Comments on Proposed Rule are Due by Dec. 5

On Nov. 5, 2019, the U.S. Department of Labor (DOL) published a proposed rule to update the “fluctuating workweek” method for calculating employee overtime wages under the Fair Labor Standards Act (FLSA). The fluctuating workweek method provides employers a cost-saving option to compensate employees who are not exempt from the Act’s overtime wage payment requirements.

If approved, the proposal would enable employers to pay bonuses, shift differentials and other incentive payments to employees who are paid under the fluctuating week method. The proposed changes were issued to clarify conflicting court rulings regarding this method. 

This publication is only a proposed rule, so it does not impose any new requirements on employers. However, the DOL is inviting employers to review this proposal and submit their comments, if any, to the DOL by Dec. 5, 2019 by mail or through the Federal eRulemaking Portal.

New Requirements Take Effect Jan. 1, 2020

The California Department of Industrial Relations (DIR) has published updates to the minimum salary threshold that computer employees, physicians and surgeons must receive in order to qualify for the state’s overtime exemptions. The DIR reviews and adjusts these rates each as necessary to reflect the cost of inflation. 

The hourly wage rate for physicians will increase from $82.72 per hour to $84.79 per hour on Jan. 1, 2020. Similarly, the minimum salary requirements for computer employees will increase from $45.41 per hour to $46.55 per hour starting Jan. 1, 2020. For the computer employee exemption, the DIR also specified a new $96,968 annual salary and an $8,080.71 monthly rate starting Jan. 1, 2020.

Click here for more information on the updated salary level for physicians and surgeons, or here for more information on the updated salary level for computer employees.

Contribution Limit to Increase $50 in 2020

The IRS has announced that the contribution limit for health flexible spending arrangements (health FSAs) will be $2,750 in 2020. For 2019, the contribution limit is $2,700.

401(k) Contribution Limit Increased to $19,500

The IRS has announced that the amounts employees can contribute to 401(k)s and some IRAs will increase in 2020. In particular:

• The employee contribution limit for 401(k) plans will be $19,500, up from $19,000 in 2019. The catch-up contribution limit for employees aged 50 and over will be $6,500, up from $6,000.
• The employee contribution limit for IRAs will remain $6,000. The catch-up contribution limit for employees aged 50 and over also remains unchanged, at $1,000.
• The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans will increase to $13,500, up from $13,000 in 2019.

Click here for more information.

Employers Are Not Required to Obtain HPIDs for Health Plans

In 2012, the Department of Health and Human Services (HHS) released a final rule that required certain health plans to obtain their own health plan identifiers (HPIDs) and start using them in HIPAA standard transactions. 

After issuing the final rule, HHS received feedback that the HPID’s implementation would be disruptive, costly and counterproductive. Based on this feedback, on Oct. 31, 2014, HHS delayed the enforcement of the HPID requirement until further notice. 

On Oct. 25, 2019, HHS released a final rule that officially withdraws the HPID requirement. Due to this development, health plans are not required to obtain HPIDs and the HPID is not required to be used in HIPAA standard transactions. The health care industry may continue to use its own standard payer identifier in these transactions.

For more information on this development, click here.

New Law Took Effect July 28

Last May, Washington adopted a new law requiring employers to display a poster about domestic violence. The poster was published recently by the Washington Employment Security Department (ESD) and it includes instructions employees can follow to contact help if they are dealing with a domestic violence situation. The poster also includes some blank space employers can use to add information about local resources. 

Employers will need to display this poster in a conspicuous place where other workplace posters are displayed. Click here to access the domestic violence poster and other posters published by the the ESD.

Proposal Does Not Apply to Group Health Plans

On Oct. 23, 2019, the U.S. Department of Labor (DOL) published a proposed rule that would allow plan administrators to make retirement plan disclosures available on a website.

The safe harbor would be permitted for employee pension benefit plan disclosures, such as summary annual reports or pension benefit statements, but not for any document that must be furnished upon request. The proposal would not apply to employee welfare benefit plans, such as group health plans or plans providing disability benefits.

