Big changes are happening in the realm of workplace compliance issues and labor laws in the United States. Noncompliance with government regulations can have serious consequences—and can cost your business big time. Keep up with what's happening between the government and the workplace with the HR Compliance Tracker: your go-to place to stay updated on some major workforce compliance issues.
Treasury announces new employer tax credit for paid family and medical leave
Employers who provide paid family and medical leave to their employees in the 2018 and 2019 tax years may qualify for a new business credit. “By enhancing the benefits of this tax credit, we help empower working parents to pursue their careers while balancing their demands at home," said Treasury Secretary Steven Mnuchin.
If you’re setting up or updating a leave policy, a retroactive credit may also be available to employers. Generally, employees with paid family and medical leave who earned $72,000 or less in the previous year qualify for the credit.Check out this guidance to learn how to calculate the credit and the application of special rules and limitations.
Congressional tax overhaul bill passes, signed into law
On December 20, 2017, Congress passed the 2017 Tax Act H.R. 1 (known as the Tax Cuts and Jobs Act). Two days later, President Trump signed the bill into law. The joint congressional committee also released a Joint Explanatory Statement. This document serves to shed light on the different reconciled tax bills passed earlier by the House and Senate and provides a list of provision explanations of the legislation.
Among the changes in this tax overhaul, businesses will likely take most interest in the reduced corporate tax rate and changes to the taxability of certain employee benefits and perks. The tax act also ends the individual mandate for healthcare coverage beginning in 2019 (the employer mandate still stands under the Affordable Care Act). HR can expect the tax act to impact several areas like paid leave and fringe benefits.
Since the bill became a law, many corporations have announced how they plan to use their savings to give back to employees and reinvest money into their companies. Aflac plans to expand its employee benefits and training programs, including a raised 401K match. Suntrust Banks, Inc. also plans to raise its 401K matching and offer cash incentives for employees who complete their in-house “financial fitness” program. Other companies boast increased wages and bonuses in the year ahead. Talent experts say this is a smart move on the part of companies looking to attract better talent, increase retention, and improve their overall brand as employers.
For more insight, SHRM recently released an article highlighting the key tax changes affecting employee benefits.
Labor law changes coming to California in 2018
California governor, Jerry Brown recently signed some significant bills into place for California employment law. SHRM put together a list of the top five new state laws that HR should start preparing for. Here’s a summary of those laws:
- Inquiries about salary history: employers will no longer be permitted to ask job candidates about their earning, current or prior. Employers must also provide job candidates with pay scale information should the applicant request it.
- Immigration: employers must demand warrants and subpoenas from Immigration and Customs Enforcement (ICE) agents before enforcement. Employers must also provide certain notices to employees and union reps.
- Ban the box: employers with five or more employees may no longer look at a job candidate’s criminal record until the employer makes a conditional offer of employment. Employers may change the offer upon reviewing criminal history if they follow certain steps before coming to their final decision. This makes California the 10th state to require private-sector employers to ban the box. “Ban the box” comes from the idea that employers discriminate against candidates who check the box on applications that asks if they’ve ever been convicted of a felony. The Ban the Box movement aims to encourage employers to hire the most qualified candidate for a job, regardless of whether they have prior convictions.
- Baby bonding leave: Small businesses with 20-49 employees must provide at least 12 weeks of job-protected new parent leave within the first year of a child’s birth, adoption, or foster care placement. To qualify, employees must have more than 12 months of service and at 1250 hours of service with the employer within that 12 months. Employees must complete the service requirement before beginning the leave period.
- Gender identity and sexual orientation harassment training: In addition to sexual harassment training requirements for companies with 50 or more employees, the new law will add required training on gender identity, gender expression, and sexual orientation harassment. Employers must also post a transgender rights notice in the workplace.
If you’re in Human Resources in the state of California, it’s time to prepare for some changes to employment law coming in 2018. If you’re an HR professional in another state, take note: other states could soon be following suit.
Fiduciary law to go into effect June 9 without delay
U.S. Labor Secretary, Alexander Acosta, announced that the Fiduciary Rule will go into partial effect on June 9, 2017 without further delay. The rule will still go into full effect on January 1, 2018. This rule expands the definition of “investment advice fiduciary” under the Employee Retirement Income Security Act of 1974 (ERISA). This expanded definition will include financial professionals (brokers and planners) who work with retirement plans as fiduciaries.
Now is an important time for HR managers to evaluate their current retirement plans, vendors, and advisers. You want to ensure your employees receive the best plans for their families and the future.
Working Families Flexibility Act passes the House
The Working Families Flexibility Act recently passed the House of Representatives and now awaits a Senate vote. This bill aims to amend the Fair Labor Standards Act (FLSA). The vote fell largely along party lines, passing the bill 229 to 197. Under this controversial amendment, employers in the private sector could give non-exempt employees compensatory time instead of monetary compensation for overtime worked. Employees would earn comp time at the rate of one and a half hours for every hour of overtime worked.