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Payroll Glossary - C
Cafeteria Plan: A plan that offers adjustable benefits under Interal Revenue Code section 125. Employees choose their benefits from a menu of cash and benefits, which can be paid for with pretax deductions from wages if they qualify.
Cash or Deferred Arrangement (CODA): An arrangement under a retirement plan which allows employees to receive either cash or have the employer contribute the same amount to the plan.
Catch-up Contributions: Elective payroll deferrals by an employee to a defined contribution retirement plan or IRA above any standard statutory limit
Child Support Withholding: Keeping back amounts from an employee's paycheck to fulfill a child support order from a court or a state administrative agency.
Circular E: IRS Publication 15, Employer's Tax Guide. This publication contains the basic rules, guidelines, and instructions for all payroll tax functions.
COBRA: Consolidated Omnibus Budget Reconciliation Act of 1985.
Common Law Employee: A worker who is an employee under the common law test.
Common Law Test: A test that measures the control and direction that an employer has the authority to compel a worker. Where the employer has the right to direct the worker as to how, where, and when the work will be completed, in addition to controlling the result of the work, and assuming the risk of loss, the worker is considered a common law employee.
Common Paymaster: One of two or more related corporations that pay employees who work concurrently for the related corporations. Under this concept, the related corporations are treated as a single employer for all employment tax purposes.
Compensation: All money and nonmoney payments provided to an employee for services rendered to the employer.
Compensatory Time: Paid time off given to an employee for working extra hours. The Federal Wage Hour Law places severe restrictions on the use of comp time to avoid paying overtime,although special exemptions are allowed for public sector employees.
Concurrent Employment: Working for more than one related employer under a common paymaster arrangement.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA): Federal law that requires certain employers with group health care coverage to allow continued coverage from the insurance carrier to separated employees and other qualifying beneficiaries.
Constructive Payment: An IRS rule that says wages have been paid to an employee, when the employee has reasonable access to the wages without substantial limitations or restrictions.
Consumer Credit Protection Act (CCPA): Federal law that controls the dollars of an employee's wages that can be garnished to pay creditor debts, including child support.
Cost-of-Living Adjustment (COLA): An adjustment of wages or benefit payments to account for changes in the cost of living , generally based on increases in the CPI (Consumer Price Index).
Cost-of-Living Index: See Consumer Price Index..
Covered Employees: For each law affecting payroll and human resources, this term defines those workers who are subject to the law.
Credit Reduction: A reduction in the credit an employer receives against FUTA tax owed for state unemployment taxes paid, where the state has not repaid a federal loan under the joint federal/state unemployment compensation program.
Critical Path: Management strategy that maps out deadlines that must be met to finish a project within the time allowed.
CSEA: Child Support Enforcement Agency