Chapter 3

Payroll, Tax and Reporting

  • Meet the ADP Experts

    Christopher Ryan
    Vice President for Strategic Advisory Services

    Pete Isberg
    Vice President Government Relations

    What can (and should) we be doing to address equal pay?

    “It used to be that employers could make discussing wages a fireable offence, but law changes mean this isn’t always the case anymore.”
    Chris: Most employers work hard to create a fair and vibrant workplace. But each year companies recruit, promote, transfer, and terminate millions of jobs throughout the country. Without proper attention, the sheer volume of staffing activity alone will break down even the most robust pay structures. Amidst this perfectly normal chaos, many things can happen, and then somebody asks, “Why is Fred making more than Mary?”

    It used to be that employers could make discussing wages a fireable offence, but law changes mean this isn’t always the case anymore. In fact, questions like this should be viewed as a good thing. It is a natural human tendency for associates to compare their relative contributions and rewards against those of their peers. The way that you as an employer respond when these questions come up, both in style and substance, will define your organization.

    Beyond the legal and compliance risks of a pay equity lawsuit, getting this right gives employees insight into the fundamental characteristics of the organization. For instance, is this an employer who appreciated the link between people and outcomes? And is performance accurately measured and appropriately rewarded?

    These are questions that any potential new employee or investor might be interested to answer.

    Smart companies already have a commitment to pay equity, using data to spot and fix issues. At that point, the commitment to pay equity crosses the threshold to become an actionable policy.

    What are the compliance implications of the current tax reforms in the US?

    “When it comes to tax reforms, all relevant departments will have to do their part and chip in to make the most of the opportunities, and minimize the pitfalls.”

    Pete: Tax reform brought about by the Tax Cuts and Jobs Act could have a big impact on employers and employees, both in the short terms and beyond. That’s why when it comes to tax reforms, all relevant departments will have to do their part and chip in to make the most of the opportunities, and minimize the pitfalls.

    The main challenge is working out whether employees' full-year tax liabilities will be affected significantly enough to warrant correction. If so, that’ll require an updated Form W-4. Not getting this right could potentially result in underwithholding, which see employees owing money, rather than getting a refund.

    To help employers get to grips with the changes, the IRS released Publication 15, the "Employer's Tax Guide." This details the changes, and is the official, comprehensive guide. Finance leaders should sit down with their HR, accounting and payroll departments and review it together. That way you stand the best chance of ensuring full compliance, and everyone will understand what employees need to know. (And be sure to look out for state legislation that affects withholding and reporting.)

    Example of Excellence

    Identifying and tackling equal pay shouldn’t be difficult. We’ve built a webpage to help you meet your obligation and build a workplace where everyone can thrive.