2020 is quickly approaching and Federal, local and state governments have been busy establishing new labor laws.
Federal Overtime Rule
Effective January 1, 2020, a final overtime rule from the US Department of Labor (DOL) will increase the minimum salary from $455 per week (or $23,660 per year) to $684 per week (or $35,568 per year).
The rule also will allow employers to count nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level test, as long as they are paid annually or more frequently.
The final rule updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004.
In the final rule, the Department is:
If your exempt employees’ salaries fall below this threshold, you will generally either have to:
An employer must ensure that it is in compliance with a number of federal, state and municipal rules regarding labor and employment law postings. These notices communicate certain rights to employees. Employers must post notices in accordance with the applicable statutes and regulations and update the notices as needed. Certain notices may be posted electronically.
For organizations that have employees who telecommute or have other flexible work arrangements, the employer may wish to display posters through electronic means, such as on an intranet or through electronic mail. Employers should be aware that, depending on state or municipal requirements, telecommuting arrangements may give rise to additional posting requirements.
An employer should post notices in a conspicuous manner at a location that is accessible by employees, applicants and even the public in certain circumstances. Certain state and local laws may require that posters be displayed in a language other than English – usually any language that is spoken by at least 10 percent of the workforce.
You are required to have the following Federal Posting:
It is recommended but not required to have the following Federal Posting:
Redesigned 2020 Form W-4 and Withholding Instructions
The Internal Revenue Service (IRS) has released second drafts of the completely redesigned and renamed 2020 Form W-4 and new Publication 15-T, Federal Income Tax Withholding Methods for use in 2020. The changes are being made to comply with the 2017 federal tax reform law, which suspended personal exemptions through 2025. Although the final form and publication will not be released until the fall, the IRS has instructed employers to begin reprogramming their payroll software based on the second draft.
Beginning in 2020, employees will no longer be able to set their withholding by adjusting their withholding allowances. Instead, employees hired after January 1, 2020, and employees who must update their Form W-4 to account for changes to marital status or tax dependents, must at a minimum complete step 1 by providing their personal information and sign the form in step 5. Employees hired before January 1, 2020, and employees who do not change their existing Form W-4, are not required to file a 2020 Form W-4 with their employer.
OSHA Electronic Reporting Rules
OSHA issued a final rule amending electronic reporting requirements. The final rule requires an employer to electronically submit its Employer Identification Number (EIN) along with Form 300A data by March 2 of each year, beginning in 2020. The rule is effective on February 25, 2019. +84 FR 380.
2020 Health Savings Account Limits
The Internal Revenue Service (IRS) announced the annual limits for Health Savings Accounts (HSAs) for 2020. HSAs are pre-tax accounts available to individuals covered under a high-deductible health plan. Eligible individuals can accumulate money, tax-free, in HSAs to pay for qualified medical expenses. The HSA limits, which are indexed for inflation every year, will increase in 2020.
The annual maximum HSA contribution for 2020 is:
Health Reimbursement Account (HRA)
The Departments of Labor, Health and Human Services and Treasury have released new rules, which will provide employers with more health reimbursement account (HRA) options. Effective January 1, 2020, employers may:
Get ready for the new Federal, local and state labor laws in 2020 now and your new year will be off to a smoother start!
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Sheila Grosdidier, SCP
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