OFFICE: Office of the State Comptroller STATE: NH DATE: 03/01/2012 QUESTION / ISSUE:
Once again I have an issue in New Hampshire which I would benefit greatly from the processes of other states. I would like to emphasize how invaluable this opportunity is to quickly gain the experience of numerous states. I would like to know whether states:
1. Have multiple EIN’s for various agency/departments or 2. Have only one EIN for the state
3. If non-exempt employees work for one department full-time and another part-time, what is the overtime policy?
4. If overtime premium pay is avoided though multiple EINs or other means, has this ever been challenged?
State Comments
Arizona 120+ agencies are based on one state of Arizona Tax EIN (state universities and a few select agencies have their own). Tracking cross-employment is challenging, since we sometimes have situations where an employee is considered non-exempt in one agency and exempt in another. Thankfully these instances are rare. Generally, as the individual is "hired" into the 2nd agency, the agencies would get together and agree to the proper treatment. Without any such agreement, we would look at the hours as they are worked in the workweek for both agencies and start charging overtime at the 41st hour to whatever agency was working that employee. Because the employee only has one official record for payment and reporting purposes, the "home" agency maintains the responsibility to track and charge to the 2nd agency per their agreement. Using multiple employer IDs to avoid
overtime, besides being potentially incorrect or at best risky, would cause greater
system/process inefficiencies than paying any overtime if/when it occurs and having one statewide Tax ID.
Colorado Response #1:
1. One EIN for all state agencies, except for Colorado Department of Transportation which has its own. Each higher education institution has its own EIN
2. See #1 – no.
3. If the worker is classified as an employee, and is non-exempt, the hiring agency for part-time work pays the overtime.
4. We comply with the FLSA. Response #2:
The state of Colorado has one primary EIN, but some agencies and institutions have obtained a separate EIN to address problems with the Treasury Offset program and other federal interactions. The following information was provided by our Statewide Central Payroll Unit manager:
• The multiple agency employment issue is addressed in Colorado personnel rules 3-26 & 3-33.
• 3-26 - All employees are covered by the Fair Labor Standards Act (FLSA). Under FLSA, the state is considered to be a single employer. Employees cannot waive their rights under FLSA.
• 3-33 - In a properly authorized dual employment arrangement, the written agreement shall include the exemption status designation based on the combined duties, the department responsible for paying any overtime, and the overtime hourly rate. The overtime rate is either the regular rate from one of the jobs or a weighted rate from both jobs. Work time from both jobs is combined to calculate overtime.
• This is what the rule is. Unfortunately, I would guess that this isn’t always the practice because people don’t realize that the state is one employer. This is one thing that a
statewide time and attendance system could theoretically help catch. However, some agencies are good about checking. For example: many corrections employees work for the state fair in the late summer. The two agencies work out the overtime. Florida Regarding your first two questions, we have recommended state agencies in Florida obtain
their own FEINs and not use the state of Florida’s FEIN due to problems with federal offsets, assessments of penalties, etc. We issued a Comptroller’s Memorandum to the state
agencies in 2002 regarding this matter (below). We file all the payroll taxes for the state and most the state’s 1099s under the state of Florida’s FEIN. We also recommend to state agencies to apply for federal grants under their own FEIN. We have had a couple of instances where the feds snatched some grant money from one of our agencies due to another agency owing them money. In these cases, they were both using the state’s main FEIN.
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July 03, 2002 COMPTROLLER'S MEMORANDUM NO. 03 (2002-03)
SUBJECT: FEDERAL EMPLOYER IDENTIFICATION NUMBER
This memorandum rescinds Comptroller's Memorandum No. 09, (1996-97).
There are many activities throughout state Government that require filing Federal returns, remitting Federal taxes, or submitting claims for refunds of Federal taxes. Some agencies filing these returns have used the Federal Employer Identification Number (FEIN) of the Office of the Comptroller. This has caused some confusion and assessment of penalties and interest to our employer payroll tax account for non-employment items.
Agencies using the Office of the Comptroller's FEIN for filing Federal returns or claims should discontinue this practice immediately. Agencies that require a unique FEIN must apply for the number by filing a Form SS-4, Application for Employer Identification Number, with the Internal Revenue Service. Internal Revenue Service Publication 1635, Understanding Your EIN, provides information about Federal identification numbers. Forms, instructions, and publications may be obtained from the Internal Revenue Service by calling 1-800-829-3676, or by using the IRS Internet Web Site at www.irs.gov.
Questions regarding this memorandum should be directed to Ernest Thompson by phone at (850) 410-9432, Suncom 210-9432, or by email at [email protected] with the Bureau of State Payrolls.
Hawaii 1. Each department has its own EIN used to report 1099 information.
2. We use a single EIN to report payroll information for state employees processed through the state's central payroll system. The central payroll system processes payroll for the majority of state departments and agencies and issues over 80,000 W-2s per year. We know of the legislature having its own EIN to report payroll for session workers and some charter schools having their own EINs to report both 1099 and payroll information.
Regarding items 3 and 4, I don't recall a policy addressing the situation noted, but I need to check with another department.
