The Library

Banking Holiday Alert: Labor Day


All banks will be closed for Labor Day on Monday, September 1, 2014.

Be aware that no direct deposits will settle or be initiated on this day.

If your check date is Monday, September 1st, Tuesday, September 2nd, or Wednesday, September 3rd, you may need to contact us in order to coordinate your payroll processing for a timely direct deposit.

Southwestern Payroll Service’s office will also be closed Monday, September 1, 2014, in observance of Labor Day.

NOTE: If you would normally pick up your payroll – or have it delivered by courier on this day – please make arrangements to come in on Friday, August 29th or contact us to have the delivery date changed.

Questions can be answered through the contact form below or by phone at 918.388.3320.


Employee, Contractor, or Statutory Employee: Who Are They?

SWPay Employee StatusOne of the questions we are asked most frequently is “Who is an employee?” The answer to this question has significant financial and legal implications for your business.

Here are some pointers to help you make this determination for your particular circumstances and point you to resources that will give you confidence in your decision.

Many businesses would prefer to pay all individuals as independent contractors, who do not legally require employer taxes, employee tax withholding or benefits.

In recent years, the IRS has paid particular attention to the determining of worker status, due to the loss of billions in uncollected taxes from those employers who pay employees as contractors instead.

While there is no simple rule for all purposes and all jurisdictions, there are numerous factors which can be looked at together to help determine who is an employee and who is not.

The IRS uses something called the 20 Factor Test to determine how much control the business exercises over the manner in which the work is done, the schedule of the work and resources used.

Generally, when a business controls or has the right to control what work will be done and when, where and how – then the worker is an employee.

The most common way to determine if someone is a contract worker is to rule out any factors that would make them an employee. A worker is only a contractor if you can only control the result of the work.

For example, when hiring a painter to paint your home, you have the right to determine an agreed upon price, a deadline for completion and whether the work is done to your satisfaction – and little else. Otherwise, they are considered a common law employee.

The IRS states: “Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.”

Workers can be assigned to one of four classifications that govern how they must be treated for tax purposes. They are employee (common law), independent contractor, statutory employee and statutory non-employee.

Even if a worker might be considered a contract worker under the common law guidelines, there a four special circumstances that would render them a Statutory Employee.

Access these exceptions, and additional contingent considerations here..

In short, the exceptions are:

  1. Food and laundry delivery drivers who are agents or receive commission
  2. Life insurance agents who sell primarily for one insurance company
  3. Home workers using materials you provide to create items to your specifications to be delivered back to your company or customer
  4. Salesmen or saleswomen who sell goods to other businesses for resale or use in their businesses

When these special cases also are required to 1) Perform the services personally, 2) Do not have a large investment in tools or equipment and 3) Provide these services continually to the same base of clients, then they are considered Statutory Employees.

There are also three kinds of workers that must be treated as Statutory Non-employees, thus as contract workers.

They are:

  1. Direct sellers
  2. Licensed real estate agents
  3. Companion sitters not employed by a placement service

If payments are made to the sellers and agents only for sales produced and not based on any expectation of hours and they are employed under a contract that states they will not be treated as employees for tax purposes, then they are Statutory Non-employees.

If in doubt, submit this IRS Form SS-8 for an official determination.

Here are the complete IRS guidelines.

Ultimately, if you decide that you can treat workers as independent contractors, you may wish to consult a labor attorney or CPA to be sure you make the right call. It is always safe to treat a worker as an employee, and for most companies, this is almost always the right answer.

Call Southwestern Payroll with any questions to help you clarify whether your workers are employees or something else.

Additional information is available here from the Department of Labor.

Copyright: Southwestern Payroll Service, Inc. 2014 918.587.321

Best Payroll Company for Small Business – What to Look For


No one ever said running a small business was easy, but managing the day-to-day operations is enough work without the added complications of accurately handling payroll.

Still, many companies choose to do just that – and often their efforts are rewarded by mistakes made in moments of exhaustion.

