Not all payroll vendors provide equal services & systems. Request a list of current payroll types: municipal, BOE, etc. for references.
I. Most Important - Does the vendor you are considering have an electronic tax payment service which Eliminates Risk by Keeping You in Control of Your Tax Dollars?
a. Will the prospective vendor be in compliance with N.J.A.C. 5:30 - 17 Electronic Disbursement Controls for Payroll Purposes Law of May 2003?
b. Who has control of the Tax Deposits?
c. Does the prospective vendor impound all payroll tax liabilities & hold them in an escrow account prior to payment?
II. Are you confident that the vendor you are considering can do a municipal, BOE, housing authority, etc. payroll correctly?
a. Will they calculate the required medical deduction or make you do it?
b. Will they calculate pension correctly on a per payroll basis?
c. Will they be calculating pension according to the NJ State Pension Board requirements?
d. Can they handle the Defined Contribution Retirement Program (DCRP)?
e. Do they understand & handle Pension Shortage & Reimbursement requirements correctly?
f. Do they provide Quarterly PERS & PFRS reports exactly in the ROC format?
g. Do they handle multiple Police earnings that differentiate from non-pensionable & pensionable?
h. Do they breakout Extra Compensation into clearly identified specific earning types?
i. Do they split out wages automatically to specific budget line items?
j. Can they create a budget interface data file that will eliminate the need to manually enter the data into the budget G/L system?
k. Can they issue Agency & Garnishment Deduction Checks out of the payroll agency account on a per payroll, monthly, quarterly, or any multiple frequency basis?
l. Do they have Accrual Reporting with management reports & balances on check stubs?
m. Do they have an automatic W-2 Group Term Life Insurance (over $50K) imputed income calculation & report?
n. Do they have an easy way to handle Third Party Sick Pay calculations & reports?
o. Do they have an easy way to handle Worker’s Compensation Reductions and Reimbursements?
p. Do they provide a remote services report viewer system to allow for same day review and printing of all payroll reports within one hour of processing?
Both Federal and State Regulations are setting the Industry Standards for common law employers that engage the services of a Third-Party Payer.
1. STATE OF NEW JERSEY (CFO Notice #2003-5)
1-1 N.J.A.C. 5:30-17 Provides Formal Authority For Local Governments, Counties, Authorities, And School Districts To Hire Third Party Payroll Services/Disbursing Services.
1-2 N.J.A.C.A. 52:27D – 20.1 Authorized Adoption of The Rules.
1-3 A) When The Rules Do Not Affect Vendors.
B) When Compliance Is Required.
C) Auditors Directed To Review For Compliance.
D) Practices Covered By Notice Should Be Shared With Local Unit Legal Advisor.
1-4 LFN #2009 – 18 (Follow-up To CFO #2003 – 5).
1-5 Twelve Page Guide To Electronic Disbursement Controls For Payroll Purposes. Compliance Required.
2. IRS.GOV
2-1 Know Your Tax Responsibilities As An Employer
3. FEDERAL – DEPARTMENT OF THE TREASURY
3-1 Internal Revenue Service.
3-2 IRC 6672 (TFRP) Effective July 1, 2011.
3-3 Interim Guidance For Conducting Trust Fund Recovery Penalty Investigations In Cases Involving A Third-Party Payer.
4. NACHA – ACH NETWORK RULES
4-1 Effective March 18, 2011.
4-2 IRC 6672 (TFRP) Effective July 1, 2011.
Can your vendor or the vendor you are considering process your payroll correctly?
| CASA Does | |
| Are they calculating the required medical deduction? | ✓ |
| Are they calculating pension correctly on a per payroll basis? | ✓ |
| Are they calculating pension according to the NJ State Pension Board requirements? | ✓ |
| Can they handle the Defined Contribution Retirement Program (DCRP)? | ✓ |
| Do they understand & handle Pension Shortage & Reimbursement requirements correctly? | ✓ |
| Do they provide Quarterly PERS & PFRS reports exactly in the ROC format? | ✓ |
| Do they handle multiple Police earnings that differentiate from non-pensionable & pensionable? | ✓ |
| Do they provide a Special Report of Social Security Contributions (the figures are used for the State DOENET System)? | ✓ |
| Do they breakout Extra Compensation into clearly identified specific earning types? | ✓ |
| Do they split out wages automatically to specific budget line items? | ✓ |
| Do they issue Agency & Garnishment Deduction Checks out of the agency account on a per payroll, monthly, quarterly, or any multiple frequency basis? | ✓ |
| Do they have Accrual Reporting with management reports & balances on check stubs? | ✓ |
| Do they have an automatic W-2 Group Term Life Insurance (over $50K) imputed income calculation & report? | ✓ |
| Does their system have an easy way to handle Third Party Sick Pay calculations & reports? | ✓ |
| Do they have an Electronic Tax Payment Service, which eliminates Risk by Keeping You in Control of your tax dollars? | ✓ |