This is an extensive glossary of acronyms and terms used in our industry.
ADB: Accidental Death Benefit
AD&D: Accidental Death and Dismemberment
ADEA: Age Discrimination in Employment Act
ASO: Administrative Services Only
COC: Certificate of Coverage
DOB: Date of Birth
DOL: Department of Labor
DOMA: Defense of Marriage Act
EAP: Employee Assistance Program
EDI: Electronic Data Interchange
EEO: Equal Employment Opportunity
EFT: Electronic Funds Transfer
EFTPS: Electronic Federal tax Payment System
EGTRRA: Economic Growth and Tax Relief Reconciliation Act
EIC: Earned Income Tax Credit
EIN: Employer Tax Identification Number
EOB: Explanation of Benefits
EOI: Evidence of Insurability
EPLI: Employment Practices Liability Insurance
ERD: Equal Rights Division
FCRA: Fair Credit Reporting Act
FEIN: Federal Employer Identification Number
FICA: Federal Insurance Contributions Act
FUTA: Federal Unemployment Tax Act
GTL Insurance: Group Term Life Insurance
HCE: Highly Compensated Employee
HCR: Health Care Reform
HRA: Health Reimbursement Arrangement
HAS: Health Savings Account
IDEA: Individuals with Disabilities Education Act of 1997
IRA: Individual Retirement Account
IRC: Internal Revenue Code
IRS: Internal Revenue Service
JGTRRA: Jobs and Growth Tax Relief Reconciliation Act
LTD Plan: Long-Term Disability Plan
MSA: Medical Savings Account
NHCE (or Non-HCE): Non-Highly Compensated Employee
NMHPA: Newborns’ and Mothers’ Health Protection Act
OCR: Office for Civil Rights
PCP: Primary Care Physician
PDA: pregnancy Discrimination Act
PEO: Professional Employer Organization
PHI: Protected Health Information
POA: Power of Attorney
PPO: Preferred Provider Organization
PTO: Paid Time Off
QDRO: Qualified Domestic Relations Order
QMCSO: Qualified Medical Child Support Order
RTW: Return to Work (date for disability coverage)
SBJPA: Small Business Job Protection Act
SEP: Simplified Employee Pension
SOP: Standard Operating Procedure
SPD: Summary Plan Description
SSA: Social Security Administration
STD: Short Term Disability
SUTA: State Unemployment Tax Act
TPA: Third Party Administrator
USERRA: Uniformed Services Employment and Reemployment Rights Act
WHCRA: Women’s Health and Cancer Rights Act
Accrual: The recognition of assets, expenses, liabilities, or revenues after the cash value has been determined, but before it is transferred.
Administrative Fees: Fees charged by OMS for benefits administration, workers’ compensation and risk management, loss control and safety program services, human resources support, compliance assistance, quarterly tax returns and auditing packages, technical support, and processing your payroll. Generally, it is calculated as a percentage of your gross payroll. Clients have also been assessed a Minimum Fee if their gross payroll falls below a certain level. Both fees are detailed in your client service contract.
ACH Debit: ACH means Automated Clearing House. Debiting the employer’s bank account for the amount of the total payroll invoice. Debits generally occur on the payroll date and the debit will appear on your bank statement. ACH is a seamless process and allows OMS to collect all of the money needed to pay employees, regulatory agencies, and workers’ comp.
ADA - The ADA prohibits discrimination on the basis of disability in employment, programs and services provided by state and local governments, goods and services provided by private companies, and in commercial facilities.
Advance Earned Income Credit (AEIC): Employees eligible for this credit will essentially receive half of their tax refund paid out over the course of the fiscal year rather than receive a credit after they file their year-end tax return. Employees requesting information from their employers regarding AEIC should be referred to the W-5 instructions from the IRS. Upon completion of the W-5, the form should be submitted to the OMS payroll specialist who will then set up the credit for their next paycheck.
After-tax deduction: A deduction from an employee’s pay that does not reduce the employee’s taxable wages. It is taken out only after all applicable taxes and other deductions have been withheld (e.g., union dues, garnishments, charitable contributions).
