1. Whatproceduresareincludedinatypicalpayrollaccountingsystem?
3. In staffing their offices, some firms encourage in-house referrals (recommendations from present employees). What are possible objections to this practice as a means of obtaining job applicants? What advantages may the firm that uses in-house referrals realize? Consider whether you would recommend your friends to your current employer.

12/11/2016 ACC105 Lesson 1 Lesson 1 Payroll and Personnel Records Print Introduction: Connecting Your Learning Lesson 1 provides an overview of the payroll and human resource professions. and the various regulations that affect them. Most people have participated in these operations at one time or another, whether as a prospective employee looking for a job, a business owner needing to hire employees, a current employee looking forward to payday, or as an employee participating in the payroll processing cycle. If you are currently working, you will nd it helpful to look at your paycheck for an example of the various deductions taken out of your gross pay. You will learn about these deductions during this course. Generating a paycheck is the ultimate goal for both employees and business owners. Employees want to be paid, and employers know employees are needed to further their businesses. However, issuing or receiving the paycheck is just the nal step in a very long process of hiring and training employees, determining hours worked, calculating and withholding taxes, and updating and maintaining payroll records. As an employer, knowing applicable rules and regulations can save you time and money, as well as help you avoid unnecessary lawsuits. You will need to know what records to keep, and the types of information you must obtain from both current and prospective employees. This lesson covers these topics and will provide you with a brief look at the topics explored in upcoming lessons. Payroll accountants are frequently in demand. This class may be the start of a new career for you. This knowledge will also be helpful if you decide to operate your own business, even if you do not hire employees. Readings, Resources, and Assignments Required Textbook Readings Chapter 1: "The Need for Payroll and Personnel Records" Multimedia Resources Textbook Companion Web site Required Assignments Short-Answer Essays Accounting Subject Guide: A one-stop shop for all of your accounting related research needs. Check Prior Knowledge You are not required to turn in the answers to the following questions; however, they will help you focus on this lesson. What is your reason for taking this course? How do you feel it will help you either professionally or personally? Think about what you already know about payroll and personnel records. What roles do a company's human resources and payroll departments play within a business? How do these two departments affect you as an employee or business owner? Should a company outsource its payroll operations? Why or why not? How much do you know about the various payroll rules and regulations? What are the risks of not understanding or following these regulations? Focusing Your Learning Ocial course competencies covered in this lesson: Describe the fundamental payroll tax laws. Identify methods of maintaining payroll records. Lesson Objectives By the end of this lesson, you should be able to: 1. Identify the various laws that affect employers in their payroll operations. https://www.riolearn.org/content/acc/acc105/ACC105_INTER_0000_v4/lessons/lesson01.shtml?encryptedsectionid=WlFvQVhmUmt5VkxGeVNPOVpOUThr... 1/5 12/11/2016 2. 3. 4. 5. ACC105 Lesson 1 Examine the recordkeeping requirements for laws related to payroll. Describe the employment procedures generally followed in a human resources department. Recognize the various personnel records businesses use and the types of information shown on each form. Identify the payroll register and employee earnings records. The textbook will guide you through each chapter and point out the concepts and topics that the lesson objectives address. Be sure to read the textbook's "Preface" section before you start the rst chapter. This emphasizes additional features of the book that will help you succeed in this course. The textbook companion Web site is also an excellent place for you to visit during each lesson. Key Terms Access the Textbook Companion Web site, and review the Glossary to ensure you understand the key terms for the chapter. You can also access ash cards on the site and practice the key terms. Approaching the Objectives No matter the size or type of organization, payroll is always one of the most important business functions. Ensuring that paychecks are properly authorized, generated for the correct amounts, and prepared in compliance with various laws can be a challenge. The Payroll Profession Given the importance of their work, payroll professionals have become increasingly important to the accounting profession. Whether you are an entry-level payroll clerk or a payroll supervisor, as a payroll employee, you must be aware of changes in your eld and remain technically competent. Employees can join the American Payroll Association (APA) to obtain upto-date training. You can also become certied as a payroll accountant through an exam process. The APA has established a Code of Ethics that sets the direction for those in the industry. Major Federal Payroll Laws This lesson briey summarizes major federal payroll laws. Upcoming lessons discuss each of these laws in greater detail. Figure 