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PayTech October Newsletter

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At PayTech, we are dedicated to keeping you up-to-date on all the latest news that concerns you, your business, and the services we provide! Read on to see PayTech’s October Updates on payroll, HR, accounting, and our general market news.

Market Update

Key Employee Contracts:

One of the decisions business owners must make surround key employees.  There are significant considerations that take some forethought and discussion. Business owners should consult an attorney to write and/or review the contract.  The most common contract is the non-compete clause.  The contract is to protect owners from their sales force and marketing department leaving to go to the competition and taking business with them.  However, a non-compete cannot take away the employees ability to work.  Some considerations should be time, geography, and type of business.  A non-solicitation clause of company clients and proprietary information is fair.  It is fair to require all company information be returned.   It is not fair to say that your salesman cannot ever sell a widget again.  Another reason for a key employee contract may be intellectual property developed by the employee during the employment.  It needs to be determined before the employee starts a project who owns the developed product.  These are just a few of the considerations employers must look at when entering into a contract with an employee.  Forbes offered a 14 point check list on their website in November of 2013.  The link is included.  https://www.forbes.com/sites/allbusiness/2013/11/11/negotiating-employment-agreements-checklist-of-14-key-issues/

Payroll Update

Guarding Against Phantom Employees
One of the most common way that companies are embezzled from is through payroll.  Phantom employees are set up into the payroll system and employers may never see the payroll register. Payroll companies have no way of knowing whether or not there have been new hires in a pay period, other than what has been added into the system.   Most companies pay employees through direct deposit or employees receive their check from payroll personnel.  Neither option protects owners from Phantom employees.  Phantom employees only exist on payday.  Owners need to protect themselves by ensuring they are only paying real employees.  There are some options to ensure that there are no phantom employees on payroll. Periodically, do a surprise physical payout and  hand deliver payroll either personally or by independent auditors.  If your company is large enough that you do not know all of your employees personally, have them sign for payroll and verify with an id.  Another option is to check the direct deposit file for deposits into the same account.  Ask your customer service representative for help if you dod not know how to get this file.  

HR Update

EEO-1 Report Deadline Extended to October 30
The Equal Employment Opportunity Commission (EEOC) requires certain companies over a certain size to submit a report categorizing their employees by race/ethnicity, gender, and job category. This demographic survey, called the EEO-1, is due by October 30 (most years this deadline is September 30). Companies that meet the following criteria are required to file the report:
• Have 100 or more employees; or
• Have fewer than 100 employees if the company is owned by or affiliated with another company and the entire enterprise employs a total of 100 or more employees; or
• Is a Federal government prime contractor or first-tier subcontractor with 50 or more employees and a contract or subcontract amounting to $50,000 or more; or
• Serves as a depository of Government funds in any amount; or
• Is a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Notes.
If you’re required to file the report, here are some things to keep in mind:
• The EEOC would prefer that you file online.
• If you are a single-establishment company, you are required to submit only one EEO-1 data report. If you are a multi-establishment company, then you are required to submit a separate report for each location of your company.
• Identify the ethnicity of employees based on the way they identify themselves. If they refuse to self-identify, then use employment records or visual observation.
• Pull employment data from one pay period in July, August, or September.
• Include both full-time and part-time employees.
• Include employees who telework in the survey for the location to which they report (not where they live). 
• You do not need to include applicant data.
• Don’t forget to click the “certify report” button—without doing so, the EEOC will not receive your report!

Accounting Update

Start thinking about preparing now to make the end-of-year accounting process easier!

  • Check your list of vendors to make sure you have W-9 forms on file for independent contractors used during 2015.
  • Check with your employees to make sure they don’t have address changes or need to change their withholding (Form W-4).
  • Does your profit or loss so far this year look different from last year? If so, we may need to look at changing your estimated payments or salary. Check with your accounting contact for help with looking at your company’s financial statements for this year.
  • If you haven’t already, now is a good time to catch up with archiving; box up those 2014 records. Remember: in general, accounting records need to be kept for seven tax years. Scanning documents can be a great option to safe space. Questions on what you need to keep and what you can shred? Send an email or give your accounting contact a call.

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