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©2017 The Payroll Advisor1
Going Paperless in Payroll
Presented on Wednesday, June 14, 2017
©2016 The Payroll Advisor 2
Housekeeping
©2016 The Payroll Advisor
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Credit QuestionsToday’s
topicSpeaker
To earn RCH credit you must
©2016 The Payroll Advisor
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Stay on the webinar, online for the full 60 minutes
Be watching using your unique URL
Certificates delivered by email, to registered email,
by July 14th
Our Focus For Today
Updating and improving your direct deposit
Updating and Improving (or establishing) your pay card program
Going electronic on your timekeeping system
Filing quarterly returns or other required reports electronically
Making electronic payments where available for such items as child support payments and tax deposits
Implementing e-IWO for child support garnishments
Implementing an electronic portal for employee self-service of Form W-4
Distributing Forms W-2 to employees electronically for the initial copy
Distributing all duplicate Form W-2 requests electronically
Submission of request forms (vacation requests, address changes) to payroll electronically where possible
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©2017 The Payroll Advisor
About the Speaker
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Vicki M. Lambert, CPP, is President and Academic Director of
The Payroll Advisor™, a firm specializing in payroll education
and training. The company’s website
www.thepayrolladvisor.com offers a subscription payroll
news service which keeps payroll professionals up-to-date on
the latest rules and regulations.
As an adjunct faculty member at Brandman University, Ms.
Lambert is the creator of and instructor for the Practical
Payroll Online payroll training program, which is approved by
the APA for recertification credits.
Vicki M. Lambert, CPP, is President and
Academic Director of The Payroll
Advisor™, a firm specializing in payroll
education and training. The company’s
website www.thepayrolladvisor.com offers
a subscription payroll news service which
keeps payroll professionals up-to-date on
the latest rules and regulations.
Updating, implementing and improving
your programs
Direct Deposit and Paycards7
©2017 The Payroll Advisor
5 Steps to Improving Direct Deposit
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Get Your House in Order First
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Are your sign up forms bad?
Do you include directions and samples?
Are the forms easy to access and submit but still secure
Do you
explain
how
long the
process
will
take?
Survey Your Employees
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Can be essay or check box style
Can be quick email or paper form
Helps narrow your marketing
Survey Your Employees11
Don’t waste time doing all company e-mail blasts
Direct e-mail only the employees who get paper checks
This is the time for paycheck stuffers!
©2017 The Payroll Advisor
U.S. Treasury Survey12
Came up with 4 main reasons why they wanted a paper check
1. Money management
2. Sense of control
3. General Inertia: Haven’t gotten around to it
4. Mechanical limitations: there is a block to them having a bank account
©2017 The Payroll Advisor
Create the Target Marketing
Materials
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Create marketing
to target reasons
given in survey
Design marketing
to address
majority of needs
or concerns
Use materials
that will reach the
target audience
such as payroll
stuffers
Conduct the Campaign
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Conduct the campaign on many fronts
And keep it going!
Conduct the Campaign
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Live sign up
on site
Employees
like help
Banners and
signs
Employees
need to be
reminded
Create FAQs
Employees
need facts
Conduct the Campaign
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Create a slogan—such as
“Lose Wait”
Hold webinars
and online
meetings
Get banks and
credit unions
to help sell it
Conduct the Campaign
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Get testimonials
Direct
deposit is
great!
Have staff advertise when
distributing checks
Get balloons, coffee mugs or other
items to promote the campaign
Remember New Employees
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New Employee Orientation
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Have someone from payroll attend to explain the program plus complete and accept direct deposit forms
Need more than 2 minutes
Do a slide presentation explaining the benefits
Need time to answer questions and accept forms
Maybe a table at the back after your presentation
New Employee Orientation
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May have to have more than one employee there
Warn employees in advance that they need to bring a voided check with them to sign up—HR should do for you in the info packet for the orientation
You can state these things but can’t force so state forcefully
Any new employee who did not sign up gets a follow-up e-mail reminder prior to first paycheck
New Employees
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Special stuffing in paycheck for first payroll as a reminder to sign up…I put in the form itself
They go on your targeted marketing list if they fail to sign up by the second payroll…don’t let them slide
Focus some of the posters and displays around at new employees specifically
Post signs etc. in HR where new employees are hired or interviewed
Rinse and Repeat…
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This is an ongoing marketing campaign until there is 100% participation of all employees who are bankable
No time limit
May find trouble spots that you can adjust your marketing campaign as you go along
Trouble Spots
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Older employees can sometimes be wary of electronic payments if they are not used to it
Try “identity theft” protection
Remind them that they will have direct deposit when they are on social security—say nicely of course!
