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Federal Government Makes 13 HR-Related Regulatory Changes

Emily Hartman /

Every month we breakdown the upcoming legislative and regulatory deadlines about labor and human resources (HR) you need to know. Looking ahead to the rest of February and March, we’ve got updates from OSHA, the Department of Labor, and the National Labor Relations Board.

Summary:

U.S. Department of Labor Rules on Joint Employers; 4-Factor Test

Who: All employers

When: March 16, 2020

What:

The U.S. Department of Labor released the final rule about when companies are considered joint employers under the Fair Labor Standards Act.

The final rule uses a 4-factor test to assess whether the organization is responsible for:

  • Hiring or terminating the employee.
  • Controls or oversees the employee’s schedule and employment conditions “to a substantial degree.”
  • Controls the employee’s pay rate and payment method.
  • Maintains the employee’s employment records.

The final rule states that there could be other factors that could impact the decision about joint employment. The decision is based on whether the employer has a substantial impact over the other factors.

The DOL also included a list of factors that are NOT part of the joint employment test. Those factors include:

  • Unused rights to control a worker’s employment terms and conditions. The employer needs to exert control actively.
  • The employee’s financial dependence on the employer, which includes if the employee is in a specialty position, has the opportunity to gain or lose based on their skill, pays for equipment or materials for work or employing help, or if there are contracts with other organizations where the joint employer receives comparable services.
  • Using a franchisor business model, or something similar doesn’t have an impact on joint-employer status.
  • Legal or contractual obligations to ensure the health and safety of an employee (e.g., background checks, harassment policies, workplace safety procedures).
  • Quality control standards to ensure consistency and reputation.
  • Typical HR forms, like an employee handbook. Association health plans and retirement plans are also excluded from the test.
  • Allowing an employer to operate on another business’s premises or “store within a store.”
  • Participating in an apprenticeship is also discounted from the test.

How:

  • Work with legal counsel to assess your current business practices.
  • Determine if you may need to use the 4-factor test with certain relationships and third-party contracts.

Additional Resources:

Final Rule: Joint Employer Part 791

Final Rule

2020 W-4 Federal Form Is Here

Who: All employers

When: Effectively Immediately

What:

The U.S. Internal Revenue Service (IRS) released the final 2020 Form W-4.

The most important change to note, there are no withholding allowances on the new form. Another change is to accommodate employees that have more than one job or are part of a household with more than one income. Employers are expected to convert full-year expected tax credits

Small changes were made to the language to help employees understanding the privacy concerns on page 2, “Your Privacy.”

How:

Be sure to use the new form with all employees hired after January 1, 2020, or with employees who ask to change their withholding allowances. KPA has updated HRDrive with Publication 15 T Federal Income Tax Withholding Methods and the 2020 W-4 Form.

Additional Resources

2020 W-4 Form

FAQs on the 2020 W-4 Form

15-T Federal Income Tax Withholding Methods

2020 Date Extended for Affordable Care Act 2019 Reporting to Employees

Who: All employers

When: Effective Immediately (deadline breakdown below)

What:

The IRS extended the January 31, 2020 deadline for employers to provide their workers with copies of their 1095-C or B reporting forms. The deadline extension is because the IRS hasn’t finalized the 2019 ACA reporting forms.

The IRS also granted additional relief for small employers (less than 50 full-time employees), they may post an online notice that 2019 Forms 1095-B are available with a request, likewise for employers, with 50+ full-time employees or the equivalent of part-time employees, regarding Form 1095-C for part-time employees.

Small employers need to complete and file Forms 1095-B and 1094-B with the IRS. Small employers must also file Forms 1095-C and 1094-C if they are part of a service group that altogether has more than 50 full-time employees.

2020 Dates for 2019 Affordable Care Act (ACA) Reporting

Action

Deliver 1095 forms to employees

Submit paper filing to IRS

Submit e-filing to IRS

Deadline

March 2, 2020 (previously January 31)

February 28, 2020

March 31, 2020

How:

  • Determine your status as a large or small employer, based on your data from 2018.
  • Decide whether it’s better to use a monthly measurement or a look-back measurement to identify the number of full-time employees you have.
  • Decide on the safe harbor your business will use to determine the affordability calculation.
  • Review and ensure that your employees’ social security number requests have been met.
  • If you’re a small employer, review the self-insured group health plans
  • Review the IRS instructions for the required forms.

