Chapter 1 Flashcards
Setting Every Community Up for Retirement Enhancement (SECURE)
- Granted small employers tax incentives to implement an automatic retirement plan erollment for their employees. Also, allows small employers to form a group that would allow each business’s employees to have better access to retirement plans than the employer could offer by itself.
SECURE Act 2.0
Mandatory in 2025. 92 new provisions. Automatic enrollment in retirement plans at a rate between 3 and 10% of their annual play.
Tax Cuts and Jobs Act
Provided a tax credit to employers ofering paid leave under FMLA. Employers may be eligible for a credit of 12.5%-25%, Expires 2025. State taxes on employees may increase in some states.
Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
governs military service members’ rights regarding the length of military service, return to work, and accomodations for injured veterans. In 2011, Veterans Opp to Work Act, allowed USERRA to recognize claims of hostile work environment results from an individual’s military status.
Outsourcing of Payroll Duties
Not as prominent in small companies due to the cost of service versus its benefits. Payroll can be performed without disrupting the revenue-producing tasks of the business.
Sarbanes-Oxley Act of 2002 (SOX)
provided criminal penalties for violations of ERISA. Provides protections for whistleblowers and mandates auditors’ rotation among publcly owned companies.
American REcovery and Reinvestment Act of 2009 (ARRA)
provided tex credits for employers and employees through Making Work Pay provisions. Tax return credits for the unemployed.
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
protects workers and their families with preexisting medical conditions from discrimination based on those conditions.
The Protecting Americans from Tax Hikes (PATH) Act of 2015
prevented certain tax fraud schemes. Offered employers tax credits for hiring qualified veterans and individuals who have endured long-term unemployed. extended ATRA provisions.
16th Amendment
allowd the U.S. government to levy and collect income taxes on individuals. Incorporated a tiered income tax to limit the tax on wages earned.
Civil Rights Act of 1964
prohibited dicrimination based on race, creed, color, sex and national origin.
Davis-Bacon Act
- requires federal contractors to pay employees an amount commesurate with the prevailing local wage. Enacted to create a standard wages for governmental conracts in excess of $2,000.
Walsh-Healey Public Contracts Act
- Required employers working on federal contracts in excess of $10,000 to pay employees the federal minimum wage and follow the OT provisions of the Fair Labor Standards Act.
Federal Unemployment Tax Act (FUTA)
Employment tax requiring employees to help displaced workers, individuals from the workforce who find themselves unemployed and meet certain state or federal qualifications.
Fair Labor Standards Act
- egulates minimum wage and stipulates the 40 hour work week. Sets minimum age of 16 in the workplace, although exceptions apply for family-run businesses and farms.Tipped employees are exempt from minimum wage standards.
Minimum Wage
minimum hourly amount that may be paid to an employee.
Living Wage
a wage that is sufficient to meet basis subsistence needs.
Exempt workers..
..are not subject to the wage and overtime provisions of the FLSA.
Diane B. Allen Equal Pay Act
Prevents pay differences based on traits protected under other civil rights law. Protects employees who discussed pay with other employees. New Jersey.
Internet-based accounting
is a payroll processing option for companies that lack the resources to purchase a computer-based accounting system and desire the ease of access available in internet-based packages.
Computer-based accounting
eliminates apparoximately 80% of payroll processing time and errors. Integration of payroll data with other company financial functions through ERP. Requies regular software updates to ensure accuracy.
Manual Payroll Systems
Payroll employees relies on deduction percentages presented in pbulications from the IRS. Publication 15. Publication 15-T. Faces time constraints and updated tax tables. Uses Excel.
Publication 15
Employer’s tax Guide.
Publication 15-T
Federal Income Tax Witholding Methods.
Equal Pay Act of 1963
mandates that males and females be paid equally for equal work.
Lily Ledbetter Fair Pay Act of 2009
Removed 180-day statute of limitations on unequal treatment claims. Ledbetter’s employer declined her raises based on negative reviws that Ledbetter claimed were discriminatory. US Supreme Court ruled in favor of Goodyear because of the lack of timeliness in the filing.
Taxes and other liabilities..
..must be reported to governmental agencies in accordance with established deadlines.
Employer Indentification Number
Number assigned to employers by the IRS for task reporting. Allows the IRS to know which companies may have employees, generating unemployment tax revenue for the government and creating tax liabilities for the employers.
