Employer Payroll Tax
Employee Payroll Taxes
The federal minimum wage is $7.25 per hour for employees that are covered by the Fair Labor Standards Act. However, it is possible that an employee is also subject to the state’s minimum wage laws in which case, the employee is entitled to the higher of the two.
State laws vary concerning the timing of payment after a pay period ends and payment in light of holidays and weekends, as well as requiring specific paydays.
The majority of states require payment of wages semimonthly; however, some states allow for monthly payment of wages, while other states require weekly payment.
In the US, a full-time employee is typically engaged for a 40-hour work week. Part-time employees are classified as employees who work less than 30 hours a week. In addition, part-time employees are not entitled to medical benefits.
Nonexempt hourly employees must be paid one-and-a-half times their regular rate of pay for all hours worked over 40 in a workweek. Employers are not required to pay overtime for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.
FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. They should also meet the minimum salary threshold to qualify as exempt.
A few states require that employers provide employees with a day of rest each week and/or compensate them at a premium rate for work performed on the seventh consecutive day of work.
In the US, both the employer and employee contribute 6.20% for social security.
Both the employer and employee contribute 1.45% to Medicare.
There are 10 federal holidays in the United States and there are 9 US Stock Exchange holidays that are observed annually.
The federal Fair Labor Standards Act does not require employers to pay their employees for time not worked, such as holidays. The same is true in the vast majority of states. These benefits are generally a matter of contract between the employer and the employee.
Family care leave: The Family Medical Leave Act (FMLA) provides certain employees with up to 12 weeks of unpaid, job-protected leave per year or certain family and medical reasons (maternity leave, serious illnesses or if the employee needs to care for a spouse or child). Employers are required to maintain the employees’ health benefits during their leave and keep their job open.
Employees are eligible for leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles. Whether an employee has worked the minimum 1,250 hours of service is determined according to the Fair Labor Standards Act principles for determining compensable hours or work.
Many states will have additional Family, Medical, Maternity, and parental leave that will either work concurrent with FMLA leave or in addition.
Work related injury leave: In the United Stated, worker’s compensation insurance is paid by the employer. If an employee is injured during work, the worker’s compensation insurance will pay medical expenses. In the event that the employee is not able to work, worker’s compensation also covers wage loss until the employee is able to return to work.
When dismissing a worker the employer has a responsibility to ensure federal, state and city ordinances are followed when off-boarding an employee, some jurisdictions will impose a penalty if the following items are not processed as per the jurisdictions timeframe, this includes: providing the employee a termination/unemployment notice, processing final pay, and ensuring a workers COBRA (benefit) information processed.
Employees are employed ‘at will’ and U.S. law does not require a formal notice period to terminate an individual employee. Therefore, either party can terminate the employment relationship with no notice.
In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed and employers must give 60 days’ notice to impacted employees. There are a number of states which have their own provisions for mass layoff which go above the federal requirement.
There is no requirement for severance pay and it is a matter of agreement between an employer and an employee. Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed by both parties. Some employers choose to offer severance based on their employee’s length of service as an example.
No federal VAT