Additional Resources (note that HRDrive is updated with the following):

Notice 2019-63

1094-B Forms

1094-C Forms

1095-B Forms

1095-C Forms

New Registration for H-1B Permits; 2020 Lottery Coming Soon

Who: All employers who hire or sponsor international employees through the H-1B program

When: March 1 – 20, 2020

What:

The new U.S. Citizenship and Immigration Services (USCIS) online registration system for H-1 petitions is now live. Employers will now have to pay $10 for each registration

In the new system, employers will first fill out an online registration form with basic information that will enter them into the lottery. Only those forms selected in the lottery will be required to file complete petitions. This change is meant to save everyone time and money.

The lottery is capped at 65,000 visas, although an additional 20,000 are set aside for applicants with higher degrees.

How:

When filling out a registration form, be sure to have handy:

  • Basic information about the individual and the position, like the job description, education requirements, office location, salary, resume, passport ID page.
  • Your company’s Federal Employer Identification Number.
  • Identify who the company contact will be. It’s recommended you identify one person for all of your registration forms.
  • Consult with your legal counsel to confirm proper documentation and screening.

Union Restrictions Expanded to Work E-mail

Who: Employers with labor union employees

When: Effective Immediately

What:

In a case at the end of 2019, the National Labor Relations Board ruled that employers may restrict employees’ use of an employer’s equipment, including work email and equipment. The decided case was about Caesar’s Entertainment’s handbook that banned the use of the company’s infrastructure to promote or solicit for personal gain, like using personal email or visiting inappropriate websites.

Although employers may restrict the use of work email and equipment, they may not target union-related activities.

How:

  • Review your current policies and procedures to ensure that the use of IT infrastructure is clearly defined. Pay careful attention to any restrictive language and ensure it couldn’t be perceived as discriminatory.

Additional Resources:

Register Guard

National Labor Relations Board

Workplace Investigation Confidentiality Now Required

Who: All employers

When: Effective Immediately

What:

The National Labor Relations Board overturned a 2015-ruling. The new decision states that employers may require employees to maintain confidentiality during workplace investigations. The NLRB used a framework for analyzing employer rules, based on a recent Boeing Co. decision:

  • The employer’s confidentiality rules don’t forbid or affect an employee’s ability to exercise their rights, the potential impact on the employee’s protected rights outweighs.
  • The employer’s rules don’t affect the National Labor Relations Act (NLRA), and the legitimate justifications outweigh the impact on the NLRA-protected activity.
  • The employer’s rules are unlawful because they would affect an NLRA-protected activity, and the impact on the NLRA activity doesn’t outweigh the justifications.

Employers may only require confidentiality from participants in the investigation, and not forbid employees discussing the events that an investigation is based on.

How:

  • Review your handbook policies and procedures, and any other employment policies, for workplace investigation language.
  • Consult with legal counsel and be sure your current language aligns with the new rule.

Employers May Stop Deducting Union Fees With Expired Collective Bargaining Agreements

Who: Employers with collective bargaining agreements

When: Effective Immediately

What:

The National Labor Relations Board ruled that once a collective bargaining agreement (CBA) has expired, employers do not need to keep deducting union fees from employee paychecks and paying the union.

If a collective bargaining agreement expires, unions will need to acquire payments directly from employees.

How:

Review with legal counsel your current collective bargaining agreements and how you may want to be prepared for the expiration of a CBA.

Tax Repeal on High-cost Health Plans

Who: Employers who offer health plans

When: Effective Immediately

What:

President Trump signed an Act at the end of 2019 that effectively put an end to the “Cadillac Tax,” a large excise tax that would have affected expensive health plans.

The tax would have applied a 40% excise tax on employer-sponsored health plans that went over $11,200 for a single family and $30,150 for family coverage. Calculating the employer-sponsored health plan would have included employee and employer contributions to Health Savings Accounts, Flexible Spending Accounts, Health Reimbursement Arrangements, in addition to the health insurance premium.

How:

  • Reevaluate your current health plan offerings and determine if you need to change your approach to covering the old “Cadillac Tax.”

U.S. Department of Labor Publishes 3 Opinion Letters, Clarifying FMLA and FLSA Rules

Who: All Employers

When: Effective Immediately

What:

On January 7, 2020, the U.S. Department of Labor (DOL) Wage and Hour Division two opinion letters about the Fair Labor Standards Act and one letter about the Family Medical Leave Act. The details of each letter are below:

FLSA2020-1: Overtime Pay Calculations and Nondiscretionary Bonuses

  • This letter is about how to calculate the regular rate of pay when taking into consideration a lump sum nondiscretionary bonus.
  • The bonus should be allocated equally throughout the period associated with the bonus.
  • If the employee worked overtime during that period, the employer must add the pro-rated bonus amount to that week, adjust the employee’s regular rate of pay, and calculate the additional overtime pay.