Business Standard Mileage Rate: Reimbursements to employee transportation expenses incurred while using their vehicles for business. Generally, this is the maximum rate per mile that the employer is allowed to be paid before it becomes taxable compensation to the employee. The IRS publishes these rates annually and OMS includes this amount on its annual review of payroll rules that is provided to clients. If you have any questions about the current rate or the tax consequences, please contact your payroll specialist.
Child Support Withholding: A deduction order sent from the state’s governing body that requires a deduction (involuntary) to be withheld from the employee’s check. If you should receive any court orders for your employees, please forward to your payroll representative immediately. We will set up the deduction in our payroll system and remit payments directly to the appropriate authorities. As indicated by the order, an administration fee will be charged to the employee, for processing the payments. The employer is responsible for withholding the amounts and paying them over to the party named in the withholding order. OMS assumes this responsibility for its clients and will take care of this responsibility.
Circular E: IRS Publication 15, Employer’s Tax Guide. This publication is an extensive payroll reference guide with the basic rules and instructions for withholding, depositing, reporting, and paying federal employment taxes.
COBRA - The Consolidated Omnibus Reconciliation Act (COBRA provides for the continuation of group health coverage for certain former employees, retirees, spouses, and dependent children.
Compliance: Referring to compliance with any federal, state or local laws regarding taxes and dealings with employees.
Consumer Credit Protection Act (CCPA): Federal law that restricts the amount of an employee’s earnings that can be garnished to pay creditor debts, including child support. OMS will refer to these guidelines when setting up garnishment and child support orders.
Deductions:An expense that can be subtracted from a taxpayer’s gross income in order to reduce the amount of income that is subject to taxation.
Deduction Authorization Form: A form completed by the employer, signed by the employee, and submitted to OMS. OMS will set up the deductions in our payroll system prior to the next payroll. Examples of deductions include health, dental, vision, advances, tools, and meals. All payroll deductions require the signed authorization of the employee.
Direct Deposit: The electronic transfer of an employee’s net pay directly into financial institution accounts designated by the employee, thus avoiding the need for a “live” paycheck.
Direct Deposit Authorization Form: A form submitted containing the routing number and account number of the employee’s bank. OMS encourages direct deposits for all clients and employees.
Electronic Filing: The process of filing tax and information returns directly from one computer to another. Currently, OMS submits all New Hire Reporting, State Unemployment Taxes, and W3’s electronically via the Internet.
Employee Business Expenses: Amounts spent by an employee for travel, lodging, meals, etc., while on the employer’s business. Reimbursements for such expenses are generally excluded from income if they are properly accounted for. If your company reimburses employees for business expenses and would like to pay this with payroll, please contact your OMS payroll specialist.
Employee Verification Service (EVS): A service offered by the Social Security Administration allowing employers to verify the accuracy of their employees’ social security numbers. This is the process of determining whether a newly hired employee is authorized to work in the United States under the Immigration Reform and Control Act. OMS offers this service to our clients for a fee. Please call your Payroll Specialists for more information.
EEOC - The Equal Employment Opportunity Commission (EEOC) was established by Title VII of the Civil Rights Act of 1964. The EEOC enforces the principal federal statutes prohibiting employment discrimination.
ERISA - The Employee Retirement Income Security Act (ERISA) sets uniform minimum standards to assure that employee benefit plans are established and maintained in a fair and financially sound manner.
Escheat: In the context of payroll, the turning over of unclaimed wages to the state after a period of time is determined by state law. Generally, payroll checks left uncashed by the employee for a period exceeding one year must be turned over to the State of Florida. OMS performs an audit of uncashed checks annually and turns these funds over to the State.
Exempt Employees: While this term can refer to anyone not covered as an employee under a certain law, it generally means those employees who are exempt from the minimum wage, overtime pay, and certain recordkeeping requirements of the Federal Wage-Hour Law.
