture" provision. For most employers, the quarterly employment tax return for the quarter ending March 31, 2012, is due April 30, 2012.

"Payroll Tax Cut Temporarily Extended into 2012" January 2012 <HR and Benefits Newsletter> (January 2012) Brought to you by ClubPay

The holiday season has begun and many employers have questions about whether they're required to provide time off or holiday pay. Here's a look at some frequently asked questions and answers.

Are employers required to provide employees time off for a holiday?
Although not generally required by federal or state law, many employers choose to grant employees time off for certain holidays or to close the business altogether on those days.

Companies with 15 or more employees are subject to federal religious discrimination laws and may need to allow employees time off for religious observance, unless such time off would be an undue hardship for the business. Employers should also consult their state's nondiscrimination laws to learn if there are similar requirements for time off related to religious observances for employers of fewer than 15 employees.

What are some common holidays that employers observe?
Common holidays observed in the U.S. include:

• New Year's Day
• Martin Luther King, Jr. Day
• Presidents' Day
• Memorial Day
• Independence Day (Fourth of July)
• Labor Day
• Columbus Day
• Veterans' Day
• Thanksgiving Day and the Day After Thanksgiving
• Christmas Day

Do employers have to pay their employees if the business is closed for a holiday?
Federal law and most state laws do not require employers to pay employees if time off for holidays is granted. Whether or not employees are paid for holidays is generally a matter of company policy. Employers need to be careful when it comes to exempt employees, though--as a general rule, if an exempt employee performs any work during a workweek, he or she must be paid the full salary amount.

What about employees scheduled to work on a holiday if the business remains open?
Extra compensation (above and beyond an employee's regular rate of pay) for work on holidays is also generally a matter of company policy, although employers must comply with any specific state law requirements regarding holiday pay. Although some companies pay employees at a special rate (such as time-and-a-half) for holiday shifts, generally an employee is only entitled to his or her regular pay, plus any overtime.

Remember that states will generally enforce an employer's written policy regarding holiday pay, so it's important to follow company policy and to apply the rules consistently and fairly to all employees.

For questions about the specific requirements in your state, contact your state labor department or a knowledgeable employment law attorney.

"Holiday Time Off: What Employers Should Know" December 2011 <HR and Benefits Newsletter> (December 2011) Brought to you by ClubPay

The National Labor Relations Board (NLRB) has postponed the implementation date for its new notice-posting rule by more than 2 months in order to allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses. The new effective date of the rule is January 31, 2012.

As a result of the postponement, most private club employers will be required to post the 11-by-17-inch notice beginning on January 31, 2012. The notice is available at no cost from the NLRB through its website, either by downloading and printing or ordering a print by mail.

The decision to extend the rollout period followed questions from businesses and trade organizations indicating uncertainty about which businesses fall under the NLRB's jurisdiction, and was made in the interest of ensuring broad voluntary compliance.

According to the NLRB, no other changes in the rule, or in the form or content of the notice, will be made.

Additional Information
For further information about the jurisdiction and posting requirements for the new notice, please see the NLRB's Frequently Asked Questions, which will be updated regularly as new questions arise. For questions that do not appear on the list, or to arrange for an NLRB presentation on the rule, employers may contact the agency at questions@nlrb.gov or 866-667-NLRB.

"Deadline for Employers to Post New Employee Rights Notice Delayed Until Jan. 31, 2012" November 2011 <HR and Benefits Newsletter> (November 2011) Brought to you by ClubPay

The U.S. Department of Labor (DOL) has entered into a series of agreements with the Internal Revenue Service (IRS), as well as several state labor commissioners and other department leaders, which will enable those agencies to share information and coordinate law enforcement to end the business practice of misclassifying employees in order to avoid providing employment protections.

Voluntary Classification Settlement Program
At the same time, the IRS has launched a new program that will enable many employers to resolve past worker classification issues and achieve certainty under the tax law at a low cost by voluntarily reclassifying their workers. The Voluntary Classification Settlement Program (VCSP) will allow employers the opportunity to come into compliance by making a minimal payment covering past federal payroll tax obligations rather than waiting for an IRS audit.

Who is eligible to participate in the program?
The VCSP is available to many businesses, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as nonemployees or independent contractors, and now want to correctly treat these workers as employees.

To be eligible, an applicant must:

• Consistently have treated the workers in the past as nonemployees.
• Have filed all required Forms 1099 for the workers for the previous 3 years.
• Not currently be under audit by the IRS, the DOL or a state agency concerning the classification of these workers.

How does the program work?
Employers accepted into the program will pay an amount effectively equaling just over 1% of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Participating employers will, for the first 3 years under the program, be subject to a special 6-year statute of limitations, rather than the usual 3 years that generally applies to payroll taxes.

