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401(K) RETIREMENT PLAN : 401(K) is an employer-sponsored qualified retirement savings plan. It allows you to save for your retirement while deferring any immediate income taxes on the money you save or their respective earnings until withdrawn.
ABSENCE : An excused absence is a period of administratively authorized absence from official duties. without loss of pay and without charge to an employee’s leave account.
ACH (Automated Clearing House): ACH is an electronic network for financial transactions in the U. S. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit payroll and vendor payments. ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills.
ADA (Americans with Disabilities Act) Enacted in 1990, this prohibits, under certain circumstances, discrimination based on disability. It affords similar protections against discrimination to Americans with disabilities as the Civil Rights Act of 1964,which made discrimination based on race, religion, sex, national origin, and other characteristics illegal. Disability is defined by the ADA as "a physical or mental impairment that substantially limits a major life activity." The determination of whether any particular condition is considered a disability is made on a case by case basis. Certain specific conditions are excluded as disabilities, such as current substance abuse and visual impairment which is correctable by prescription lenses. On September 25, 2008, President George W. Bush signed into law the ADA Amendments Act of 2008 (ADAAA). This was intended to give broader protections for disabled workers and "turn back the clock" on court rulings which Congress deemed too restrictive.
AFFIRMATIVE ACTION : Affirmative action is specific steps employers take to prevent discrimination and to address stereotypical thinking and biases that may impede employment opportunities for identified groups of people.
BACKGROUND CHECK : Companies use background checks to verify that an employee is who they say they are and is eligible for the job in which he or she is hired. Some licensed jobs, such as childcare workers require a criminal background check.
COBRA (Consolidated Omnibus Budget Reconciliation Act): COBRA benefits workers who lose health benefits. It gives workers and their families the right to choose to continue group health benefits provided by group health plans. These benefits are allowed for limited time periods under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events.
DOL (Department of Labor) The DOL aides’ wage earners, retirees, and job seekers by monitoring and improving working conditions, protecting health care and retirement benefits, and helping employers find work. The DOL also tracks economic factors such as changes in employment and prices. In addition, the DOL administers many Federal labor laws like unemployment insurance, minimum wage, overtime pay, and freedom from discrimination in the work place.
DIRECT DEPOSITS : A deposit in which funds (paychecks in particular) are directly credited to the employee’s individual bank account. This saves the employee a trip to the bank.
DISABILITY: A person is disabled under the Americans with Disabilities Act only if:
1)He or she has a physical or mental impairment; and
2)That impairment substantially limits a major life activity, such as walking, seeing, hearing, speaking, and breathing. Accommodation for disability is provided whenever reasonable.
DISCRIMINATION Discrimination is the treatment or consideration of others based on class or category such as religion, gender, race, or disability rather than individual merit.
DISPOSABLE EARNINGS: Disposable earnings is the amount left after legally required deductions have been made from gross pay for federal, state, and local taxes.
EEO (Equal employment Opportunity): Enacted in 1972, the EEO is designed to ensure fair treatment to all segments of society without regard to race, religion, color, national origin, or sex. The goal of this law and program is to make discrimination in employment illegal.
EFTPS (Electronic Federal Tax Payment System): The EFTPS is a tax payment system offered by the U.S. Department of Treasury to allow taxpayers to pay federal taxes electronically and free of cost.
EMPLOYEE HANDBOOK The employee handbook summarizes company behavior requirements, outlines benefits offered and also gives tools that can be used to enforce disciplinary action if needed. Employers design handbooks to answer employees' questions before employees ask them and to advise them on company policies that an employee might have never considered.
EPA (Equal Pay Act): Enacted in 1963, The EPA provides that the employer may not pay lower wages to employees of one gender than it pays to employees of the other gender employees within the same establishment for equal work at jobs that require equal skill, effort and responsibility, and that are performed under similar working conditions.
ERISA (Employee Retirement Income Security Act): Enacted in 1974, the ERISA is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. There have been a number of amendments to ERISA, expanding the protections available to health benefit plan participants and beneficiaries. In general, ERISA does not cover group health plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment, or disability laws. ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans.
