Unclaimed Checks in Unclaimed Checks in Your Payroll Department

If your payroll system is not set up with Direct Deposit then there is a chance that you have unclaimed checks being stored at your office. What do you do with those?

It is a good idea to have an Unclaimed Checks policy in your employee handbook. We list some suggestions for wording below.

1. Determine if the employee is entitled to the check.

2. Make a concerted effort to deliver the check.

3. Hold the check for two weeks.

4. Send check to state unclaimed property

5. If a check is returned after being mailed, specify a period of time where it will be held at the office for pick up before turning it in to the state.

Employers should keep a record of the employee’s name and last known address for a specific time period after the wages become reportable. After the specified time period has lapsed, sending the check to your state’s abandoned/unclaimed property department probably does your former employee a favor. Because many companies do not have a mechanism for holding on to unclaimed property for long periods of time, chances are that at some point the check would be lost or destroyed. However, while abandoned property laws vary from state to state, Washington’s state law *“protects unclaimed property until it can be returned. There is no time limit for filing a claim and rightful owners or their heirs can claim property reported since 1955. The state may auction the content of safe deposit boxes, however, if not claimed within five years.”*

Some other particulars of unclaimed property laws in the Pacific Northwest:

Washington:

  • Unpaid wages, including wages represented by un-presented payroll checks, owing in the ordinary course of the holder’s business which remain unclaimed by the owner for more than one year after becoming payable are presumed abandoned.*

Oregon:

  • Property becomes unclaimed if the owner can´t be contacted by the holder of the asset within a specified period of time. Examples of unclaimed property include savings or checking accounts, uncashed payroll or dividend checks, and safe deposit box contents.

  • Unclaimed money is held in trust in the Common School Fund forever for claim. The fund’s interest earnings benefit K-12 public schools through biennial distributions to Oregon’s 197 school districts.**

 

*Source – http://ucp.dor.wa.gov/aboutUCP.aspx

**Source – http://www.oregon.gov/dsl/UP/Pages/about_us.aspx

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Is there value in implementing paycards at work?

A paycard mimics the functions of a debit card and can reduce the hassle of paper check writing for an organization’s payroll department. Paycard usage is increasing as it becomes more challenging to cash paper checks and as businesses recognize the value in accepting electronic payments as opposed to a check. For organizations who are intent on streamlining their payroll process and reducing their paper consumption, paycards are an ideal suggestion for employees who do not have bank accounts and are not interested in direct deposit. According to NACHA, companies can save up to $3.15 per payment by using direct deposit instead of paper checks.* A company with 100 employees on paper checks can save nearly $19,000 a year by switching to direct deposit. Channeling our inner Letterman (except we’re serious!), we bring you:

Top 10 Reasons to Implement Paycards**

1. Seamless integration into your existing payroll system
2. Increase employee productivity
3. Protect funds
4. Prepare for the unexpected
5. Eliminate check delivery fees
6. Minimize stop payment exposure
7. Remove escheatment liability
8. Reduce check fraud
9. Empower employees
10. Go green—and reduce your carbon footprint

Employees also benefit from the use of paycards. Checks can be lost in the mail, while a paycard can be kept in a safe place or on one’s person at all times. Since direct deposit can be used to load a person’s earnings onto the card, the steps of receiving the check in the mail, locating identification, and taking the check to the bank to be cashed are all eliminated. As mentioned previously, there are workers who do not have bank accounts. The holder of a paycard will not have to deal with check cashing fees  In addition, because paycards include the selection of a PIN number, they are much more secure. If lost, it is unlikely that someone else could guess the PIN and use the card. For these reasons a paycard is valuable to employees as well as employers

While there has been concern expressed in the media about the security of paycards and the potential for hidden fees, paycards are subject to significant regulation. An informative explanation of how paycards are regulated can be found here. To summarize, many states have statutes that allow for employees to access their full wages, with no fee, at least once per month. Federal protections include Regulation E, which requires disclosure of fees associated with an employee’s use of the card. Fees may be incurred, particularly if the cardholder goes outside the free options to access his/her money, but these fees must be disclosed. Funds on paycards are insured by the FDIC, and branded paycards (Visa, MasterCard, etc) often enjoy a zero cardholder liability policy in case of a lost or stolen card or fraudulent behavior (by someone other than the cardholder).