Idaho 2. The three universities have their own EINs and process their own payrolls. The state of Idaho then processes a separate ‘reimbursement’ payroll providing state funds back to the university. All other state agencies are paid under ONE EIN.
3. The state of Idaho looks at all hours submitted by all agencies (except the universities) for an employee and calculates overtime on any hours over 40 in the week. Therefore, the agency(s) where the employee actually worked hours over 40 would be paying the overtime.
4. Because Idaho does not actually pay the individual university employees through payroll (only reimburses state funds), overtime has never been challenged.
Iowa 1. All the wage reporting is done using the EIN for the Iowa Department of Administrative Services, State Accounting Enterprise. (DAS-SAE). We process payroll for 60+ state agencies, but not all state agencies or any of the state universities. They each report using their own EIN.
2. State agencies each have their own EIN, but do not do their own wage reporting if they are one of the 60+ agencies for whom we process payroll.
3. N/A. 4. N/A.
Kansas One EIN for all state agencies (including regent institutions). The state of Kansas is considered one employer for tax reporting purposes.
We pay multiple-job employees on a combined single-check. For an employee who works concurrently at multiple agencies, the agencies are required to work together to track/identify at what point in the work-week the FLSA threshold is met for overtime and record overtime accordingly. There are also edits in our custom time and leave system related to overtime calculation.
Minnesota 1&2: Minnesota has one EIN that is used for all agencies for payroll processing. However, we do have multiple EINs. Generally speaking, most EINs are used for non-payroll processes with one exception. The exception is our state college and university system has a separate EIN for student payroll processing.
3. When non-exempt employees work for more than one state agency, then we require the two agencies to work together to determine who pays the overtime. In most cases, this is the secondary or part-time appointment. However, in some instances that agencies agree to split the overtime because both positions may be part-time. Also, we have some instances where one position is exempt and another is non-exempt. The agency with the non-exempt position pays all of the overtime; but all of the hours are used in calculating the overtime on the non-exempt position. (This is based on advice we received from the DOL. We had a major DOL audit in the late 1990s; but have had two separate small scale audits that focused on a small subset of employees.)
4. Not Applicable -- We have not run into any instances where the employee worked under the student payroll and the overall state payroll, so this has been a non-issue. Montana 1, 2&4. The state of Montana has one EIN for the state, excluding the university systems
which have one for each campus.
3. The overtime is charged to the part-time department.
4. This would only be a potential issue if a primary government employee also worked for the university system (or vice-versa). Because these are legally separate entities we wouldn’t necessarily know this was occurring and I don’t believe it would be an issue.
Nevada 1. We have only one EIN number for the state. We used to have multiple numbers but several years ago we went to just one number
2. They would receive overtime pay for time worked in the part-time position. 3. N/A.
New Mexico Multiple EINs are allowed for the following specific reasons:
• Human Services Department has a FEIN for their Medicaid payments. • Education Retirement Board has a FEIN for their retiree payments.
• Public Employees Retirement Association has a FEIN for the retiree payments. • Department of Workforce Solutions has a FEIN for the Unemployment Insurance &
Employee Service Grants.
• General Services Department has a FEIN for the Worker’s Compensation payments. For all other business, all agencies conduct business under the state’s FEIN, which is controlled by the Department of Finance and Administration (DFA). The Central Payroll Bureau, which is part of DFA, prepares the payroll for the entire state with the exception of about 16 agencies. These agencies prepare their own payroll under their own FEIN. We are not aware of any crossover of employees between the state and these 16 agencies. I was unable to find a formal policy, but I have made inquiries of Central Payroll, but have not heard back from them yet. I didn’t want to wait any longer to respond. Once I get more info, I’ll let you know Ed.
North Carolina North Carolina operates a central payroll system and reports under one EIN for the majority of state agencies. This does not include local school teachers who are not considered state employees in this situation. Each university and community college operates its own payroll system and reports under separate EINs. We have a dual employment policy to cover situations when an employee works for more than one state entity. That policy spells out which entity is responsible for paying the employer tax costs, retirement, health insurance and overtime if applicable. The link to that policy is:
http://www.osp.state.nc.us/manuals/3_Employment%20and%20Records/dualempl.htm
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Oregon Response #1:
Oregon has multiple EINs for our state agencies although we use a common paymaster EIN for processing payroll for all of these agencies. When an employee works for more than one agency all hours and pay from both agencies are factored in to determine overtime eligibility as the “state of Oregon” is considered a single employer by IRS and SSA.
We were brought to task on this back in 2003 when we self-reported that our payroll system was not including some of the “premium pay types” into the overtime rate computation for our employees. At that time we made some changes to the Oregon Statewide Payroll
Application to correct both the problem with premium pay inclusion in the overtime calculation as well as recognize and report when a single employee works for multiple agencies.
Response #2:
The state of Oregon does have multiple EINs for agencies; however, the payroll is central and only one EIN is used for all state employees.
