Are you in compliance? As of April 9, 2021, here’s a list of the top 5 payroll compliance issues that provide added risk for Minnesota businesses. We offer rock-solid compliance review of your in-house payroll to help mitigate your risk.

  1. American Rescue Plan Act of 2021
    • Tax credits are available but only to employers with fewer than 500 employees and up to certain caps. Is Form 941 prepared correctly to reflect COVID-19 wages?
    • Employees can use Emergency Paid Sick Leave (EPSL) from April 1 through September 30, 2021. (See reasons listed below). Be aware that any inconsistencies in the granting of leave could potentially lead to a discrimination claim.
    • Are you following the 4-1-21 changes of the Emergency Family and Medical Leave (EFMLA)?
  2. Employee Retention Credit for 2020 and 2021
    • Did you take the Employee Retention Credit (ERC)?
    • Did you take advantage of all ERCs?
    • We can go back and review, as well as help you prepare going forward.
    • Did you prepare Form 941 and W-2s correctly?
  3. PPP loan forgiveness applications
    • Do you have the correct reports for PPP loan forgiveness and ERC to maximize loan forgiveness?
  4. Completing new W-4 forms & your state specific W-4 forms, when needed
    • Your employees must complete the Federal W-4 Form and a state specific W-4 form when they begin employment or when their personal or financial situation changes so that the employer can withhold the correct income tax from your pay.
  5. Completing and maintaining MN Department of Labor Employee Notice
    • All employers must provide each employee with a written notice at the start of their employment and keep a signed copy of the notice on file, as of July 1, 2019. The notice must contain required information about an employee’s employment status and terms of employment.

Reasons for Using EPSL and EFMLA

Starting on April 1, employees can take EPSL or EFMLA for the same set of reasons, which is a useful simplification. The following are acceptable reasons for taking these leaves:
  1. When quarantined or isolated; subject to federal, state, or local quarantine or isolation order
  2. When advised by a health care provider to self-quarantine because of COVID-19
  3. When the employee is:
  • Experiencing symptoms of COVID-19 and seeking a medical diagnosis
  • Seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 because they have been exposed or because their employer has requested the test or diagnosis
  • Obtaining a COVID-19 vaccination or recovering from any injury, disability, illness, or condition related to the vaccination
4. When caring for another person who is isolating or quarantining on government or doctor’s orders
5. When caring for a child whose school or place of care is closed due to COVID-19
Employees and employers will—in most cases—want to exhaust EPSL first, since it has a higher tax credit, except when used to care for others.

Our payroll experts can review your in-house payroll for compliance.