Employment Compliance Changes: January 2019
January is a busy time for changes in employment law and compliance within the U.S., so it’s important to be prepared for how this might affect your business and workers. We’ve put together the most significant compliance changes that will be implemented between December 2018 and the start of January 2019. Scroll down to view further details on the changes.
New York family leave increasing
Washington and Massachusetts paid family leave
401(k) and IRA increases- 2019 contribution limits
Oregon and payroll-deduction IRA program
Illinois expense reimbursements
ACA individual mandate repealed
HCSO San Francisco new exempt threshold in 2019
HCSO San Francisco contribution increasing
Canada updates
Major U.S. 2019 Compliance Updates
Rhode Island Paid Sick Leave
Implementation Date: July 1, 2018
What’s Changing? Employees will be able to accrue 32 hours of paid sick leave in 2019 and 40 hours each year after that. The employee will accrue one hour for every 35 hours worked.
What This Means for You? Employees will start to accrue and be able to use paid sick leave. Note that the law has some special exceptions for temporary employees working for an employment agency, placement service, or temporary staffing company, permitting the employee to use the leave only after 180 days of employment.
2. New York Paid Family Leave Increases
Implementation Date: January 1, 2019
What’s changing? New York employees will be permitted to take up to 10 weeks of job protected leave to bond with a new child or take care of a sick family member. The employee will receive up to 55% of their average weekly wage to a cap of $746.41 per week.
What this means for you? There are no increased costs to you, however there are a few things to be cautious of. First, Paid Family Leave is job protected leave, so the employee’s role cannot be terminated while they are on leave. Second, the employee can continue to keep their health insurance while on leave, and must continue to receive your client contribution Finally, employers are prohibited from discriminating or retaliating against an employee for requesting or taking Paid Family Leave.
3. Washington Paid Family Leave Starts Collections
Implementation Date: January 1, 2019
What’s changing? Starting January 1, employers will start to collect contributions to the paid family leave benefits fund. Employees will be unable to access this benefit until January 1, 2020.
What this means for you? If you have employees in Washington State, we will start collecting this employee-paid contribution. Employees won’t be able to take Washington Paid Family Leave until January 1, 2020.
4. Massachusetts Paid Family Leave Starts Collections
Implementation Date: January 1, 2019
What’s Changing? Starting January 1, employers will be required to provide certain disclosures and information to employees within 30 days of employment, advising the employee of the family leave benefit. The employee contributions begin on July 1, 2019. Qualified employees won’t be able to use the benefit until January 1, 2021.
What This Means for You? If you have employees in Massachusetts, we will be providing them with information about the paid family leave starting January 1, 2019 and start contributing on July 1, 2019 to the state plan.
5. Oregon and Payroll-Deduction IRA Program
Implementation Date: December 15, 2018
What’s Changing? Oregon employers with 20 or more covered employees must enroll in the OregonSaves payroll-deduction IRA to offer employees the option to defer their payroll to an IRA account. The new regulation is not applicable to employers who already offer an employer-sponsored retirement plan.
What This Means for You? PGC is already compliant with this new regulation as we offer compliant 401(k) and IRA plans.
6. Illinois Employees Must Be Reimbursed for Expenses
Implementation Date: January 1, 2019
What’s Changing? Illinois employers will be required to reimburse employees for all necessary expenditures or losses they incur within the scope of their employment that are directly related to services performed for the employer.
What This Means for You? If you have employees working in or out of Illinois, this is helpful to keep in mind in regard to how expenses are managed and what a worker can claim for. If you are using PGC to process expenses we can work with you to create a customized expense policy for your Illinois workers.
7. ACA Individual Mandate Repealed
Implementation Date: January 1, 2019
What’s Changing?
All individuals have been required to hold healthcare coverage through the Affordable Care Act (ACA), the new federal tax reform brought about by the Trump administration repeals the ACA individual mandate, beginning January 1, 2019 and eliminates the individual mandate by setting the penalty as $0. The penalty for not having coverage was previously $695 for an individual, $2,085 for a family, or $347.50 for a child or alternatively 2.5% of the household income, whichever is greater.
