midwest regional payroll conference 2018...as director of payroll administration at axcet hr...
TRANSCRIPT
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Midwest Regional Payroll Conference 2018
Presented by Jo McClure, CPP
Axcet HR Solutions
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As Director of Payroll Administration at Axcet HR Solutions, Jo McClure leads the development and implementation of strategic payroll goals. At Axcet, Jo manages a team of awesome experts in payroll administration, compliance and best practices who make her look really good.
Jo obtained her CPP in April of 2006 and has held several positions in the Greater Kansas City Chapter of the American Payroll Association including serving as President in 2009.
She has served as a guest speaker at the 2007, 2008, 2016 and 2017 Midwest Regional Payroll Conferences.
Jo has also published articles: "Are You on the Wrong Side of the Law" in the February 2018 issue of Thinking Bigger Business and "Selecting a New Payroll System" in the April 2008 issue of Kansas City Small Business Monthly magazine and she’s a regular contributor to the Axcet blog (hint- subscribe at blog.axcethr.com).
Jo currently lives in a newly emptied nest in Olathe, Kansas (a suburb of KC) with her husband and dogs. She becomes more of a KU Jayhawk fan with every tuition payment made on her son’s behalf.
Specialties: Implementation, payroll compliance auditing, payroll best practice recommendations
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Ensure compliance with Federal, State and Local laws
•Ensure compliance with our company policies and procedures
Primary Purpose
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• Form I-9 audits on the rise
• Increase in DOL audits (ERISA)
• Penalties being assessed
• Coordinated audits
• Publicity
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Fair Labor Standards Act Enforcement Statistics
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•PAID Program• Six-month voluntary pilot program which FLSA–
covered employers can participate in to self-audit their compliance with the overtime and minimum wage provisions of the FLSA.
•A merger?• According to the White House’s “Delivering
Government Solutions in the 21st Century Reform Plan and Reorganization Recommendations,” the Dept. of Labor (DOL) may be merging with the Dept. of Education.
Keep these on your radar…
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• Ensure compliance with company policies and procedures
• Identify non-compliant policies and procedures
• Ensure enforcement of company policies
• Internal fraud
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Increased efficiencies
Cross training
New, updated, improved, centralized
documentation
Education
Team moraleEmployee confidence
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Get your head in the game
Get everyone on board
Setting a realistic timeframe
Identify your resources
Maintain objectivity
Audit policy and practice
Never assume
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• We’re all in this together
• We are looking for our mistakes
• Give permission in advance
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• Accuracy over speed
• Knowing when not to begin
• Payroll schedule
• Company schedule
• Commit and stick
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• Your team
• Your tools
• Your policies and
procedures
• Primary sources
• Secondary sources
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• Do the policy, process and the practice match?
• Is the policy compliant? The process? The practice?
• Does the company policy exceed federal, state or local requirements?
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Create an internal audit checklistPrioritize:
I-9s
Exempt vs. Nonexempt
Hours worked
Regular rate of pay and overtime pay calculations
Compare regulations to the actual practice and then to the policy
Develop process in advance for: Reporting noncompliance issues as
they are found
Dealing with them as they arise
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• A documented, comprehensive list of all payroll areas to be audited
• Include everything that could possibly be paid to or deducted from an employee
• Consider DOL and IRS (tax) implications
• Start with the highlights and break it down from there
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• Regular rate of pay
• Overtime
• I-9 forms
• Withholding orders
• Exemption status
• Earning & deduction
codes
• Minimum wage
• Employee files
• Per Diem
• Supplemental pay
• Direct deposits
• Manual processes
• Time & attendance
• Fringe benefits
• Allowances
• Year-end processes
• Taxable wage limits
• Reimbursements
• New hires
• Terminations
• Paid time off
• Loans
• Overpayments
• Constructive receipt
• Employee data changes
• Reversals
• W-4s & withholding practices
• SSN verifications
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• Gift cards
• Service awards
• Employee discounts
• Gym memberships
• Personal use of company vehicle
• Company paid benefit premiums for owners of S-corps
• And many, many more
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• Notice of Inspection (NOI) received.
• Employers have three business days to produce their I-9s, along with any associated records requested (including names and hire dates of employees, payroll records and E-Verify info).
• ICE inspects then notifies employers of any potential issues. They have 10 business days to fix the problems before ICE assesses fines and other penalties. If no issues discovered- employer will receive a Notice of Inspection Results stating they’re in compliance.
• Self-audit guidelines can be found here: bit.ly/selfaudit560.
• IMAGE program ice.gov/image.
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• This payroll audit item is NOT about determining exemption status
• It IS about payroll practices specific to exempt employees
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On call time Travel time Waiting time
Rounding Training timeOff the clock
work
Cleaning pay Sleeping time Breaks
Prep/concluding activities
Paid time off Holidays
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Bonuses Commissions
Shift differentials
Manual Calculations
Retro pay increases
Weighted averages
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Hourly: time and a half over 40 hours
Salary: salary ÷ number of hours the salary is intended to compensate = regular rate
• Regular hours < 40: add regular rate for each hour up to 40, then pay time and a half for hours over 40
• Regular hours = 40: time and a half
• Regular hours > 40: pay hours from 40 up to regular schedule at half-time, then time and a half past that
• Irregular hours: regular rate = salary ÷ total hours, then pay half-time for all hours over 40
Other pay methods: regular rate = total pay ÷ total hours; add half the regular rate for each overtime hour
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Audit topic and findings
Recommendations
Company policy
Supporting documentation
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Manual processesPre/post open
enrollmentYear end
401(k) ACA Information security
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Determine what level of auditing/testing is needed:
• Full system auditing• Limited auditing of the basics• Auditing/ testing of changes
(release notes)
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Create your plan • Determine in advance- Who will take the lead from your
company? Will you proactively involve legal counsel? You’ll need to review and react to the request quickly .
• Be prepared to provide responsive existing documents; check your posters- employee rights & Family and Medical Leave Act rights (if the FMLA applies to your business).
• Expect employees (including terminated employees) to be interviewed.
• Expect DOL Follow-up through additional interviews or via requests for more information. The DOL may also conduct a debriefing discussion to cover legal issues that may exist and penalties or back wages if assessed/owed.
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Keep learning
Keep listening
Keep training
Keep looking
for better ways
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