Eventually even the best employees will find themselves dealing with problems outside of work, which are significant enough to interfere with their duties. This will typically come in the form of illness, a death in the family, or another catastrophic event that will require them to take time off work. The employee may find that the savings they have is not sufficient to cover the emergency they’re dealing with. In this scenario the employee may request a payroll advance from you to help them, but before you grant it to them here are some things to consider.
The advance is a loan which is provided to employees. It is taken out of wages that you intend to pay them in the future. It differs from the typical loans that are given between friends or family members. Whereas a friend or loved one may back you back at some future time once they get the money, there is no specific time in which this is expected.
An advance from an employer, on the other hand, is much more formal. There will be repayment terms which you’ll be expected to meet, with consequences if you do not. The repayments will usually be taken out of your future earnings, and you can use an entire paycheck to pay it off or spread the payments across multiple checks to keep some funds in your pocket. No employer is required by law to give such advances to their employees, but there are a number of best practices that should be followed.
Favoritism should be avoided when it comes to issuing these advances. In other words, if you’re willing to give it to one employee then you should also be willing to grant it to all of them. Generally, it is best to maintain a policy which is established so that everyone can be held to the exact same standards. For example, employees should work for you for a minimum time period before you’re open to granting them a loan, such as 12 months.
You should also set limits on how much an employee can request. It obviously doesn’t make much sense to issue an employee an advance which is substantially higher than their monthly or quarterly earnings, because then they can quit and you will never get the money back. Limits should also be placed on the number of times that an employee may request an advance within a single year.
Also, another critical factor to keep in mind is that when you issue an employee an advance, the deductions that you take out of their check must not result in them earning less than the federal or local minimum wage, otherwise you would be in violation of the law. You should also consider charging interest on the advance for the simple courtesy of providing the service along with the paperwork that you will be required to process.
One of the hottest trends in information technology today is mobile HR. It is very attractive to millennials in particular which means that small businesses that adapt to it have the greatest chance of recruiting the best and brightest from this generation. Below are some reasons mobile HR is changing the payroll and IT landscape.
Payroll taxes in and of themselves are complex, but becomes more so for large businesses that operate in multiple states. This is because these taxes are subject to federal, state and local regulations, which can change at any time. Therefore, it is in the best interests of HR departments to keep abreast of these changes, because if they don’t the company could be held liable. The Affordable Care Act has muddied the waters further, particularly in regards to common ownership, which is a reference to businesses that have franchises or which operate in numerous locations. Below are some additional things regarding payroll taxes to consider.
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A verified Twitter account is a special account offered through the social media giant Twitter which is reserved for both organizations and public figures. They are designed to assist users in finding qualified accounts and information, and in the past were exclusive. However, a growing number of small businesses are recognizing the benefits of having one. Below are some guidelines that those who wish to setup these accounts should be aware of.
California collects a variety of taxes from its residents and as of this writing has an income tax rate of 13.3 percent, which is the highest in the United States. There are a number of reasons why taxes in this stateare so high, and below are some state taxes in California that residents are responsible for.