What This Means for You? Employees who previously enrolled in medical insurance to avoid the ACA penalty may choose to become uninsured effective January 1, 2019. The tax reform enacted does not eliminate the employer mandate, just the employee mandate. Practically speaking, this means we are still required to offer your eligible full time and variable hour employees a medical insurance plan that meets the ACA guidelines. You may see a reduction in uptake of benefits from your workforce employed by PGC, and therefore an overall reduction in employer contribution required.
8. New Jersey Implements a Health Insurance Individual Mandate
Implementation Date: January 1, 2019
What’s Changing? The New Jersey will implement an individual health insurance mandate that mirrors the one created by the ACA. Under the new law, all New Jersey taxpayers are required to have minimum essential coverage beginning on January 1st. If not, these taxpayers may face a state shared responsibility tax.
What This Means for You? All your New Jersey employees should obtain minimum essential compliant coverage from PGC or from the state insurance marketplace to avoid incurring any state tax penalties.
9. 401(k) and IRA Contribution Limit Increases, HCE Update
Implementation Date: January 1, 2019
What’s Changing? The Internal Revenue Service is raising the 401(k) maximum contribution from $18,500 to $19,000. The IRA contribution limit is increasing from $5,500 to $6,000. They have also raised the Highly Compensated Employee (HCE) definition to $125,000 from $120,000.
What This Means for You? PGC has already adjusted all of these limits, so you’re covered. This also means that your employees who have not exceeded income of $125,000 from PGC in 2018 will be eligible to participate in our 401(k) plan.
10. San Francisco HCSO increases and Exemption Threshold
Implementation Date: January 1, 2019
What’s Changing? Employees who have been employed for 90 days and regularly work 8 or more hours per week within the San Francisco city limits will now be entitled to receive a medical contribution of $503.96 per month or $2.93 per hour payable into the HCSO fund. This is an increase from $486.76 or $2.83 per hour in 2018. There will also be an Exemption Threshold in 2019: any managerial, supervisory, and confidential employees who earn more than $100,796 (or $48.46 per hour) will no longer be entitled to the HCSO contribution.
What This Means for You? For any workers who elect medical through our PGC group plan, you will be billed $528.96 monthly. For any workers who do not opt into our group medical plan and who do not waive the HCSO contribution, but are working within the San Francisco city limits, you will be billed quarterly, $2.93 per hour for the hours worked in the 3 months prior. If employing workers earning above $48.46 per hour you won’t be required to contribute to their HCSO, so the only additional cost would be the required medical contribution if they are full-time and opt into PGC’s healthcare plan.
Canada Updates
Canada Pension Plan Employee Contribution Increases
Implementation Date: January 1, 2019
What’s Changing? The employee contribution to the Canada Pension Plan (CPP) will start to see yearly increases starting in 2019 until 2023. In 2018, the CPP contribution was 4.95% for earnings between $3,500 and the Maximum Pensionable Earnings. In 2019, this amount is changing to 5.10% and increasing ever year thereafter.
What This Means for You? PGC has already worked with its payroll provider to ensure that these new rates are considered and will be effective January 1, 2019.
2. Minimum Wage Increases
The following provinces have had minimum wage increases in 2018:
Alberta, $15.00 per hour, effective October 1, 2018
British Columbia, $12.65 per hour, effective June 1, 2018
Manitoba, $11.35 per hour, effective October 1, 2018
New Brunswick, $11.25 per hour, effective April 1, 2018
Newfoundland and Labrador, $11.15 per hour, effective April 1, 2018
Northwest Territories, $13.46 per hour, effective April 1, 2018
Nova Scotia, $11.00 per hour, effective April 1, 2018
Nunavut, $13.00 per hour, effective April 1, 2018
Ontario, $14.00 per hour, effective January 1, 2019
Prince Edward Island, $11.55 per hour, effective April 1, 2018
Quebec, $12.00 per hour, effective May 1, 2018
Saskatchewan, $11.06 per hour, effective October 1, 2018
Yukon, $11.51 per hour, effective April 1, 2018
If you have any questions regarding these changes, get in touch and we will be happy to talk through these.
Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.