How can employers apply for the program?
Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees.

Where can I find more information?
Full details on the Voluntary Classification Settlement Program, including FAQs, are available on IRS.gov by clicking here, and in Announcement 2011-64. To read more about the latest enforcement efforts by DOL and the IRS, please click here.

"New Enforcement Efforts Aimed at Employee Misclassification; Employers May Avoid Payroll Tax Penalties with Voluntary Reclassification" October 2011 <HR and Benefits Newsletter> (October 2011) Brought to you by ClubPay

The Center for Consumer Information & Insurance Oversight has issued guidance that exempts stand-alone Health Reimbursement Arrangements (HRAs) in effect prior to Sept. 23, 2010 from having to comply with the Affordable Care Act's annual limit requirements for plan years beginning before Jan. 1, 2014.

Background
The Affordable Care Act generally prohibits group health plans from imposing lifetime or annual limits on the dollar value of health benefits; but allow "restricted annual limits" with respect to essential health benefits for plan years beginning before January 1, 2014. Restricted annual limits may be waived if compliance with the rules would result in a significant decrease in access to benefits or a significant increase in premiums.

Exemption for Stand-Alone HRAs
An HRA is a self-insured medical reimbursement plan funded solely by employer contributions and not through salary reduction that:

- Reimburses some or all of the medical care expenses of participating employees, spouses and dependents up to a maximum dollar amount for a coverage period; and
- Allows participants to carry forward unused amounts remaining at the end of the coverage period for use in subsequent coverage periods.

According to the guidance, all HRAs set limits on the amount that can be spent and those limits would always be less than the applicable restricted annual limit amounts, so applying the annual limit restrictions would result in a significant decrease in access to HRA benefits.

As a result, the guidance exempts all stand-alone HRAs that were in effect prior to Sept. 23, 2010 from having to apply individually for an annual limit waiver for plan years beginning on or after Sept. 23, 2010 but before Jan. 1, 2014. If an employer that maintains an HRA also maintains other coverage, whether or not that coverage is integrated with the HRA that other coverage must comply with the annual limit restrictions or obtain a waiver.

Record and Notice
Requirements Still Apply
An HRA that is exempt from applying for an annual limit waiver still must comply with the record retention and annual notice requirements to participants and subscribers included in previous guidance.

Additional Information
To read the guidance in its entirety, please click here.

"Affordable Care Act's Annual Limit Restrictions Do Not Apply to Stand-Alone HRAs in Effect Prior to Sept. 23, 2010" September 2011 <HR and Benefits Newsletter> (September 2011) Brought to you by ClubPay

Paid leave benefits continued to be the most widely available benefit offered by employers, with paid vacations available to 91% of full-time workers in private industry in March 2011, the Bureau of Labor Statistics reported in July. Access to these benefits, however, varied by employee and establishment characteristics.

• In private industry, paid vacation benefits were available to 37% of part-time workers.
• Paid sick leave was available to 75% of full-time workers and 27% of part-time workers.

The report, "Employee Benefits in the United States," contains March 2011 data compiled from the annual National Compensation Survey (NCS), which provides comprehensive measures of the incidence and provision of employee benefit plans. More than 15,000 establishments in the private and public sectors were surveyed.

Additional findings included:

• 64% of all private industry employees had access to retirement benefits.
• Medical care benefits were available to 69% of private industry workers.
• 73% of full-time employees in private industry had access to retirement benefits, and 85% to medical care.

Click here for more details and survey results. Additional information is expected to be published in early fall, including March 2011 data for private industry workers on the incidence and provisions of health care benefits, retirement benefits, life insurance, short-term and long-term disability benefits, paid holidays and vacations, and other selected benefits.

"Paid Leave Among Most Widely Available Benefits According to DOL Survey" August 2011 <HR and Benefits Newsletter> (August 2011) Brought to you by ClubPay

With the arrival of summer, the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has launched a national outreach initiative to educate workers and their employers about the hazards of working outdoors in the heat and steps needed to prevent heat-related illnesses.

The Dangers of Heat
According to OSHA, each year thousands of outdoor workers experience heat illness, which often manifests as heat exhaustion. If not quickly addressed, heat exhaustion can become heat stroke, which killed more than 30 workers last year. Heat can be a real danger for your country club staff especially in jobs on the course.

Guidance for Keeping Workers Safe
OSHA has created a new website featuring a variety of educational resources to give workers and employer’s information about heat illnesses and how to prevent them. There are also training tools for employers to use and posters to display at their worksites. OSHA will continue to add information and tools to this page throughout the summer. You may access the website by clicking here.

OSHA is also partnering with the National Oceanic and Atmospheric Administration (NOAA) on weather service alerts that will incorporate worker safety precautions when heat alerts are issued across the United States. NOAA's Heat Watch page now includes worker safety precautions when extreme heat alerts are issued. 

