by Afilliated HR & Payroll | Aug 25, 2023 | Alert
On July 26, 2023, the U.S. Equal Employment Opportunity Commission (EEOC) updated its Visual Disabilities in the Workplace and the Americans with Disabilities Act guide that explains how the Americans with Disabilities Act (ADA) applies to job applicants and employees with visual disabilities. It outlines when an employer may ask an applicant or employee questions about their vision, how an employer should treat voluntary disclosures about visual disabilities, and what types of reasonable accommodations those with visual disabilities may need in the workplace.
The updated guide also:
- Highlights new technologies for reasonable accommodation and how using artificial intelligence and algorithms to make employment decisions can impact individuals with visual disabilities;
- Addresses how an employer should handle safety concerns about applicants and employees with visual disabilities;
- Addresses how an employer can ensure that no employee is harassed because of a visual disability; and
- Discusses harassment and retaliation.
The EEOC’s disability discrimination landing page provides more information about disability discrimination, and the Job Accommodation Network (AskJAN) is a resource for workplace accommodations.
by Afilliated HR & Payroll | Jul 17, 2023 | Alert, Benefits & Compensation
The IRS has announced that the amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 for 2022. This also applies to 403(b), most 457 plans, and the federal government’s Thrift Savings Plan.
Also increasing is the catch-up contribution limit for employees aged 50 and over who participate in the above plans. This limit has increased to $7,500, up from $6,500. Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $30,000, starting in 2023.
The amount individuals can contribute to their SIMPLE retirement accounts is increased to $15,500, up from $14,000.The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans is increased to $3,500, up from $3,000.
IRAs are also going up. The limit on annual contributions to an IRA increased to $6,500, up from $6,000. The IRA catch‑up contribution limit for individuals aged 50 and over is not subject to an annual cost‑of‑living adjustment and remains $1,000.
Phase-out ranges adjusted
The IRS has also reminded taxpayers that they can deduct contributions to a traditional IRA only if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. However, if neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply. The IRS has listed the new ranges on its site. The IRS has also announced Roth IRA changes, which again, are listed on the IRS site.
The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $73,000 for married couples filing jointly, up from $68,000; $54,750 for heads of household, up from $51,000; and $36,500 for singles and married individuals filing separately, up from $34,000.
Full details are available in IRS Notice 2022-55.
by Afilliated HR & Payroll | Jun 16, 2023 | Alert
Federal employment law is about to give birth to some long-overdue requirements. As of June 27, 2023, employers with 15 or more employees must provide pregnancy-related accommodations to employees and applicants under the federal Pregnant Workers Fairness Act (PWFA). Below we’ll refer to employees and applicants collectively as “employees.”
Pregnancy Related Accommodations
Under the PWFA, employees are entitled to accommodations for a condition related to or affected by pregnancy, childbirth, or a related medical condition. The condition can be physical or mental. Pregnancy-related conditions include, among others, morning sickness, gestational diabetes, post-partum depression, and lactation.
This law expands employer obligations beyond what is already required by the Americans with Disabilities Act (ADA) in that being entitled to a pregnancy-related accommodation does not require that the employee’s condition rise to the level of disability. Also, employees are entitled to accommodations even if they can’t perform their essential job functions on a temporary basis.
Possible accommodations include but aren’t limited to:
- Providing more frequent or longer breaks
- Modifying a food or drink policy
- Providing seating or allowing the employee to sit more frequently if their job requires standing
- Observing limits on lifting
- Providing job restructuring, light duty, or a modified work schedule
Employers can’t require an employee to take leave if a reasonable on-the-job accommodation is available. Like the ADA, the employer and employee should engage in the interactive process to determine what reasonable accommodations can be provided. However, if the employer is willing to grant the employee’s request, the interactive process is not required.
Note that many states have already implemented pregnancy accommodation laws, some of which may be more generous than the PWFA. Employers need to apply the law—or the aspect of each law—that is most favorable to employees.
Undue Hardship Exception
Employers don’t have to provide an accommodation if doing so would cause an undue hardship on the operation of the employer’s business. Undue hardship is defined as “an action requiring significant difficulty or expense,” the same as under the ADA. This is a high standard for employers to meet.
Action Items
- Add a pregnancy accommodations policy to your handbook if you don’t already have one
- If you’re subject to a state law that provides similar accommodations, make sure your policy captures the most employee-friendly aspects of the applicable laws
Ensure that managers are aware of the law and types of accommodations that may be required
by Afilliated HR & Payroll | May 26, 2023 | Alert
You may be aware of widely circulated promotions — ads on radio and the internet — touting refunds involving Employee Retention Credits. The IRS says these are a blatant attempt to con ineligible people to claim the ERC credit. The problem is widespread enough to make the IRS’s annual “Dirty Dozen” list.
The promotions are mostly based on inaccurate information related to eligibility for and computation of the credit. The aggressive marketing by promoters is misleading people and businesses into thinking they can claim these credits. However, there are very specific guidelines around the pandemic-era credits that provided a financial lifeline to millions of businesses.
According to the IRS, when properly claimed, the ERC is a refundable tax credit designed for businesses that continued paying employees while shut down due to the COVID-19 pandemic, or that had a significant decline in gross receipts during the eligibility periods. The credit is not available to individuals.
Nevertheless, there are websites and advertisements touting how easy it is to qualify for the ERC, lending an air of legitimacy to abusive claims for refunds. Tax professionals are reporting that they’re receiving undue pressure from clients to participate and claim the ERC, even when the tax professional believes the client isn’t entitled to the credit.
