HIRE Act Processing Guidelines for Maxwell Management Suite

With the introduction of the new Hiring Incentives to Restore Employment (HIRE) Act, employers are eligible for a payroll tax credit if eligible employees are hired during February 3 to December 31, 2010. The credit is 6.2% of FICA taxable wages, meaning the employer receives a credit of the employer portion of the FICA for those employees.

To institute this change in Maxwell Systems Management Suite (MSMS) entails setting up a new Fringe in Fringe/Deduction Maintenance, adding a new Calculation Method in Calculation Method Maintenance, and then assigning that new Fringe to the applicable employee(s).

Note that any changes to 941 or W-2 reporting have not been described by the IRS, and if required may necessitate a software update later this year.

Reporting number of employees for Maryland Unemployment with Maxwell Systems Management Suite

As part of the quarterly payroll reporting, the state of Maryland requires employers to file the Maryland Quarterly Unemployment Insurance Contribution/Employment Report (DLLR / OUI 15) with a count of employees working on the 12th day of each month in the quarter. Specifically, line 20 of that report requires employers to

Enter the number of full-time and part-time workers (subject to the Maryland Unemployment Insurance Law) who worked during or received pay for any part of any payroll period which includes the 12th of the month.

But, the Maxwell Systems Management Suite (MSMS) State Unemployment Report does not provide the count of employees, so here’s how to gather that information.

The trick to getting the employees that worked on the 12th day of any month is to print the YTD Detail Payroll Register for the check date range that includes the 12th of each month. For example, for January 2009, figure out what check date include the pay for January 12th, then run the YTD Detail Payroll Register and use that check date as the beginning and ending check date.

Now for the hard part — print the report to the screen, then count how many employees are printed on the report. That’s the number to use when completing line 20 of the Maryland Quarterly Unemployment Insurance Contribution/Employment Report.

Another possible solution is to create a Payroll Formatted Report using Prefix PR7, define a Formatter Field called Counter with the definition simply as 1 (just the number 1), then print that report, for the date range that include the 12th day of pay for each month, and look at the total of the counter field at the end of the report.

Either way, to determine the information needed by Maryland requires printing a report for each month that includes that 12th day.

Reporting Worker’s Compensation Earnings from Payroll Detail

Periodically, Payroll Insurance Groups are not setup correctly causing incorrect Worker’s Compensation Earnings on the Payroll Insurance Report. And you can just guess how Worker’s Compensation auditors get grouchy when earnings don’t “add up”!

Fortunately, the Formatted Reports PR2 prefix, Time Card Detail, gives you access to the various earnings categories for each and every timecard transaction. Here are those fields:

110 Regular Earnings 
111 Overtime Earnings 
112 Premium Earnings 
113 Sick Earnings 
114 Holiday Earnings 
115 Vacation Earnings 
116 Bonus Earnings 
117 Per Diem (non-taxable) 
118 Expense (non-taxable)
119 Misc Earnings 
120 Other Earnings (total of 113+114+115+116+117+118+119+Union Add-On Pay)
Union Add-On Pay (is 120-(113+114+115+116+117+118+119))

So, using the PR2 prefix, earnings can be reported not only by Insurance Group (Worker’s Comp Code), and can be sorted by Job if necessary. Very helpful if you have Jobs that are wrap-up (owner paid Worker’s Comp).

How is line 1 of the Quarterly 941 calculated?

Recently, a Maxwell Management Suite customer asked how to verify the number of employees that printed on Line 1 of the Quarterly 941 Report. That line is labeled “Number of employees who received wages, tips, or other compensation for the pay period including:Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), Dec. 12 (Quarter 4)”. Simply stated, the count is based on the number of paychecks issued during a “pay period” encompassing the 12th calendar day of March, June, September, and December.

But the trick, of course, is knowing the date range used for those “pay periods”. A quick look at the CPR941 program showed that for the 1st quarter, if an employee is paid weekly (pay cycle), they will be counted if they received a check dated from March 12 to March 18. Of course, each pay cycle tests for a different set of date ranges as follows:
* Weekly: 12th to 18th
* Bi-Weekly: 12th to 25th
* Semi-Monthly: 1st to 17th
* Monthly: 1st to 31st

One thing to note is if an employee received two paychecks in one of those date ranges, they will be counted twice.

