Understanding The W4 Form and Human Resources Compliance

What are W4 Forms? What Are They Used For?

Employee’s Withholding Allowance Certificate or otherwise known as the W4 form is an Internal Revenue Service Tax form completed by an employee in the United States of America, to indicate his or her tax situation to the employer. It tells the employer the exact amount to be withheld from the employee’s paycheque.

The employer then sends the paycheque to the Internal Revenue Service (IRS) along with your name and social security number. Generally, the W4 form is not sent to the IRS.

The amount your employer withholds counts towards paying the annual income tax bill that you calculate when you file for your income tax returns.

If you withhold too much money, you are unlikely to get anything back. At the same time if you withhold too less you are likely to be charged with penalties. 

When are you Required to Fill Out a New W4 Form?

Typically, you do it when you’re starting a new job or updating your tax information. The W4 form is usually not sent to the IRS, the company will file it after determining the exact amount to be withheld. Certain situations like getting married, divorced or having kids also require you to fil outl a W4 form. 

It would be a wise decision to fill out the W-4 form if you find out that you’ve withheld a little too much or little in the previous year when you’re filing for your tax returns, doing so will save you from losing money and paying penalties.

The W-4 Form In Detail

The W4 form is 5 steps long.

Step 1 and 5

Step 1 and 5 are mandatory as you are required to fill in your personal information and sign the form. Most of the following steps are optional but it will help the taxpayer attain more accurate results

Step 2

This step needs you to fill up information about all in the income in the house if there are multiple jobs. This applies to someone who has a joint account or if both the spouses are employed and are filing their taxes jointly.

Step 3

It is filled when you’re claiming dependents, who are usually under the age of 17 and live with you for more than half a year. There additional sheets to fill if you have other types of dependants to claim.  

Step 4

It can be filled to make adjustments for our other incomes, optional withholdings, and deductions. There is also an additional form where you can set the amount for additional fees to be deducted, this is ideal for someone who just wants to make sure that their refund amount is large. 

What Does Human Resources Compliance Have To Do With The W4 Form

It is the job of a Human Resources Compliance Officer to understand the W4 form fully and communicate the same to all their employees and their onboarding candidates. They also have to make sure that all new employees fill out the form and ensure that everyone has done so in accordance with the law.

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What is Human Resources Compliance?

Every country/state have their own set of laws and it is the duty of the organizations to conduct businesses without breaking the law. It the responsibility of the HR compliance officer to ensure that the organizations meet all the required legal obligations. 

This means ensuring that they meet all the health and safety regulation standards and also making sure that the employees and the employers are abiding the law and are receiving their contractual entitlements. This means preventing unfair recruiting, tackling workplace discrimination. It is also required of the HR compliance officers to stay up to date with the law changes. 

Why is Human Resources Compliance Important?

Human Resource Compliance is important as failing to meet the legal standards and failing to follow the law is illegal and can lead to industrial disputes. Circumstances like allowing a worker to work during the first week after giving birth can also be viewed as a criminal matter.

It is challenging for an organization to keep meeting all the legal obligations, while the companies are quite confident about complying with certain legal obligations like paying National Monthly Wages but they are not as confident when the topic shifts to following fair recruitment practices.

Who is Responsible for HR Compliance in an Organization?

There are circumstances when either owner, chief director may take up this responsibility, but usually it the responsibility of the HR to ensure HR Compliance is met and to advise and strategize and implement policies in the organization.

If the organization is found to have failed the legal obligations it the HR who will be held responsible unless it the owner or the chief director who may have taken up the responsibility.

It’s their responsibility to ensure that they are in compliance with:

The Fair Labor Standards Acts

This governs the minimum wages and the overtime pays. The requirements are different in every state.

Federal Civil Rights Law

This law covers the terms and conditions of employment, hiring and firing. This law states that discriminating people on the basis of race, gender or sex when hiring/firing is unfair and unlawful.

 The Family and Medical Leaves Act

This act allows employees to take 12 weeks of unpaid leaves under different circumstances and come back and work in the same position that they were in before.

The Uniform Services Employment and Reemployment Right Act

This provides protection to employees who are called for active military duty and protects them after returning from duty.