Archive note: This article is retained for historical reference and covers 2019 state minimum wage changes. Minimum wage rules change often, so employers should confirm current federal, state, and local wage requirements before making payroll decisions.

On 1 January 2019, 20 states (and the District of Columbia) raised their minimum wage. Eight states supported this increase in automatic inflation adjustments, six states increased wages through electoral measures, and the other six states saw increases due to legislation proposed in 2018.

One state, Nevada, may raise its minimum wage in 2019 pending review by the state labor commissioner.

With all these changes in place, employers must make their final preparations to ensure a smooth transition to some potentially new requirements. It is estimated that 5.2 million workers will be affected by wage changes.

First and for most employees, the federal minimum wage is $ 7.25 per hour, and the minimum federal contractor’s wage is $ 10.35 per hour. However, these provisions of the Fair Labor Standards Act do not replace any government or local regulations that could affect your business. These rules take precedence over the minimum wage rates of the federal government.

Archive note: This article is retained for historical reference and covers 2019 state minimum wage changes. Minimum wage rules change often, so employers should confirm current federal, state, and local wage requirements before making payroll decisions.

The states that will increase their minimum wage requirements in 2019 include:

Alaska: $ 9.89 per hour

Arizona: $ 11 per hour

Arkansas: $ 9.25 per hour

California: $ 12 per hour for businesses with 26 or more employees, $ 11 per hour for businesses with fewer than 26 employees

Colorado: $ 11.10 per hour

Delaware: $ 8.75 an hour, from October 1, $ 9.25 nationwide

Florida: $ 8.46 per hour

Maine: $ 11 per hour

Massachusetts: $ 12 per hour

Michigan: $ 9.48 an hour

Minnesota: $ 9.86 per hour for large employers, $ 8.04 per hour for small employers.

Missouri: $ 8.60 per hour

Montana: $ 8.50 per hour

New Jersey: $ 8.85 per hour

New York: $ 11.10 per hour for most employers in New York State, $ 15.00 per hour for large employers and $ 13.50 for small employers in New York City, $ 12.00 per hour for Long Island and Westchester Counties

Ohio: $ 8.55 per hour

Rhode Island: $ 10.50 per hour

South Dakota: $ 9.10 per hour

Vermont: $ 10.78 per hour

Washington: $ 12 per hour

Washington, D.C.: $ 13.25, with effect from July 1 raised to $ 14.00

Employers should prepare

Employers should be fully prepared to raise the pay of workers below the minimum wage threshold. Most public enforcement agencies have given high priority to theft of wages, and failure to pay the appropriate minimum wage to workers is a serious violation.

If your company is located in an area where the minimum wage will increase and your employees’ pay increases on January 1, employees must have been informed by January 7, 2019, at the latest. The only exception is if you have already considered the change in a timely statement of salary and this card meets all relevant legal requirements. In that case, you probably do not need to provide your employees with a separate salary statement.

• If your state or local government requires you to provide a notice of payment to your employees, it must include:
• Changes to the standard wage rate;
• Changes in overtime pay; Allowances (such as food or accommodation) that are claimed as part of the minimum wage.

If you need help administering a minimum wage increase (or other wage problems for your business), contact AccuServe Payroll today.

SUTA?

SUTA (State Act on Unemployment Tax) is a payroll tax that employers must pay legally for their employees. Its main goal is to provide benefits for displaced employees, and costs for companies in high-income areas are usually rising. SUTA rates are assigned every year to companies, and the tax owed quarterly.

Most claims for unemployment are paid with limited due diligence. There are cases where the payment of former employees cannot be avoided. On the other hand, there are situations where employees have no right to these funds. Knowing the difference and knowing how to prove it to local authorities, Can save the company thousands of dollars.

Protecting your SUTA rate

• Review unemployment benefits: employees are not entitled to state unemployment benefits if they left the company themselves. This can include dismissed for a legitimate reason. (a violation of corporate rules is a common reason for refusing a benefit)
• Reduce turnover: the faster you hire and terminate employees, the higher the SUTA rate. For medium-sized companies, it's best to transfer employees with marketable skills to a department that needs them instead of letting them go. Try to improve your reviews and hiring practices, focusing on hiring employees who are likely to stay a longer time. As a bonus, this means you will spend less time and money searching for talent. This will further reduce your operating costs.
• More effective termination management: The entire termination process should be well documented, preferably employing incremental procedures to improve employee performance. If your company can show that it has made every effort to help the employee. But they still violate the rules in the company. You have a much better chance of successfully fighting the unemployment claim. Unfortunately, clerical errors in claims for unemployment are quite common. Especially since there are so many of them that employees try to process them at some point. For example, they may receive a claim from another company or receive an unemployment benefit that has never actually granted. To avoid this, you must fully review each SUTA statement and report received.

What Never to do

All of the above tips are a great way to reduce SUTA costs. However, there are things you shouldn't do if you're trying to keep rates low.