At Pamiris, one of the advantages we offer with our service is our relationship with TFG Card Solutions, Inc., whose website can be accessed here. Employers simply have their employee fill out the TFG card form and the Pamiris direct deposit form and send both to Pamiris. We enter the information into our system and the card will be used for direct deposit on the very next payroll, in most cases. There are many options for card use, such as dividing one’s wages between the employee and a card held by his/her spouse, the ability to check balance online or over the phone, and many others. The TFG Frequently Asked Questions page can explain the many card characteristics.

Resources:
https://www.paperlesspay.org/
http://usa.visa.com/corporate/corporate_solutions/payment/payroll-faq.html
http://paycard.americanpayroll.org/compliance-overview
https://www.tfgcard.com/index.php/pages/employersfaq

*Source: Employee Benefit Research Institute and Mathew Greenwald & Assoc., Inc., Retirement Confidence Survey
**Source: TFG Card Solutions, Inc. promotional material

Bonus Question and Answer

The month of December often includes paying out year-end bonuses. In the Pamiris system, this can be accomplished when running a Regular Payroll, by processing checks in-house and running a Manual Payroll, or by requesting a Custom Payroll be built.

In order to avoid confusion when the time comes, here is an FAQ on entering bonuses using the Pamiris sytem.

Q: What is Grossed-up vs. Not Grossed-up?

A: A Grossed-up Bonus means that the employer will cover all the Federal taxes, state withholding is excluded. As an example, an employer intends to pay an employee a $100 bonus. The employer, having selected Gross-up pays the amount of the bonus, ($100) plus all associated taxes ($100/.6935 in 2012). As a result, the employee will actually receive a bonus amount of close to $144.20. Any other taxes (state unemployement, state income, etc.), are assessed as usual.


Grossing up bonuses can be very costly to the employer but you have to think of it not as a $100 bonus but as a $144.20 bonus if you want the employee to receive a full $100 net bonus.

For a Not Grossed-up bonus, the employer pays the gross amount of the bonus ($100), but after associated taxes are taken out ($100 * tax % from employee W-4) the employee receives a net bonus amount that will vary, depending on their tax rate.

Q: How does Pamiris calculate the Grossed-up amount on a bonus?

A: Gross = Net/1 – (FIT rate + SS rate + Eme Med rate)

Q: What is discretionary vs non-discretionary?

A: A discretionary bonus is one given at the sole discretion of the employer, it is not an amount that has been promised to the employees. A non-discretionary bonus is given after the employer determines what standards are required to receive a bonus and an employee expects to receive that bonus if they have met those standards.

Q: How do I enter a bonus in the Pamiris system?

A: Log into the Pamiris system

  1. Go to Payroll.
  2. Go to Bonuses/Commissions .
  3. Choose an employee from the drop-down menu.Year End Bonus-Commissions
  4. Click Add.
  5. Choose an Effective Date from the drop-down calendar at the top of the page. (Effective Date needs to fall within pay period that you want to pay out funds).
  6. Enter amount of Bonus.
  7. Enter Description.
  8. Select type of Bonus (one button in each column must be marked before you can proceed).
  9. Click Save.
  10. View page with complete list of bonuses for every employee.
  11. Bonuses are not viewable on Bonuses/Commissions page once they are run in a payroll. They are viewable on paystubs and payroll reports.Add Bonuses

SlideCast Seminar: Independent Contractors and 1099s

Earlier this month, Senators introduced the Payroll Fraud Prevention Act (S. 770). This bill seeks to characterize misclassification of employees as a form of payroll fraud. If passed, the bill would expose businesses who misclassify “employees” as “non-employees” (such as independent contractors) to fines of up to $5,000 per worker per violation of the law. (Click here for a more extensive write-up about the bill – link opens in a new tab).

With this bill on the Senate floor, there’s no better time than the present to brush up on your understanding of employer/independent contractor relationships. We’ve put together a brief SlideCast that covers the basics of independent contractor relationships and filing 1099 forms.



