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August Compliance Updates: FLSA and Form I-9

Overtime Rule Still in Limbo

While the updated FLSA overtime remains on hold, oral arguments for the case were tentatively scheduled for the week of October 2. In the meantime, the Labor Department is accepting comments on the rule until September 24. The DOL’s Wage and Hour Division is looking for feedback on salary levels, inflation adjustments, the standard duties test, and highly compensated employees. The Wage and Hour Division is also looking to find out how many employers may have increased salaries in 2016 in preparation for the December 1 effective date.

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State Wage Base Updates

The following states have released their State Unemployment Tax Assessment (SUTA) wage bases for 2018:

  • Connecticut: $15,000 (unchanged)
  • Iowa: $29,900 (up from $29,300)
  • Nevada: $30,500 (up from $29,500)
  • Ohio: $9,500 (up from $9,000) - this will also be the UI wage base for 2019

For more up-to-date information about state wage bases, visit our SUTA Wage Base page.

Social Security to Increase

The Old-Age, Survivors, and Disability Insurance (OASDI) taxable wage base is projected to increase to $130,500 in 2018. The wage base, which is indexed annually to changes in the national average, was $127,000 in 2017.

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Revised Form I-9 Released

A revised version of the Form I-9 has been released by U.S. Citizenship and Immigration Services (USCIS). Employers may use the revised version or they may continue using the Form I-9 with revision date November 14, 2016, until September 17. The revised form takes effect on September 18.

Employers must continue using existing storage and retention rules for any previously completed Form I-9. The handbook that provides employers guidance on completing Form I-9 was also revised.

Employer Tax Returns

The IRS may ask for more information on employer tax returns for the 2018 filing season. The request is to help the IRS authenticate tax returns to combat fraud and identity theft. Some of the new information includes:

  • Name and SSN of the company official authorized to sign the return
  • Estimated tax payments
  • Parent company information
  • Filing history of Forms 940 and 941
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Previous measures taken have not been enough to deter data breaches. For the first five months of 2017, there were 177 reported data breached at tax preparers’ offices. For more up-to-date information on employer taxes, visit our Payroll Taxes: Rates and Changes page.

New York Family Paid Leave

New York adopted regulations implementing the state’s paid family-leave program. The new program will be phased in over four years, beginning January 1, 2018. Private employers are required to secure paid family-leave insurance coverage or self-insure so coverage begins on the January 1 date. Here are some highlights of the new regulations:

  • Employees with a regular work schedule of at least 20 hours a week are eligible for paid family leave after 26 weeks of employment.
  • Employees who work less than 20 hours a week are eligible after 175 working days.
  • Available to parents during the first 12 months after the birth, adoption, or fostering of a child.
  • Available to employees caring for a spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild with a serious medical condition.
  • Available to employees assisting family members while a spouse, child domestic partner, or parent is deployed abroad on active military duty.

During the phase-in schedule, employees may take up to eight weeks of paid leave at 50 percent of the employee’s average weekly wage. By 2021, paid leave is to increase to 12 weeks at 67 percent of the employee’s average weekly pay.

For more information, please visit the New York paid family-leave website for employer guidance.

Electronic UI Reports

More states are expected to require electronic unemployment insurance (UI) payments and reports in 2018. Currently, 19 states require electronic filing for UI in 2018: Alabama, California, Connecticut, Idaho, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, Texas, and Vermont.

Nevada could be the next state to adopt an amendment to require electronic filing. California and North Dakota are expected to expand their electronic filing for UI and tax payments in 2018. Most jurisdictions require the use of an online portal for filing UI taxes and wage reports.
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