The Department of Labor has released a new proposed rule to increase the minimum salary that an employee must earn to be exempt from minimum wage and overtime under a white collar exemption. The proposed rule requires that salaried exempt executive, professional, administrative, and computer employees must be paid at least $679 per week on a salary basis, an increase from the current minimum of $455 per week. The rule allows for non-discretionary bonuses and incentive payments to account for up to 10% of the minimum, so long as they are paid out on at least an annual basis; currently commissions and bonuses cannot be counted toward the minimum. The DOL also proposes that highly compensated employees must be paid at least $147,414 per year to qualify as exempt. Of that amount, at least $679 per week must be paid on a salary or fee basis. The anticipated effective date of this rule is January 2020.
Employers in Massachusetts will recall that recent “Grand Bargain” legislation resulted in a number of significant changes, including:
Yearly increases of the minimum wage and tipped minimum wage (2018 rate of $11 per hour increased to $12 per hour on January 1, 2019)
Decrease in Sunday premium pay (1.4 times regular rate from 1.5 times regular rate)
Changes to the calculation and payment of tipped employees’ wages
Creation of a permanent sales tax holiday
Creation of a new Paid Family and Medical Leave program
While all of these developments should be monitored closely by employers and HR professionals, those with tipped employees should pay particular attention to the changes to the calculation and payment of tipped employees’ wages.
As part of the Massachusetts “Grand Bargain,” paid family and medical leave (PFML) has been taking shape. The law will provide paid family and employee medical leave benefits for Massachusetts workers in 2021. Also, it will establish a Department and process for paid family leave of up to 12 weeks to care for a family member, and up to 20 weeks for an individual employee’s own ailment or disability.
The tax that will pay for these benefits will begin in July 2019, and paid leave benefits themselves will be available beginning in 2021. The initial contribution rate will be 0.63 percent of all wages (or other qualifying earnings or payments). This amount is anticipated to increase over time, however no set schedule for this has been communicated to employers.
Businesses that employ one or more individuals are subject to the PFML law and must submit contributions on behalf of workers and covered individuals. Employers with fewer than 25 employees must submit contributions on behalf of their employees to cover the portion of PFML contribution due from employees and covered individuals, however they are not required to pay the employerportion of the contributions for family and medical leave. The Department has stated that cities, towns, districts, and political subdivisions are exempt unless they decide to opt in.
The Federal minimum wage has been $7.25 since 2009, but many states, counties, and cities have passed their own minimum wage laws. Employers must pay non-exempt employees at least minimum wage and if the mandated federal, state, or municipal rate differs, the highest rate must be paid.
18 states increased their minimum wage effective December 31, 2018 or January 1, 2019, and 3 more will increase their minimum wage later in 2019.
Massachusetts private employers and their HR teams are trying their best to obtain info and prepare, as MA joins a short (but growing), list of states providing employees with paid family and medical leave benefits on January 1, 2021. While this date may not seem to be looming around the corner, the effective date for the new payroll tax that will be funding these benefits is July 1st of 2019.
Without further clarity promised until the proposed regulations are released (no later than March 31, 2019), HR Pros and Business Owners are looking for all options and avenues available to illuminate this program and the responsibilities that must be met to comply.
Let your employees know: now is the time to take full advantage of employer health flexible spending arrangements (FSA) during 2019.
FSAs provide employees a way to use tax-free dollars to pay medical expenses not covered by other health plans. Because eligible employees need to decide how much to contribute through payroll deductions before the plan year begins, many employers are offering their employees the option to sign up for an FSA now for participation that begins in 2019.
Interested employees wishing to contribute during the new year must make this choice again for 2019, even if they contributed in 2018. Self-employed individuals are not eligible.
As a business owner or Payroll/HR professional, there's a lot to review at this time of year in order to make sure you close out your 2018 payroll and tax data without errors or corrections. And a review of any Third-Party Sick Pay (abbreviated 3PSP) is probably (hopefully!) on your list.
Year-end deadlines are rapidly approaching - December 27 is the last day to post 2018 payroll data to meet filing deadlines. If any of your employees were issued sick pay by a third party (usually an insurance company) in 2018, take a look at these three steps to help you avoid last-minute payroll and tax adjustments.
There are many good reasons to look into an applicant’s background. Before you decide to trust applicants with your business’ money, equipment and reputation, you should be sure that their history doesn’t indicate they’ll take advantage of that trust. Moreover, you make a substantial investment in a new worker’s training and compensation. As with any investment, you want to make sure you’re not wasting that investment.
Fact is, not everyone can be trusted. When polled by executive search firm Ward Howell International, 17 percent of 501 executives surveyed said their new hires had misrepresented job qualifications. What’s more, applicants with especially scary skeletons in their closets aren’t likely to tell you about them. Finally, state laws require you to perform background checks on applicants for certain positions, especially ones dealing with children or the elderly.
One of the biggest political developments last year was the passage of Tax Reform. In addition to changes to credits, deductions, and business tax rates, the tax reform law changes the way employers calculate wage withholding for their employees.
For this reason, the IRS has released an “early release draft” of the 2019 IRS Form W-4, which incorporates a number of changes resulting from tax reform as well as the new withholding requirements. The agency has also updated their website with information on how tax reform effects taxpayers and businesses.