Posted on May 11, 2021

Amounts Attributable to Previously Issued Relief Generally Not Taxable

On May 10, 2021, the Internal Revenue Service (IRS) released guidance on the taxability of dependent care assistance programs (DCAPs) for 2021 and 2022, clarifying that amounts attributable to previously issued carryover and extended grace period relief generally are not taxable.

Specifically, if these dependent care benefits would have been excluded from income if used during taxable year 2020 (or 2021, if applicable), these benefits will remain excludible from gross income and are not considered employee wages for 2021 and 2022.

IRS Notice 2021-26 also clarifies, using a number of examples, the interaction of this standard with the one-year increase in the exclusion for employer-provided dependent care benefits from $5,000 to $10,500 for the 2021 taxable year under the American Rescue Plan Act.

© 2021 HR 360, Inc.

Posted on May 10, 2021

The Districts Minimum Wage Rate Is Adjusted Annually to Reflect Cost of Living Increases

The District of Columbia’s Office of Wage and Hour has announced that beginning July 1, 2021, the district’s minimum wage rate will increase from $15 to $15.20 per hour for all workers. The district’s minimum wage rate is adjusted each summer to reflect changes in the cost of living.

The district’s minimum wage rate applies to all employers, regardless of size. Employers are encouraged to review the information published by the Office of Wage and Hour or consult with a knowledgeable legal professional regarding exceptions to the district’s minimum wage laws. 

Employers in the District of Columbia should review and adjust their payroll systems to make sure nonexempt employees receive wages that are at least equal to the district’s minimum wage rate.

On July 1, 2021, the minimum wage for tipped employees will also increase from $5 to $5.05 per hour. Under district law, employers must ensure that each tipped employee’s wages when combined with the employee’s tips allow the employee to receive wages that are at least equal to the minimum wage requirements in the district. 

Poster Requirements

The district’s Department of Employment Services will publish and mail new minimum wage posters to all district employers. Employers are required to display this poster in a conspicuous place where employees can readily see it. The new poster is also available for download in English. 

 

© 2021 HR 360, Inc.

Posted on May 10, 2021

 Amendment Took Effect April 27, 2021

Effective April 27, 2021, Illinois has amended the state's Employee Sick Leave Act to allow workers to use their sick leave for a family member’s “personal care.”

Illinois does not require employers to provide paid sick leave. However, the Illinois Employee Sick Leave Act allows employees to use any personal sick leave benefits their employers do provide for specific reasons related to the care of certain family members.

The amendment expanded the Act to permit workers to use personal sick leave for the “personal care” of a covered family member. “Personal care” means:

• Activities to ensure that a covered family member's basic medical, hygiene, nutritional, or safety needs are met; 
• Activities to provide transportation to medical appointments for a covered family member who is unable to meet those needs; and 
• Being physically present to provide emotional support to a covered family member with a serious health condition who is receiving inpatient or home care.

The amendment defines “covered family member” as an employee’s child, stepchild, spouse, domestic partner, sibling, parent, mother-in-law, father-in-law, grandchild, grandparent or stepparent.  

© 2021 HR 360, Inc.

Posted on May 07, 2021

Adequate Worker Classification Is Crucial in Determining Eligibility for Employee Benefits and Protections

On Apr. 28, 2021, the 9th Circuit Federal Court of Appeals (the Court) held that California’s employee classification law known as AB 5 is not preempted by the Federal Aviation Administration Authorization Act (FAAAA). As a result, the Court lifted the injunction that prevented applying AB 5 to the trucking industry. 

Background

California adopted AB 5 in 2019. This law changed the process employers must follow to determine whether their workers should be classified as employees or independent contractors. This determination is crucial to assess eligibility for employment benefits and protections. The law became effective Jan. 1, 2020. 

However, on Dec. 31, 2019, a federal court in San Diego issued a temporary injunction to prevent enforcement of this law for the trucking industry.

The Court’s Decision

In reaching its decision, the Court held that the FAAAA does not preempt AB 5 as it only has “a tenuous, remote or peripheral connection” to rates, routes or services rather than a significant or even indirect effect. 