FLSA2020-2: Do Proposed Payments to Exempt Administrative and Professional Employees Count as Fee or Salary

  • This letter was in response to a question about educational consultants who were paid on a per-project basis and whether those payments were fee or salary based.
  • The DOL opined that both situations met salary basis requirements, where the consultant received regular, biweekly payments. Those payments didn’t depend on the quantity or quality of the provided work.
  • If the consultant was given a second project, beyond the original parameters of the first project, payments could be made without changing the consultant’s exempt status.

FMLA2020-1-A: Determining FMLA Eligibility for Public Employees

  • This letter is about whether a public health district in Ohio is the same agency as the County where it is located.
  • The DOL determined that if the two entities are the same public agency, then the employees may be combined when determining FMLA eligibility. The rule stipulates that an employer must have 50+ employees within 75 miles to offer protected FMLA leave.
  • Making this decision must be done on a case-by-case basis.

How:

  • Review your current FLSA and FMLA practices with legal counsel and determine their compliance with these recent letters.
  • Updated your practices to ensure their compliance with these recent opinions.

Additional Resources:

FLSA2020-1

FLSA2020-2

FMLA2020-1-A

U.S. Department of Labor

OSHA Reporting Requirements Start February 1, 2020

Who:

When: February 1, 2020 – April 30, 2020 (e-filing must be completed by March 2, 2020)

What:

The U.S. Occupational Safety and Health Administration (OSHA) requires that some employers publicly post the OSHA Form 300A, the “Summary of Work-Related Injuries and Illnesses” between February 1 – April 30, 2020.

Employers must complete and post the 300A Form each year, even if there were no OSHA recordable cases.

If you need to file electronically with OSHA:

  • The deadline to e-file is March 2, 2020
  • Be sure to have all of your OSHA 300A information ready and your federal Employer Identification Number.
  • Forms that need to be electronically filed should be so with OSHA here, or the state-equivalent for employers in State Plan states. Note: For applicable industries, you will need to file electronically even if you didn’t have any work-related injuries or illnesses in 2019.  

How:

  • Determine if you need to file your OSHA 300A electronically or if you need to post it at your location.
  • Fill out the form, and be sure to get the correct signature. Note that only people who can sign the form are either the owner, organizational officer, the highest-ranking official at the worksite, the immediate supervisor of the highest-ranking official at the worksite.

Additional Resources:

OSHA Industries

Injury Tracking Application

OSHA Increases Penalties

Who: All employers

When: Effective Immediately

What:

The U.S. Department of Labor updated its civil penalties to reflect inflation for 2020. The new maximum penalties are:

Penalty

Other-than-serious

Serious

Repeat

Willful

New Amount

$13,494

$13,494

$134,937

$134,937

Old Amount

$13,260

$13,260

$132,589

$132,589

Any employers who have active OSHA inspections should know that citations will reflect this increase.

How:

If you have an active OSHA inspection, review the incidents carefully and make sure to incorporate changes to your programs.

Additional Resource

Federal Register

Earned Income Tax Credit Notice Due January 31, 2020

Who: All employers

When: January 31, 2020

What:

By January 31, 2020, employers must give all employees that have worked for the business in the last year their Earned Income Credit (EIC). Employees must receive one of the following:

  • U.S. Internal Revenue Service Form W-2, Wage and Tax Statement
  • A substitute Form W-2 with the same EIC information on Copy B of the IRS Form W-2.
  • Notice 797, Possible Federal Tax Refusing Due to the Earned Income Credit
  • A written statement from the employer with the same language as Notice 797

If you don’t meet the January 31, 2020 deadline and are required to give to provide the form, you must give the employee Notice 797 or your written statement by the due date. If you provide an employee with the W-2 form, but it doesn’t have the required information, you have to inform the employee 1 week from the date the W-2 was given.

If the W-2 isn’t required, you must notify the employee by February 7, 2020.

The forms must either be sent by first-class mail to the employee’s last known address or handed in-person to the employee.

How:

  • Review your employees’ information and ensure proper information goes onto the W-2.
  • Review your distribution procedures and ensure they will comply with the deadline.

Deadline to Distribute W-2s to Employees

Who: All employers

When: Effective Immediately

What:

Employers must submit Form W-2 to every employee that has had income, social security, Medicare taxes withheld, or the income tax would have been withheld if the employee claimed one or less allowances or didn’t claim exemption on Form W-4.

Employer’s must give employee’s the form through the mail with a proper address and postmark, electronically, or by hand delivery. This distribution must be done by or before January 31, 2020.

How:

  • Review your employees’ information and ensure proper information goes onto the W-2.
  • Review your distribution procedures and ensure they will comply with the deadline.
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