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Unpaid leave as cost-cutting measure
Benefits & Compensation
Unpaid leave as cost-cutting measure
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Hello, we're trying to implement 10-20 days of unpaid leave per year per EE.
Has anyone done this and what are the implications for payroll?
Does the ER still pay any sort of payroll taxes or if
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Forums » Topic Forums » Benefits & Compensation » Unpaid leave as cost-cutting measure
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Unpaid leave as cost-cutting measure
posted at 3/23/2009 4:53 AM EDT
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Posts: 59
First: 9/5/2008 Last: 9/4/2009 |
Hello, we're trying to implement 10-20 days of unpaid leave per year per EE.
Has anyone done this and what are the implications for payroll? Does the ER still pay any sort of payroll taxes or if the EE does not show up on a particular payroll report - the ER does not have any tax liability? Any insight would be greatly appreciated. Thank you. |
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Unpaid leave as cost-cutting measure
posted at 3/23/2009 5:41 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
The employer is only responsible for paying taxes on wages -- either worked or paid timeoff. You would keep them on payroll unless you want to somehow change their status back and forth. They would still count during that week as employees for counts like FMLA employer eligibility and COBRA employer size eligibility.
You have to be very careful though when it comes to exempt employees. They must have a whole workweek off with NO interaction/work being done during the whole week. The only exceptions for partial pay are for FMLA or first/last week of work OR if the EMPLOYEE takes a personal/sick day with no balance left in a sick leave bank. |
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Unpaid leave as cost-cutting measure
posted at 3/23/2009 7:10 AM EDT
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Posts: 59
First: 9/5/2008 Last: 9/4/2009 |
Thank you.
99% of our workforce are Exempt. I was thinking to leave them on payroll...the 2nd issue is that we pay pre-tax for transit, health premiums and 401k deductions... it will be a bit of a nightmare to keep track and have all those deductions taken out after the EE comes back from leave... |
Forums » Topic Forums » Benefits & Compensation » Unpaid leave as cost-cutting measure