The Court also added that AB 5 affects motor carriers solely in their capacity as employers without altering their relationship with consumers. In this issue, the Court was not persuaded by the California Trucking Association argument that a possible increase in prices—or consolidation and elimination of routes—would be a fundamental change in the way motor carriers do business. 

Impact on Employers

Without the injunction in place, motor carriers in California will need to comply with AB 5’s classification requirements. Even though an appeal to the U.S. Supreme Court is possible, motor carriers in the state should review their compliance options with knowledgeable council.  

 

© 2021 HR 360, Inc.

Posted on May 05, 2021

The Final Rule Will Be Officially Withdrawn After Its Publication in the Federal Register

On May 5, 2021, the U.S. Department of Labor (DOL) announced it will officially withdraw the Independent Contractor final rule. The withdrawal will be effective on the day the DOL’s official withdrawal is published in the Federal Register. The Federal Register is expected to publish the withdrawal on May 6, 2021. 

Background Information

The rule was originally published in January, but its effective date was delayed as the result of a freeze the Biden administration ordered on regulatory changes adopted late into the previous administration. 

The independent contractor final rule would have required employers to use an economic reality test to gauge financial dependency in an employment relationship to determine whether workers should be classified as employees or independent contractors. 

Rescinding the Rule

After reviewing the rule, the DOL determined that the rule was inconsistent with the text and purpose of the Fair Labor Standards Act and that implementing the rule would have “a confusing and disruptive effect on workers and businesses alike.” 

Impact on Employers

The DOL is withdrawing this rule before its May 7 effective date. As a result, employers are not required to change any practices or policies to comply with any new requirements. 

Instead, employers should review their employee classification procedures to ensure they comply with existing DOL guidance. 

© 2021 HR 360, Inc.

Posted on April 30, 2021

The New Rate Becomes Mandatory on Jan. 30, 2022, and Will Be Adjusted Annually by the U.S. Department of Labor

On April 27, 2021, President Joe Biden issued an executive order requiring federal contractors to pay their employees a $15 minimum wage rate. Beginning in 2023, new minimum wage rates for federal contractor employees will become effective on Jan. 1. 

Affected Employers

• The executive order applies to federal contractors and subcontractors. Compliance with this order will be monitored by federal agencies for their respective contracts. 
• The order applies to new federal contracts, solicitations and contract renewals entered into or exercised on or after Jan. 30, 2022. The order does not apply to grants, nor to contracts or agreements with Indian tribes.
• This executive order does not alter or excuse compliance with any applicable federal or state prevailing wage law, or any local law establishing a minimum wage rate higher than the rate established by this order. 

Tipped Employees

Under federal law, tipped employees can receive a cash wage that is lower than the minimum wage rate. For tipped employees working for a federal contractor, the cash wage will increase to $10.50 per hour on Jan. 30, 2022. Beginning Jan. 1, 2023, the cash wage for tipped employees will be 85% of the minimum wage rate for federal contractors. 

Employers must ensure that tipped employees receive compensation that is at least equal to the minimum wage rate. This may require increasing a tipped employee’s cash wage so that the employee’s cash wage and tips, when combined, are at least equal to the minimum wage rate.

© 2021 HR 360, Inc.

Posted on April 30, 2021

Funds Available for Employees and Small Employers

Washington state has created a temporary grant program to provide paid family and medical leave (PFML) to individuals who, due to COVID-19, are unable to meet the “hours-worked” requirement for the benefit. The grant program is outlined in an April 21, 2021, amendment to the PFML law. Employees may begin filing for the grants Aug. 1, 2021.

Washington PFML imposes an eligibility requirement of 820 hours worked in either the first four of the last five calendar quarters or the last four completed calendar quarters preceding the application for leave.

The new law allows workers who do not meet the hours-worked requirement but are otherwise eligible for PFML to receive a pandemic leave assistance employee grant for the benefit. To be eligible, the worker’s PFML claim must have a start date in 2021 through March 31, 2022, and the worker must have:

• Worked 820 hours during the first through fourth quarters of 2019; or
• Worked 820 hours during the second through fourth quarters of 2019 and first quarter of 2020.

