Q & A: Addressing Changes to W-4s and SSNs


Question Corner

Addressing Changes to W-4s and SSNs

By Jason R. Mau

Q: We have exempt employees who accrue paid time off (PTO) each pay period. They would like to be able to donate some of their PTO to coworkers who don’t have any more PTO. Does that violate any federal or state laws? Are there any special exceptions or issues we should be aware of?

A: A donation of PTO to coworkers does not violate any law per se, but you should be aware that an employee’s decision to donate his or her leave it may come with tax liabilities to both the donor and donee.  However, the IRS allows exceptions for donating leave for employees dealing with personal or family medical emergencies and for employees affected by a federally-declared major disaster under a properly created employer-sponsored arrangement.  You may wish to consider limits to amounts of leave donated and received, eligibility requirements, and whether the leave donated is measured and transferred hour to hour or by pay rate differences.

Q: If an employee receives a pay raise, does she need to fill out a new W-4?

A:  The IRS does not require that new W-4 forms be provided when an employee receives a raise, but an employer may want to, as a courtesy, provide the employee with the opportunity to make a change to her form as the raise might change her tax liability for the year.     

Q: One of our employees who has worked for us a little over two years just presented us with a new Social Security number and said the old one we have been using is no longer her number. I have never heard of this before. Do we terminate the old record/file and rehire her with the new information, or do we just change the Social Security number and have her fill out a Form I-9?

A: Mismatched SSNs actually happen a little more than it probably should, but can be easily managed.  Do not immediately rush to any conclusions about the reasons behind the new number, or terminate the employee to rehire her with the new information, as an unsupported adverse action against the employee could subject the company to an antidiscrimination claim under the Immigration and Nationality Act.  Granted, it is possible the mismatch is caused by identity fraud, ineligibility to work, or illegal residence status, but it is more likely to have been caused by misreported name changes, operator error at the Social Security Administration (“SSA”), hyphenated names, or difficulties translating ethnic names in the system.  Confer with the employee and then follow up with the SSA's verification service to verify the new information.  Once confirmed, update the information in your records and submit corrections to the SSA.

Q: Our personnel files are stored electronically on an internal server. What questions should we ask our IT department to ensure they are secure?

A: To determine whether the files on your internal server are secure and being managed correctly, your IT department should be able to confirm that only authorized employees have access to the materials they are authorized to view, that the server is being backed up periodically, that there is a secondary backup system in case the software and backup are damaged, that the personnel files are not subject to the same file destruction policies as other files on the server, and that the relevant employees have the necessary training to access the system and protect the information.

Jason R. Mau is an attorney with Greener Burke Shoemaker Oberrecht, P.A.  He can be reached at 208-319-2600 or jmau@greenerlaw.com.