The 9th Circuit Court of Appeals ruled Monday that salary history is not an acceptable reason for pay differences under the Equal Pay Act (EPA), even when used in conjunction with other factors. The EPA first became law in 1963 and prohibits the payment of different wages to men and women who do work that requires equal skill, effort, and responsibility under similar working conditions.
The new reading of the law impacts employers in Alaska, Washington, Montana, Idaho, Oregon, California, Nevada, and Arizona, but since Circuit Courts often rely on one another’s rulings, it’s very possible that the impact of this decision will spread.
As written, the EPA allows for pay discrepancies for the following reasons:
Helps Employees Withhold the Correct Amount from Their Paychecks
If you’ve noticed a bump in your take home pay since the new withholding tables went into effect, you’re not alone. The Treasury Department estimated that 90% of taxpayers would see higher paychecks once the new tables were implemented. But, depending on your situation, you could be under-withheld. When you file your 2018 tax return next year, you may owe more taxes and potentially could be subject to underpayment penalties.
Conversely, if you haven’t adjusted your withholding allowances in a while, you could be over-withheld and get a big refund check next tax season. (More than 7 in 10 taxpayers fall into this category, receiving an average refund of over $2800!) While it may be nice to see that extra influx of cash once a year, perhaps you would be better served with a little more money each pay period to spend or invest as you wish.
The updated withholding calculator put out by the Internal Revenue Service (IRS) yesterday will help you figure out if you’re getting too little—or too much—taken out of your paycheck using the new tax tables. A revised withholding worksheet was also issued. Either tool can help you determine how many withholding allowances you should claim on your Form W-4, which tells your employer how much to withhold from your paycheck each pay period.
The Maryland Healthy Working Families Act requires Maryland employers with 15 or more employees to provide paid sick leave. Employers with fewer than 15 employees must provide unpaid sick leave. The law went into effect February 11, 2018.
Both paid and unpaid leave must be accrued at a rate of at least one hour of leave for every 30 hours worked, up to 40 hours per year, and allow carryover of unused leave that can be capped at a maximum accrual of 64 hours.
According to the Department of Labor, Licensing and Regulations (DLLR), there are still several bills that could affect this law:
“The General Assembly is in session until April 9, 2018, and there are several bills that could affect this legislation. Although HB1 goes into effect on February 11, 2018, bills have been introduced that would substantially impact the law.”
“In anticipation of the February 11 effective date, the Maryland Department of Labor, Licensing and Regulation would like to highlight the following information for employers. Please be advised that some of this may be subject to change based on stakeholder input and any amendments to the law.
The Tax Cuts and Jobs Act suspends tax free reimbursement for qualified moving expenses to all employees, except for active military members. Any moving expenses incurred after December 31, 2017 paid directly to an employee, or paid to a third party on behalf of an employee, must be reported as taxable income for the employee. Employees may not deduct moving expenses either, according to the Act.
Employers paying third party vendors directly can use our Special W-2 Recordings form to report the amount paid on behalf of the employee. Employers have the option of covering the employee portion of FICA by grossing up the amount to cover the FICA taxes.
At this time it is unclear what, if any, changes will occur to individual states in regard to handling moving expenses. We will communicate any state changes when more information becomes available.
Corporate Payroll Services Clients Will See Changes Reflected in
Payrolls Processed Beginning Monday, January 15, 2018
On January 11, the Internal Revenue Service released updated withholding tables for 2018 to reflect changes required by the Tax Cuts and Jobs Act signed into law last month. Employers should begin to use the new withholding tables as soon as possible, but no later than February 15, 2018, according to the January 11 news release. Clients of Corporate Payroll Services will see the withholding changes reflected in paychecks processed beginning Monday, January 15, 2018, a full month ahead of the IRS deadline.
The new tables take into account the changes in tax rates and brackets, the increase in the standard deduction and the repeal of personal exemptions. They are designed to work with the current W-4 forms that employees have filed with their employers to claim withholding allowances. No changes to the forms are required at this time.
However, the IRS indicated that it is working to revise the Form W-4 and provide a new online calculator by the end of February. The new form and calculator will take into account changes in itemized deductions, increases in the child tax credit, the new dependent credit and the repeal of dependent exemptions, with a goal of producing the correct amount of withholding and avoiding under- or over-withholding of income taxes.
The IRS also posted a Frequently Asked Questions document to clarify commonly asked questions about the withholding changes. Of course, as a Corporate Payroll Services client, if you have a question about your specific situation, please reach out to your local branch office and ask to speak to your Payroll Specialist.
Minimum wage rates are increasing in many states this year. Unless otherwise noted, the minimum wage rates in bold are updated rates effective January 1, 2018. States with no change in minimum wage rates are not bolded.
Are you hiring employees? Form I-9 is used to verify the identity and employment authorization of individuals seeking employment in the U.S. Employers are responsible for obtaining a completed form I-9 from each employee.
Starting Monday, January 22, 2017, U.S. Citizenship and Immigration Services (USCIS) will only accept the new version of Form I-9. Until then, you can use the 03/08/13 edition. (NOTE: An updated Form I-9 was issued on July 17, 2017, and must be used after September 18, 2017. Information about changes on the new form can be found here.)
The online version provides instructions, prompts, and drop down lists help ensure correct data entry. Changes include the following:
A number of states are seeing minimum wage increases this year. The minimum wage rates in bold are updated effective January 1, 2017 unless otherwise noted. States with no change in minimum wage rates are not bolded.
The new Department of Labor overtime rules, set to go into effect December 1, are now on hold.
Late yesterday, a federal judge in Texas issued an injunction blocking the new rules that would extend overtime pay to more than 4 million employees. This means that the salary threshold for exemption from overtime pay remains at $23,660 until the court makes a final ruling.
“A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity,” said U.S. District Court Judge Amos Mazzant in his ruling.
PLEASE NOTE: Corporate Payroll Services will not take any action with your employees in terms of raising or lowering salaries or converting employees from hourly to salary or vice versa without your specific instructions.
If you have instructed us to make a change in anticipation of the new rule which we have already made and you wish for us to change it back, you must specifically instruct us to do so."
If you have questions, please contact your branch office.
Beginning December 1, New Overtime Rules Could Affect You
Effective December 1, millions of salaried employees will become eligible for overtime pay under the DOL’s Fair Labor Standards Act (FLSA). If you are unaware of the new rules, you could find yourself paying overtime to employees who, before December 1, were exempt.
Current Overtime Rules
Under current rules, certain categories of salaried executive, administrative, professional and outside sales employees who meet certain job criteria and are paid up to $455 salary per week ($23,660 per year) are exempt from minimum wage and overtime pay requirements. Highly compensated individuals making over $100,000 per year and meet certain other criteria fall under special rules as well.
New Overtime Rules
Beginning December 1, new rules update the salary level at which you must begin to pay overtime to these ‘exempt’ employees to $913 per week or $47,476 annually. The threshold for highly compensated individuals was raised to $134,004.
The new rules also provide for automatic updates every three years beginning January 1, 2020.
The Internal Revenue Service released a new Tax Tip about fake tax bill notices related to the Affordable Care Act (ACA.) The scam involves fraudulent versions of notice CP2000 for tax year 2015 and may be received via email, as an attachment, or by mail.
You’ll be able to tell if you receive one of these fraudulent notices if -
(CLICK HERE TO READ THE ENTIRE IRS NOTICE regarding the “Fake IRS Tax Bill Notices”)
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The Breakroom is the Corporate Payroll Services resource center for 'News You Can Use,' feature stories, holiday notices, regulatory updates, product announcements, commentary and more.