Cultural differences will be a challenge
After 2008—I hate banks attitude!
Steps to Improving Pay Card
Program
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Get house in order
Survey unbanked employees
Create target
marketing
Run the campaign
New employees
Using the same steps
Unbanked not undecided
Final Thoughts
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Going electronic on your timekeeping
system
Timekeeping26
©2017 The Payroll Advisor
Going Electronic with Timekeeping
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According to the American Payroll Association’s The Payroll Source:
“…as much as 1% to 3% of labor costs are wasted on errors, processing costs, faulty time recording, and noncompliance penalties…Time and Attendance Automation can help control these costs”
Benefits of an Electronic System28
Less time spent processing
Fewer errors introduced during processing
Decreased costs
Increased compliance with federal and state wage and hour regulations
More efficient data for use by management to control labor costs
©2017 The Payroll Advisor
Making electronic payments and filing quarterly returns or other required reports electronically where available even if not mandatory
Paying and Reporting Taxes
Electronically29
©2017 The Payroll Advisor
Electronic Filing of Reports
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There are states that require employers to file quarterly reports electronically but we are discussing when the state gives the option to e-file or paper file
To cut down on paper use always use the e-file option even if not mandatory
EFT to Save Time and Paper
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Many states have mandatory limits that require EFT payments—California for example
Go Green—do all deposits via EFT regardless if required by the state—just as done for federal taxes
Implementing e-IWO for child support
garnishments and paying using EFT
Child Support32
©2017 The Payroll Advisor
E-IWO for Child Support
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Office of Child Support Enforcement working with employers and states to automate the income withholding process with electronic income withholding orders or e-IWO
2 types of implementation options
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E-IWO Options
Medium to large employer who has IT resources that can commit several months to programming
IWOs sent in flat file format or .XML document
You process and make appropriate updates to payroll system
Get PDF of IWO
You create acknowledgement record whether accepting or rejecting
Takes 3-5 months to implement
Receive small number of IWOs or
have no IT resources
Receive an image ready PDF copy
of the IWO and a prefilled
acknowledgment as an excel
spreadsheet or PDF
Takes 2-4 weeks to implement
Need to configure server and
directories so some IT support is still
needed
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©2017 The Payroll Advisor
Option 1—System to SystemOption 2—No Programing Option
(NPO)
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Acknowledgement
Sample
©2017 The Payroll Advisor
Want a Single Acknowledgement
Entry Form?
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XLS is for you
Receive a IWO PDF of each income withholding order sent to you by a state and a single spreadsheet for acknowledging
Enter “accept” or “reject” for each row
Supple a reason code if rejecting
Save the file
Move to outbound directory
You are done
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XLS Acknowledgment Sample
How to Enroll
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Must register by completing the e-IWO profile form and providing FEINs
Profile form includes:
Agreement to exchange data
Contact information
Exchange preferences (system to system, PDF or excel spreadsheet)
File names
Server info such as User ID, Password, IP Address, Host Name, directory Name and Port
How to Enroll
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The Employer Can Also
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Notify a state when an employee is terminated
Notify a state when an employee is going to receive a lump sum payment
Employer controls when the notices are released
Terminating Employees
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Upon termination, mail or fax a completed "Termination Notification" form to the issuing agency, OR some states will accept this information over the telephone or online. The employer should have the following information available:
Employee's name,
Employee's case identifier,
Last known home address,
New employer's address (if known), and
Date of separation.
eTerm
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Electronic Termination (eTerm) allows employers to report employee terminations online. Registered employers provide information about employee terminations (or that an individual has never worked for them) either by uploading a file or entering information in the online eTermapplication.
