Payroll
- Employee Classification
- Salary and Hourly Wages
- Timekeeping and Attendance
- Overtime and Overtime Pay
- Benefits and Deductions
- Payroll Taxes
- Payroll Software
- Direct Deposit and Paper Checks
- Payroll Cycles
- Payroll Compliance
- Record Keeping
- Year-End Reporting
Payroll Compliance
Understanding Labor Laws and Tax Regulations in Payroll Management
List of employees entitled to payments and other work benefits, and the amounts that each should receive, as well as records of previous payments, bonuses, and taxes.
Payroll management is not just about ensuring employees are paid on time. It also involves adhering to various labor laws and tax regulations. This article will provide an overview of some of the key laws and regulations that impact payroll management.
Fair Labor Standards Act (FLSA)
The FLSA is a federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay.
Family and Medical Leave Act (FMLA)
The FMLA is a federal law that provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave. FMLA is designed to help employees balance their work and family responsibilities by allowing them to take reasonable unpaid leave for certain family and medical reasons.
Equal Pay Act (EPA)
The EPA is a federal law that prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions. It is critical for employers to ensure that their pay practices are free of gender bias to avoid violations of this act.
Federal Insurance Contributions Act (FICA)
FICA is a federal law that requires employers to withhold three separate taxes from the wages paid to employees: a 6.2% Social Security tax, a 1.45% Medicare tax, and a 0.9% Medicare surtax when the employee earns over a certain threshold. The employer must also match the 6.2% Social Security tax and the 1.45% Medicare tax making the total Social Security tax 12.4% and the total Medicare tax 2.9%.
Federal Unemployment Tax Act (FUTA)
FUTA is a federal law that imposes a federal employer tax used to help fund state workforce agencies. Employers report this tax by filing an annual Form 940 with the Internal Revenue Service. In some cases, the employer may owe a FUTA tax amount after offsetting the amount it paid to a state unemployment fund.
Understanding these labor laws and tax regulations is crucial for any business. Non-compliance can lead to penalties and damage to the company's reputation. Therefore, it's essential for those in payroll management to stay updated on these laws and ensure their company is in compliance.