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Justice Department declares ACA Unconstitutional – but it’s still the Law!

As reported by CNN on March 26th, 2019, , The Justice Department, reversing its previous position, is supporting a federal judge’s ruling that the Affordable Care Act (ACA) is unconstitutional in a case that could eventually be heard by the U.S. Supreme Court. In the meantime, all ACA coverage and reporting obligations for employers remain in place.
“The Department of Justice has determined that the district court’s comprehensive opinion came to the correct conclusion and will support it on appeal,” said Kerri Kupec, spokesperson for the Justice Department.
The stance comes out of the Dec. 14th ruling by district court judge Reed O’Connor, in Texas v. United States. Mr. O’Connor ruled that because Congress eliminated the penalty on individuals without ACA-compliant health coverage effective Jan. 1, 2019, the ACA’s individual mandate requiring people to have health insurance “can no longer be sustained as an exercise of Congress’s tax power.”
For now, employers must remember that the ACA is still the law and the Justice Department’s stance does not change their present compliance obligations. Employers still have to follow ACA regulations and properly report offers of coverage (for applicable large employers). InTANDEM in conjunction with our insurers handles this obligation.
We will continue to update you with any changes regarding the ACA.

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EEO-1 Report may include Pay Data

Each year InTANDEM files the required EEO-1 report to the Equal Employment Opportunity Commission (EEOC). This year, pay data may be a necessary inclusion in the data.
Businesses with at least 100 employees and federal contractors with at least 50 employees and a contract of $50,000 or more with the federal government must file the EEO-1 form, which identifies by job category, race, sex and ethnicity the number of employees who work for the business.
The EEOC uses information about the number of women and minorities companies employ to support civil rights enforcement and analyze employment patterns, according to the agency.
The EEO-1 form was revised during President Barack Obama’s administration to require employers to report pay information from workers’ W-2 forms by race, ethnicity and sex. However, the pay-data provisions were suspended in 2017 by President Donald Trump’s administration.
Employers who oppose the expanded data collection said the W-2 income data that would be collected doesn’t provide adequate information about pay disparities.
Covered employers have until May 31 to file their 2018 EEO-1 reports, but whether they will need to submit the pay data for this filing period isn’t clear.
On March 18, the EEOC opened the portal for employers to submit EEO-1 reports but did not include the pay-data questions. The judge subsequently gave the EEOC and the OMB until April 3 to tell employers if they will have to report pay data this year.
If pay data is ultimately required it is assumed that an extension on the May 31st deadline will be given.
As always, it is a good time for employers to review their pay data for each employee to ensure that parity exists amongst all employees in a similar job with similar qualifications.
InTANDEM HR will continue to file the EEO-1 report for any of our clients who must comply with the requirements.

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Exempt Salary Threshold being reexamined, yet again

If we take a trip down FLSA minimum salary threshold memory lane we’ll recall the Obama administration attempted to raise the former and current threshold from $23,660 to $47,476. The efforts were thwarted when a Federal judge in Texas put an injunction on the change. And now it remains at $23,660 (that is the minimum amount that an exempt worker must earn in order to be considered exempt from the overtime and other requirements of FLSA). Of course the salary threshold is just one component – workers have to fall under certain defined categories of workers in order to qualify and pass additional “tests”, many of which intensely examine the actual duties of these employees.

And now, a new overtime rule proposal is heading to the the White House’s Office of Management and Budget (OMB) for review. OMB’s regulatory office has no deadline by which it must review the U.S. Department of Labor’s (DOL) rule but the move indicates that a Notice of Proposed Rulemaking (NPRM) will be published for public comment in the near future.

Most likely, an NPRM will appear in March, according to ​Tammy McCutchen, a former DOL Wage and Hour Division administrator and principal at Littler Mendelson. McCutchen, who said she confirmed the news independently, also said she expects DOL to set a salary level in the low- to mid-$30,000s.

The regulations, which set a salary threshold for overtime eligibility under the Fair Labor Standards Act (FLSA), have been in limbo for years.

