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Employers Beware!-Be Informed of Employment Insurance and Other Laws

NEW-Effective June, 2008 N.Y.S. has increased the civil penalty for failure to carry worker's compensation insurance by non complying employers to $2,000 from $1,000 per ten (10) day period of non coverage. The $1,000 penalty was increased from $250 as part of the 2007 Workers Compensation Reform Act. Don't think that an insolvent corporation will protect owners from Workers Compensation penalties. Pursuant to NYS and other state laws, these penalties pierce the corporate veil and can be assessed against business owners and certain corporate officers and will result in judgments and liens, levies against bank accounts, wage garnishments and any other means of collection enforcement. In certain circumstances non compliance can lead to criminal penalties as well. For further information read Tax News

Substantial penalties face all businesses, both small and large, that do not adhere to laws and regulations concerning hiring people to work for them. These include regulations concerning carrying mandatory non occupational disability insurance, worker's compensation insurance, employment tax withholding, OSHA standards, discrimination laws, American's With Disabilities Act, etc. It is strongly advised that anyone who owns a small business or are thinking of owning and operating any type of business cannot ignore thoroughly understanding the rules that affect their business, and not to rely on someone else to tell them. That someone else may end up being the state Worker's Compensation Board assessing a very STIFF PENALTY for not having disability or worker's compensation insurance, or not posting your coverage notice in a place that employees can see. Don't assume that your insurance agent or your accountant is going to "take care of it". When things go wrong, you, the owner, are responsible.



  Relocating employees or placing them on overseas assignment presents unusual and complex tax and HR issues. This applies to both Americans working abroad as well as foreign nationals working in the U.S. Choosing Powers & Company to assist you with the tax aspects of this area will help avoid costly complications.



Powers & Company can help you with:


Employee Tax Return Preparation

  • Powers & Co will ensure that your expatriate employees maintain adequate compliance with all U.S. tax requirements while taking advantage of every tax benefit associated with global assignments.


Tax Protection/Tax Equalization Policy Implementation and Administration

  • Employee incentive


    Because foreign assignments result in multiple jurisdiction taxation, foreign service allowances, reimbursements and company provided resources are often subject to taxation both in the host country as well as the home country. Accordingly, this additional tax burden can make an employee’s acceptance of the foreign assignment prohibitive. For this reason multinational employers often seek to protect their employees by offering a guaranteed net compensation package or providing full tax equalization.


  • Tax Protection vs. Tax Equalization While the objective of both tax equalization and tax protection policies are similar in that both are intended to ensure that the employee suffers no additional tax burden as a result of the foreign service assignment, full tax equalization provides a much more cost effective approach for the employer and is most equitable.

Procedurally, this is accomplished by discontinuing U.S. tax withholding at the time that the employee begins the foreign assignment and is expected to qualify for expatriate tax benefits. The employees’ base salary is then reduced by the amount of “hypothetical tax” that the employee would be expected to pay had the employee not been on foreign assignment.  

The employer then assumes full responsibility for paying all domestic and foreign income taxes that are associated with the foreign assignment income. Because all tax benefits associated with the foreign assignment are claimed for the benefit of the employer the cost of providing tax assistance is significantly reduced while avoiding an unintended tax windfall to the employee at the employer’s expense.

Whether your business adopts a policy of tax protection or full tax equalization, Powers & Company’s many years of experience will enable your company to develop, implement and administer the plan in an equitable, cost efficient and effective manner. We will help you:

  • Design, Develop and Implement your Expatriate or Relocation Tax Policy

  • Prepare Hypothetical Tax Calculations and Updates

  • Prepare Employee Tax Returns

  • Calculate Year End Tax Gross Ups and Employee Settlements

  • Address Expatriate and Relocation Payroll and Withholding Tax Issues



Copyright © 1999-2015 IRS CIRCULAR 230 NOTICE:  To ensure compliance with recently enacted U.S. Treasury Department regulations, we hereby advise you that any and all tax information contained in this website should not be considered as tax advice nor intended for the use of any taxpayer for the purpose of evading or avoiding tax penalties that may be imposed pursuant to U.S. law. Furthermore, the use of any tax information contained in this communication has neither been written nor intended for the purpose of promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any taxpayer, and such taxpayer should seek advice on the taxpayer’s particular circumstances from an independent tax advisor. The information contained throughout this web site is provided without charge, and although all efforts have been made to ensure the reliability of the information contained in this internet web site, the information contained herein should be used for general understanding only and should not be relied upon exclusively as the basis of any tax or financial decisions or for any positions taken on any tax return. Advice should only be obtained directly through the retention of a competent tax advisor. Tax Power is an established trademark of Powers & Company, Inc. and Powers Tax Services since 1999. Unauthorized use of the phrase Tax Power without expressed permission of Powers & Company, Inc. will be prosecuted to the fullest extent of the law. Last modified: January 15, 2015 The articles, guides and published information contained in this website is protected by U.S. copyright laws and cannot be reproduced in any form without the expressed permission.

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