The worker’s failure to meet the regular hours-worked requirement cannot result from job loss due to misconduct or a voluntary separation unrelated to the pandemic.
 
Certain employers with 150 or fewer employees may be eligible for a $3,000 or $1,000 grant to assist with the costs of leave taken by employees who have received the PFML grants. Employers with voluntary plans are not eligible.

© 2021 HR 360, Inc.

Posted on April 29, 2021

Provisions Not Affected by the Delay Take Effect April 30

On Dec. 30, 2020, the U.S. Department of Labor (DOL) published a final rule to amend employee tip regulations under the Fair Labor Standards Act (FLSA). On Apr. 29, 2021, the DOL published another final rule delaying the effective date of three provisions of the 2020 employee tip rule (the Rule) to Dec. 31, 2021. 

Delayed Provisions

The three provisions affected by this delay relate to the assessment of civil money penalties against employers that violate federal wage and hour laws, as well as regulations that dictate the application of tip credits to employees who perform both tipped and non-tipped work.  

The DOL explained that this delay will provide the agency additional time to conduct another rulemaking to potentially revise that portion of the Rule addressing the application of tip credit provisions to tipped employees who perform both tipped and non-tipped duties.

Effective Apr. 30, 2021

On Feb. 26, 2021, a “delay rule” extended the effective date of the 2020 employee tip rule until April 30, 2021. As previously scheduled, the remainder of the Rule will become effective Apr. 30, 2021, including those portions that address the keeping of tips and tip pooling, recordkeeping and other minor changes. 

Request for Comment 

The DOL is soliciting public comment on how to improve the Rule’s recordkeeping requirements and the provision that bans managers and supervisors from keeping employees’ tips. 

© 2021 HR 360, Inc.

Posted on April 28, 2021

The New Preferential System Will Remain in Place Until Dec. 31, 2024

As of Apr. 16, 2021, certain employers are required to give preference to rehiring and retaining employees displaced by COVID-19 when filling new positions. This new law applies to hotels, private clubs, event centers, airport hospitality operations, airport service providers and enterprises that provide building service to office, retail or other commercial buildings.

Preference System

Employers must notify qualified, laid-off employees within five business days of all new job positions. If more than one qualified, laid-off employee applies, the position must be offered to the individual with the greatest length of service based on the date of hire.

Laid-off employees who receive an offer must be given at least five business days to accept or decline the offer. Employers can make simultaneous, conditional offers to laid-off employees, as long as preference parameters are observed. Employers must keep a record of these offers and related communications for three years.

Employers that decline to recall laid-off employees on the grounds of qualifications must provide laid-off employees a notice including the reasons for the decision within 30 days. Finally, employers cannot refuse to employ, terminate, reduce compensation or take other adverse action against any laid-off employee for seeking to enforce their rights under this law.

Employee Eligibility

Laid-off employees would qualify for a recall position if they held the same or similar position at the enterprise at the time of the employee’s most recent layoff with the employer.

A laid off employee is an individual who was: 

• Employed for six months or more during the 12 months preceding Jan. 1, 2020; and
• Separated from employment due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force or other economic, non-disciplinary reason related to the COVID-19 pandemic.

© 2021 HR 360, Inc.

Posted on April 27, 2021

Leave Must Be Paid if Employer Requires Vaccination

As of April 21, 2021, a new Chicago ordinance requires employers in the city to give employees time off work to receive the COVID-19 vaccine.
 
In addition, employers that require their employees to receive the COVID-19 vaccine must pay employees their regular rate of pay for up to four hours per dose. If an employer does not mandate the vaccine, an employee’s time off to get the vaccine may be unpaid. However, employees who have accrued paid sick leave must be given the option of using it for this purpose.

All employees must be allowed to get the vaccine during their regular work shifts. Employers may not require employees to schedule it around work.

Employers are prohibited from retaliating against employees for taking time from work for vaccination. Violations are subject to penalties.

© 2021 HR 360, Inc.

