No Respect For the Payroll Department

It's a classic battle of the little guy versus the elite.  And, as usual, the elite are winning.

Who are the elite?  The President and the United States Senate.  The little guy? Your local payroll department that issues your check every week, on time and for the correct amount.

The House of Representatives passed a one-year extension of the current payroll-tax rate for FICA-SS which, otherwise, would revert to 6.2% from 4.2% on January 1st. Action required in the payroll department? None.  Just the usual year-end hustle, otherwise, have a nice holiday season.

Not content to let things be simple, the Senate countered with a bill that would extend the current rates for only two months.  And to top it off, they slipped in the $18,350 kicker!

$18,350?  Yes, indeed.  The politicians want to make sure that no high-rollers, that is, people making over $9,175 per month get away with any extra money.  Not to mention the evil forces of management who might be expecting a bonus check sometime in January.

So they put in a provision that any amount of earnings in excess of $18,350 paid during January-February will be taxed at 6.2% and not at 4.2%

I can almost guarantee you that there is no switch to be flipped in your employer's payroll system that will implement that change!

Many people are paid with a payroll system that has been neglected, patched and repaired for many years.  I talked a few years back with one contract programmer who maintained the payroll system for the engineers on a railroad.  The system had to accommodate both a differential for miles on uphill grade and downhill grades - plus a differential for passage through "Indian Territory."  Those provisions were still in the contract under which the engineers operated.  I hope my friend is still available and on call for the week after Christmas.

So where do the payroll departments of the country stand on this issue?  Well just Google  "payroll tax 18350" and follow a few of the links.  Or follow this link to see the letter from the National Payroll Reporting Consortium.  A quote:

In our opinion enactment of HR 3630 as written could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.

And just where does the president stand on this abomination?  Well, here's one photo (thanks, Drudge)  that captures him in a leadership role:

That's right, the president thinks a two-month extension is preferrable to a twelve month extension.  And the media buys it!  Have you read or heard anything about the chaos that this two-month extension is going to cause?

Ah, well.  Payroll never gets any respect.

As for me?  I'm retired, so I don't have to deal with this issue.  Just keep sending me those social security check, you young folks.  And thanks for the 3.6% raise you are giving me on January 1st.  Say, how are you paying for that raise when you quit putting 6.2% into the Social Security Trust Fund and dropped back to 4.2%?  Well, I guess that goes in a different post.