Form SS-4
Form a company files to obtain an EIN.
Companies working with..
radio frequency time cards can allocate employee time accurately to company activities.
Consolidated Omnibus Budget Reformation Act of 1985
Provided continuance of employee medical benefits after separation from the company.
Immigration Reform and Control Act of 1986 (IRCA)
requires employers to verify that employees are legally able to work in the United States. Form 1-9 required and retention is three years from the date of hire of one year from the date of termination.
Family and Medical Leave Act of 1993 (FMLA)
granted employees the right to ttask medical leave under reasonable circumstances without fear of jobs. May take unpaid leave, but medical benefits must continue.
Personal Responsibility and Work Opportunity Reconcilation Act of 1996 (PRWOR)
mandated that employes file a new hire reporting form within 20 days after an employee initially commences work.Protects children and needy families by enforcing child support obligations.
Right-work legislation
promotes and employee’s right to opt out of union membership.
Workers’ Compensation
State laws govern workers’ compensation laws. Mandatory insurance policy paid by employers that provides wage replacement and medical benefits to employees who are injured in the course of their employment.
Professional Competence
Capability to perform professional duties with an agreed upon standard of quality.D
Due Care
the caution that a reasonable person would exercise to avoid being charged with negligence. Must remain current with accounting practices and legal developments.
Objectivity
accountant considers only facts relevant to the task at hand.
Independence
to act professionally without external pressures that would cause a third party to question the integrity of actions and decisions.
Privacy Act of 1974
about the use of information about private citizens.C
Computer Fraud and Abuse Act
- addresses cybercrime.
Emplyoee Retirement Income Security Act of 1974 (ERISA)
protection for employees’ retirement savings, preventing employers from using employee savings to satisfy business expenses. During 2007-2009, some meployee retirement funds’ values decreased, causing employees to postpone retirement.
Americans with Disabilities Act of 1990 (ADA)
protecting the antidiscrimniation right sof American workers with disabilities. Applies to employers with 15 or more employees on the payroll.
Civil Rights Act of 1991
grante employees who have been discriminated against the chance to be paid monetary damages through legal proceedings.
Social Security Act/Federal Insurance Contributions Act (FICA)
provided funding for social welfare benefits including Social Security and Medicare.
Medicare
A government-mandated health insurance program individuals. Payroll tax mandated to be paid by all employees of a firm.
Independent Contractors
are not company employees are are not reflected in payroll records. Form SS8 is used to determine employee or independent contractor status.
Affordable Care Act (ACA)
Mandated health care coverage for all Americans regardless of employment status. Employers responsibility: disclosure and justifications for rates of plans and any increases in premius. Report # of full time equivalent employees, cost of insurance coverage and elimination of a waiting period for health insurance coverage.
Tax Cuts and Jobs Act
Changed employee federal income tax liability and required a comprehensive reforming of employee income tax computations. Change to Social Security wage base, adjustments to nonresident alien withholidng, adjustments for inflation and decreases in supplemental wage withholding rates.
Consolidated Approprirations Act of 2018
increased funding for the E-Verify program (internet-based system that offers employers instant verification of an employee’s eligibility to work in the U.S.). Does NOT replace I-9.
Coronavirus Aid, Relief and Economic Stimulus Act (CARES)
to provide economic relief for individuals and businesses. Included individual economic stimulus and encouragemenet for businsses to keep their employees. Tax credit of 50% of employees’ wages (up to 10k in wages per employee) promoted employee retention.
Taxpayer Certainty and Disaster Tax Relief Act (TCDRA)
Modifications to CARES. Extended employee retentions credit through 6/30/21. Amount per employees to $14,000
Professionalism
transparency and public accountability of accounting records.
Integrity
Possessing honesty and high moran principles.
Copeland Anti-Kickback Act
prohibits a federal contractor or subcontractor from inducing an employee to forgo a portion of the wages guaranteed by the contract.
Enterprise Coverage
Company must have a minimum of two employees, volume of sales performed annually must exceed $500,000. Hosptials, Schools, govt agencies, resident care.
Individual Coverage
Firms that regularly conduct interstate business, such as companies that produce goods for shipment to a different state, have employees who travel to other states or otherwise conduct business with firms of people in other states.
Certified Payroll
report mandated for certain federal government contracts that verifies the accuracy of labor expenses incurred during completion of contract-related activities.
