Payroll Kentucky, Unique Aspects of Kentucky Payroll Law and Practice

The Kentucky State Agency that oversees theThe Kentucky new hire-reporting agency can be
collection and reporting of State income taxesreached at 800-817-2262 or 804-771-9602 or on the
deducted from payroll checks is:web at
Revenue CabinetKentucky does not allow compulsory direct deposit
200 Fair Oaks LaneKentucky requires the following information on an
Frankfort, KY 40601-1134employee's pay stub:
(502) 564-7287- Gross and Net Earnings
Kentucky requires you to use the Federal "K-4- purpose of deductions
Employee Withholding Exemption Certificate" form toKentucky requires that employee be paid no less often
calculate state income tax withholding.than semimonthly, less frequently for FLSA-exempt
Not all states allow salary reductions made underemployees.
Section 125 cafeteria plans or 401(k) to be treated inKentucky requires that the lag time between the end
the same manner as the IRS code allows. In Kentuckyof the pay period and the payment of wages to the
cafeteria plans are not taxable for income taxemployee not exceed eighteen days.
calculation; taxable for unemployment insuranceKentucky payroll law requires that involuntarily
purposes. 401(k) plan deferrals are not taxable forterminated employees must be paid their final pay with
income taxes; taxable for unemployment purposes.in later of next regular payday or 14 days and that
In Kentucky supplemental wages are required to bevoluntarily terminated employees must be paid their
aggregated for the state income tax withholdingfinal pay later of next regular payday or 14 days.
calculation.Deceased employee's wages must be paid when
You must file your Kentucky state W-2s by magneticnormally due to the surviving spouse or custodian of
media if you are have at least 250 employees and areminor children if there is no will and estate is not over
required to file your federal W-2s by magnetic media.$15,000.
The Kentucky State Unemployment Insurance AgencyEscheat laws in Kentucky require that unclaimed
is:wages be paid over to the state after seven years.
Department for Employment ServicesThe employer is further required in Kentucky to keep a
275 E. Main St., 2nd Fl. E.record of the wages abandoned and turned over to
Frankfort, KY 40621the state for a period of 5 years.
(502) 564-2900Kentucky payroll law mandates no more than $3.02
The State of Kentucky taxable wage base formay be used as a tip credit.
unemployment purposes is wages up to $8000.00.In Kentucky the payroll laws covering mandatory rest
Kentucky requires Magnetic media reporting ofor meal breaks are that employees must have a
quarterly wage reporting if the employer has at leastreasonable meal period within 3-5 hours after shift
250 employees that they are reporting that quarter.starts; 10-minute rest each 4 hours; minors: 30-minute
Unemployment records must be retained in Kentuckymeal period after 5 hours.
for a minimum period of six years. This informationKentucky statute requires that wage and hour records
generally includes: name; social security number; datesbe kept for a period of not less than one year. These
of hire, rehire and termination; wages by period; payrollrecords will normally consist of at least the information
pay periods and pay dates; date and circumstances ofrequired under FLSA.
termination.The Kentucky agency charged with enforcing Child
The Kentucky State Agency charged with enforcingSupport Orders and laws is:
the state wage and hour laws is:Child Support Enforcement Commission
Labor CabinetOffice of the Attorney General
Division of Employment Standards,700 Capitol Ave., Ste. 118
Apprenticeship and TrainingFrankfort, KY 40601
1047 U.S. 127 South, Ste. 4(800) 248-1163
Frankfort, KY 40601-4381Kentucky has the following provisions for child support
(502) 564-3070deductions:
The minimum wage in Kentucky is $5.15 per hour.- When to start Withholding? Order specifies date to
The general provision in Kentucky concerning payingbegin.
overtime in a non-FLSA covered employer is one and- When to send Payment? Date noted in order.
one half times regular rate after 40-hour week.- When to send Termination Notice? "Promptly."
Kentucky State new hire reporting requirements are- Maximum Administrative Fee? $1 per payment.
that every employer must report every new hire and- Withholding Limits? 50% of disposable earnings.
rehire and job refusals. The employer must report thePlease note that this article is not updated for changes
federally required elements of:that can and will happen from time to time.
- Employee's nameCharles J. Read, CPA has been in the payroll,
- Employee's addressaccounting and tax business for 30 years,the last
- Employee's social security numberfifteen in private practice. Mr. Read is the author of
- Employer's name"Tax and Accounting Issuesin Forming a New
- Employers addressBusiness."
- Employer's Federal Employer Identification NumberTo find professional payroll services at a budget price
(EIN)go to paperless payroll company.
This information must be reported within 20 days ofFor a full service payroll bureau with CPA's on staff
the hiring or rehiring.visit .
The information can be sent as a W4 or equivalent bySee an excerpt of Mr. Read's interviews from William
mail, fax or electronically.Shatner's "Heartbeat of America"television show on
There is a $250.00 penalty for 3rd and later offensesthe web sites linked above.
for a late report in Kentucky.