Vision Payroll

September 30, 2011

Question of the Week: What Are the IRS and DOL Doing About Workers Who Receive 1099s?

IRS Commissioner Douglas H. Shulman
IRS Commissioner Douglas H. Shulman
This week’s question comes from Steve, a small business owner.

Steve asks:

I’ve read about the Voluntary Classification Settlement Program (VCSP) and its application process with the Internal Revenue Service (IRS). What are the IRS and Department of Labor (DOL) doing about workers who receive 1099s?

Answer: The IRS and DOL are entering into agreements that include the IRS and DOL as well as several states to share information and coordinate enforcement of current laws and regulations.

Memoranda Signed at Washington Ceremony

Secretary of Labor Hilda L. Solis recently hosted a ceremony at DOL headquarters in Washington to sign a memorandum of understanding with the IRS that will improve departmental efforts to end the business practice of misclassifying employees in order to avoid providing employment protections. In addition, labor commissioners and other agency leaders representing seven states signed memoranda of understanding with the department’s Wage and Hour Division (WHD) and, in some cases, its Employee Benefits Security Administration, Occupational Safety and Health Administration, Office of Federal Contract Compliance Programs and Office of the Solicitor. The signatory states are Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington. Secretary Solis also announced agreements for the WHD to enter into memoranda of understanding with the state labor agencies of Hawaii, Illinois and Montana, as well as with New York’s attorney general.

DOL and IRS Will Share Information with Participating States

The memoranda of understanding will enable the DOL to share information and coordinate law enforcement with the IRS and participating states in order to level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law.

Secretary Solis: We’re Standing United to End the Practice of Misclassifying Employees

“We’re here today to sign a series of agreements that together send a coordinated message: We’re standing united to end the practice of misclassifying employees,” said Secretary Solis. “We are taking important steps toward making sure that the American dream is still available for all employees and responsible employers alike.”

Commissioner Shulman: We Will Work Together More Efficiently to Address Worker Misclassification Issues

“This agreement takes the partnership between the IRS and DOL to a new level,” said IRS Commissioner Doug Shulman. “In this new phase of our relationship, we will work together more efficiently to address worker misclassification issues, and better serve the needs of small businesses and employees.”

Misclassification Can Create Economic Pressure for Law-Abiding Business Owners

Business models that attempt to change, obscure or eliminate the employment relationship are not inherently illegal, unless they are used to evade compliance with federal labor laws — for example, if an employee is misclassified as an independent contractor and subsequently denied rights and benefits to which he or she is entitled under the law. In addition, misclassification can create economic pressure for law-abiding business owners.

Memoranda Arose as Part of the Misclassification Initiative

These memoranda of understanding arose as part of the department’s Misclassification Initiative, which was launched under the auspices of Vice President Biden’s Middle Class Task Force with the goal of preventing, detecting and remedying employee misclassification.

Contact Vision Payroll Today

Contact Vision Payroll if you have further questions on the memoranda of understanding.

November 30, 2010

Hawai’i Reduces Taxable Wage Base from $34,900 to $34,200 for 2011

Filed under: News — Tags: , , , — Vision @ 3:07 pm
Pearl Imada Iboshi, Acting Director, Hawai’i Department of Labor and Industrial Relations
Pearl Imada Iboshi, Acting Director, Hawai’i Department of Labor and Industrial Relations
The Hawai’i Department of Labor and Industrial relations has announced that the taxable wage base will decrease from $34,900 in 2010 to $34,200 for 2011. The contribution rate schedule will change from “D” to “F”.

New Employer Tax Rates to Increase

The tax rates for new employers will increase from 3% to 4%, but the Employment & Training Assessment Rate will remain at 0.1%

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the Hawai’i wage base and rate changes or visit our Unemployment Taxable Wage Base page.

March 14, 2010

Hawai’i Reduces Taxable Wage Base from $38,800 to $34,900

Filed under: News — Tags: , , — Vision @ 8:53 pm

Governor Linda Lingle signed into law HB 2169 that lowers the taxable wage base for 2010 from $38,800 to $34,900 or 90% of the average annual wage for 2010 and 2011. The new law also sets the rate schedule to Schedule D for 2010 and Schedule F for 2011. Vision Payroll has updated its tax table calculation for Hawai’i employers and will adjust tax liabilities on the next live payroll for all Hawai’i employers. Contact Vision Payroll if you have any questions on the Hawai’i wage base and rate changes or visit our Unemployment Taxable Wage Base page.

November 1, 2009

Hawai‘i Unemployment Wage Base to Increase to $37,800

Filed under: News — Tags: , , , , — Vision @ 11:09 pm

Director Darwin Ching of the Hawai‘i Department of Labor and Industrial Relations (DLIR) has announced an increase in the taxable wage base for 2010. The wage base will increase from $13,000 for 2009 to $37,800 for 2010. Contact Vision Payroll if you have any questions on Hawai‘i unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

September 29, 2009

Hawaii Announces Changes to Payroll Tax Deposit Frequency for Many Employers

Filed under: News — Tags: , , — Vision @ 11:56 am

In Department of Taxation Announcement No. 2009-11, the State of Hawaii recently implemented changes to the deposit frequency rules for employers paying state withholding tax. For wages paid before January 1, 2010 the current rules will remain in effect. For wages paid after December 31, 2009, the new rule is that any employer required to deposit federal payroll taxes on a semi-weekly deposit schedule must also deposit Hawaii withholding taxes on the same frequency. In addition, employers who must follow the semi-weekly deposit schedule will be required to pay those taxes by electronic funds transfer. Contact Vision Payroll if you have any further questions on the changes to the Hawaii deposit frequency rules.

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