If government shuts down, what exactly happens? Sometimes lost in the discussions of the government shutdown is that, this time, things are a bit different. Five of the 12 appropriation bills already have been passed, including the Departments of Labor, Health and Human Services, and Education and Related Agencies Appropriations Act of 2019. That means that even if we have a government shutdown, the Wage & Hour Division, OFCCP, OSHA, MSHA, and the NLRB will keep right on going. The EEOC, however, is part of the Commerce, Justice, Science, and Related Agencies appropriation, which has not yet been signed into law. Thus, at this point, the EEOC would be part of a government shutdown, should that occur. Source: Seyfarth Shaw 12/13/18
Congress is putting their money on the line making them more responsible: Congress passed a bill last week amending congressional accountability rules to make members of Congress pay sexual harassment judgments and settlements out of pocket and announce publicly when they strike deals. The bill's passage comes after leaders in the U.S. Senate and the U.S. House of Representatives agreed on text reforming how Congress handles sexual harassment among its own, said sponsors Sen. Roy Blunt, R-Mo., and Sen. Amy Klobuchar, D-Minn. Both houses passed the bill by unanimous consent. The bill is sitting on the President’s desk. Source: Law360 12/14/18
New farm bill legalizes hemp: Congress has moved to pass a farm bill that allocates billions in subsidies to American farmers, legalizes hemp, bolsters farmers’ markets, and rejects stricter limits on food stamps pushed by House Republicans. President Trump is expected to sign the bipartisan legislation. The farm bill also legalizes the production of hemp, a form of cannabis with lower CBD levels than marijuana. Analysts told CNBC that hemp could grow into a $20 billion industry by 2022. Given that Michigan has legalized recreational marijuana, and employers cannot find qualified workers, it may mean that drug testing for marijuana in Michigan may go away, even with the potential threat of higher premiums for workman’s compensation. Source: Chicago Tribune 12/11/18
Paid Leave tax credit update: The IRS has issued additional FAQs regarding the employer credit for paid family and medical leave under Code Sec. 45S. The IRS had previously issued FAQs on the credit in April 2018, and then issued additional guidance in IRS Notice 2018-71 in October 2018. The new FAQs are reflective of that guidance. The FAQs provide that except for the first taxable year of an employer beginning after December 31, 2017, an employer can claim the credit only for leave taken after the written leave policy is in place. For example, if an employer adopts a written policy that satisfies all requirements of Code Sec. 45S on June 15, 2019, with an effective date of July 1, 2019, the employer may claim the credit for family and medical leave paid per that policy to qualifying employees for leave taken on or after July 1, 2019. The FAQs also indicate that in a written policy, an eligible employer must allow at least two weeks of paid family and medical leave (prorated for part-time employees) for all qualifying employees at a rate of at least 50% of the wages normally paid to them. Source: CCH, IRS
Reminder – Tax changes for employee achievement awards: Under previous law, employers could deduct the cost of certain employee achievement awards. Deductible awards were excludible from employee income. Under the Tax Cuts and Jobs Act there is now a prohibition on cash, gift cards, and other non-tangible personal property as employee achievement awards. Special rules allow an employee to exclude certain achievement awards from their wages if the awards are tangible personal property. The new law clarifies that tangible personal property doesn’t include cash, cash equivalents, gift cards, gift coupons, certain gift certificates, tickets to theater or sporting events, vacations, meals, lodging, stocks, bonds, securities, and other similar items. More information is available at Tax Cuts and Jobs Act: A Comparison for businesses and in the Employer Update.
Michigan gets approval for new Insurance Provider Assessment tax: The federal Centers for Medicare and Medicaid Services (CMS) has approved Michigan’s waiver for a new Insurance Provider Assessment (IPA) tax which replaces the state’s costly Health Insurance Claims Assessment (HICA) tax. As a result, the uncompetitive HICA tax is officially repealed effective 10/1/18, as the law states that the HICA is repealed the first day of the calendar quarter in which CMS approves the waiver. The end result will be lower taxes on employers. Source: Michigan Manufactures Association 12/11/18
Do you know when your employees will retire? Only half of employers said they have a good understanding of when employees will retire, despite 83% of them saying a significant number of employees are nearing or are at retirement, according to a Willis Towers Watson (WTW) study of 2.9 million employees. The 2018 Longer Working Careers Survey revealed that 54% of employers said they believe the loss of talent caused by retirement will pose the most significant labor market risk in the next five years. Half said they think they will encounter difficulty finding workers to replace those who retired, and 48% voiced concerns about the loss of organization-specific knowledge. Almost half of respondents said they are concerned that benefit costs will rise as employees delay their retirements, and 41% said they worry that this delay will also heighten wage and salary costs. Postponing retirement could mean trouble for younger employees, too; 37% of employers said that they have concerns that the delays could prohibit employees with less seniority from advancing. Source: HR Dive 12/13/18
The 12 Days of Christmas costs increased 1.2% in 2018: The PNC Christmas Price Index predicts true loves will need to have more money on hand to fill the stockings on the mantle this holiday shopping season. To purchase the gifts included in the classic holiday song “The 12 Days of Christmas,” it will cost 1.2% more than it did in 2017, according to the 35th annual holiday economic analysis by The PNC Financial Services Group. PNC calculated the 2018 price tag for The PNC Christmas Price Index at $39,094.93, approximately $450 or 1.2% more than last year’s cost, but less than the government’s Consumer Price Index, which increased 2.5% through October in year-over-year measurement before seasonal adjustment. “While we have witnessed more market volatility this year, consumer confidence remains strong and wage growth is beginning to catch up with high employment,” said Amanda Agati, co-chief investment strategist for The PNC Financial Services Group. “The PNC Christmas Price Index reflects these trends, as we see strong growth in key areas.” For example, the price for Six Geese-a-Laying was up 8.3%, after not seeing an increase since 2014. After posting the largest growth rate in 2017’s index, the cost of Five Gold Rings fell 9% due to less demand and fluctuations in gold prices throughout 2018. Further, as lagging wages start to catch up to a tight labor market, the Lords-a-Leaping, Pipers Piping, and Drummers Drumming all saw an increase, as costs rose between 3% and 3.5%. For tech-savvy true loves, the PNC Christmas Price Index also calculates the cost of “The Twelve Days of Christmas” gifts purchased on the Internet. As Internet prices tend to be higher due to travel and shipping costs, true loves will have to splurge $41,165.95 ($2,071.02 more than in-store purchases) for the convenience of online shopping this year. Source: CDN 11/15/18