In the United States, payroll support consists of any financial, payments, loans, grants, tax credits or other assistance in connection with the CARES Act. Payroll legislation—such as the Fair Labor Standards Act (FLSA)—establishes regulation over aspects such as minimum wage, overtime pay, youth employment standards, and more.
Why is payroll compliance legislation important?
Payroll regulation compliance is important because it:
- Ensures employees are correctly compensated for their work
- Funds social service programs such as Medicare and unemployment
- Helps decrease penalties and lawsuits
- Can improve workforce morale
What are some other US federal payroll legislation?
Aside from state and local regulations, other federal legislation that employers should be aware of includes:
- Federal Insurance Contributions Acts (FICA): FICA is a payroll tax funding Social Security and Medicare
- Federal Unemployment Tax Act (FUTA): FUTA offers temporary income aid for workers who have been laid off or declared redundant
- Equal Pay Act (EPA): EPA helps prevent wage discrimination based on gender, requiring employers to pay men and women who perform similar jobs at the same workplace the same amount
- Davis-Bacon Act: The Davis-Bacon Act requires that businesses involved in public projects must compensate workers and mechanics with current wages
What do employers need to do to comply with payroll tax legislation?
A few basic actions for complying with payroll regulations include:
- Calculating wages accurately, including overtime
- Withholding the correct amount of payroll taxes from wages subject to payroll taxes, such as Social Security or Medicare
- Depositing tax liabilities on time with the accurate federal, state, and local tax agencies
- Filing payroll tax returns
What are some international payroll support laws?
Even if the organization’s headquarters is based in the United States, it must follow the local, state, and country laws where its employees work. A few international payroll regulations to pay attention to are:
- European Union Working Time Directive (WTD): This legislation protects employee health and safety and limits how many hours individuals can work per week, including overtime. WTD also mandates standards for breaks and paid leave.
- Labor Law of the People’s Republic of China: This Chinese regulation limits how many hours employees can work per day and per week, as well as provides guidelines on employment contracts, wages, labor disputes, working conditions, welfare, and overtime.
- Wages Protection System of the United Arab Emirates (UAE): Under the WPS, businesses in the UAE must register with the Ministry of Human Resources and Emiratisation and pay employees through an accredited financial institution by established deadlines. Employers who do not register or make the payments on time can be denied work permits.
- UK Employment Rights Act: This law guides businesses in the UK on how to create and manage employment contracts, reasonable dismissal notices, unfair dismissal, parental leave, and redundancy.
- Labor Standards Act of Japan: Japan’s Labor Standards Act covers minimum wage, working hours, overtime, annual leave, and other employment issues.
- German Act on Part-Time Work and Fixed-Term Contracts: This legislation in Germany pertains to increasing or reducing work hours during permanent employment.