Why Outsource Payroll?

No matter how many employees you have, outsourcing makes sense for a variety of reasons. Small employers under 50 employees probably lack the expertise in-house to handle everything correctly in an efficient way. Remember that a payroll company doesn’t just provide you with a service, but with a knowledge base and team of experts with years of experience.

We are always ready to process payroll. We never get sick or go on vacation so you are not dependent on a single employee that knows how things work.

Companies of all sizes find that outsourcing costs less and allows employees to focus on revenue generating activities.

What Do I Look For?

When you make the decision to find a payroll professional, here are some things to look for. Take notes, make comparisons, and see what Southwestern Payroll has to offer.


What’s the most important quality in the company you use to manage your payroll? Understanding. The payroll team you choose should take the time to get to know you and your company’s unique functions and practices.

They should take the time to understand you, your employees, your business, and how you operate. Without it, you’re just another client. With it, they’re part of your team.

At Southwestern Payroll, we make payroll easier for you and your staff – right from the start – by investing the time to understand how you run your business. We customize our strategy and tools to fit your needs.

Not only do we keep up with the large national payroll companies, we offer you personal service, an available staff, and the time it takes to keep your company’s payroll up-to-date, efficient, and meeting the needs of your employees. These benefits are usually missing with a company where you’re just another client number.


Look for a company that has the experience and knowledge to handle your payroll tax and compliance concerns. Payroll needs vary from business to business, and a good company will already have a plan for any situation that might occur within your office.

Whether you’re taking on new employees, starting to garnish wages, or need help with complex compliance regulations, they should be prepared to handle it with efficiency and accuracy.

Customer Service

Most payroll companies offer a direct line to customer service. But can you really get someone on the line in an emergency? Employees change bank accounts, W-2s get lost and people panic when the money’s not where they expect it to be. Having a live person ready to solve problems immediately can make all the difference in an emergency. We’re here to help you. And that means giving you access to us – whenever you need us.

Cost Efficiency

The service you receive should be cost-effective for your bottom line. If you spend more time calling the payroll company to make adjustments and corrections than you would doing payroll yourself, the cost has outweighed the benefits.

Our accuracy, efficiency, and concern for your business equate to money in your pocket and time on your hands.

Services Provided

Do they provide certain important features like payroll setup for new employees, payroll reports, and PTO accrual? How about payroll tax payment, garnishment service, and paycards?

Whatever your needs, today or next year, the payroll company you choose should be prepared to offer you service, standards, and speed to complete the transactions you need to succeed in business.


Not only are ethics crucial to the reliability of a payroll company, they are vital to your health as a company. The handling of your money, and your employees’ paychecks, must be kept in the most trusted hands. So take a moment to really examine your dealings with the people you trust with the life blood of your business. Do you see evidence of character and good business practices in your communications with them?

At SWPay, all your funds can be reconciled and accounted for at any time. In addition to high standards of electronic information protection, we take special care of your information by controlling paper documents in our building.

Looking for a payroll company who cares about you?

Give SWPay a call: 918.587.3321

A New Website For Southwestern Payroll

Introducing the One, the Only, the Brand New Website for Southwestern Payroll!

We are pleased to announce the launch of our new and improved website. The new layout gives you ease of use and a simpler navigation. See the difference below.

Ye Olde Site


New and Improved Site


Accessing your site is now even faster and easier! Note the minor differences in navigation to and Time and Attendance below:

Ye Olde Site


New and Improved!


Our new site is more than just entertaining. We’ve chocked it full of advice and expertise. Have questions? Give us a call at 918.587.3321

Let us know if you have any questions. Enjoy!

Important HRmony Security Features

In an effort to enhance security to our system, Southwestern Payroll will be implementing an enhanced security login structure as outlined below. The change applies to all users within the system, regardless of whether it’s an administrator with full privileges or an employee using the ESS portal. Our goal is to provide not only world-class technology, but world-class security as well.