How Employers Can Participate
Employers currently registered with the Lump Sum Reporting application on OCSE’s Child Support Services Portal are automatically enrolled in eTerm.
Employers who are not registered for the Lump Sum Reporting application should contact the Employer Services Team at [email protected] for a brief demonstration of the application. Once the demonstration is completed, employers can register to use both the eTerm and Lump Sum Reporting applications by completing the Employer Services Agreement and Profile form.
eTerm Process
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Employer:
Provides notification that the person is no longer or was never employed by the employer
Receives an acknowledgment indicating whether the file was successfully uploaded to the Employer Services Web Application
Views report files, which are available for download for 60 days.
eTerm Application:
Generates notification of the termination to the state either through an e-IWO file (if the state participates with e-IWO) or
Sends an email notification of the termination to the appropriate state child support agency.
©2017 The Payroll Advisor45
©2017 The Payroll Advisor46
Map courtesy of the OCSE
Lump Sum Reporting Process
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Employer:
Provide information about employees who are eligible to receive a lump sum payment using one of these methods: Enter information about each employee into the fields on the
Lump Sum Reporting screen
Upload a Microsoft Excel spreadsheet (or similar format) to report many employees at one time
After providing pending lump sum payment information, you will: Receive confirmation that the information was uploaded
Be able to review errors if the information was not uploaded
Correct the errors and resubmit files
View information you reported in the last 60 calendar days
Lump Sum Reporting Process
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OCSE Portal:
Validate the file upload
Notify the employer if there are file errors
Re-validate the file once the employer resubmits it
Compare information provided by the employer to individuals who owe child support
Generate notification to the state(s) about the pending lump sum payment
Provide details about information submitted by employers for 60 calendar days
©2017 The Payroll Advisor49
©2017 The Payroll Advisor50
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Map courtesy of the OCSE
©2017 The Payroll Advisor
Paying by EFT
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Only 15 states require child support to be paid electronically. These include: CA, FL, IL, IN, IA, MA, NE, NV, ND, OH, OR, PA, TX, VA, and WV
All state child support agencies except for South Carolina accept payments by EFT/EDI (electronic funds transfer/electronic data interchange)
EDI includes the identifying information such as case number to properly apply the payment
MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VAWV
OH
MI
NY
PA
MD
DE
NJ
CTRI
MA
ME
VT
NH
AK
HI
Requires EFT
Offers EFT but does not require
Does not offer EFT
EFT Requirements
©2017 The Payroll Advisor53
Implementing an electronic portal for
employee self-service of Form W-4
Form W-454
©2017 The Payroll Advisor
Electronic Form W-4
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May establish system that allows employees to submit their initial form or change existing form electronically
Paper form must be available as well
Paper form can be required for some employees if business reason justifies
Must be able to provide questionable forms to IRS electronically
Tech Specs for Electronic Forms
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Electronic version must contain exact same info as the paper version-no exceptions
Must be PIN or verified system
Lock-in letter compliance must be available
Perjury statement must be there
Employees must understand that it is signed under penalty of perjury just like the paper form
Tech Spec Continued
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Electronic signature required
Must be able to print hard copy
All other regulations apply the same as paper form
Practical Point: Good to have a system that
requires employee to acknowledge perjury
statement in order to submit as a separate step
Distributing Forms W-2 to employees
electronically for the initial copy and for
duplicates
Form W-258
©2017 The Payroll Advisor
Electronic Forms W-2 to Employees
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Software or website specs will vary
Employee must consent—electronic consent even if consenting on paper
Big stumbling block is disclosure requirements
Statement can be furnished on the web if employee given access info
See link section – IRS code
©2017 The Payroll Advisor
Disclosure Requirements
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May get paper if they want it
How long will the consent last
Procedure for paper copy after giving consent
How to withdraw consent and how it is confirmed
Conditions on when electronic Form W-2 is not
available
Procedures for updating contact info for employee
Employer must notify if changes in contact info for
employer
©2017 The Payroll Advisor
Disclosure Example from Yale
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• If an employee does not consent to receive an electronic version of Form W-2, he or she will be furnished a Form W-2 on paper.
