HR and Payroll FAQ's

Here are some HR/ Payroll FAQ's, courtesy of the American Association of Professional Bookkeepers: Good stuff to keep on hand.

Must we pay an exempt employee who is out on disability?

This is a matter of company policy, not federal law. Typically, a policy (or state law for state-required disability) stipulates how employees will be paid when on short- or long-term disability and whether the payments will be made through payroll or an insurance company.

If an employee claims exempt from FITW on a W-4, are his wages FICA exempt, too?

No. You must withhold and pay FICA tax regardless.

We require an employee to live in an apartment and pay the rent. Is this taxable income to him?

The rent paid on his behalf is not taxable income if there is a business purpose for his living in that apartment complex (not simply in that geographical area), such as a job as superintendent or on-site building manager. Otherwise, the rent paid is taxable income to him.

If we terminate employees, must we give severance pay?

No, FLSA does not require severance pay. However, you may be required to pay severance if your company has a pattern or practice of doing so.