As all of you are aware, there are frequent news reports of security breaches at large and small companies and governments around the globe. With several high profile data breaches, including the most recent one involving the breach of the federal employee database, employers might be wondering – is there still something we can do better to protect our employees’ data?

The answer is absolutely YES. This is why we are implementing these enhanced security measures to protect the data of your company and employees.

We encourage you to share this information with your staff and employees. Many of them may already be familiar with this kind of process using online banking or other logins, as many banks now have such secure login practices.


pdf-iconADMIN Summary: Enhanced_Security_Requirements

pdf-iconEMPLOYEE Posting of Security Requirements

pdf-iconMFA Manager Approval

Note: Please share this “EMPLOYEE Posting” document with your employees.

Below is a Summary of the Changes

1. Enhanced Password Standards:
Going forward, your password must contain a minimum of 8 characters and include at least one of the following:

  • Uppercase Letter
  • Lowercase Letter
  • Number
  • Symbol

An example would be: Password1$

2. Multi-factor Authentication:
Multi-factor Authentication adds an additional level of security. After you enter your username/password and click login, if the system does not recognize this computer as one you have used in the past, the system will require a second form of authentication before you can continue. A code will be emailed or texted to you, which you will then enter to access the system.
The security combination factors are as follows:

  • Password = something you know
  • Code = something you have

What Will Happen On Thursday Morning?

Step #1: Users should start the login process as usual. After you successfully enter the username and password, the system will prompt you for a new password (even if your current password already meets the new standard). The password criteria will have to meet our new standards outlined above. (There will be on-screen instructions advising users of the new requirements).

Step #2: After changing the password, you will be prompted to configure the Multi-Factor Authentication Settings. Up to three methods can be configured for receiving the code, as follows:

  • SMS Mobile #: Will be used to send codes via text message (preferred method)
  • Email: Will be used to send codes via email address
  • Voice Phone #: Will be used to send codes via phone call

You may choose to enter all 3 or only 1.

The system will have pre-filled any phone or email that is already listed in your account. However if you want to use another phone/email for the purpose of receiving the code, those fields can be overwritten with new information. When done, click save.

Once this step is completed, you will be logged in to the system. (If you change your email or phone number in this process, it will not replace or update information entered in your employee profile, this is used strictly for code authentication).

Next time you log in, the system will list the methods you have selected in the setup process, you will be able to select one of those. The system will generate a random 6 digit code and send it to you, after entering the code; the system will validate the number and grant access to the application.

Important: If this is your office or home computer that you will use in the future to login, you should check the box to remember this computer. This will avoid the code requirement on future logins from “this computer”.

Password Change and Multi-factor authentication Will NOT be required when using Web Clock. However when you login next to the system portal, the system will prompt you to change the password and setup the new Multi-factor authentication; you will then have to use that new password for Web Clock as well.

Mobile Users:
Mobile users will be required to change their password as well according to the same guidelines. However for the mobile app, the system will not enforce the MFA code authentication. You will be able to login on the mobile app with the username/password only since it does not access the larger data system directly.

We appreciate your cooperation and understanding. We recognize that it might be a small inconvenience during the transition, but it is a big step in the right direction to protect your company and employee data.

If you have any questions please do not hesitate to call 918-388-3320 or email your account representative or and we will be glad to assist you.

Holland Hall Alumni Golf Tournament


Patriot Golf Club Event 2014

Darin Alred, President of Southwestern Payroll, is proud of being an alumnus of Holland Hall, in Tulsa. As a result, we are happy to sponsor the Holland Hall Alumni Golf Tournament!

The event begins June 9, 2014, at the Patriot Golf Club in beautiful Owasso, Oklahoma.

Family, friends, and alumni of Holland Hall are welcome to come and enjoy the day!