FICA (Federal Insurance Contributions Act): A United States payroll tax imposed by the federal government on both employees and employers to fund Social Security and Medicare – federal programs that provide benefits for retirees, the disabled, and children of deceased workers. Social Security benefits include old age, survivors, and disability insurance (OASDI) while Medicare provides hospital insurance benefits.
FLSA (Fair Labor Standards Act): Enacted in 1938 and administered by the Employment Standards Administration’s Wage and Hour division within the U.S Department of Labor, the FLSA prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. For nonagricultural operations, it restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous.
FMLA (Family and Medical Leave Act): Enacted in 1993, the FMLA provides eligible employees up to 12 work weeks (480 hours) of paid or unpaid job-protected leave during any 12-month period for one or more of the following qualifying events:
1)A serious personal health condition that prevents an employee from performing his or her job,
2) Care for a child during the first year following birth, adoption or foster care placement,
3) Care for a family member who has a serious health condition.
While on FMLA leave, employees are entitled to benefits; however, their benefits are subject to changes that occur within the group plan while the individual is on leave. Employees may take FMLA as paid or unpaid leave. Employees on paid leave may use earned sick, vacation or personal leave and they will continue to have benefit contributions deducted from their pay. In all cases, FMLA must be approved and requests for paid and unpaid leave must meet the appropriate policy conditions. Sick leave is accrued paid leave that employees earn and can use. Sick leave may be used in the event of personal illness or injury, to care for an immediate family member, or in the case of the death of an immediate family member.
FORM 1099 : Form 1099 is a form promulgated by the Internal Revenue Service (IRS) and is used in the United States income tax system to prepare and file an information return to report various types of income other than wages, salaries, and tips (for which Social Security Administration Form W-2 is used instead).
FORM W-2 (Wage and tax statement): The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck. Every employer engaged in a trade or business who pays remuneration for services performed by an employee, including noncash payments, must file a Form W-2 for each employee (even if the employee is related to the employer) from whom:
1)Income, social security, or Medicare tax was withheld.
2)Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate
FORM W-2C (Correction to wage and tax statement): Used to correct a previously filed Form W-2. A separate form is used for each year needing correction.
FORM W-4 (Employees withholding allowance certificate): Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. Consider completing a new Form W-4 each year and when your personal or financial situation changes.
FORM W-9 (Request for taxpayer identification number and certification): A person who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income.
FUTA (Federal Unemployment Tax Act): The FUTA, with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a Federal and a State unemployment tax.
GROSS PAY : The total of an employee's regular remuneration including allowances, overtime pay, commissions, and bonuses, and any other amounts, before any deductions are made.
HIPAA (Health Insurance Portability and Accountability Act): Enacted in 1996, HIPAA is an amendment to the Employee Retirement Income Security Act (ERISA), to provide new rights and protections for participants and beneficiaries in group health plans. Understanding this amendment is important to your decisions about future health coverage. HIPAA contains protections both for health coverage offered in connection with employment (group health plans) and for individual insurance policies sold by insurance companies (individual policies). If you find a new job that offers health coverage, or if you are eligible for coverage under a family member's employment-based plan, HIPAA includes protections for coverage under group health plans that limit exclusions for preexisting conditions, prohibit discrimination against employees and dependents based on their health status and allow a special opportunity to enroll in a new plan to individuals in certain circumstances.
MINIMUM WAGE : A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labor.The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
NEGLIGENT HIRING The legal theory of negligent hiring is based on the premise that an employer can be liable for the violent acts or wrongdoing of its employees if it did not adequately investigate employees’ backgrounds or qualifications. Negligent hiring claims often involve employees who are in a position to pose a threat of injury to the public (such as a driver or delivery person) and who subsequently attack another employee or an outside third party (such as a client or customer). The employer's legal liability typically depends on the circumstances leading up to the employee's misconduct and on whether the employee was acting within the scope of his employment duties.
NET PAY : Net pay is the remaining amount after deductions such as taxes and insurance are made from the gross salary, where net means ultimate.
NEW HIRE REPORTING New hire reporting is the process by which you, as an employer, report information on your newly hired employees to a designated state agency shortly after the date of hire. New hire reports are matched against child support records at the state and national levels to locate parents who owe child support. This is especially helpful for interstate cases (in which one parent lives in a different state from his or her child), which are often the most difficult cases for states to resolve. All employers are required to report certain information on newly-hired employees to a State Directory of New Hires and each state has their own requirements. Generally, the reported information contains the employers’ information along with the new hires name, social security number, hire date and address.