Posted on April 27, 2021

Employers Must Submit EEO-1 Reports by July 19, 2021

The portal for private-sector employers to submit equal employment opportunity (EEO-1) workforce data from 2019 and 2020 is now open, the U.S. Equal Employment Opportunity Commission (EEOC) announced April 26, 2021. The deadline for submissions is July 19, 2021. This data collection was previously delayed due to the coronavirus pandemic.

In general, a private-sector employer is subject to EEO-1 reporting if it has 100 or more employees or is a federal contractor with 50 or more employees and has a contract of $50,000 or more.

Employers that are subject to EEO-1 reporting requirements should begin submitting 2019 and 2020 EEO-1 data in the EEO-1 portal and ensure that they complete these submissions by July 19, 2021. These employers should also review the EEOC’s home page and new website dedicated to EEO data collections for additional information.

© 2021 HR 360, Inc.

Posted on April 22, 2021

Public Health Emergency Leave is Effective Upon Enactment, and Bereavement Leave Takes Effect Oct. 1, 2021

The Maryland legislature passed a number of new bills affecting employers, including those addressing bereavement leave and protections for essential workers in a catastrophic public health emergency. These bills are expected to be signed into law shortly.

Public Health Emergency Leave

Effective upon enactment, the Essential Workers Protection Act (EWPA) generally provides protections for essential workers related to the COVID-19 pandemic. Most notably, the EWPA provides up to 112 hours of paid public health emergency leave per essential worker, in addition to any existing paid leave, but only if there is federal or state funding for that leave.

The worker would be able to take this leave for the following reasons related to the communicable disease: 

• To isolate due to a diagnosis or symptoms;
• To obtain a diagnosis, preventive care or treatment;
• To care for a family member diagnosed with the disease;
• By order of a public health official or health care professional because of the worker’s exposure to or symptoms of the disease, or to care for a family member who has been so ordered; or
• To care for a family member whose care provider is unavailable or whose school/place of care has been closed because of the emergency. 

Bereavement Leave

Effective Oct. 1, 2021, the Maryland legislature amended its existing bereavement leave law to require employers with 15 or more employees to allow the use of any existing accrued paid leave for bereavement purposes. This allows employees to take accrued paid leave in the case of the death of a spouse, parent or child of any age. The employer cannot take any adverse action against an employee who has used or requested this leave, opposed an unlawful practice, reported a violation or participated in a proceeding under this law.

© 2021 HR 360, Inc.

Posted on April 15, 2021

Requirement Applies to All Private Employers and Their Employees

Beginning July 1, 2022, most New Mexico employers will be required to provide up to 64 hours of paid leave annually for specific reasons relating to the health or safety of employees or their family members. The requirement is contained in the state’s new Healthy Workplaces Act, passed April 8, 2021.

The only employer exception provided in the law is for government employers. All employees are eligible for leave, including part-time, seasonal and temporary employees.

Employees must accrue at least one hour of paid leave for every 30 hours worked, or employers may frontload 64 hours of paid leave on Jan. 1 each year. Leave carries over from year to year, but employee use of leave may be capped at 64 hours annually.

Leave begins accruing and may be used at the start of employment or July 1, 2022, whichever is later. Payout on separation of employment is not required.

Employers with policies providing equivalent leave benefits as those required by the law will be deemed in compliance.
 
Employers must notify employees of their rights under the new law at the start of employment and in a poster displayed in the workplace. The state’s Department of Workforce Solutions will provide a model notice for this purpose.

Penalties for employer violations of the paid leave law include damages, back pay, reinstatement and attorneys fees, among others.

© 2021 HR 360, Inc.

Posted on April 15, 2021

Employers May Substitute Equivalent Leave Policies

Under a new law effective July 1, 2021, employers of home health workers in Virginia must provide paid sick leave for specific purposes relating to the medical needs of the workers or their family members.

The law covers home health workers who work on average at least 20 hours per week or 90 hours per month. “Home health worker” means an individual who provides personal care, respite or companion services to an individual who receives consumer-directed services under the state plan for medical assistance services.