FEIN: Employer Identification Number is the employer’s account number with the Internal Revenue Service which consists of nine digits (00-0000000). This number is required on all federal tax returns and all Employee W2’s. It is very important that OMS have the correct number on file. If for whatever reason (i.e. business is sold or type of entity is changed) your company changes FEIN’s during the year, it is very important that you contact us immediately.
FICA: Federal Insurance Contributions Act. In general, both the employee and the employer are each required to pay in 6.2% of taxable wages (up to the FICA Wage Limit) for social security and 1.45% of their taxable wages (no limit) for Medicare. These amounts are remitted by OMS via EFTPS and are reconciled on the quarterly 941 payroll tax returns.
FLSA - The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.
FMLA - The Family Medical Leave Act (FMLA) is enforced by the Department of Labor (DOL). It provides eligible employees unpaid leave during any 12-month period for any of the following reasons: for the birth and care of the newborn child, for placement with the employee of a child for adoption or foster care, to care for an immediate family member, or to take their medical leave or to care for covered family members of the armed forces.
Garnishment: A garnishment is a court order notifying an employer that a legal claim has been made against an employee’s wages. The garnishment is the result of a legal proceeding authorizing an involuntary transfer of an employee’s wages to a creditor to satisfy a debt. Typically, payroll garnishment orders are issued as a last resort after all of other attempts at debt collection have been exhausted. Please submit all garnishment orders as soon as they are received to your payroll specialist who will be responsible for setting it up in payroll. All payments for these orders will be remitted by OMS on the employer’s behalf.
Healthiest You: An app-based product that gets you in contact with a doctor 24/7. It allows you to have your health in your hands.
HIPAA -- The Health Insurance Portability and Accountability Act (HIPAA) - HIPAA is a federal law that limits pre-existing condition exclusions, permits special enrollment when certain life or work events occur, and prohibits discrimination against employees and dependents based on their health status, and guarantees availability and renewability of health coverage to certain employees and individuals.
I-9: Immigration and Naturalization Employment Eligibility verification form.
Levy: A levy is issued by the IRS and are mandatory payroll deductions required by law. Typically, tax levies are issued as a last resort for the collection of back taxes (personal) from the employee. Please submit all tax levies as soon as they are received to your payroll specialist who will be responsible for setting it up. All payments will be remitted by OMS on the employer’s behalf to the United States Treasury.
Minimum Billing: This is the minimum administrative fee charged by OMS for services rendered on a per payroll basis. In general, the minimum billing is only relevant if the gross payroll does not reach a certain level. Also note that OMS will assess a minimum billing for every pay period even if you do not report payroll.
Minimum Wage: The lowest amount that an employer can pay its employees per hour under federal or state law. Tipped employees must be paid minimum wage at a per hour rate less the minimum wage tip credit. For employees that do not declare enough tips, they will be paid a minimum wage to bring their per hour rate to the appropriate minimum level.
Net Pay: That part of an employee’s wages that remains after all deductions have been subtracted (i.e. taxes, health insurance premiums, union dues, etc.). The net check is “take-home” pay for the employee. It will be the amount of the live check or the direct deposit received by the employee.
New Hire Reporting: The reporting of newly hired and rehired employees to state agencies to facilitate the collection of child support and/or to uncover abuse in the state’s unemployment compensation, workers’ compensation, or public assistance programs. All new hire reporting for payroll clients is handled by OMS as a part of its Administrative Services. New Hire reporting is completed online by OMS for all clients on a weekly basis.
Nonexempt Employees: Employees who are covered by the minimum wage and overtime provisions of the Fair Labor Standards Act. They may be paid on an hourly or salary basis.
Non-profit: A group organized for purposes other than generating a profit and in which no part of the organization’s income is distributed to its members or officers.
OSHA - The Occupational Safety and Health Administration (OSHA) is a division of the DOL. OSHA investigates and enforces the OSH Act of 1970.
Overtime: Hours worked in excess of maximums set by federal or state law that must be compensated at a premium rate of pay. Under the FLSA, all hours worked over 40 in a workweek (defined as 7 consecutive days x 24 hours) must be paid at no less than 1.5 times the employee’s regular rate of pay.
