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  1. What is an I-9 Form?
    • Form I-9, officially the Employment Eligibility Verification, is a United States Citizenship and Immigration Service form. It is used to verify the identity and legal authorization to work of all paid employees in the United States. All U.S. employers must ensure proper competition of Form I-9 for each individual they hire for employment.
    • Acceptable documents for I-9
      • An unexpired U.S. Passport
      • A U.S. Passport Card
      • A permanent Resident Card (often called a “green card”) or Alien Registration Receipt Card with photograph
      • An Unexpired Temporary Resident Card
      • Drivers License
      • Social Security Card
    • Worksite PAY offers an onboarding process with an electronic Form of the I-9, which allows your company to stay in compliance when hiring a new employee.
  2. What is supplemental pay?
    • Supplemental wages are wage payments to an employee that aren’t regular wages.  Compensation received from employment that is in addition to regular, ordinary salary or wages.
    • Supplemental wages may include commissions, overtime earnings, awards, bonuses, retirement matching programs, or payment for unused vacation days.
  3. What is a W-4 Form and a W-2 Form?
    • An employee uses a W-4 (Employee’s Withholding Allowance Certification) to inform the company’s payroll department how much tax to withhold from their earned income. 
    • The W-2 is provided by the employer to the employee, summarizing gross pay for the year.
  4. What is the difference from withholding and deducting?
    • Withholding is for federal or state taxes that are taken from the employee’s pay.
    • Deductions are for other amounts which can be taken from the employee’s paycheck, like health care costs and retirement benefits.
  5. What is Workers Compensation Insurance?
    • Workers Compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sure their employer for the tort of negligence.
    • It is the employer’s responsibility to pay for workers compensation benefits to protect those who have injured themselves at an event at work. 
  6. Am I allowed to pay employees in cash?
    • Each employer is required to report all wages to the IRS, including those are paid in cash.  If you pay a worker in cash, you are still required to pay payroll taxes.  If you pay employees with cash remember the IRS will pay closer attention to your records, so you need to make sure to deposit the correct amount of taxes.
  7. What is the difference from an exempt and nonexempt employee?
    • Employees who qualify as exempt are exempt from overtime regulations and minimum wage laws.  Employees must earn a specific amount of salary to be exempt from overtime pay. 
    • Nonexempt employees must be paid for every hour of overtime they work.  The federal Fair Labor Standards Act (FLSA) and the laws of the 50 states regulate what constitutes overtime.
  8. What is unemployment tax?
    • Unemployment tax is the Federal Unemployment Tax Act (FUTA) that imposes a federal employer tax used to help fund state workforce agencies.  Employers report this tax by filing annual Form 940 with Internal Revenue Service.  The amount paid goes into a fund which pays unemployment benefits to employees who have been laid off.  Employees leaving voluntarily do not receive coverage.
  9. What are some common payroll mistakes?
    • Filling late payroll taxes:  Failing to file on time could bring additional percent penalties.
    • Errors on tax forms: Mistakes on tax forms may cause you to remit too much or too little in payroll taxes.
    • Submitting incorrect payroll amounts: IRS can penalize you for submitting the wrong amount of payroll tax.
    • Misclassifying employees: Categorizing your employees or contract workers incorrectly.
    • Getting employee details wrong:  When processing payroll, inaccurate employee information may cause trouble with the IRS.
    • Not maintaining confidentiality:  Payroll information should not be disclosed to anyone outside of the payroll department.
  10. What is a Garnishment and what happens if a garnishment is ignored by an employer?
    • Garnishment is legal process for collecting a monetary judgment on behalf of a plaintiff from a defendant.  It allows the plaintiff to take the money or property of the debtor from the person or institution that holds that property.  Wage garnishment may continue until the entire debt is paid or arrangements are made to pay off the debt.
    • If an employer ignores a garnishment, depending on the state, the employer is liable for the full amount of the debtor’s outstanding debt.  Even if the employee turns out to not be an employee.
  11. Can wages be garnished if you are an independent contractor?
    • If you are an independent contractor, employers cannot garnish your wages, but there is another collection method that a creditor can use to get your business income, called garnishment for property other than personal earnings or non-earnings garnishment.

Disclaimer: The information contained on this site does not necessarily constitute legal advice. Such information is general in nature and is provided solely for informational purposes. All investment decisions are solely the responsibility of the user.