If the proposal is adopted, plan administrators may continue to use the existing safe harbor for electronic delivery, or to furnish paper documents by hand-delivery or mail. The proposal would provide a new, optional method where plan administrators who satisfy specified conditions may furnish documents electronically, unless participants affirmatively opt out.

Click here for more information on the proposal.

New Rate Takes Effect on Jan. 1

Florida has announced that the state’s minimum wage rate will increase from $8.46 per hour to $8.56 per hour on Jan. 1, 2020. Similarly, the minimum wage rate for tipped employees will increase from $5.44 to $5.54 per hour. 

This 10-cent increase has been approved to adjust the state’s minimum wage for inflation. A new minimum wage poster and other information about Florida’s minimum wage rates is also available here.

New Law Takes Effect Jan. 1

On Oct. 10, 2019, California adopted a new law that strengthens lactation accommodation protections for employees. The new law becomes effective on Jan. 1, 2020 and is similar to San Francisco’s lactation accommodation law. 

In addition to current lactation accommodations, the new law requires employers to provide a private lactation room that: 

• Is safe, clean and free from hazardous materials;
• Contains a surface for a breast pump and personal items;
• Contains a place to sit; and
• Has access to electricity or alternative devices (extension cords, charging stations) needed to operate breast pumps.

The lactation room may not be a bathroom.

Also beginning Jan. 1, 2020, employers must provide lactating employees with access to a sink with running water and a suitable place for storing expressed milk, such as a refrigerator. Water and storage access must be in proximity to the employee’s workspace. 

Employers with fewer than 50 employees may be exempt from one of the requirements listed above if they can prove that providing the accommodation would cause them significant difficulty or expense in relation to the size, financial resources, nature or structure of the employers’ business. 

Employers must implement a lactation policy and include it in their employee handbook or other set of policies made available to employees. The policy must be distributed to new employees upon hiring and when an employee asks about or requests parental leave.

Click here for more information about lactation accommodations.

New Rate Becomes Effective Jan. 1

On Oct. 7, 2019, the South Dakota Department of Labor and Regulation announced that the state minimum wage rate will increase from $9.10 per hour ($4.55 per hour for tipped employees) to $9.30 per hour ($4.65 per hour for tipped employees). The new rate becomes effective on Jan. 1, 2020. 

The state’s minimum wage rate is adjusted every year to reflect changes in the cost of living, measured by the U.S. Department of Labor Consumer Price Index. 

Click here for additional information on South Dakota’s wage laws.

New Rate Becomes Effective Jan. 1

On Oct. 7, 2019, the Vermont Department of Labor announced that the state minimum wage rate will increase from $10.78 ($5.39 per hour for tipped employees) to $10.96 per hour ($5.48 per hour for tipped employees). The new rate becomes effective on Jan. 1, 2020. 

The 18-cent increase is the result of an annual adjustment the state makes to account for inflation. The state minimum wage rate for tipped employees is traditionally 50 percent of the full minimum wage rate.

Comment Period for Proposed Rule Ends Dec. 9

On Oct. 8, 2019, the U.S. Department of Labor (DOL) published a proposed rule to amend employee tip regulations under the Fair Labor Standards Act. This proposed rule has been issued, in part, to bring the regulations into alignment with legislation approved by Congress in 2018 and to incorporate DOL guidance about tipped wages. 

Among other things, the proposed rule would:  

• Prohibit employers (including managers and supervisors) from keeping employee tips;
• Permit non-tipped employees to share in the tip pool, if their employer does not use the tip credit; and
• Allow employers to use the tip credit when paying tipped employees for non-tipped activities that are “contemporaneously” performed with tipped activities. 

Some expect the proposed rule will “provide employers greater flexibility in determining pay practices for tipped and non-tipped workers.” These individuals also expect that the proposed rule “may allow for a reduction in wage disparities among employees who contribute to the customers’ experience.”

Click here for more information.

New Rate Becomes Effective Jan. 1 

On Sep. 30, 2019, the Montana Department of Labor and Industry announced that the state minimum wage rate will increase from $8.50 to $8.65 per hour. The new rate becomes effective on Jan. 1, 2020. 