• Incorrect classification of employees: Some companies try to lower SUTA rates by incorrectly classifying employees as independent contractors. In many cases, they improperly refuse other benefits employees are entitled.
• Get multiple account numbers: Each state has an agency that assigns SUTA account numbers to companies. Don't request multiple numbers and then switch all employees to the account with the lowest interest rate this year.
• Connecting employees: This method - usually larger, rich in cash - buys a company with a lower SUTA rate. They transfer their employees, with the reduced rate being used in addition to all other benefits of purchasing the company.

In summary, these practices are an illegal form of manipulation of the rates known as 'SUTA dumping.' If you are unsure if your method will be considered, SUTA dumping and may result in fines. Please contact us at AccuServe Payroll and talk to the company's legal advisor.

AccusServe Payroll - Employees Tips

Tipping has long been a tradition in the restaurant industry, but it also causes headaches when it comes to pay and employee tips. Let's review some of the difficulties allowing tips involved - and what you can do about them. 

Tip Reporting

Yes, employees need to be honest on much money they earn on tips every day. The tricky part for employers, of course is that employees may be tempted to lie. This is usually to improve their personal finances. If you earn $10 an hour and $5 more than you actually received, you can take home much more than you expected.

IRS.gov can help. Publication 1244 contains two forms that allow you to record the tips received daily. Ask your employees to use it and check them from time to time to make sure they report them accurately.

Tip Credits

Employees receiving tips must always received at least a federal minimum wage. As an employer, you can get a tip credit on their salary. This happens if you pay at least $2.13 per hour (in most states), provided you get enough tips to make up for the difference. If they don't get enough tips to cover the difference, you'll have to pay for these costs and pay them the difference. That is why accurate tip reporting is essential. Now wages for overtime should be calculated based on the full minimum wage, and not based on compensation after applying the tax credit.

Tip Tax and Employee Tips

As an owner, you must pay taxes on cash tips received by employees. Non-cash tips (such as event tickets) are not taxable or have monthly tips of less than $ 20. To be honest, this probably only applies to young people with only a minimum part-time job. So don't expect employees to tip so little that you won't have to pay taxes on them.

Note: keep in mind that many automatic tips - especially 18% or more - count as restaurant income rather than employee income and are subject to sales tax.

Tipping Allocation

Many restaurants use a system in which employees pass their tips to the total pool, which is then shared by all members. That's good - knowing how much each employee should get out of the pool, it's easy to catch people lying. Employees must report their income only after allocation, not before. In this system, they did not "earn" a tip until it was assigned.

Some restaurants offer staff meals.

Some restaurants offer staff meals. The value of these meals can be deducted from their salary and thus exempt from tax if:

• Meals are provided within your companies premises.
• Meals are served for your convenience.

As explained by the IRS, any meals that take place immediately before, during or shortly after the employee's working hours. These are considered to be consumed for your convenience. In practice, this means that it's generally better to feed employees than to pay them. The promise of a good meal each day can be an excellent incentive for employees.

Disclaimer: Although the information provided here is true and to the best of our knowledge and belief, regulations may vary by jurisdiction or may change since the last time this content was updated. If you have other questions about the effects of advice, contact a qualified lawyer.

We would be happy to answer any questions around this subject or any payroll question reach out to us on our Contact Us page

SSN Verifications

To process W-2 for payroll purposes, upon employment, you must ask employees for social security. This is usually not a problem, but it is possible that at some point, you will have issues checking the employee’s social security number. The good news is that this issue is quite common. You can take various measures to fix it and make sure that your company complies with applicable laws.

In this situation, do the following:

1. Check the number entered- If you cannot verify your social security number, make sure you enter the correct number and name that is on the employee’s file. You may have exchanged a number or entered something in error the first time you tried to confirm.
2. Try different name configurations- If your new hire has many names, try entering different configurations. You can enter a surname in a format that does not match the surname on the social security card.
3. Ask your new hire to confirm the number- after making sure that you have correctly entered the name and number, contact the new hire and ask him if the social security number was correctly entered in the documentation.
4. Instruct the employee to visit Social Security local office- If the number provided by the employee is still not recognized. Tell the employee to contact the Social Security office to get to the bottom of the problem.
5. Document your efforts- You should accurately document each step while reviewing your employee’s social security number. If you document your efforts and retain this information for at least three years, to protect your business from liability.

What happens if you can’t verify your social security number?

Many employers assume that they must dismiss an employee if they cannot provide a valid Social Security number. However, If you suspend or fire an employee due to review issues, you may violate federal and state labor laws. Instead, document your efforts to review your social security number and save this information to a file.

Create a business policy

The best way to provide an effective solution to your social security review problem is to create a consistent corporate policy. This policy should specify the steps to be taken and time frame in the event of problems with social security reviews. If you have a policy, you can effectively control the checking process, while complying with all applicable laws and regulations.

We would be happy to answer any questions around this subject or any payroll question reach out to us on our Contact Us page