Pay Card: A reloadable prepaid card that allows employers to electronically load employees’ wages or salary onto the card.
Payroll Period: The period of service for which an employer pays wages to its employees. In general, the payroll periods are weekly, bi-weekly, semi-monthly and monthly. All frequencies are acceptable and should be based on a business decision made by the employer. In general, the frequency determined must be consistent throughout the fiscal year.
Per Diem: A flat daily rate of reimbursement for business expenses (e.g., meals, lodging, and incidentals) incurred by employees while traveling overnight on business. Per diems can be taxable or nontaxable and can be included on the employees’ paycheck or paid directly by the employer.
Quarterly Packets: Packets are prepared quarterly by our CPA and provided to clients approximately one month after the end of each quarter. Contained in these packets will be confirmations of all tax payments made and copies of all tax returns prepared on behalf of the client.
Severance Pay: A payment offered by some employers to terminated employees that are designed to tide them over until new employment is secured. If you would like to pay any of your employees severance, please contact your payroll specialists and they can make special delivery arrangements if the check is to be cut off-cycle. We will use the utmost discretion. Also, severance qualifies for supplemental wage tax treatment.
Shift Differential: Extra pay received by employees for working a less-than-desirable shift (i.e. evenings or late nights).
Social Security Number (SSN): An individual’s taxpayer identification number, consisting of nine digits (000-00-0000). All employees must have a valid social security number prior to beginning work at your company.
SUI: State Unemployment Insurance is collected as a percentage of gross wages for all applicable employees up to a yearly wage limit. State unemployment charges will be invoiced to the client on every payroll. OMS is responsible for remitting this money to the state on a quarterly basis.
Supplemental Wages: Compensation received by employees other than their regular pay, such as bonuses, commissions, and severance pay. Income tax may be withheld from such payments at a flat rate under certain circumstances.
941 Tax Return: Quarterly payroll returns submitted to the IRS. This return shows the total federal taxes withheld, FICA Social Security, and Medicare paid in throughout each quarter. These returns are due one month after the end of each quarter. OMS is responsible for the preparation and reconciliation of these forms every quarter. Copies of the returns are included in the Quarterly Packets provided to each of our clients.
940 Tax Return: This is the annual Federal Unemployment Tax (FUTA) return due at the end of each calendar year. The current FUTA tax rate is .8% of the employee’s first $7,000 in taxable wages and is a payroll expense to the employer. OMS remits this money on a quarterly basis via EFTPS and prepares the annual return.
UCT-6: State Unemployment tax return that is due quarterly. OMS is responsible for the preparation of these returns every quarter. Copies of these will be provided in your Quarterly Packet.
W-4: A government form used to indicate the number of personal exemptions an employee wishes to claim.
W-2: A statement of an individual’s annual wages and taxes provided by an employer that must be included with the employee’s federal, state, and city income tax returns.
Workweek: The basis for determining an employee’s regular rate of pay and overtime pay due under the Fair Labor Standards Act. It can be any consecutive 7-day (168-hour) period chosen by the employer (e.g., Saturday through Friday, Wednesday through Tuesday).
Workers’ Compensation Classification Code: Also called Class Code. The workers' comp premium rate is commensurate with the risk associated with that workplace exposure. For example, the classification code for an office clerk should carry a significantly lower rate than the code for a roofer. Incorrect classification of workplace exposures can make a big difference in rates and premiums. Employers must be sure to provide accurate information and inform OMS when employees change jobs or job tasks are added.
48 Hour Rule: All payroll timesheets must be submitted to OMS at least 48 hours in advance of the pay date to ensure timely processing and direct deposit receipt by their employees. This a policy implemented by the federal banking system.
401(k) Plan: A cash or deferred arrangement that allows employees to authorize their employer to place pretax dollars in a retirement plan that invests the money. The contributions (including those matched by the employer) and any earnings on them are not subject to federal income tax until they are withdrawn at retirement. OMS can assist with setting up a 401(k) plan.