Subject

Hiring Incentives to Restore Employment Act (HIRE Act).

Purpose

To provide the State University of New York (SUNY) and the City University of New York (CUNY) agencies with instructions for setting up employees in PayServ who are hired under the HIRE Act, and to explain how the Office of the State Comptroller (OSC) will update PayServ records for employees previously hired under the HIRE Act.

Affected Employees

Employees hired under the HIRE Act by SUNY or CUNY in 2010.

Effective Date(s)

Employees hired under the HIRE ACT and entered in PayServ, on or after November 4, 2010.

Background

The US Congress and President of the United States enacted the Hiring Incentives to Restore Employment Act (HIRE Act) effective February 3, 2010.  This act allows employers an exemption from the employer's share of social security tax on wages paid after March 18, 2010 to certain employees hired after February 3, 2010. Generally, State governments are not eligible for this incentive. However, public colleges and universities (SUNY and CUNY) are eligible.

In order for New York State to take advantage of this incentive, information about the employee’s FICA status is required.  A new option of ER FICA Exmpt is now available in the FICA Status field on the employee job record.  Because the HIRE Act was enacted prior to the required changes in PayServ, records for employees hired and entered in PayServ prior to the November 3, 2010 will have to be updated though a special process at OSC based on information provided by the agencies. PayServ is now updated to allow agencies to select the appropriate status at the time of the hire. 

OSC Actions

OSC has added a new option in the FICA Status dropdown box on the Job Data page, ER FICA Exmpt, for employees hired under the provisions of the HIRE Act. When this option is selected PayServ will determine the amount of the employer share of social security taxes and will update the employee Tax Balance Page as displayed below.

Records for employees who were hired under the provisions of the HIRE Act prior to the availability of this option will need to be updated by OSC.

Agencies have provided OSC with spreadsheets listing these employees who were hired between February 3, 2010 and June 30, 2010.  Agencies must now provide this same information for the period of July 1, 2010 through November 3, 2010 under the provisions of the HIRE Act(See Agency Actions below). 

Using these spreadsheets OSC will automatically set the FICA Status to ER FICA Exmpt on all Job Data rows equal to or greater than February 3, 2010. OSC will also update the employee Tax Balance Page to reflect the employer share of the social security taxes.

Agency Actions

Agencies are to begin selecting ER FICA Exmpt on November 4, 2010 for all employees hired under the provisions of the HIRE Act that have not yet been entered in PayServ. When entering a new employee, agencies must select  the FICA Status of “ER FICA Exmpt” on the Payroll tab of the Job Data page

In order for OSC to update the records for employees hired under the provisions of the HIRE Act between July 1 and November 3, agencies must provide this information using the spreadsheet attached.  This spreadsheet should be sent to the Tax Administration and Compliance mail box.

Please note:  Agencies are required to retain copies of the Form W-11 for four (4) years in the event of an Internal Revenue Service Audit.

Questions

Questions regarding this bulletin may be emailed to the Tax and Compliance mailbox.