Was this SlideCast helpful to you? If so, we hope you’ll pass it on. If not, please leave a comment letting us know how we can provide more helpful and relevant information about payroll and HR.

Improving Your Internship Program

Based on all the buzz around OEN’s upcoming Internship Workshop, it seems like companies are reevaluating the value and purpose of internships. Young business owners who have gone on to bury unsatisfactory internships under a mountain of career achievements seem determined not to relegate stereotypically negative interning experiences to junior and senior college students a few years behind them. This increased awareness of the need to develop more meaningful intern programs is a good start, but companies need to make sure that their good intentions translate to action. Here are a few of our suggestions. 

Pay your interns. Companies are able to choose interns from a large, enthusiastic pool of students, graduates, and young professionals trying out a new career. But interns are not free labor, and confusing the two can mean legal trouble for your business. If your company is benefiting from the work your interns are producing, your interns should be receiving a paycheck according to these U.S. Department of Labor criteria. By agreeing to pay interns, you’re putting additional pressure on them to prove their worth, and these days so few young people have the luxury of accepting an unpaid internship, regardless of how great the opportunity is.

Teach your interns. Give interns a quick lesson in your company architecture and objectives. Providing this education to them at the beginning of the internship provides them with a greater understanding of how your company functions, what their place is in the company, and how their work contributes to the business. You’re going to receive completed work that is more aligned to your specific business needs if your interns know exactly what they need to do to get the job done.

Have specific projects for your interns. Even the most self-starting intern is going to be frustrated with the task of having to invent their own productive workday schedule. Lacking the business foresight of a veteran employee, when left to their own devices interns may unintentionally gravitate towards work that is unnecessary. Prevent this by having specific, well-defined tasks laid out for your interns to do. Once they’ve knocked a few of these projects out of the park, you can slowly begin to introduce work that requires a higher level of independent thinking.

Include your interns. Keeping interns secluded or treating them like second-class citizens within your company hurts everyone. Being in the dark about basic business functions or unaware of the key conversations going on in your company will inhibit the depth of their insights and likely detract from the relevance of their projects. When your interns speak up at meetings, be receptive to their ideas. They’re approaching the opportunity as a learning experience, and living up to their expectations in that regard will keep them motivated to live up to yours. Additionally, having a fully-integrated intern gives you a valuable opportunity to learn about how your company is perceived by viewing it through an intelligent, fresh pair of young eyes.

Be flexible. Giving your interns some flexibility is important, especially if you’re hiring students. Unless the internship is an explicitly intensive, full-time gig, the chance that your intern is working a second job, or taking classes on the side are pretty high. Be open to the idea of partial telecommuting or only coming into the office for special meetings, and be understanding when faced with scheduling conflicts or the rare double-booking.

Give feedback, get feedback. Strong, silent type employers can be confusing and frustrating to interns. Providing regular, targeted feedback allows interns to adjust their performance and will result in better, more valuable work. Inversely, be sure your door is always open for interns with inquiries or suggestions about their experience interning with your company.

What golden rules do you follow when employing interns? What benefits, if any, did employing interns have on your company? Answer these questions, or submit other intern-related thoughts and experiences in the comments.

Additional Reading:

Understanding the I-9: the Employment Eligibility Verification Form

Basics

In 1986, the federal government passed the Immigration Reform and Control Act, which required employers to verify that employees were able to provide documents proving their legal authorization to work in the United States. The Employment Eligibility Verification (I-9) is the official document provided for this purpose.Employees must fill out an I-9 no later than the time of hire. Employers are responsible for making sure their new hire fills out Section 1 completely, and on time.Employees must retain an I-9 for all current employees, and all former employees for three years after the employee is hired or one year after the termination of that employee, whichever date is later. I-9s must be stored separately from personal information files. 

I-9s are NOT required for unpaid volunteers or contractors, but employers may still be penalized if they contract work to a contractor that employs unauthorized workers.

