Payroll Kentucky, Unique Aspects of Kentucky Payroll Law and Practice

The Kentucky State Agency that oversees theThere is a $250.00 penalty for 3rd and later offenses
collection and reporting of State income taxesfor a late report in Kentucky.The Kentucky new
deducted from payroll checks is:Revenue Cabinethire-reporting agency can be reached at 800-817-2262
200 Fair Oaks Laneor 804-771-9602 or on the web at does not allow
Frankfort, KY 40601-1134compulsory direct depositKentucky requires the
(502) 564-7287following information on an employee's pay stub:Gross
requires you to use the Federal "K-4 Employeeand Net Earnings
Withholding Exemption Certificate" form to calculatepurpose of deductionsKentucky requires that
state income tax withholding.Not all states allow salaryemployee be paid no less often than semimonthly, less
reductions made under Section 125 cafeteria plans orfrequently for FLSA-exempt employees.Kentucky
401(k) to be treated in the same manner as the IRSrequires that the lag time between the end of the pay
code allows. In Kentucky cafeteria plans are notperiod and the payment of wages to the employee
taxable for income tax calculation; taxable fornot exceed eighteen days.Kentucky payroll law
unemployment insurance purposes. 401(k) planrequires that involuntarily terminated employees must
deferrals are not taxable for income taxes; taxable forbe paid their final pay with in later of next regular
unemployment purposes.In Kentucky supplementalpayday or 14 days and that voluntarily terminated
wages are required to be aggregated for the stateemployees must be paid their final pay later of next
income tax withholding calculation.You must file yourregular payday or 14 days.Deceased employee's
Kentucky state W-2s by magnetic media if you arewages must be paid when normally due to the
have at least 250 employees and are required to filesurviving spouse or custodian of minor children if there
your federal W-2s by magnetic media.The Kentuckyis no will and estate is not over $15,000.Escheat laws in
State Unemployment Insurance Agency is:DepartmentKentucky require that unclaimed wages be paid over
for Employment Servicesto the state after seven years.The employer is further
275 E. Main St., 2nd Fl. E.required in Kentucky to keep a record of the wages
Frankfort, KY 40621abandoned and turned over to the state for a period
(502) 564-2900of 5 years.Kentucky payroll law mandates no more
State of Kentucky taxable wage base forthan $3.02 may be used as a tip credit.In Kentucky the
unemployment purposes is wages up topayroll laws covering mandatory rest or meal breaks
$8000.00.Kentucky requires Magnetic media reportingare that employees must have a reasonable meal
of quarterly wage reporting if the employer has atperiod within 3-5 hours after shift starts; 10-minute rest
least 250 employees that they are reporting thateach 4 hours; minors: 30-minute meal period after 5
quarter.Unemployment records must be retained inhours.Kentucky statute requires that wage and hour
Kentucky for a minimum period of six years. Thisrecords be kept for a period of not less than one year.
information generally includes: name; social securityThese records will normally consist of at least the
number; dates of hire, rehire and termination; wages byinformation required under FLSA.The Kentucky agency
period; payroll pay periods and pay dates; date andcharged with enforcing Child Support Orders and laws
circumstances of termination.The Kentucky Stateis:Child Support Enforcement Commission
Agency charged with enforcing the state wage andOffice of the Attorney General
hour laws is:Labor Cabinet700 Capitol Ave., Ste. 118
Division of Employment Standards,Frankfort, KY 40601
Apprenticeship and Training(800) 248-1163
1047 U.S. 127 South, Ste. 4has the following provisions for child support
Frankfort, KY 40601-4381deductions:When to start Withholding? Order specifies
(502) 564-3070date to begin.
minimum wage in Kentucky is $5.15 per hour.TheWhen to send Payment? Date noted in order.
general provision in Kentucky concerning payingWhen to send Termination Notice? "Promptly."
overtime in a non-FLSA covered employer is one andMaximum Administrative Fee? $1 per payment.
one half times regular rate after 40-hourWithholding Limits? 50% of disposable earnings.
week.Kentucky State new hire reporting requirementsPlease note that this article is not updated for
are that every employer must report every new hirechanges that can and will happen from time to
and rehire and job refusals. The employer must reporttime.Charles J. Read, CPA has been in the payroll,
the federally required elements of:Employee's nameaccounting and tax business for 30 years, the last
Employee's addressfifteen in private practice. Mr. Read is the author of
Employee's social security number"How to Start a New Business".For Professional
Employer's namePayroll services at a Budget Price go to a Paperless
Employers addressPayroll Company.Go to For a full service payroll
Employer's Federal Employer Identification Numberservice bureau with CPA's on staff.See an excerpt of
(EIN) This information must be reported within 20 daysMr. Read's interviews from William Shatners
of the hiring or rehiring."Heartbeat of America" television show on the
The information can be sent as a W4 or equivalentwebsites linked above.
by mail, fax or electronically.