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“Get ahead with our midyear payroll compliance checklist today!”

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TLDR:

Businesses with employees in multiple states need to ensure compliance with state and local labor and payroll laws. Key considerations include accurate recordkeeping, registration with state and local labor departments and tax agencies, handling wage garnishments and benefits deductions, applying for foreign qualification in states with nexus, complying with federal laws, and having tools and resources in place to manage multi-state payroll effectively.

Key Elements:

  • Businesses with employees in multiple states must comply with state and local labor and payroll laws.
  • Accurate recordkeeping, registration with state and local labor departments and tax agencies, and handling wage garnishments are essential.
  • Foreign qualification may be required in states where businesses have nexus, and compliance with federal laws is also crucial.
  • Effective management of multi-state payroll requires proper tools, resources, and legal advice.

If you have business clients with employees in more than one state, they must pay careful attention to the payroll-related rules and tax responsibilities in the states where their staff members live and work. With the middle of 2024 approaching, now is a perfect time to remind your business clients to assess if they’re complying with their payroll responsibilities. First things first, here’s a quick summary of what managing multistate payroll involves: Paying wages and salaries; Making the appropriate payroll deductions from employees’ compensation; Paying employment taxes and fees that employers are responsible for; and Administering benefits for employees. A business must pay attention to those tasks not only in the states where their company has a physical presence but also in states where they have remote employees.

The following checklist can help your clients assess if they have all the bases covered:

  1. Keeping accurate records about where their employees live and work.
  2. Registering with the appropriate state and local labor departments.
  3. Registering with the appropriate state and local tax agencies to withhold and remit employment-related taxes.
  4. Handling wage garnishments and voluntary benefits deductions correctly.
  5. Applying for foreign qualification in states where they have nexus.
  6. Ensuring compliance with federal labor and payroll laws.
  7. Having the tools and resources in place to manage multi-state payroll properly.

Handling payroll — let alone multistate payroll — has many moving parts. Even the slightest error can lead to major issues that require a painstaking process to correct. Payroll mistakes and missed deadlines can also lead to fines and other penalties. Hopefully, your clients are getting legal advice from an attorney, using reliable accounting software and looking to you for guidance. With your expertise and assistance in managing payroll that expands to multiple states, they can feel more confident everything is in good order no matter where they have employees.

Nellie Akalp, CEO, CorpNet.com

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