It is our hope that any decisions made give employers some time to implement the new threshold whatever that may ultimately be. We will update you.

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FSLA, OSHA, and FMLA Violations subject to increased DOL Penalties

As of Jan. 23, 2019, the U.S. Department of Labor (DOL) increased penalties for violating federal minimum wage, overtime, and posting and safety requirements. The increased monetary fines apply to penalties assessed under Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Occupational Safety and Health Act (OSH Act).

What’s the reason for the increase?

The DOL and other federal agencies must issue annual adjustments to penalty amounts in order to account for inflation, as required by the Federal Civil Penalties Inflation Adjustment Act of 2015.

What do the federal agencies and regulations cover?

Employee Polygraph Protection Act (EPPA)

This applies to most private employers and prohibits them from using lie detector tests for pre-employment screening or during employment.

FLSA

This federal law establishes minimum wage, overtime pay, recordkeeping, and child labor standards that affect full and part-time employees in the private sector as well as federal, state, and local governments. One of the most common violations is the classifications of workers as exempt who are actually non-exempt base on their job duties. When in doubt please contact InTANDEM HR to ensure your workers are properly classified.

FMLA

This allows eligible employees of covered employers (50 or more employees in a 75 mile radius) to take unpaid, but job-protected leave for specified family and medical reasons. It also requires the continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.

OSHA

Enforced by the Occupational Safety and Health Administration (OSHA), this law requires compliance with the act’s standards to provide employees with a workplace free from recognized hazards.

What are the increased penalties?

FLSA

According to the DOL, employers that repeatedly or willfully violate federal minimum wage or overtime requirements will receive a maximum monetary penalty of $2,014. That’s up from $1,964.

Violations of the FLSA’s child labor restrictions increased to a maximum of $12,845 per under-18-year-old employee.

FMLA

If you are covered by the FMLA, you’re required to post a notice (in a conspicuous place) explaining the rule’s provisions and information regarding the DOL’s Wage & Hour Division. Failure to comply with this posting requirement increased from $169 to $173. InTANDEM’s all-in-one labor poster includes these provisions.

OSHA

According to the DOL, the maximum penalty for violations of safety standards classified as series and ‘other-than-serious,’ and posting violations increased from $12,934 to $13,260 per violation.

For failure to abate violations, they increased from $12,934 to $13,260 per day.

Minimum penalties for willful violations increased from $9,239 to $9,472. Maximum penalties for willful violations are up to $132,598 from $129,336.

The maximum penalty for repeat violations increased to $132,598. That’s up from $129,336.

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All 2018 W-2s available online!

All employees who actively worked for InTANDEM HR and our work site partners in 2018 are now able to view their 2018 W-2 in the InTANDEM HR Employee Self-Service portal. If they requested an electronic W-2 they will not receive a paper mailed copy. If they did not select the electronic option a paper copy will be mailed to them by our TPA no later than 1/31/2019. All W-2s for 2018 and prior applicable years are available electronically online through the ESS now, regardless of whether employees selected the electronic or paper version.

 

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APA and IRS Partner on Messaging About New Tax Cut Law Impacts

On December 19, the IRS released Publication 5330The New Tax Cut Law Will Impact Your 2018 Tax Return, with information that payroll professionals can use to respond to employee questions during the tax filing season.

The publication includes two key messages:

  1. “Remember, these changes come from the new tax law, not your payroll or human resource office.”
  2. “Your employer/payroll office doesn’t provide tax advice.”

Instead, the IRS directs employees to the IRS website and to tax professionals in order to understand changes caused by the Tax Cuts and Jobs Act (TCJA; Pub. L. 115-97).

Publication 5330 explains that there were major changes to the tax law for 2018 taxes. The tax tables issued earlier in the year made adjustments to take-home pay to reflect new tax rates. These adjustments may change the amount of employees’ tax refunds or tax bills during the filing season, especially if employees did not complete Forms W-4 to adjust their withholding during the year.

