Setting Up State Family and Medical Leave

Some states have enacted a paid Family and Medical Leave (FAML) program. This is different than the Federal Family and Medical Leave Act (FMLA). States with these programs require employees and/or employers to contribute to a paid leave fund. 

To set this up in PowerChurch's Payroll module, you would do the following:

Check Your Specific State's Documentation

In this article, we have used Paid Leave Oregon as an example. Check your specific state's documentation regarding the amounts to contribute to the FAML fund, which wages are subject to the FAML contribution, and how/when/where the funds should be remitted.

Employee

If employees are required to have an amount withheld from their paycheck, you can do this by adding an Other Deduction item.

Go to Accounting > Payroll > Setup > Maintain Item Descriptions. Click Add and select Other Deduction as the type of item you're adding.

Enter the following information:

• Item No. Enter a unique number.
• Description. Enter a unique name to identify this payroll item (for example, "Paid Leave OR - Employee").
• Liability account. Select a liability account from your Chart of Accounts to track the payable amount.
• Bank account. Select the bank account from which the check is written. Note: This field is only visible if using Advanced Setup Mode in Payroll.
• Tax options. Choose After-Tax Deduction.
• Report on W2. If the amount deducted from employees’ wages needs to be reported on the W2, check this option and enter a Box 14 Abbreviation. Note: The Box 14 Abbreviation field is only available in PowerChurch Plus Versions 14 and higher.
• % calculation. In most cases, Gross Wages is the correct choice. Some states require that clergy Housing Allowance is included in the calculation. If this is required in your state, choose the Include Housing Allowance option. Note: This option is only available in PowerChurch Plus Versions 14 and higher. 
• AP vendor (optional). Select the Accounts Payable vendor that will be used for paying the amounts withheld.

When you are done, the screen would look something like the following:

Employer

If employers are required to contribute to the paid leave fund, you can set up an item to accrue this amount on each paycheck.

To set this up, go to Accounting > Payroll > Setup > Maintain Item Descriptions. Click Add and select Employer Liability as the type of item you're adding.

Enter the following information:

• Item No. Enter a unique number.
• Description. Enter a unique name to identify this payroll item (for example, "Paid Leave OR - Employer").
• Liability account. Select a liability account from your Chart of Accounts to track the payable amount. This can be the same account used for the employee portion.
• Expense account. Select an expense account to track the employer expense.
• Non-tax item. Check this option.
• Report on W2. If the employer contribution amount needs to be reported on the W2, check this option and enter a Box 14 Abbreviation. Note: This checkbox and the Box 14 Abbreviation field is only available in PowerChurch Plus Versions 14 and higher.
• % calculation. In most cases, Gross Wages is the correct choice. Some states require that clergy Housing Allowance is included in the calculation. If this is required in your state, choose the Include Housing Allowance option. Note: The % calculation field is only available in PowerChurch Plus Versions 14 and higher.
• AP vendor (optional). Select the Accounts Payable vendor that will be used for paying the amounts withheld.

When you are done, the screen would look something like the following:

Tax Table

Some states require calculations that are only possible via tax table, such as salary caps.

In PowerChurch Plus Versions 14 and higher, you can add a new tax table for this purpose by going to Accounting > Payroll > Setup > Maintain Tax Tables. Click Add and choose Generic: Flat Percentage.

Enter the following information:

• Description. Enter a unique name to identify this tax table (for example, “Paid Leave OR - Employee”).
• Tax type. Choose . Note: Only PowerChurch Plus Versions 14 and higher have the ability to add tax tables for non-tax items.
• Percentage. Enter the percentage for the employee or employer item calculation.
• There is a cap on this tax. Check this option if the employee or employer amounts only apply up to a certain salary per year.

When you are done, the screen would look something like this:

Add Item(s) to the Employee Pay Items

Assign the Other Deduction and/or the Employer Liability item(s) to each employee.

1. Go to Accounting > Payroll > Maintain List of Employees.
2. Select an employee and click on the Pay Items tab.
3. Click the Add button located below the Pay Items grid.
4. Select the item type Other Deduction or Employer Liability.
5. Select the FAML employee or employer item.
6. Set the Amount/Percent field to Amount, Percent, or Tax Table. Note: Only PowerChurch Plus Versions 14 and higher have the Tax Table option in this field.
7. Enter the amount, percentage, or tax table to be used for this item.

When you are done, the new Pay Items would look something like the following:

W2 Reporting

For users of PowerChurch Plus Versions 14 and higher, the amounts would automatically report on the W2 based on the "Report on W2" and "Box 14 Abbreviation" options specified on the employee/employer items added earlier.

For users of Versions 12 and prior, if your state requires that the FAML amounts are to be reported on W2 forms, those amounts will need to be manually added to each form when generating W2s at the end of the year.