Limited-time offer only
ERCs were only valid during the pandemic and for a limited group of businesses. As always, you are ultimately responsible for the accuracy of the information on your tax return. Willful filing of false information and fraudulent tax forms can lead to serious civil and criminal penalties.
You should think twice before filing a claim for ERCs — the IRS is actively auditing and conducting criminal investigations related to these false claims. Don’t get caught up in them, IRS commissioners urge — the agency is stepping up ERC enforcement action. The IRS Small Business/Self-Employed division has trained auditors to examine this type of claim and the IRS Criminal Investigation Division is seeking out promoters of these fraudulent claims.
The IRS encourages tax professionals to continue to advise clients not to file ERC claims when the professionals believe the potential applicants don’t qualify. In fact, the agency’s Office of Professional Responsibility sent a special bulletin to accountants outlining core responsibilities for ERC claims.
How the con works
Shady promoters make broad arguments suggesting that all employers are eligible without evaluating an employer’s individual circumstances. Actually, only recovery startup businesses were eligible for the ERC in the fourth quarter of 2021. Third parties don’t inform employers that they can’t claim the ERC on wages that were reported as payroll costs in obtaining Paycheck Protection Program loan forgiveness.
Some ERC advertisements exist solely to collect your personally identifiable information in exchange for false promises. Scammers use the data for identity theft. You are urged to report instances of fraud and IRS-related phishing schemes to the IRS at phishing@irs.gov and to the Treasury Inspector General for Tax Administration, a federal office affording IRS oversight, at 800-366-4484.
by Afilliated HR & Payroll | May 15, 2023 | Alert
As we let you know last October, the end date for the COVID-related I-9 verification flexibility was (and still is) scheduled for July 31, 2023. Given the number of times this deadline had been extended, it seemed possible, though not probable, that it would be extended yet again. However, U.S. Immigration and Customs Enforcement (ICE) has now announced that the deadline is firm, and employers that were taking advantage of the COVID-19-related flexibility will have until August 30, 2023, to do in-person verifications of employment documents that were only inspected virtually.
U.S. Citizenship and Immigration Services (USCIS) has provided a very useful FAQ as well as instructions on how to notate the Form I-9 when inspected in-person after originally being inspected virtually.
Next Steps
If you haven’t kept a list of those employees whose documents were inspected virtually, pull that information together and determine who will serve as your authorized representative to inspect the documents in-person.
Once you know whose documents need to be inspected and their work location, you may be able to save both time and money on travel with a bit of strategy. You can have different authorized representatives for different regions.This job can be assigned to anyone you’d trust with a sensitive task. Given that employers are liable for any violations in connection with the form or the verification process, you should choose someone who can pay attention to detail and train them on exactly how you want the verification done. You can also outsource the role of authorized representative to a law firm, notary, or someone else who can legally offer this service.
Finally, consider having someone from your HR team remotely oversee the in-person inspection (via phone call, video, or messaging app) to ensure a consistent process is followed as well as to be available to address any questions or concerns from the employee or person acting as the authorized representative.
by Afilliated HR & Payroll | Apr 17, 2023 | Alert, Benefits & Compensation, HR Administration, Recruiting and Developing Talent
Who counts as an employee versus an independent contractor may be about to change. A DOL proposal suggests revamping employee classification, reclassifying workers who are economically dependent on a company as employees entitled to more benefits and legal protections.
The DOL has received 12,469 comments on the proposed rule, so the agency may not issue a final rule for a while. But while it’s deciding, the IRS is keeping its stark distinction. You don’t generally have to withhold or pay any taxes on payments to independent contractors, as you do with employees. The Employment Tax Examination Program is a guide the IRS uses as a parameter to examine employers that have a high risk of misclassifying employees.
If you’re a business owner hiring or contracting with other individuals to provide services, consider the following questions, which the IRS currently asks when classifying employees:
- What degree of control and independence is there in the contractual arrangement? Does your company control or have the right to control what the worker does and how the worker does his or her job?
- Do you control the business aspects of the worker’s job? This includes considerations such as how the worker is paid, whether expenses are reimbursed, and who provides tools and supplies.
- Are there written contracts or employee benefits, such as a pension plan and vacation pay, and will the relationship continue? Is the work performed a key aspect of the business?
You need to weigh all factors when determining whether a worker is an independent contractor. The key is to look at your entire relationship and decide the degree or extent of your right to direct and control how he or she works. Document each factor used in coming up with your determination.
New factors?
The proposed rule will likely consider economic factors that accumulate in an investment of work, including scheduling, supervision, price-setting and the ability to work for other employers, asking whether the work is integral to the employer’s business. The new rule may align with the rise of the gig economy and a class of worker who effectively works full time for a company but is still considered an independent contractor. The DOL’s proposed rule could change that, availing these workers of benefits and labor protections under federal law.
The lengthy proposed rule — still a work in progress — is available on the DOL website. In brief, the rule stresses six characteristics the DOL may use in making a determination:
- Opportunity for profit or loss depending on managerial skill
- Investments by the worker and the employer
- Degree of permanence of the work relationship
- Nature and degree of control
- Extent to which the work performed is an integral part of the employer’s business.
- Skill and initiative.
If you want to be sure you’re following the IRS’s current definitions, you can get an official ruling via Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. The IRS will review the facts and circumstances and officially determine the worker’s status. It can take up to six months to get an answer, but you’ll feel confident in the determination.
Meanwhile, consult with counsel to make sure not to misclassify an employee. And keep an eye on future changes — we’ll have further communications if and when the rule becomes final.