The law does not cover workers who:

1. Are licensed, registered, or certified by a health regulatory board within the Department of Health Professions;
2. Are employed by a hospital licensed by the Department of Health; and
3. Work, on average, no more than 30 hours per month.

Workers accrue one hour of leave for every 30 hours worked, beginning at the start of employment. Carry-over and frontloading provisions apply, but accrual and use of paid sick leave may be capped at 40 hours per year.

Leave must be provided on the employee’s request; however, when the need for leave is foreseeable, the employee must try to provide advance notice and try to schedule the leave to avoid unduly disrupting the employer’s operations.

Employers with leave policies that provide equivalent benefits are not required to provide additional leave under the new law.

© 2021 HR 360, Inc.

Posted on April 13, 2021

Employers Must Provide Notice of Law by April 13

A new Philadelphia Public Health Emergency Leave (PHEL) law mandates up to 80 hours of paid employee leave for specific COVID-19-related reasons. Leave became available under the law on March 29, 2021, and employers are required to notify employees about the law by April 13, 2021. A model notice provided by the city compares the current PHEL law with a similar law that expired in December 2020. The PHEL law remains in effect until one week after the end of the public health emergency.
 
The law applies to employers with 50 or more employees. It covers employees who have worked for a given employer for at least 90 days and:

• Work in Philadelphia;
• Normally work in Philadelphia but are currently teleworking from another location as a result of COVID-19; or
• Work for a given employer from multiple locations or mobile locations, if at least 51% of their work time is spent in Philadelphia.

Full-time, part-time and union employees are covered by the law; however, seasonal, temporary, and state or federal employees are not covered.
 
Leave must be provided for certain reasons related to an employee’s or family member’s COVID-19 symptoms or exposure, to the COVID-19-related closure of child care or school, or to receive a vaccine or recover from vaccination.
 
With some exceptions, employers must offer PHEL in addition to other paid leave and may not require employees to use PHEL before other leave.

© 2021 HR 360, Inc.

Posted on April 12, 2021

The New Law Uses Different Formulas to Calculate the Regular Wage Rate

On March 31, 2021, Virginia adopted the Virginia Overtime Wage Act (the Act). This new law becomes effective July 1, 2021, and, like its federal counterpart—the Fair Labor Standards Act (FLSA)—will require employers to compensate their non-exempt employees for overtime work at a rate of 1 ½ the employees’ regular wage rate.

Wage Rate Calculation

The Act establishes a new formula to calculate an employee’s regular wage rate.  Under the FLSA, the regular wage rate is the sum of all remuneration paid for employment (less certain statutory exclusions) divided by the total number of hours worked during the workweek.

Under the Act, the regular wage rate formula depends on whether the employee receives a salary or an hourly wage, as follows: 

• For hourly employees: Add all wages earned at the hourly wage rate and any other non-overtime wages paid or allocated for the workweek (less any items regularly excluded under the FLSA). Divide the sum by the total number of hours worked in the workweek.
• For salaried employees: The regular rate of pay is one-fortieth (0.025) of all wages paid for the workweek. 

Additional Changes

The Act also enables employees to file claims for unpaid overtime wages up to three years after the event takes place, removes the good faith defense for employers that fail to pay overtime wages, and increases the penalties, costs and damages that employers may be required to pay for unpaid overtime wages.

© 2021 HR 360, Inc.

Posted on April 07, 2021

Plans May Use Model Notices for New COBRA Notice Obligations

On April 7, 2021, the U.S. Department of Labor (DOL) issued FAQs and model notices for the COBRA premium assistance provisions of the American Rescue Plan Act (ARPA). The ARPA provides a 100% subsidy for employer-sponsored group health insurance continued under COBRA and similar state continuation of coverage programs. The subsidy applies from April 1 through September 30, 2021. The notices and FAQs appear on a new DOL web page dedicated to the ARPA COBRA subsidy.
 