1-2 in the textbook summarizes the various data that must be maintained by each law. The Fair Labor Standards Act (FLSA), also known as the Federal Wage and Hour Law, establishes the federal minimum wage ($7.25 per hour as of July 24, 2009), as well as additional requirements for equal pay for equal work, employment of child labor, public service contracts, and wage garnishments. State minimum wage laws may differ from federal laws. For the purposes of this class, you will use the payroll numbers listed in the textbook. The Raise the Wage Act was introduced in the U.S. Senate in 2015. If passed, it would raise the federal minimum wage from $7.25 to $8.00 per hour starting three months after its enactment, and increase the wage by a dollar an hour over the next four years. After that, the Secretary of Labor would determine the amount of the increase annually. This legislation would also increase the minimum wage for employees who receive tips as explained in the article "Minimum Wage for Workers Who Receive Tips." The legislation must pass both the Senate and the House for the increases to go into effect. Until such legislation is passed, a minimum wage increase is uncertain. The Federal Insurance Contributions Act (FICA), or Social Security, imposes two taxes on employees and employers: one tax finances the federal OldAge Survivors and Disability Insurance Program (OASDI), and the other finances the Medicare program. Income Tax Withholding Laws cover the income tax levied on most employee earnings, which is deducted from employee gross pay. Federal, state, and local governments may impose these taxes. Unemployment Tax Acts apply at both the federal (FUTA) and state (SUTA) levels for unemployment benefits. Fair Employment Laws and Executive Orders This lesson also discusses the various employment laws that ensure fair employment practices throughout the country. Many of these laws deal with discrimination based on age, race, color, religion, gender, or national origin. These include the following: Civil Rights Act of 1964 Age Discrimination in Employment Act Americans with Disabilities Act https://www.riolearn.org/content/acc/acc105/ACC105_INTER_0000_v4/lessons/lesson01.shtml?encryptedsectionid=WlFvQVhmUmt5VkxGeVNPOVpOUThr... 2/5 12/11/2016 ACC105 Lesson 1 You will need to know the major provisions for each of these acts, including information such as which employees are covered and any minimum dollar provisions. In addition to these acts, several other laws affect the payroll and personnel records that a company must retain. Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 Immigration Reform and Control Act of 1986 Family and Medical Leave Act of 1993 Uniform Services Employment and Reemployment Rights Act of 1994 Employee Retirement Income Security Act of 1974 Affordable Care Act of 2010 (ACA) State laws also affect the need for payroll and personnel records, including workers' compensation and state disability-benet laws. Human Resources System If you have ever had a job in business or government, you have probably dealt with human resources in one way or another. Human resources often encompass recruiting, hiring, training, and terminating employees. With these functions come extensive recordkeeping requirements. The following lists the basic documents that describe most human resource functions. Requisition for personnel - This lets the human resource department know that additional employees are needed. This process may happen through written notification such as a memo, or it may be handled electronically through email or some other electronic notification system. Job posting sheets - Companies use these sheets to post information about open positions with the company. They often include minimum experience and education qualifications as well as a description of essential tasks pertaining to the position. Application for employment - Most people are most familiar with this document. Through these forms, potential employees provide personal information, educational and work experience, and personal references that the company may contact. Reference inquiry form - Some businesses use this form to check employee references. Checking references can be beneficial for prospective employers but often provides very little information, as past employers sometimes are only willing to verify dates of employment. Hiring notice - This notice is sent to the payroll department to let them know when a new employee is hired. This allows the payroll department to add him/her to their records. The notice typically includes information such as employee name and number, position, pay rate, and starting date. Employee history record These records may include information regarding the employee's attendance, work performance (evaluations), promotions, and historical salary information, as well as any corrective actions taken (letters of reprimand, written warnings, etc.). Change in payroll rate form - This form notifies the payroll department about a change in an employee's pay rate. It may or may not originate with the human resources department. The form will generally include the employee's old pay rate, the new rate, the effective date for the change, and who authorized the change. As you can see, the human resources department often works closely with the payroll department. To learn more about maintaining personnel records, visit The Management Advantage Web site. Payroll Accounting System https://www.riolearn.org/content/acc/acc105/ACC105_INTER_0000_v4/lessons/lesson01.shtml?encryptedsectionid=WlFvQVhmUmt5VkxGeVNPOVpOUThr... 