by Health Risk Assessment on December 9, 2010
Ever set out to organize and dispose of old staff member files and paperwork in the office? the job is tougher than it seems.
Best practice – Create a records retention policy as your first step. A host of federal and state laws specify how long you must retain pay- and benefits-related documents.
Compliance is essential if a current or former staff member sues or the DOL, IRS or the state audits your records.
Here’s a records-retention schedule advised by employment lawyer Jacqueline McManus -
o Retain for two years employee personnel files, including performance reviews and training.
o Hold these for three years – wage records, including time cards, base pay and overtime wage-rate calculations and records explaining wage diferentials for personnel performing the same job, and hold I-9 forms for three years from hire date or one year after termination, whichever is later.
o Keep these four years – all Payroll documents, including – home address records, and all wage records, including weekly OT earnings, straight time pay, deductions, bonuses, pay period designations and payment dates.
o Use a five-year retention window for employee health info like medical and first-aid records from on-the-job injuries, and drug and alcohol testing records.
o Keep this benefits data for six years (or one year after plan termination) – elections and enrollment forms, benefit change documents, and COBRA notices.
o Retain 401(k) files indefinitely.
by Health Risk Assessment on December 8, 2010
Many corporations attempt to reward workforce during the holidays. But be careful -
There’s a common misbelief that the IRS considers gift cards worth $20 or less de minimus benefits and, accordingly, they’re tax free. Regretfully, that’s not true. With few exceptions, the IRS considers nearly anything with cash value a taxable form of compensation.
Practically speaking, the IRS is unlikely to go after your firm or an worker over several small-value gift cards for which you withheld no taxes. But they could, especially if your firm regularly hands out gift cards.
At some firms, those $5 to $20 cards can add up to a few thousand dollars worth of uncompensated taxes in a few years. Each $15 gift card would usually require about $5.55 withheld.
To be safe, you can use gift cards sparingly and pay the tax for the recipient. Or else you can educate folks proactively that Uncle Sam requires you to take out for taxes.
Read the fine print
Gift cards may be money-wasters or or morale-killers if staff members have a bad experience attempting to redeem them. Read the fine-print before you buy. Three common pitfalls to watch -
o expiration dates. Some retailers offer cards that last forever. But many have expiration dates, rendering the cards worthless after a period of time
o dormancy fees. A $50 card can end up worth only $40 at stores that deduct “dormancy fees” after a certain period of time, and
o redemption fees. Some stores charge a fee for redeeming cards that can be used in multiple locations.
The good news – There are some good deals out there. Business use of gift cards has doubled since 2001, and related sales bring in $20 billion a year to retailers. With such fierce competition, it compensates to shop around.
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