The March 2020 CARES Act allows employers to reduce their quarterly federal employment tax deposit obligations in certain situations. For example, if an employer is entitled to a credit of $5,000 for (a) qualified sick leave wages, (b) certain related health plan expenses, and (c) the employer’s share of Medicare tax on the leave wages, and if the employer is otherwise required to deposit $8,000 in employment taxes, the employer could reduce its federal employment tax deposits by $5,000. The employer would only be required to deposit the remaining $3,000 on its next regular deposit date. As another example, if an employer is entitled to an employee retention credit of $10,000 and was required to deposit $8,000 in employment taxes, the employer could retain the entire $8,000 of taxes as a portion of the refundable tax credit it is entitled to and file a request for an advance payment for the remaining $2,000 using Form 7200.
The $900 billion pandemic relief that passed Congress in December was a compromise measure aimed at improving economic recovery. Some of its most important features are as follows:
Two virus relief packages have passed Congress and been implemented, each running slightly in excess of $1 trillion. They provided a $600.00 per week federal supplement to state unemployment benefits, so generous that a majority of workers on unemployment received more money than if they were working. That federal supplement expired at the end of July, and extensive negotiations occurred between the Administration and the Democrats over an extension and other pandemic relief.
In a 6-3 ruling on June 16, 2020, the U.S. Supreme Court ruled that the federal civil rights laws protect workers on the basis of their sexual orientation or gender identity. Bostockv. Clayton County. The much-publicized issue and ruling comes as a surprise to many and serves as a prime example that changes in social mores among the population can affect statutory interpretation.
Atlanta Senior Principal Larry Stine, nationally recognized expert on occupational safety and health law, was extensively quoted in an article published by Bloomberg Law News on June 3, 2020. Contrary to some reports the Occupational Safety and Health Administration (OSHA) has ramped up its inspections of many employers, especially meat and poultry processors, in response to COVID-19.
OSHA inspections are up 70% since April 28. Asked to comment on why OSHA continue to inspect meat processing plants despite President Trump’s executive order requiring meat processing plants to remain open because they are critical to maintaining the nation’s food supply, Stine said he “never expected OSHA to do anything else.”
Update: The House has passed, and the President has indicated his support for, the Families First Coronavirus Response Act. The Senate is to consider this bill on March 17, 2020. Employers are primarily impacted by the paid sick leave, expanded FMLA leave, and tax credit.
On April 1, 2020, the U.S. Department of Labor (DOL) issued a temporary rule to implement the public health emergency and paid sick leave provisions. The regulations are consistent with the questions and answers previously issued, and discussed below, as well as the webinar discussed below. The most important clarification in the regulation is the type notice an employee must provide to the employer, and the documentation the employer may require the employee to provide as to the need for such leave. Therefore, the applicable regulations in these areas are attached, Sections 826.90 and 826.100.
On September 24, 2019, the U.S. Department of Labor announced its long-anticipated Final Rule on exemptions and overtime under the Fair Labor Standards Act (FLSA). The new rule takes effect January 1, 2020.
Unlike its Obama-era predecessor, which was challenged in court and enjoined by the U.S. Court of Appeals for the Fifth Circuit, the new Final Rule is more of an update than a reinvention of the regulatory structure. It increases the salary thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker). It also allows employers to count a portion of certain nondiscretionary bonuses and commissions towards meeting that salary level: this will allow an employer to “catch up” an employee’s earnings at year end so the employee qualifies for the exemption. The total annual compensation level for highly compensated employees (HCE) is increased from the currently-enforced level of $100,000 to $107,432 per year. Long-standing exemptions for teachers, lawyers, and other professionals remain unchanged.
The new salary thresholds basically just reflect growth in employee earnings since the current thresholds were last updated in 2004. Similar revisions to special salary levels allowed for workers in U.S. territories and in the motion picture industry also are included. Detailed information about the final rule is available at https://www.dol.gov/whd/overtime2019/.
What does this mean for you? Now is the time to take a look at your current payroll. Make sure that salaried, exempt employees’ earnings meet or exceed the new $684/week threshold: but know that if you fall short, you may be able to make it up to them at year end (that will be December 2020) with a bonus. Also check any “highly compensated” employees to be sure they are meeting or exceeding the new $107,432 level.
Comment: Unlike the previous Administration’s proposal, which sought to completely revamp the rules for overtime pay, this Final Rule should not pose difficult compliance problems. As always, we will be happy to work with you to ensure that your questions are answered and that you can confidently plan and execute compensation policies in accordance with the law.
Questions? Need more information? Call Larry Stine at 404-365-0900.
On August 7, 2019, U.S. Immigration and Customs Enforcement (ICE) personnel arrested about 680 persons during seven food processing plant raids in Mississippi. Published reports indicated that 243 employees were arrested at the Morton, Mississippi plant of Koch Foods of Mississippi. Three other companies were also raided, some at more than one plant, but Koch Foods has taken an aggressive action to defend itself. On September 3, 2019, Koch Foods of Mississippi, LLC, filed a Motion to Suppress and Return of Property taken during the raids, contending that the raid was not legal, and that the "exclusionary rule" should bar the government's use of the information illegally seized during the raid. The exclusionary rule applies as an application of the Fourth Amendment to the U.S. Constitution, which applies when government authorities exhibit deliberate, reckless, or grossly negligent disregard for Fourth Amendment rights in searches and seizures of a person's or entity's property.
Thanks to a lawsuit, an Obama-era initiative requiring large employers to submit detailed pay data sorted by race and gender has been revived. Employers with more than 100 employees must complete a disclosure form and upload this data for 2017 and 2018, which may be used against them, no later than September 30, 2019.
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