So if your employees are paid weekly, verify line 1 of the 941 by printing the YTD Detail PR Register, for all employees, for March 12 to March 18 and count the number of checks that print on the report.

Is remote timecard collection possible?

When it comes to construction companies, I’ve noticed there are not many successful examples of remote timecard collection projects . Here are my thoughts on why there isn’t much ‘observable’ success, and what is necessary to actually implement a successful remote timecard collection strategy.

There are no simple answers as to why there very few examples of successful remote timecard collection projects. Most likely, it is because few companies are willing to bear the expense and effort to make the ‘culture’ changes necessary for such a project to succeed. It requires a company-wide effort, including a motivated management team, to insure success of something as delicate as a new time-keeping system!

Who, What, Where, When?

One of the difficult barriers in dealing with ‘remote timecard collection’ is the physical manner in which said devices will be used. A big hurdle is developing a process the field personnel will utilize. It involves the old who, what, where, when questions:

  1. Who does the recording of the data? Is it the employee, the foreman/supervisor, or an on-site administrator?
  2. What kind of device might succeed in recording the data? A scanner, a biometric device, a barcode reader, a handheld computer?
  3. Where does the recording of time happen? At the point the employee walks onto the site, in the foreman’s truck or job trailer, or at the actual point of where the work is happening?
  4. When does the recording of time happen? Beginning/ending of the shift, each time the ‘Task’ being accomplished changes, or at the end of the shift?

What device to use?

Another barricade to success is determining the technology (type of device) that might be used to collect the timecard data. When looking at the actual timecard collection devices, these questions should be addressed:

  1. Can the pertinent data be collected by the time-card device selected? At a minimum, you need the date worked, employee number, job/project number, task code (phase of work), and the number of hours (regular, overtime, premium).
  2. In what from is the data exported from the device? Can it be e-mailed? Put on a floppy? Sent wireless? Sent via the Internet?
  3. Can the device survive the environment it must work in? Cold, hot, dust, dropped, bumped, lost?
  4. What kind of money is budgeted for each device?

Note: I do think most time-card collection devices will output some kind of file, and even if that file can’t be directly imported into a payroll system, at least the data can be pre-processed and then imported. Actually, this is the area most easily controlled.

A successful example

An example of a successful data collection process involved a client that was motivated and willing to spend the necessary money to succeed. Here’s what made it work:

  1. A biometric device (a handprint device) was used to record employees coming into the job-site and leaving the job-site. Actually, because of the volume of employees, two handprint devices were used so the employees didn’t go berserk waiting in line to get in/out of the job-site.
  2. The time data was stored on a local computer (running the third-party application that monitored the biometric devices) at the job-site trailer then exported from that computer and emailed to ‘accounting’.
  3. The e-mailed data was put through a pre-process (custom code to overcome what the timecard collection output failed to do) step, and finally imported into the payroll system.

The hard questions

Ultimately, the big questions about implementing a timecard collection process centers on whether the relevant data, like the task (phase of work), can be captured, and can the company get the field employees to make that happen?

Finally, remember this–sometimes, the best timecard collection device is the simple paper and pencil.

Taxable Car Allowance

Employee must be charged with $1,000.00 taxable car allowance for a tax year. The $1,000.00 will be charged in one lump sum to the employee.

1. If you don’t have one, in Standard Rate Code Maintenance, setup a Rate Code called CAR as a Miscellaneous Pay Type.

2. If you don’t have one, setup a Deduction called CAR in Fringe/Deduction Maintenance. Make all flags for federal and state(s) Yes. If you feel the Car Allowance is not susceptible to FICA, FUTA, SUTA, or Worker’s Comp, please discuss that with your accountant.

3. In Employee Deduct/Fringe Maint. assign the CAR Deduction to the employee with a Fixed Dollar Amount of $1,000.00.

4. During the entry of an employees’ weekly TimeCard, add a Line, using the Rate Code CAR, for $1,000.00.

Note: the employee will be ‘charged’ with $1,000.00 because of the Miscellaneous Pay and the $1,000.00 will then be ‘deducted’ out because of the Fringe/Deduction. As a result the employee gets taxed for the Car Allowance.

5. If Car Allowance is to appear in a special box of the W2, you will have to put that amount manually in that special box in the W2 under Adjust Empl. Year End Earnings. The Gross Wages will already reflect the $1,000.00.