3/5 12/11/2016 ACC105 Lesson 1 As with human resources, most people are familiar with the payroll department. Without a payroll department, employees aren't paid. For many businesses, payroll is their largest expense. This is especially true of a service company. The size and level of automation within payroll departments may vary drastically. Regardless of the complexity of the system, it is essential that businesses have a sucient payroll accounting system. Most companies automate their payroll function. The payroll accounting system relies on several processes and records to function properly. Employee timesheet - This is usually the first component that starts the payroll process. Employee timesheet formats can vary greatly. Time worked may be recorded and calculated manually, or it may be automatically generated from employees punchingin or scanning/swiping employee badges. Salaried employees may not be required to prepare a timesheet. You'll hear about this in more detail in Lesson 2. Payroll register - This summarizes the current period's payroll data. Detailed information located in the register helps prepare the payroll accounting entries and various reports. The payroll register comes in many different formats depending on the sophistication of the company's financial and payroll system. Regardless of the format used, similar data is included for each employee. Employee earning record - This record summarizes payroll data for each employee. Data from this record is used to prepare the employee's W2, Wage and Tax Statement, at the end of the year. Paycheck - The amount an employee is paid represents the net pay calculated on the payroll register. Many times, employees will not receive an actual, hard copy paycheck, but rather have monies directly deposited into their bank accounts. In most cases, employees will receive a pay stub or voucher showing the detailed payroll data with total earnings and any applicable deductions. Some companies choose to outsource their payroll function. This is a smart choice for those businesses that don't have the staff or applicable knowledge to handle this function themselves. Here are two Web articles that provide some additional insight into outsourcing payroll. IRS - "Outsourcing Payroll Duties" Vision HR - "Benets of Outsourcing Payroll" Summarizing Your Learning The following questions will provide you with a self-assessment of your learning and will allow you to make selective adjustments to ensure that you fully understand the content of this lesson. You are not required to submit the answers to these questions. Review the key terms/concepts for this lesson listed at the end of the chapter. Make sure you understand the concepts associated with each key term. The publisher has provided you with the applicable page reference where the key term is discussed. Complete the exercises and activities found within the assigned chapter. These activities will also help you understand the concepts. Revisit the questions asked in the "Check Prior Knowledge" section above. Have your answers changed? How or why? Name at least four of the laws or regulations that govern payroll, and explain what the law or regulation entails. If you currently have a job, describe the payroll procedures followed by your human resources department. List the payroll records most likely maintained by your human resources department. Why is each one critical? Visit the Textbook Companion Web site. Use the drop-down menu at the top of the page to select the chapter assigned for this lesson. Do the activities, quizzes, and problems listed for the assigned chapter. Completing these will strengthen your understanding of the concepts. Assessing Your Learning Graded Assignments The following are required assignments for this lesson. 1. Read Chapter 1: "The Need for Payroll and Personnel Records." 2. Complete the Lesson 1 Short-Answer Essays (40 points). Short-Answer Essays Note: Please use the tax rates listed in the textbook to complete all course assessments even though actual rates may have changed since the textbook was published. 1. Answer the questions below in short-answer essay format. Your response must address all parts of each question and include examples where appropriate. Make sure to cite any references you use. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number. Refer to the grading matrix in the Course Introduction for information on how your instructor will grade the essays. Short-Answer Essay Questions 1. What are the typical procedures followed by a human resources department when hiring new employees? https://www.riolearn.org/content/acc/acc105/ACC105_INTER_0000_v4/lessons/lesson01.shtml?encryptedsectionid=WlFvQVhmUmt5VkxGeVNPOVpOUThr... 4/5 12/11/2016 ACC105 Lesson 1 2. What procedures are included in a typical payroll accounting system? 3. In stang their oces, some rms encourage in-house referrals (recommendations from present employees). What are possible objections to this practice as a means of obtaining job applicants? What advantages may the rm that uses in-house referrals realize? Consider whether you would recommend your friends to your current employer. 2. Submit the assignment, which is Lesson 1 Short Answer Essays in the Gradebook. Copyright 2016 Rio Salado College. All Rights Reserved. https://www.riolearn.org/content/acc/acc105/ACC105_INTER_0000_v4/lessons/lesson01.shtml?encryptedsectionid=WlFvQVhmUmt5VkxGeVNPOVpOUThr... 5/5