OSHA ( Occupational Safety and Health Administration) OSHA's mission is to prevent work-related injuries, illnesses, and deaths. Since the agency was created in 1971, occupational deaths have been cut by 62% and injuries have declined by 42%.
PAYROLL Payroll is one of a series of accounting transactions dealing with the process of paying employees for services rendered. It does so after processing the various requirements for withholding of money from the employee for payment of payroll taxes insurance premiums, employee benefits, garnishments and other deductions.
PAYROLL CHECK Payroll check is a check issued in payment of wages or salary.
PAYROLL REGISTER The payroll register is an accounting document that provides a summary of the payroll information for a pay period. The payroll register will list all employees who were paid during the pay period, along with their various deductions and net pay.
PAYROLL TAX : Payroll tax generally refers to a tax which employers are required to withhold from employees paychecks. Employers are required to withhold federal income tax, social security tax and Medicare tax. Together, the social security and Medicare are known as the FICA tax. In some states, employers may be required to withhold state income tax, or even city and/or local income tax.
PRE-EXISTING CONDITION : A pre-existing condition is a medical condition present before enrollment date in a new group health plan. Under HIPAA, the only pre-existing conditions that may be excluded under a pre-existing condition exclusion are those for which medical advice, diagnosis, care or treatment was recommended or received within the 6-month period before the enrollment date. (Enrollment date is the first day of coverage, or if there is a waiting period to get into the plan, the first day of the waiting period.). If you had a medical condition in the past, but have not received any medical advice, diagnosis, care or treatment within the 6 months prior to your enrollment date in the plan, your old condition is not a pre-existing condition to which an exclusion can be applied. Moreover, under HIPAA, pre-existing condition exclusions cannot be applied to pregnancy, regardless of whether the woman had previous health coverage. In addition, a pre-existing condition exclusion cannot be applied to a newborn, adopted child under age 18, or a child under age 18 placed for adoption as long as the child became covered under health coverage within 30 days of the birth, adoption or placement for adoption and provided that the child does not incur a subsequent 63-day break in coverage.
PRE-TAX An amount removed from pay before taxes are deducted. For example, some 401(k) plans are a pretax contribution - the deduction is made before the taxes are figured, thus lowering your tax liability.
SDI (State Disability Insurance): The SDI program provides temporary benefit payments to workers for non work-related disabilities. SDI tax also provides Paid Family Leave (PFL) benefits. PFL is a component of SDI and extends benefits to individuals unable to work because they need to care for a seriously ill family member or bond with a new child.
SECTION 125 CAFETERIA PLAN The Section 125 Cafeteria Plan is the section of the Internal Revenue Service (IRS) regulations which allows an employer to deduct employee contributions for certain benefits on a pre-tax basis, such as health, dental and vision premiums. This reduces the amount of federal, state and local taxes you owe.
SERIOUS HEALTH CONDITION A serious health condition includes any illness, injury, impairment, or physical or mental condition that involves:
1)Impatient care (i.e., an overnight stay), including any period of incapacity or any subsequent treatment in connection with the inpatient care; or
2)Continuing treatment by a health care provider. Thus, it includes temporary conditions such as a broken leg, as well as a chronic condition like diabetes.
SEXUAL HARASSMENT Sexual harassment is unwelcome behavior from either a coworker or advisor that targets others and interferes with a daily work routine. It can cause a hostile and uncomfortable work environment for any person involved.
SUTA (State Unemployment Tax Authority): SUTA is paid by an employer and is added to a fund that can be used by a qualifying employee in the event she is unemployed. The tax is determined by taxing a percentage of a worker's salary that is capped at a certain annual pay level.
USERRA (Uniformed Services Employment Rights and Reemployment Act): USERRA provides extensive rights to employees who are forced to leave their employment position for service in the uniformed services. Due to the recent expansion in military activity around the world, employers of every size and type should become familiar with USERRA and its specific requirements.
W/C (Workers Compensation): W/C is a form of insurance that provides wage replacement and medical benefits for employees who are injured in the course of employment.
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