I-9 Form

I-9s are broken into 3 sections:

  • Employee Information and Verification – filled out by all new employees hired after November 6, 1986. Asks a new employee to fill out basic information (name, address, D.O.B, &c). New employees do not have to provide their SSN unless they’re using the USCIS Electronic Employment Eligibility Verification Perogram (E-Verify). For more information on E-Verify, click here.
  • Employer Review and Verification – employees are required to present employer with either ONE document that establishes both identity and employment authorization (such as a U.S. Passport or a Permanent Resident Card) or both a document that establishes identity and a document that establishes employment authorization (state drivers license AND social security card, or school ID card with photo AND U.S. Citizen ID card, for example). The employer records the details of these documents and signs the I-9, verifying that they are legitimate. Page 5 of the I-9 form lists all acceptable forms of identification.
  • Updating and Verification – employers fill this section out if
    • employee changes their name
    • employee is rehired within three years of initial hire date
    • employee’s work authorization is approaching expiration

Employers are required to pair the I-9 with the form instructions – and with good reason. The instructions offer specific information that’s helpful to employers and their new hires alike.

Penalties

Employers can incur penalties for the following Form I-9 related offenses:

  • Improperly kept I-9s (ex. found with personal information, not readily accessible, &c.) – fine up to $110 per missing document, and $1,100 per form – and that’s even if the employee is authorized to work in the US.
  • Hiring an unauthorized worker – fine from $250 – $5,500 per worker and possible 1 year bar from federal government contracts (example?)
  • Knowingly committing or participating in document fraud – first offense fine from $375 – $3, 200 per document, subsequent offense fine from $3,200 – $6,500 per document

Additional unfair immigration-related employment penalties may result from requesting more documentation than is required on the I-9, so be careful not to accidentally incur a penalty attempting to be thorough.

Additional Resources

  • U.S. Citizenship and Immigration Services Website – When in doubt, go straight to the source. The USCIS website is full of helpful information for employers (most notably this PDF ‘Handbook for Employers: Instructions for Completing Form I-9‘). Simply search ‘I-9’ from their homepage to access a list of resources offered through their website.
  • Intuit’s Form I-9 Tip SheetAnother handy PDF with fast facts, checklists, and – especially handy – I-9 do’s and don’ts

Reminder

All content provided on this blog is for informational purposes only, it is not to be used as legal advice…” Click here to read the rest of our blog disclaimer.

Working with a Dog: The Art of Office Pet Etiquette

Chief - Pamiris PDX Office Dog

Meet Chief, the Pamiris PDX office dog.

The inside of our Portland headquarters, located right off the corner of 21st and Irving, looks exactly like you’d expect a young, local office to look. Bikes line the atrium, next to a coffee table covered with Pamiris Payroll brochures and swag. Offices constructed out of wood and glass offer the perfect balance of privacy and sociability. Jars of Sterling Coffee Roasters coffee beans sit, almost empty, next to a well-used espresso machine. But the first thing most people notice is Chief, the Pamiris office dog. Chief is a 1-year-old lab/mastiff mix, certainly not a lapdog. And while the Pamiris team appreciates his enthusiasm and charm, we also accept that not everyone is going to adore Chief like we do. How does a business maintain a professional work environment without compromising a love for their dog? Here are some of our standards:

  • Take care of any outstanding behavioral problems before moving your dog into your office. Ask friends and family for candid feedback on your dog’s behavior. Identify any problems and make sure they’re taken care of before your pet sets foot in the workplace.
  • Keep your dog clean. Don’t give clients or prospective employees any reason to dislike your dog before they even see it. Maintain a regular cleaning regimen to avoid unpleasant smells.
  • Inform first-time office visitors that you have an office dog. If they’re aware of the excited greeting they’ll receive upon entering, they’re less likely to be put off by it. Additionally, mentioning the presence of a pet upfront allows clients with allergies to suggest an alternate meeting place.
  • Designate a dog-free meeting room for clients who may be allergic. For some, the inability to buddy up with your pup isn’t dictated by personal preference, but by health restrictions. Be sure these clients have a place to conduct business with you where they won’t be distracted by itchy eyes or a more serious allergic reaction.
  • Make sure your dog gets some exercise before arriving in the office. A dog with too much energy bounding through a small office is a perfect recipe for toppled monitors and shredded reports. Take your dog for a quick walk or run around the block before the two of you head to work. The morning activity will mellow out your pooch and the fresh air will clear your head allowing you to work more productively.
  • Take responsibility for your pet. Every now and again accidents happen. Even the best owners have to clean up after mystery stomach flus or quiet a fit of sporadic barking. Always apologize promptly and sincerely for any misbehavior. If applicable, couple your apologies with a plan of action. Show the affected person or people that their concerns are important to you, and that you’re taking steps to fix the problem.