Secure Payroll Procedures: Stewardship

At Southwestern Payroll, we take the responsibility that we have to our clients very seriously. Perhaps our most important responsibility is to be good stewards of each client’s information and funds. As a company, we have a long legacy of good stewardship and have put in place numerous policies and procedures to be sure we continue to protect our clients.


In order to process payrolls, we have to collect and maintain personal information for employees of our clients as well as potentially sensitive information about our clients themselves.

Employee information includes names, birthdates, social security numbers, addresses, bank accounts, health insurance elections, retirement plan elections, performance reviews, dependent information, child support orders, and much more. Company level information that we store includes FEINs, bank accounts, state tax account numbers, senior management contact information, and more.

Protecting electronic information

Much of the focus on information security centers on electronic access and protection. Increasingly, information is stored and available through web-based applications. Having proper internet security protocols in place and enforced is certainly critical. Proper network security to protect our network from infiltration is another critical step.

In addition to these protections, we have numerous other ways we protect client information. Delivery of payroll reports electronically is a great convenience for many. We offer several ways to deliver this information securely. They include encrypted emails, Secure FTP, and a secure file sharing system.

Securing paper documentation

Another critical facet of information security is controlling the paper documents in an organization. All paper archive documents are stored in secure areas protected by surveillance. Southwestern Payroll uses a secure onsite shredding service for all paper documents that do not need to be stored. Every piece of paper that has any text (excluding food waste) is shredded onsite before being secured and recycled. This ensures that sensitive information can’t be retrieved from our garbage.

Employee education and external review

Employees are educated about communications with unauthorized parties that might use social engineering to gain passwords or other relevant security information. Many sophisticated electronic attacks start with this type of low tech breach.

Each year we bring in outside auditors to review our procedures and policies to be sure we are keeping current with changing demands and technologies. Additionally, the physical security of our building is protected by audio and video surveillance at all times and by monitored alarms. Any entry to the building after hours is documented.

Our most important duties

Good financial stewardship is the other most important duty we have to our clients. As part of our processing, we collect funds from client bank accounts and escrow them until the funds need to be distributed to employees, tax authorities, or third parties.

In order to be sure we protect our clients and keep their funds safe, we maintain them in separate bank accounts by type of funds, never commingling them with our own operating funds.

Further, we reconcile all accounts containing client funds on a daily basis. This ensures that we collect all funds we expected to collect and that we paid all funds that we intended to pay.

All funds are safe and accounted for

Each dollar that we collect has an attendant liability associated with it. We track these liabilities by client and by fund type so that we know when we have paid and collected all funds due.

We can provide, on request, a detailed record of all client cash and outstanding liabilities to ensure that we have all funds needed to meet those liabilities. Our clients can rest assured that their funds are safe, accounted for and properly distributed.

Seeking the highest standards

We seek the highest standards for security and protection for our clients. From employee data to your payroll funds and information, we protect you.

Secure payroll procedures start the minute we begin collecting information about your company and your employees. Since 1955, we have held ourselves to a high standard of accountability. Our job is to serve our clients and protect their assets and information at every step of the payroll process.

Have questions about payroll? Give us a call: 918.587.3321

Our support team is standing by, or you can contact us online.

Bowl for Kids Sake with SWPay

Grab your bowling shoes!

The SWPay team will “Bowl For Kids Sake” supporting Big Brothers & Big Sisters at Andy B’s again this year.

Our team’s bowlers returning for this year’s event are: Megan Warren, Amy Slater, Steve Hobbs, Troy Petit, and Samantha Hartanovich.

The team has raised money for the event, and donations are still coming in.

Check out Bowl For Kids’ Sake here!

Last year, Amy had the high score for the first game due to her awesome smack talk, and Steve scored highest on the next. Will one of them score the title of “Best SWPay Bowler” this year?

Thank you, Andy B’s, for a fabulous time!

Garnishment Processing Service: The Right Way

Need help?

shutterstock_141127666Commercial garnishments, child support orders, tax levies, student loan payments and other wage attachments have become an increasingly difficult burden for employers to bear.

