Payroll Massachusetts, Unique Aspects of Massachusetts Payroll Law and Practice
The Massachusetts State Agency that oversees the collection and reporting of State income taxes deducted from payroll checks is:
Department of Revenue
51 Sleeper St.
Boston, MA 02205
(617) 887-6367
(800) 392-6089 (in state)
www.state.ma.us/dor/dorpg.htm
Massachusetts allows the use of the federal W-4 form if exemptions claimed are the same for state and federal. Otherwise, you must use "M4 Massachusetts Employees Withholding Exemption Certificate" for Massachusetts income tax withholding.
Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In Massachusetts cafeteria plans are not taxable for income tax calculation; taxable for unemployment insurance purposes. 401(k) plan deferrals are not taxable for income taxes; taxable for unemployment purposes.
In Massachusetts supplemental wages are required to be aggregated for the state income tax withholding calculation.
You must file your Massachusetts State W-2s by magnetic media if you are required to file your federal W-2s by magnetic media.
The Massachusetts State Unemployment Insurance Agency is:
Division of Employment Security
Charles F. Hurley Bldg.
19 Staniford St., 5th Fl. DET
Boston, MA 02114-2589
(617) 626-6855
http://www.detma.org/
The State of Massachusetts taxable wage base for unemployment purposes is wages up to $14,000.00.
Massachusetts requires Magnetic media reporting of quarterly wage reporting if the employer has at least 250 employees that they are reporting that quarter.
Unemployment records must be retained in Massachusetts for a minimum period of four years. This information generally includes: name; social security number; dates of hire, rehire and termination; wages by period; payroll pay periods and pay dates; date and circumstances of termination.
The Massachusetts State Agency charged with enforcing the state wage and hour laws is:
Department of Labor and Industries
Fair Labor and Business Practices Division
200 Portland St.
Boston, MA 02114
(617) 727-3465
http://www.ago.state.ma.us/
The minimum wage in Massachusetts is $6.75 per hour.
The general provision in Massachusetts concerning paying overtime in a non-FLSA covered employer is one and one half times regular rate after 40-hour week.
Massachusetts State new hire reporting requirements are that every employer must report every new hire and rehire and contractors over $600. The employer must report the federally required elements of:
Employees name
date of hire or contract
Employees address
Employees social security number
Employers name
Employers address
Employers Federal Employer Identification Number (EIN)
This information must be reported within 14 days of the hiring or rehiring.
The information can be sent as a W4 or equivalent by mail, fax or electronically.
There is a $25.00 penalty for a late report and $500 for conspiracy in Massachusetts.
The Massachusetts new hire-reporting agency can be reached at 800-332-2733 or 617-626-4154 or on the web at http://www.cse.state.ma.us/.
Massachusetts does not allow compulsory direct deposit.
Massachusetts requires the following information on an employees pay stub:
Gross and Net Earnings
Employers and employees name.
payment date
amount and nature of deductions
increases
straight time and overtime pay
hours worked
itemized deductions
Massachusetts requires that employee be paid biweekly or weekly; semimonthly or biweekly for FLSA-exempts or salaried employees (monthly if they agree).
Massachusetts requires that the lag time between the end of the pay period and the payment of wages to the employee not exceed six days if workweek is 5 or 6 days; 7 days after pay period if workweek is 7 days or less than 5 days.
Massachusetts payroll law requires that involuntarily terminated employees must be paid their final pay immediately and that voluntarily terminated employees must be paid their final pay by the next regular payday (if there is none, the next Saturday) or by mail if employee requests it.
Deceased employees wages of $100 must be paid to the surviving spouse, adult child, or parent (in that order) 30 days after death and if there is no will.
Escheat laws in Massachusetts require that unclaimed wages be paid over to the state after three years.
The employer is further required in Massachusetts to keep a record of the wages abandoned and turned over to the state for a period of 5 years.
Massachusettss payroll law mandates no more than $4.125 may be used as a tip credit.
In Massachusetts the payroll laws covering mandatory rest or meal breaks are only that all employees must have 30 minutes rest after six hours of work.
Massachusettss statute requires that wage and hour records be kept for a period of not less than two years. These records will normally consist of at least the information required under FLSA.
The Massachusetts agency charged with enforcing Child Support Orders and laws is:
Massachusetts Department of Revenue
Child Support Enforcement Division
51 Sleeper St.
P.O. Box 9492
Boston, MA 02205-9492
(800) 332-2733
http://www.cse.state.ma.us/
Massachusetts has the following provisions for child support deductions:
When to start Withholding? Next payday more than 3 days after notice.
When to send Payment? Within 3 days of Payday.
When to send Termination Notice? Within 3 days of payday.
Maximum Administrative Fee? $1 per payment.
Withholding Limits? Federal Rules under CCPA.
Please note that this article is not updated for changes that can and will happen from time to time.
Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice.
Mr. Read is the author of "How to Start a New Business."
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