Awareness is the key to a peaceful workplace, with or without an office pooch. Remain sensitive to the needs and preferences of your clients and employees. They’ll appreciate your considerateness, and your dog will appreciate the extra positive attention.

Does your office have a pet policy? An office dog? What tips do you have for maintaining a productive, worry-free atmosphere? Leave them in the comments. The writer of the most interesting tip will receive a package of McTavish gingerbread cookies embellished with the Pamiris logo. Trust us – they’re really good.

Taking the Plunge: Deciding to Outsource Payroll

Stack of paperwork

If your desk is starting to look like this, it may be time to outsource your payroll to an online service provider.

Whether you’ve just made your first hire, or your company headquarters is already packed with productive employees, you can enjoy the increased time, money, and peace of mind knowing that your payroll is in competent hands. Outsourcing payrollallows you to focus on the key functions of your business, and leave tedious details in the hands of a professional. Unsure how to go about outsourcing your payroll to an appropriate provider? Keep reading.Step 1: Define your business objectives. Discuss the following questions with your executive team, and be very precise with your answers.

  • What processes are you considering turning over to an outsourced payroll service provider?
    Bad answer: “We want to outsource our payroll process.”
    Good answer: “We want to outsource our payroll process, including payroll-related tax calculations, withholdings and deposits, to an online-based provider who offers electronic reports, mobile payroll services, and direct deposit payment options.”
  • What do you hope to achieve by outsourcing these processes?
    Bad answer example: “We hope to see an overall increase in productivity.”
    Good answer example: “We hope that by eliminating payroll as a technical concern, that our office administration team will have more time to commit to crucial projects X, Y, and Z.” or “by outsourcing payroll our HR personnel will have the ability to focus on X,Y,Z”
  • What results are you expecting from outsourcing these processes?
    Bad answer example: “Easy pay periods.”
    Good answer: “As a small company with an uncomplicated payroll, we expect to spend a maximum of 2 hours per pay period double-checking our information before handing the process over to our payroll service provider. At that point, we expect to be removed from the equation beyond the occasional phone call.”Remember: if you skip this step and enter into an agreement without fixed expectations, there’s a good chance both you and the company you’ve hired will become frustrated with the business relationship.
Step 2:Do your homework. Talk to a few businesses that look similar to yours on paper about outsourced payroll service providers they use. Then, talk to a few businesses that look similar to how you want your business to look on paper about which companies they outsource to. Narrow your choices down to two or three companies.Step 3: Meet with prospective outsourced service providers, questions ready. You may want to inquire about how these service providers have dealt with payroll issues similar to ones your company faces. At your meeting, be clear and upfront about the objectives and expectations you defined in Step 1.

Step 4: Weigh the pros and cons. While you want to be sure to crunch numbers and get the most bang for your buck, there are equally important factors to consider that aren’t as easily quantified:

  • Competence- Is their work punctual and accurate?
  • Scalability- Can their infrastructure adequately accommodate client growth?
  • Ease of Use- Does using their services give you a headache? Is their system well designed, properly labeled, and user friendly?
  • Flexibility- Are their representatives willing to work with any unique situations? Is their system able to expand to accommodate extra features?
  • Relationship- Are you treated like your business and time is valuable? How long do you have wait on the phone before speaking to a client representative?

Step 5: Pick a winner. You’ve done your homework, met with providers, and weighed the merits of each. You’re ready to make an informed decision. Choosing an outsourced payroll service provider should be the beginning of the end to accounting-related headaches and tedious work-arounds. It’s time to enjoy your freedom, and focus on what you do best- running your business.

This article is inspired numerous Quora questions concerning the “best” payroll provder for their company. We hope that this was helpful in addressing the misconception that there is one “best” outsourced payroll provider for any company. Was this article helpful in addressing these concerns? Is there other information you’d like to see addressed in future blog posts? Let us know in the comments.

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