"Protect Workers from Heat Related Illnesses" July 2011 <HR and Benefits Newsletter> (July 2011) Brought to you by ClubPay

Internal Revenue Service (IRS) has released the 2012 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under the Internal Revenue Code.

Background on HSAs
An HSA is a health savings account (a tax-exempt trust or custodial account) set up exclusively for paying qualified medical expenses. To be eligible to have contributions made to an HSA, an individual must be covered under a high deductible health plan (HDHP) and meet certain other eligibility requirements.

An HSA may receive contributions from an eligible individual or any other person, including an employer or a family member, on behalf of an eligible individual. Contributions, other than employer contributions, are deductible on the eligible individual's return whether or not the individual itemizes deductions. Employer contributions are not included in income. Distributions from an HSA that are used to pay qualified medical expenses are not taxed.*

Annual Contribution Limitation
For calendar year 2012, the annual limitation on HSA deductions for an individual with self-only coverage under a high deductible health plan is $3,100. The annual limitation on HSA deductions for an individual with family coverage under a high deductible health plan is $6,250 for calendar year 2012.
 
High Deductible Health Plan
For calendar year 2012, a "high deductible health plan" is defined as a health plan with an annual deductible that is not less than $1,200 (no change from calendar year 2011) for self-only coverage or $2,400 (no change from calendar year 2011) for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,050 for self-only coverage or $12,100 for family coverage.
 
To view Revenue Procedure 2011-32, please click here.

*Note that, under the new Affordable Care Act requirements, only medicines or drugs that are prescribed (including over-the-counter medicines or drugs obtained with a prescription) or insulin are considered qualified medical expenses for HSA purposes for amounts paid after 2010. Additionally, for HSA distributions after 2010, the additional tax on distributions not used for qualified medical expenses is increased to 20%.

"2012 Health Savings Account Limits" June 2011 <HR and Benefits Newsletter> (June 2011) Brought to you by ClubPay

Repeal of 1099 Reporting Requirement

President Obama recently signed into law a bill that removes the expanded "1099" reporting requirement from the Affordable Care Act. The provision would have required businesses to report on Form 1099 all purchases of goods and services of $600 or more annually.
 
The bill, officially named the "Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011," makes the following changes to the Affordable Care Act:  

• Repeals the expansion of existing requirements that businesses report information to the Internal Revenue Service on payments for goods of $600 or more annually to other businesses; and
• Increases the amount of overpayment of premium assistance tax credits for purchasing health insurance coverage through state-based Exchanges that will be subject to repayment.

The White House announced the repeal in a press release issued April 14.

Free Choice Voucher Requirement Eliminated

President Obama also signed into law a bill that eliminates the requirement under the Affordable Care Act that employers provide free choice vouchers to certain employees. 

Beginning in 2014, employers who offer health insurance coverage would have been required to provide a "free choice" voucher for purchasing health care through state-based Exchanges to qualifying employees:

• Whose household incomes were at or below 400% of the federal poverty level; and
• Whose required premium contributions for the employer's coverage would be between 8% and 9.8% of their household in-come.  

The dollar amount of the voucher would have been equal to the premium contribution the employer would have paid on behalf of the employee under the employer's plan.
 
The provision was repealed on April 15 as part of the Department of Defense and Full-Year Continuing Appropriations Act of 2011.

"Affordable Care Act's 1099 Reporting Requirement, Free Choice Voucher Provision Repealed" May 2011 <HR and Benefits Newsletter> (May 2011)

As is the case with any major decision concerning software, when it comes to payroll there are often many considerations which need to be made. In situations like this, Annaliese Franzen is here to help.

Annaliese joined our Jonas team just over one year ago, and has quickly made an impression on staff and clients alike. Coming to Jonas with a wealth of knowledge acquired from years working in the Payroll industry, Annaliese was well prepared to tackle the challenges that would be posed to her by Jonas Club Management clients. As a payroll specialist, Annaliese’s sole objective is to work closely with Jonas club Management clients in order to assess their Payroll needs. Once there is a clear understanding, Annaliese makes recommendations which allow our clients to make a more educated decision regarding whether our in-house Jonas Payroll solution, or our full service outsourced ClubPay Payroll solution, would be the best fit.

In the short time since Annaliese joined us here at Jonas, her unique ability to identify club’s requirements and help them through their decision making process has resulted in more than a few commendations, and more are sure to come.

If you would like to speak with Annaliese for a complimentary payroll analysis email: annaliese.franzen@jonassoftware.com

Join us for an upcoming webinar demonstration of ClubPay's outsourced payroll solution for clubs: Thursday, May 19th at 2:00pm EST - Register Here