The 15-cent increase is the result of an annual adjustment the state makes to account for changes in inflation. 

Click here for additional information on Montana’s minimum wage.

New Rate Becomes Effective on Jan. 1

Ohio has announced a new minimum wage rate of $8.70 per hour for nonexempt employees. The state minimum wage rate applies to employers that gross $319,000 per year or more. The 2020 wage for tipped employees is $4.35 per hour.

Employers that gross less than $319,00 per year must pay their employees at least the federal minimum wage rate of $7.25 per hour. The federal minimum wage rate also applies to employees under the age of 16. 

The Ohio Department of Commerce has already published the 2020 minimum wage poster employers must display in their workplace.

New Rate Becomes Effective on Jan. 1

The state of Alaska has announced a minimum wage rate of $10.19 per hour for 2020. The minimum wage in the state is adjusted annually using the Consumer Price Index for urban consumers in the Anchorage metropolitan area for the preceding calendar year. 

Click here for more information about Alaska's wage laws. 

New Law Becomes Effective Jan. 1

California has adopted a new law that changes the process for determining whether a worker should be classified as an employee or independent contractor. The new law sets the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles as the state standard for employee classification and expands its scope to include classification related to the state’s labor code, wage orders, unemployment benefits and workers’ compensation laws. 

Under the new standard, also known as the ABC test, a worker is an employee if he or she provides labor or services for remuneration. The new law also shifts responsibility to employers to prove that independent contractors are classified correctly. Under the ABC test, a worker is an employee, unless the employer can prove that the worker:

A: Is free from the control and direction of the employer when performing work, both practically and in the contractual agreement between the parties;
B: Performs work that is outside the usual course of the employer’s business; and
C: Is culturally engaged in an independently established trade, occupation or business of the same nature as the work performed for the employer.

Finally, the new law does not diminish the flexibility of part-time or intermittent work schedules, nor the ability to work for multiple employers, but it does prohibit employers from reclassifying individuals who were employees on Jan. 1, 2019 as independent contractors.

Final Rule Takes Effect Jan. 1

On Sept. 24, 2019, the U.S. Department of Labor (DOL) announced a new final rule that updates the salary thresholds that some individuals must meet in order to qualify for a minimum wage and overtime exemption under the federal Fair Labors Standards Act (FLSA). The final rule becomes effective on Jan. 1, 2020. 

As expected, this final rule increases the standard salary level for the executive, administrative and professional exemptions from $455 to $684 per week ($35,568 per year). It also increases the highly compensated employee salary level from $100,000 to $107,432 per year.

In addition, the rule allows employers to use an employee’s nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the employee’s standard salary level. 

Finally, the rule also makes changes to the standard salary level for the exemption that applies to employees in the motion picture industry and some U.S. territories.  

The DOL intends to update the standard salary and highly compensated employee total annual compensation levels more regularly in the future through notice-and-comment rulemaking.

Employer Notice and Withholding Requirements Become Effective

The end of the month marks important employer deadlines for Massachusetts Paid Family and Medical Leave (PFML).

By Sept. 30, 2019, Massachusetts employers are required to provide written notice to their current workforce of PFML benefits, contribution rates, and other provisions as outlined in the law. For more information from the Massachusetts Department of Family and Medical Leave, click here.
 
In addition, by Oct. 1, 2019, Massachusetts employers must begin withholding PFMLcontributions from covered individuals' wages. Click here for more information.
  

New State Rates Become Effective on Jan. 1, 2020

The Minnesota Department of Labor and Industry has announced that the state minimum wage rate for large employers will increase to $10 per hour on Jan. 1, 2020. A large employer for minimum wage purposes is an employer with an annual gross revenue of $500,000 or more. 

In addition, the state has announced an $8.15 per hour rate for: 

• Employers with a gross revenue of less than $500,000
• The state training wage (this rate applies to workers under 20 years of age during the first 90 consecutive days of employment)
• The state youth wage (this rate applies to workers who are under 18 years of age) 

Please note that additional rates apply in Minneapolis and St. Paul.