The IRS also advises employees on what to do in 2019 to better prepare themselves for the 2020 tax filing season. Emphasis is placed on determining the appropriate amount of withholding during the year by performing a “Paycheck Checkup,” even if an employee made adjustments to withholding in 2018.

Publication 5330 was developed by the IRS in partnership with APA (American Payroll Association) and includes both the IRS and APA official logos. At the request of Terry Lemons, the IRS’s Chief of Communications and Liaison, APA’s Government Relations Task Force (GRTF) Subcommittee on IRS Issues prepared a list of topics for IRS outreach. Payroll professionals likely distributed many messages about the TCJA to employees during the year. Publication 5330 provides an official notice that payroll and human resource offices can use to respond to employee questions.

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IRS Business Standard Mileage Rate $.58 in 2019

The IRS announced that the business standard mileage rate for transportation expenses paid or incurred beginning January 1, 2019, will be 58 cents per mile, up 3.5 cents from the 54.5 cents-per-mile rate in effect during 2018 [Notice 2019-02, released 12-14-18].

The mileage rate may be used to compute the amount to reimburse employees who are using their own cars for business purposes. It may also be used by employers that elect to use the “cents-per-mile” valuation method for purposes of determining the amount that needs to be imputed to an employee’s income for personal use of certain company-owned or leased nonluxury vehicles. However, it may not be used by employees in claiming a tax deduction for unreimbursed employee business expenses, since such deductions are suspended by the Tax Cuts and Jobs Act.

REMINDER – There is no legal requirement in the private sector to reimburse employees for miles driven in the course and scope of their job at the federal IRS rate.  Employers may choose a rate that is higher or lower than this IRS standard. Employers that intend to continue using the business standard mileage rate should make sure they change to the 2019 rate for all affected travel on or after January 1, 2019. And remember that business miles driven in December 2018 that show up on an employee’s expense report in 2019 are governed by the rules applicable to the corresponding 2018 mileage rate.

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Beware of “Scammer” Emails Posing as IRS

A recent scam coming from emails impersonating the IRS has triggered an onslaught of computer viruses. The IRS has posted this article alerting consumers to the issue:

The phony emails can be potentially dangerous to your small business if employees do click on the links as they contain malware, which, when clicked on, can spread viruses throughout a company. The IRS has indicated that the emails typically come from institutions posing as banks or other financial firms. If you see an email purporting to be from “IRS Online”, carrying an attachment that says something similar to “Tax Account Transcript”, do not open it!

If using a personal computer, the IRS urges that you delete or forward the scam email to phishing@irs.gov. If it’s on the work computer, your employees should notify your technology professionals.

 

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IRS Increases FSA Annual Election Maximum

On Thursday, November 15, 2018, the IRS released a statement that officially increased the annual contribution limit for Healthcare Flexible Spending Accounts (FSA) – both Medical FSAs and Limited Purpose FSAs – and the monthly contribution limits for Qualified Parking and Transportation Accounts for any plan years beginning in 2019. There was no change to the Dependent Care Flexible Spending Account.

Beginning on January 1, 2019, the maximum employee election amounts for FSAs are as follows:

  • Annual Medical and Limited Purpose Flexible Spending Account (FSA) contribution limits will increase by $50 from the current amount of $2,650 to $2,700
  • Monthly limit for Parking and Transit will increase $5 from the current amount of $260 to $265

This comes as a follow-up to the announcement of increased limits for Health Savings Account (HSA) contributions for 2019 announced earlier this year. For those with Single coverage, the HSA contribution limit increases by $50, while accounts tied to Family coverage went up by $100. The catch-up contribution for HSA account holders age 55 or older will remain the same at $1,000. Here is a summary of the HSA contribution limit changes taking effect in 2019:

  • HSA limits increase to $3,500 for single coverage and $7,000 for family coverage

No change to the catch-up for over 55+.

If you wish to increase your FSA contribution to this new limit given its announcement after our open enrollment commenced, you may do so up until December 31, 2018. Contact your InTANDEM HR Account Manager if you wish to make a change to your previously submitted Flexible Spending Account election.