The new model notices released by the DOL are the following:

• Model General Notice and COBRA Continuation Coverage Election Notice: MS Word | PDF
• Model Notice in Connection with Extended Election Period: MS Word | PDF
• Model Alternative Notice: MS Word | PDF
• Model Notice of Expiration of Premium Assistance: MS Word | PDF
• Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021: MS Word | PDF  

The DOL guidance contains 21 FAQs on topics such as eligibility, elections, notice requirements and duration of the subsidy. Notably, the FAQs state that prior federal COVID-19-related relief for plan deadlines does not apply to notice or election periods set forth in the ARPA provisions about the COBRA subsidy. However, an individual may elect COBRA from an earlier qualifying event if the individual is eligible to make that election, including under the extended time frames provided under the prior deadline relief.

© 2021 HR 360, Inc.

Posted on April 07, 2021

The Tax Credit Will Increase to 70 Percent of Eligible Wages for the First Two Quarters of 2021

On April 2, 2021, the Internal Revenue Service (IRS) published Notice 2021-23 to provide guidance for employers claiming the employee retention credit (ERC) for the first two quarters of 2021. The ERC was originally created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and has since been modified and extended by other laws—most recently, the American Rescue Plan Act (ARPA) on March 11, 2021. 

Changes to ERC Credits

The notice provides information about ERC changes effective for the first two quarters of 2021, including: 

• The increase in the maximum credit amount;
• The expansion of the category of employers that may be eligible to claim the credit;
• Modifications to the gross receipts test;
• Revisions to the definition of qualified wages; and
• New restrictions on the ability of eligible employers to request an advance payment of the credit.

Using the ERC

According to the IRS, employers can access the ERC for the first and second calendar quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits.  Employers with an average of 500 or fewer full-time employees in 2019 may request advance payment of the credit (subject to certain limits), after reducing deposits. 

Additional Guidance Expected

Under the ARPA, the ERC will also be available for the third and fourth quarters of 2021. Notice 2021-23 does not address this—additional guidance is expected for the last two quarters of the year in a subsequent publication. 

© 2021 HR 360, Inc.

Posted on April 01, 2021

State Department of Labor Addresses Mandatory, Optional and Family Situations

The Illinois Department of Labor (IDOL) has issued guidance for employers about employee leave for COVID-19 vaccination, addressing mandatory, optional and family member situations. The guidance is summarized below.

Mandatory vaccination: If an employer requires employees to be vaccinated, the time employees take for vaccination is likely compensable under the Illinois Minimum Wage Law and the federal Fair Labor Standards Act, even if the time is nonwork time. Employers should combine mandatory vaccination with paid leave or other compensation.

Optional vaccination: Employees should be allowed to use sick leave, vacation time or other paid time off for voluntary vaccination. Employers that do not offer paid time off (and are not required to do so) should consider offering employees flex time so they may be vaccinated without having to take unpaid time, or offer the flexibility of taking unpaid time off for vaccination.

Vaccination of family members: COVID-19 vaccine appointments are permissible medical appointments under the Illinois Employee Sick Leave Act (ESLA), which requires that sick leave be allowed for certain family medical purposes on the same terms as the employee’s own illness or injury.

© 2021 HR 360, Inc.

Posted on March 30, 2021

Deadline for Submission of 2019 and 2020 Workforce Data is July 19, 2021

The portal for private-sector employers to submit equal employment opportunity (EEO-1) workforce data from 2019 and 2020 will open on April 26, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) announced March 29, 2021. The agency also announced that the deadline for submitting 2019 and 2020 EEO-1 data is July 19, 2021. This data collection was previously delayed due to the coronavirus pandemic.

Mandated under Title VII of the Civil Rights Act, the EEO-1 Report is an annual survey that requires certain employers to submit information about their workforces by race or ethnicity, gender and job category by March 31 every year. In general, a private-sector employer is subject to EEO-1 reporting if it has a 100 or more employees or is a federal contractor with 50 or more employees and a contract of $50,000 or more.

Employers that are subject to EEO-1 reporting requirements should begin preparing to submit 2019 and 2020 EEO-1 data and monitor the EEOC’s home page and new website dedicated to EEO data collections for additional updates.

© 2021 HR 360, Inc.