Welcome to the March edition of the Mize Payroll Newsletter! 

Federal News

EEO-1 Data Collection

On April 30, 2024, the 2023 EEO-1 Component 1 data collection will open, with a filing deadline of June 4, 2024. If you are a Mize payroll client, we will soon be in touch with any outstanding information we may need in order to assist you with this filing requirement. More information about EEO-1 filing can be found by clicking here.

New Form 941

he IRS has updated Form 941 along with its accompanying Schedules B and R. Employers should use the March 2024 version starting with first quarter 2024 reports due April 30, 2024. The updated form and instructions can be found here.

Employee or Independent Contractor?

Whether an individual is an employee or independent contractor makes a huge difference when it comes to who’s responsible for paying payroll taxes, the individual’s eligibility for employee benefits, and a myriad of other employer obligations. The US Department of Labor has updated Fact Sheet #13, Employee or Independent Contractor Classification Under the FLSA, which includes the final requirements issued in January. 

State By State News

State Tax Exemptions. California allows certain owners and employees to apply for an exemption from specific state taxes. Here’s who’s eligible, along with the process for filing for exemption:


Sole Shareholder/Corporate Officer SDI Exclusion

To apply for the State Disability Insurance (SDI) exclusion, you need to fill out the Sole Shareholder/Corporate Officer Exclusion Statement and upload it to the Employment Development Department (EDD) website through your e-Services for Business login. The approval process can take a little while. If you’re a Mize payroll client, forward the approval letter from the EDD to your payroll processor and we’ll get you set up. The approval letter will indicate the quarter in which the exclusion begins. We can then refund any withheld SDI back to you on a subsequent check.


Family Employee Tax Exemptions

In addition, companies that are sole proprietors and partnerships can take advantage of tax exemptions for qualifying family members who are employed by their organization. The exemption applies to California unemployment insurance (UI), employment training tax (ETT), and state disability insurance (SDI). These employees would remain liable for personal income tax (PIT).


The employed family members covered under the exemption include:


Children under age 18 employed by their father or mother.

  • Stepchildren, foster children, and sons- or daughters-in-law are not included in the exemption.
  • Once the child reaches their 18th birthday, they no longer qualify for the exemption.

Employed family members who are not covered by this exemption include:

  • Brother, sister, niece, nephew, aunt, uncle, stepparent, foster parent, father- or mother-in-law, or grandparent.


If the company is a partnership, the employed family member must meet the criteria for BOTH partners. For instance, if the partnership is made up of two spouses, their shared legal minor children would be exempt, but the child of one who is the stepchild of the other would not qualify. Also, if the spouse partnership employs one of their parents, that parent would not qualify since they are not a parent to both partners. However, if the partners are siblings and employ a parent, that parent would qualify since they are the parent of both partners.


If your sole proprietorship or partnership employs family members you believe would qualify for this exemption, please contact your Mize payroll processor. Provide the employee’s name and relationship along with your business entity type (sole proprietor or partnership). We will then evaluate to determine whether the employee meets the qualification and set up their tax status accordingly in the payroll system.



Rest Break Rules. This is not a new law, but a reminder that most California workers must receive the following breaks:


  • An uninterrupted 30-minute unpaid meal break when working more than five hours in a day.
  • An additional 30-minute unpaid meal break when working more than 12 hours in a day.
  • A paid 10-minute rest period for every four hours worked.


More information from the California Department of Industrial Relations on meal breaks can be found here, and more information on rest periods/lactation accommodation can be found here.

Colorado


Refundable Tax Credit Notice. Colorado employers are required to provide an annual notice to each employee who receives a Form W-2. This information was provided to Mize payroll clients when Forms W-2 were sent out in January, but for those non-payroll clients who may need additional information, the notice is provided here.

Rest Break Rules. This isn’t new news, but an important reminder that Colorado law requires that employers provide at least a 30-minute uninterrupted meal period for employees who work a shift of over five consecutive hours. The meal period must be at least one hour after starting and one hour before ending a shift, as much as practical. If the type of work the employee performs makes it impractical to provide an uninterrupted 30-minute meal period, the employee must be allowed to eat while working and be paid for that time. More information is available from the Colorado Department of Labor and Employment by clicking here.

Illinois


Equal Pay Registration Deadline Coming Up Quickly. If your Illinois businesses meets these two criteria:

 

1)    You had 100 or more employees as of December 31, 2023

2)    Your company is subject to EEO-1 reporting.

Then you need to submit an application to obtain an Equal Pay Registration Certificate (EPRC) by March 24, 2024. This Certificate provides certain pay, demographic, and other data to the Illinois Department of Labor. Your business will then be required to recertify every two years after the first submission.

 

For more information visit the EPRC webpage.

 

Instructions on how to access the Equal Pay Act Registration portal to upload the required information can be accessed by clicking here.

Maryland


Paid Family Leave. Employer contributions to the new paid family leave program are set to begin on October 1, 2024. The Maryland Department of Labor recently issued frequently asked questions about the new program which indicate that pending legislation may delay the program until July 2025. Watch this newsletter for updates.

Michigan


New Unemployment Insurance System. A new computer system is expected to launch this fall and be fully operational in 2025. The Michigan Unemployment Insurance Agency says the new system will allow for “quick processing of reports and payments, features robust fraud detection, speaks your language, and lets you easily track your account.”

New Jersey


RetireReady NJ. The new state-mandated retirement program will launch this spring and open out to all employers with 25 or more employees this summer. More information is available at the program’s website.

New Mexico


Last month we told you that both the city and county of Santa Fe have announced a minimum wage increase effective March 1, 2024 to $14.60 per hour. However, the tip credit effective March 1, 2024 for each jurisdiction is different.

The tip credit in the City of Santa Fe is $11.60 per hour (up from $11.03 per hour) with a minimum cash wage of $3 per hour for tipped employees. The tip credit for employees in Santa Fe County is $10.22 per hour (up from $9.82 per hour) with a minimum cash wage for tipped employees of $4.38 per hour.

When it comes to Mize Payroll 2.0, Ann knows it all! Check out her latest 2.0 tips:





Have a tip or trick you'd like Ann to cover? Let her know, ahobart@mizecpas.com

Tools You Can Use

Electronic Pay Solutions


Employees like to get paid on time. Sometimes that’s harder than it might seem. With delivery issues, severe weather, and wildfires frequently in the news and maybe even your back yard, getting paychecks to employees can be difficult. That’s where electronic payroll solutions like direct deposit and pay cards can be a great solution.


Electronic pay solutions can also save you money. The costs of both printing and delivery are going up, which increases your payroll fees. With direct deposit and pay cards, employees can access their pay stubs and year-end Forms W-2 and 1095 online through the Mize payroll portal.


Read more about the benefits of electronic pay from our Insights blog by clicking here.  

Earned Wage Access

 

Even if employees get paid on time, sometimes that money doesn’t stretch until the next payday. Stuff happens – the washing machine overflows, the car breaks down, or somebody gets sick. Sometimes employees need money sooner than later, but there aren’t a lot of great options. Payday loans, overdrawing their checking account, and incurring credit card debt can chock up high fees. The employer can give a pay advance or loan, but that can put you in a difficult position.


That’s where an Earned Wage Access (EWA) program can help. EWA programs are a new employee benefit that advances employees a certain amount or percentage of their accrued wages. The employee’s next paycheck is automatically reduced by the advanced amount, with no risk or liability to the employer.


For more information about ZayZoon, the EWA program offered through Mize CPAs, click here or visit with your Mize professional.

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