ab298 associates capstone in accounting state and federal laws and regulations on business unit 2...
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AB298AB298Associates Capstone in Associates Capstone in
AccountingAccounting
State and Federal Laws and Regulations on Business
CHAPTER 5 Unit 2Unit 2
SeminarSeminar
Many Laws that Affect Many Laws that Affect Personnel Personnel Fair Labor Standards Act (FLSA) Federal Insurance Contribution Act
(FICA)Income tax withholding laws
Federal, state and localUnemployment tax actsFair employment lawsOther federal lawsState minimum wage and maximum
hour laws and other state specific laws
Fair Labor Standards Act (FLSA)Fair Labor Standards Act (FLSA)
Federal Wage & Hour Law of 1938Minimum wage is $7.25/hourEqual pay for equal work provisions Sets law for companies involved
In interstate commerce or In production of goods/services for
interstate commerceRequires payroll records be maintained
Federal Insurance Federal Insurance Contributions Act (FICA)Contributions Act (FICA)Comprised of two taxes Both taxes paid by ER (employer) and EE
(employee)OASDI (Old Age, Survivors & Disability
Insurance)
6.2% with a cap that is cost-of-living indexedHI (Health Insurance Plan - Medicare)
1.45% with no cap
Income Tax Withholding LawsIncome Tax Withholding Laws
Federal income tax Levied on earnings of employees Income tax is withheld from paychecks
State and local income tax Income tax is withheld from paychecksDifferent in each stateNot all states have state income tax
Unemployment Tax ActsUnemployment Tax Acts FUTA (Federal Unemployment Tax Act)
ER tax – paid on $7,000 per EE per year Taxes used to pay state and federal
administrative expenses, not used to pay unemployment benefits
SUTA (State Unemployment Tax Act) Mandatory unemployment insurance – each
state is different SSA outlines standards that each state’s
unemployment compensation law must follow Used to pay unemployment benefits
Fair Employment LawsFair Employment Laws
Title VII of the Civil Rights Act of 1964 EEO (Equal Employment Opportunity)
Can’t discriminate in hiring, firing, promoting or compensating based on Color, race, religion, national origin or gender
Applies to all ERs who engage in an industry affecting commerce and employ 15 or more workers in each of 20 or more weeks
See http://www.eeoc.gov/ for more information
Age Discrimination in Age Discrimination in Employment Act Employment Act (ADEA)(ADEA)ADEA states employers cannot use age
to discriminate in hiring, firing or promoting Applies to employers with 20 or more
employeesProvides protection to workers over 40
with a few key exceptions
Americans with Americans with Disabilities Act (ADADisabilities Act (ADA))
Prevents employers with 15 or more employees from discriminating against qualified persons based upon disability
“Reasonable accommodation” must be provided - this is a very vague term and subject to court interpretation
FederalFederal Personal Personal Responsibility & Work Responsibility & Work Opportunity Reconciliation Opportunity Reconciliation ActActRequires employers to report
information on all new hires within 20 days to state agency Includes name, address and social security
number (submitting copy of W-4 suffices in many states)
Records coordinated through Office of Child Support Enforcement (OCSE)
Fines up to $25/hire levied for failure to report A few states now require same from
independent contractors
Immigration Reform Immigration Reform and Control Act (IRCA)and Control Act (IRCA)
Law that bars hiring and retaining aliens unauthorized to work in U.S.
Accomplished by employee completing I-9 (Employment Eligibility Verification) within three business days of employment
U.S. Citizenship & Immigration Services may audit and levy penaltiesCriminal penalties can apply if pattern of
discriminatory practices foundE-Verify is a system that allows ERs to
check employment eligibility of new hires
Family Medical Leave Act Family Medical Leave Act (FMLA)(FMLA) Covers companies with 50 or more EE within 75
mile radius Employee guaranteed 12 weeks unpaid leave for
Birth, adoption, critical care for child, spouse or parent Leave may be used all at once or at separate times –
within 12 months of qualifying event Employer continues health care coverage Right to return to same job or comparable when
family member is on active duty or up to 26 weeks fposition
FMLA expanded to include up to 12 weeks or line of duty injury/illness
Some states have paid family leave plans
Uniformed Services Uniformed Services Employment & Employment & Reemployment Rights ActReemployment Rights ActMilitary personnel given right to take
leaves of absences from civilian jobs Right to return to prior jobs with
seniority intactHealth benefits must be started without
a waiting periodDoesn’t apply if dishonorably discharged
Employee Retirement Employee Retirement Income Security Act Income Security Act (ERISA)(ERISA)
Trustees must monitor pension plans Vested 100% in 3-6 years
Example of a vesting plan
Years of % Vested in Service Pension Plan
2 50%
4 75%
5 100%
Provides for Pension Benefit Guaranty Corporation
A federal agency which guarantees benefits to EE
Stringent recordkeeping required
Current LegislationCurrent Legislation
Hiring Incentives to Restore Employment Act (HIRE) – 3/18/10Gives ER tax credits if pay wages to previously
unemployed new hireHealth Care and Education Reconciliation
Act (HCERA) – 3/30/10Most provisions effective 2014 Immediately ER must include cost of ER-provided
health coverage on EE’s Form W-2Patient Protection & Affordable Care Act –
3/23/10Offers tax credit to small ERs who offer health
insurance to EEs
State Laws State Laws Workers’ Compensation
Most states require employers to pay employees’ premiums Can self insure if state approvedDifferent premiums based upon job class
State Disability Benefit LawsFive states plus Puerto Rico have
established laws requiring employers to provide disability benefits
This applies even if the disability did not arise due to employment!
Human Resource SystemHuman Resource System
FLSA requires stringent personnel recordkeeping – embodied in the Human Resource (HR) SystemRequisition for Personnel notifies HR of need
for new employeesApplication for Employment completed by
person seeking employment No law prohibiting questions about religion, gender,
race, age or national origin - but must tie into ability to perform job (for example, bilingual capabilities) –these are allowed if they are qualifications for the job
If application asks age/birth date, should contain ADEA language notifying candidate of anti-discriminatory provisions
Human Resource SystemHuman Resource System Reference Inquiry conducted before
employment Due to amount of litigation in this area, respondents
should only verify facts and not offer subjective information
Really diminishes credibility of reference inquiries Prospective employer may require applicant to sign
Employment Reference Release Must notify employee if seeking investigative
consumer report Hiring Notice alerts payroll department to new
EE Employee History Record contains
performance evaluations, compensation adjustments, disciplinary issues, etc.
Critical area – employment related litigation is very expensive and often times avoidable
Unit 2 JournalUnit 2 JournalIn your journal please answer the following questions regarding your company:What information did the website contain on the first page?What are the mission, vision and values of the company?What products or services does your company provide?Explain what significant innovation(s), if any, the company will make to their products or services?Please list some significant accomplishments over the life of the corporation. Please list at least 3 major accomplishments.
Please make sure that your responses are in complete sentences and that you use correct grammar and punctuation.
Access the Journal tab at the top of the course page.
Unit 2 ProjectUnit 2 ProjectAssignment: You are a mid-level manager for a large firm. Your task is to hire 20 new employees for a new production line. Prior to execution, you must report to your district manager on what your plan is to work through the hiring process to ensure compliance with local, state, and Federal regulations on Equal Opportunity in the workplace. Your report should be in the form of a one-page memo/document that discusses the regulations, listing 3 of the regulations prohibiting employment discrimination and how they will apply to your hiring process.