What Employers Need to Know About Payroll in South Carolina
South Carolina payroll laws can be complicated and tricky to navigate, particularly if you’re just starting out as an employer. Fortunately, there are resources available online to help you stay in compliance and avoid costly mistakes. Keep reading to learn everything you need to know about South Carolina payroll law!
Employment is not just about wages
First of all, it is important for employees to know that employers are allowed to deduct any fees on behalf of the employee, including 401(k) contributions, health, and dental insurance premiums and other medical expenses incurred on behalf of the employer. This can be really helpful for the employee who does not want a direct deposit or does not have their own checking account. The Internal Revenue Service (IRS) has created certain guidelines for what you are allowed to deduct from your paycheck. The two main types are dependent care expenses and moving expenses. If these deductions apply, they should be reported with Form W-2 so they can be counted as an adjustment when determining taxable income. The IRS also allows above-the-line deductions, which are subtracted from gross income. These include:
1) Traditional IRA contributions
2) Qualified education expenses
3) Self-employed retirement plan contributions
4) Health savings account contribution
5) Self-employed SEP contribution
Underpayment is a rampant problem
Like any other type of fraud, underpayment is hard to spot. One of the best ways that you can be proactive about finding and preventing this type of crime from happening on your watch is by having a regular payroll audit. For example, an annual or semi-annual audit where you go through every pay period for the last year and look for any inconsistencies.
Even more helpful than this approach would be the implementation of a document retention policy in your company’s HR manual that lays out what happens if there is ever an overpayment or underpayment. As soon as you know there has been an overpayment, then you can set aside the extra money until it needs to be paid back. If someone accidentally received too much pay due to human error (or computer error), then they will need to repay the amount overpaid. If someone accidentally took home less than they were owed, then they should get their unpaid wages once you find out about the discrepancy during your next payroll audit.
Simplifying payroll can save you time and money
Do you need to simplify your payroll? The Office of Economic Development (OED) offers a way for companies with 25 or fewer employees to simplify their payroll for free by using the Electronic Employee Verification System (EEVS). This service saves time and money because employers do not have to print, process, store, account for, collect signatures on, or deliver paychecks. The EEVS generates an earnings statement each pay period that is mailed directly to the employee. When there are no deductions from wages or benefits being withheld from an employee’s check, there is no paper trail—saving both the employer and employee valuable time and resources. If payroll becomes complicated and more than 25 employees, then EEVS will cost $10 per month per employee who has a Social Security number. For example, if there are three employees who need to be included in payroll processing with Social Security numbers, then it would cost $30 per month plus the $10 set-up fee.
Workers’ compensation insurance
Injuries and illnesses that occur during the course of employment are covered by workers’ compensation insurance. It is the employer’s responsibility to ensure this coverage has been selected and that the employee pays their portion of premiums or deductibles. Workers’ compensation insurance provides a way for employees who have sustained an injury on the job to get fair, prompt, and equitable compensation for injuries. Workers’ compensation also includes death benefits for dependents such as children, spouses, parents, and other relatives who are financially dependent on the worker who has died as a result of a work-related accident or illness. The benefits provided under the law include payments for medical expenses, lost wages, permanent disability (if applicable), death benefits (a lump sum payment equal to two years of lost wages) and vocational rehabilitation services.
Applying for unemployment benefits
If you’ve laid off any employees or been laid off yourself, the unemployment office is a good resource. However, be sure that you meet eligibility requirements, which may vary based on the company’s size and the length of time you were employed there. If you can’t find the information online, contact your local unemployment office for more details about how to apply for benefits. It’s important that these requests are made promptly–within 14 days–to ensure that eligible employees are paid timely and regularly if they need assistance as they look for new work. -If you haven’t applied for benefits yet, it’s best to do so soon before the three-month period expires.
-Remember that applications will take up to two weeks to process, so make sure you do this early!
-Finally, don’t forget to notify your employer once you’ve submitted an application. The unemployment office will send them a notice explaining why an employee filed an application and requesting that their wages continue being deposited into the appropriate account.
