Payroll Basics
What is payroll?
The process of compensating employees/contractors for their work, including compliance, taxes, benefits, and reporting.
Which form is used to determine an employee's federal income tax withholding?
Form W-4
What is the difference between exempt and non-exempt employees?
Exempt employees are not entitled to overtime pay if they meet certain criteria; non-exempt employees must be paid overtime for hours worked over 40 in a week.
Which law sets minimum wage, overtime, and recordkeeping standards?
Fair Labor Standards Act (FLSA)
Determine if the workers is exempt/non-exempt, hourly/salary OR if they are a contractor.
Jen cuts runs a salon out of her garage. She charges $50 per haircut.
contractor
What are two reasons payroll is important for a company?
Ensures EE satisfaction
Legal compliance (avoid fines)
Protects company reputation
Which form verifies employment eligibility in the U.S.?
Form I-9 (or use of E-Verify via USCIS website)
Form W-2 is provided to which type of worker?
Employee
What does the Family and Medical Leave Act (FMLA) provide?
Unpaid, job-protected leave
Determine if the workers is exempt/non-exempt, hourly/salary OR if they are a contractor.
Sabrina makes $1,250 each week.
exempt, salary
Name 3 payroll frequencies and the number of checks each produces annually.
Weekly (52 checks), Bi-Weekly (26 checks), Semi-Monthly (24 checks), Monthly (12 checks), Annually (1 check)
Which form is used to report non-employee compensation to the IRS?
Form 1099-NEC
Not quite! Hourly employees are almost always non-exempt; salaried employees can be exempt or non-exempt depending on job duties and salary level.
Who enforces MOST payroll laws in the U.S.?
The Wage and Hour Division of the Department of Labor (DOL)
Rico earns $1,000 each week but earned overtime last Friday for staying late to finish a project.
non-exempt, salary
At what stage of the employee life cycle is an employee completing tax forms and providing direct deposit account information?
Onboarding
When must employers provide Form W-2 to their employees?
No later than 1/31 (if on a weekend, the following business day).
What is the FLSA minimum salary for exempt employees?
$844 per week ($43,888 per year)
What are four possible consequences of non-compliance with payroll laws?
Penalties, fines, employee lawsuits, audits.
Assisted Living Facilities (ALF's) are typically regulated at what level?
State
In which stages of the employee life cycle are benefits involved?
All - Recruitment, Onboarding, Employment, and Offboarding.
What is the purpose of Form W-2?
Used by employers to report an employee's wages, withheld taxes, and other information to employees, the IRS, and the Social Security Administration each year.
What are two key differences between employees and contractors?
Employees receive Form W-2, contractors receive Form 1099-NEC.
Employees are usually subject to taxes and benefits, contractors are not.
What is the main purpose of the Consumer Credit Protection Act (CPPA)?
To limit the percent of disposable earnings for garnishments and job protection.
Which type of post-acute care most often includes physical, occupational, and speech therapy?
Skilled nursing facilities