• The 2012 Electronic Form W-2 Consent Statement is effective for Forms W-2 issued for the calendar year 2012 and all future periods until consent is withdrawn or the individual is no longer employed by the University.
• After giving consent, an employee may still request a paper Form W-2 by contacting the Payroll office in writing. This may be done via email to: [email protected] or U.S. mail to: Payroll Department Attn: Tax Form Request, Yale University, P.O. Box 208356, New Haven, CT 06520-8356. The request for a paper W-2 will not terminate consent.
• An employee may withdraw his or her consent with 30 days' notice by sending a written confirmation of the withdrawal and its effective date. This may be done via email to: [email protected] or U.S. mail to: Payroll Department Attn: Consent Request, Yale University, PO Box 208356, New Haven, CT 06520-8356. The withdrawal of consent does not apply to a Form W-2 that was furnished electronically before the withdrawal of consent is furnished. Upon receipt of the withdrawal, the University Payroll Department will send a written confirmation of the withdrawal via U.S. mail or email.
©2017 The Payroll Advisor
Disclosure Example from Yale
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• The University will not provide the Form W-2 electronically to an individual who has terminated his or her employment with the University prior to 1/1/2013. These individuals will receive paper copies via U.S. mail. Only active University employees will have access to the electronic version of Form W-2. If a former employee requires an additional copy of the Form W-2, he or she may follow the aforementioned methods of contacting the University Payroll Department.
• If an employee has consented to receive an electronic version of Form W-2 and has not printed the form prior to termination, he or she should contact the University Payroll Department in order to receive a paper copy via U.S. mail.
• An employee must contact Yale University Payroll Department immediately with any updated contact information (e.g. email address, mailing address, etc). This may be done via email to [email protected] or U.S. mail to: Payroll Department Attn: Tax Form Request, Yale University, P.O. Box 208356, New Haven, CT 06520-8356.
• The hardware and software requirements needed to access, print and retain Form W-2 electronically include an internet connection, web browser, and Adobe Acrobat reader.
• The electronic version of Form W-2 will be available on the web site for at least 3 years from its original posting date.
• The Form W-2 may be required to be printed and attached to a federal, state, or local income tax return.
©2017 The Payroll Advisor
Duplicate Form W-2
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Nothing in the regulations require a duplicate
form to be on paper
No disclosure required for duplicate forms
May require employee to download—should
furnish printer and computer to use just in case
Employers are not prohibited from charging a fee
for the issuance of duplicate Form W-2 per IRS
Code—charge for paper not for electronic?
©2017 The Payroll Advisor
Submission of request forms (vacation
requests, address changes) to payroll
electronically where possible
And Finally Internally64
©2017 The Payroll Advisor
Going Paperless Internally
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What about Paystubs?
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40 states have some type of requirement for paystubs or pay statements
Paper or electronic-7 states have enacted legislation permitted electronic 1 has issued statement
DE, HI, IA, ME, MN, NC, OK, and OR
CA, NM, NY & VT employee must agree to it
Websites
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If you have one they
must be up-to-date
If you don’t have one—
get one if possible
PDF files of all forms,
links to IRS or state info
FAQs and all policies
Examples
Are There Any Questions?
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How Can Ascentis Help Me?
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Ascentis Payroll helps you “go green”! A number of routine payroll
tasks have been automated so you can say goodbye to your forms.
• New hire forms such as direct deposit requests and W-4 forms
can be entered and changed by your employees directly in
Employee Self Service.
• Employee changes (such as address changes) and employee
requests (such as time off) are also maintained in ESS.
• Ascentis Timekeeper allows form free timecard entry and
approval.
• Employee payment information (check stubs and W-2s) have a
full paperless option.
• Let our tax service file your quarterly returns for you.
• Send child support and garnishment payments to agencies via
EFT rather than a printed check.
To earn RCH credit you must
©2016 The Payroll Advisor
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Stay on the webinar, online for the full 60 minutes
Be watching using your unique URL
Certificates delivered by email, to registered email,
by July 14th
On-Demand Webinars
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Watch from anywhere, at anytime, at no cost to you!
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Sharing the Education
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