Pennsylvania 2. Each agency does have its own unique EIN; however, all employee/tax reporting is done using the EIN of the central payroll office. This includes New Hire Reporting, 941 filings etc. This is also the EIN that appears on employee W-2s.
3. Commonwealth policy is as follows: Agencies are to refrain from scheduling
nonexempt employees in a dual employment situation to work more than an aggregate of 40 hours per week in both positions to avoid mandatory premium overtime
payments.
South Dakota The state of South Dakota has only one EIN. If a non-exempt employee works in more than one state agency, the second position is called a level two position. When payroll is run, the level two position is processed with the primary position to determine any overtime due. Distribution rules determine which agency is responsible for which payroll amounts.
Texas 1. The state of Texas has 119 state agencies and 62 institutions of higher education and each of them is a separate employer with separate EINs for each.
2. N/A for Texas.
3. We have been advised and treat the state as a single employer for purposes of overtime, so if a non-exempt employee is employed by more than one agency or institution of higher education concurrently, he is treated as non-exempt by both, even if one of the employments is exempt. We advise agencies and institutions to
coordinate the payment of overtime so that the requirements are met and we have a statutory requirement that an individual must advise both agencies and/or institutions of higher education before accepting secondary, concurrent employment. That language is intended to ensure that there is the opportunity to do the coordination. Our office also reports on a monthly basis, those employees who are employed by more than one agency to the affected agencies/institutions in an attempt to ensure that they are aware.
4. No.
Utah In Utah, we handle payroll centrally for the executive, judicial and legislative branches. However, it does not cover higher education. This is considered the "state" for us.
We have one EIN (Employer ID Number) for the "state".
We do have situations where an employee works more than one job for the state. When that happens, we assign different positions and pay rates but do not assign different employee numbers. This avoids the problems of issuing multiple W-2s which SSA does not like and it allows us to follow FLSA laws with regard to overtime pay.
Virginia 1. Virginia has multiple EINs for various agencies. 2. No.
3. Time worked for the two separate employing agencies is not combined for purposes of determining overtime.
4. Not been challenged.
West Virginia West Virginia departments have separate EINs. It is not just one for the whole state. We do not allow people to work for different departments at the same time.
Wisconsin In the state of Wisconsin, each agency has a separate EIN. Overtime is calculated at the agency level unless it is determined that a joint employment situation exists. The Wisconsin Human Resources Handbook provides the following guidance regarding joint employment and the responsibilities of the agencies:
Sec. 520.100 Employees Occupying Multiple Positions [Reference C.F.R. Part 791] 1. Categorizing Employees as Exempt or Nonexempt
a. Employee categorization must be based on the total employment situation with a single agency unless a joint employment situation exists. In a joint
employment situation, employee categorization must be based on the total employment situation with the jointly employing agencies.
b. Appointing authorities should evaluate all work performed by an employee (for the agency or in a joint employment situation) during the workweek or work period. The position occupied at the time each duty was performed is not relevant.
An employee may be exempt even if one job is as an LTE if the employee’s salary from the permanent job meets both the minimum salary and the salary basis tests. Exempt status may be appropriate if the percentage of exempt work performed by the
employee in both jobs meets the duty and discretion test.
2. Determining Overtime Compensation for Nonexempt Employees
a. All hours worked for a single agency or in a joint employment situation must be totaled in each workweek or work period to determine if any overtime is worked. Hours worked in each agency are totaled separately for employees who occupy positions in more than one agency, unless a joint employment situation exists.
b. The employee and the agency (or agencies in a joint employment situation) may agree prior to performance of the work that he or she will be paid during overtime hours at the premium rate for the position in which the overtime hours are worked. Unless such an agreement is reached premium pay must be calculated based on the total employment situation with an agency (or agencies in a joint employment situation.)
3. Joint Employment and Responsibility for Premium Pay
A determination of whether the employment situation is considered joint
employment or separate and distinct employment depends upon all facts in the particular case. Agencies should answer the following questions to determine if a joint employment relationship exists:
a. When employed by one state agency, is the employment by another state agency completely voluntary on the part of the employee, or is the
employee led to believe in any way that he or she should accept additional work from another state agency?
b. When employed by one state agency, is the employee assured, promised or led to believe that he or she will receive additional work from another state agency?
c. Are employees of one state agency given a special preference for additional work at another state agency?
d. What are the percentages of time in all workweeks in which the employee works for one state agency as compared to the employee’s work for another state agency or agencies?
e. Does the work for one state agency represent only part-time or irregular work? f. What effect does the employee’s work in one job have on his or her other job or
jobs?
When an employee works for two or more agencies in a joint employment situation, the hiring agencies must coordinate with each other regarding the total number of hours worked by the employee in any workweek. If any premium pay is required, all jointly employing agencies are responsible under the FLSA, both individually and jointly, for the additional pay required which exceeds the regular rate for the overtime hours. The costs of such additional pay is prorated on the basis of extra hours worked for each agency or on some other basis agreeable to the agencies involved.
This was last updated in March of 2005.
Wyoming Wyoming uses only EIN for payroll. The main job is the non-overtime and the secondary job is the overtime.