Incorrectly processing an order or failing to respond in a timely manner can expose the employer to significant financial risk and potentially damage relationships with employees.

Our Service Saves Time & Money

Southwestern Payroll Service has developed a garnishment administration service that alleviates all the hassle of managing this time consuming and complicated process.

And, we warranty that we will process them correctly, protecting our clients from unexpected costs.

When an order or other relevant information is received, our enrolled clients simply send us the document in a way that is convenient for them. We return a receipt so that the client knows we have received it and are taking responsibility.

Our clients are then provided with the form to notify their employee that the garnishment has been received.

After verifying the validity of the order, we contact the appropriate authority, file any appropriate responses, correctly calculate and withhold the deduction from the employee’s pay, remit the payment to the third party (state, attorney etc.) and file any subsequent paperwork.

In addition, we respond to termination orders and handle any employee terminations.

Most of our clients elect to pass most of the cost of this administration on to the employees through an additional payroll deduction. We set our fees to the proper statutory guidelines for each type; fees that employers are allowed to charge their employees for processing these orders.

Legal concerns

Increasingly, judges are routinely finding in favor of plaintiffs when a commercial garnishment order is not properly handled. This means that the employer can be found liable for the entire amount of the money owed by the employee even if the employee did not make enough to pay the garnishment.

Many families depend on the proper collection and distribution of child support funds to feed and clothe their children. Employees depend on their employer to keep them in compliance with these orders.

Let SWPay handle it.

Subscribing to our service ensures that your company will stay in compliance, avoid financial assessments and keep this important process running smoothly.

Find out more by contacting SWPay at 918-587-3321.

Employee Onboarding: Part 1

After the handshake

Onboarding employees
Once an employee has accepted a position with your company, you need to begin fulfilling the legal requirements of onboarding them.

What is onboarding?

Onboarding is the process of completing all necessary paperwork and putting everything in place for them to begin working for your company. It’s become the term of choice in many workplaces.

Properly onboarding an employee is an important responsibility of every employer. It goes well beyond a simple job application and resumé in a file.

Steps to proper onboarding

While there may be many necessary steps specific to your company or industry, (safety training, orientation, uniform fitting etc.), there are many steps that all employers should have in common.

The most well-known steps are completing a form W-4 and a form I-9. The W-4, also known as the Employee’s Withholding Allowance Certificate, instructs the employer on how to set up an employee in the payroll system.

If done properly, this ensures that the correct amount of federal income tax is withheld from each check according to the elections made by the employee.

The W-4 form is available here.

A copy of this completed form MUST be retained by the employer at all times and for all employees. Please be aware that you must follow the elections made by the employee. It is not the employer’s right or responsibility to advise the employee or override their elections. Failure to follow the withholding guidelines may subject your company to liability if the employee owes taxes at the end of the year.

The Form I-9, also known as the Employment Eligibility Verification, is now administered by the Department of Homeland Security through the U.S. Citizenship and Immigration Service (USCIS).

All employers are required to complete this form for all employees once they have accepted a position of employment. It lays out very specific instructions and acceptable forms of identification.

The I-9 form, along with the instructions, is available here.

Use Proper Forms

U.S. law requires companies to employ only individuals who may legally work in the United States.

To assist with this, the USCIS and the Social Security Administration have provided the e-verify service.

Once a Form I-9 has been received from an employee, the employer should complete the e-verification online to be sure that the name and SSN provided are match government records.

The process is quick and easy.

Information about the program is available here.

Important Information

Federal law prohibits discrimination in hiring resulting from your suspicion that an individual might not be eligible to work legally in the United States.

You should make your hiring decision before using e-verify. If e-verify does not immediately confirm eligibility to work, there will be clear instructions on how to resolve any discrepancies or tentative non-confirmations.

In the next article we will discuss new hire reporting and benefit eligibility.

Have questions about your payroll process?

Call 918.587.3321 for answers to your questions, or contact us here.