Personnel e.bulletin – January 2016
2016 Employment Law Changes and Trends
Prepared for the PHCC Educational Foundation by TPO, Inc.
As the New Year begins, it’s important to be aware of the following employment law changes for 2016. With these in mind, you can investigate further – on agency websites and with an employment attorney – what changes you need to make to keep your business in compliance with the employment laws.
Affordable Care Act
Employer Shared Responsibility Provisions. Since January 1, 2015, employers with 100 or more full-time (or full-time equivalent) employees that do not offer health insurance to those employees (and their dependents), or that offer coverage that is not affordable or does not provide minimum value, have faced a potential assessment if at least one of their full-time employees receives a premium tax credit to purchase coverage in the individual marketplace. A full-time employee is employed an average of at least 30 hours per week. Employers with at least 50 but fewer than 100 full-time or full-time equivalent employees generally had until 2016 before these rules applied.
However, on October 7, 2015, the president signed the Protecting Affordable Coverage for Employees (PACE) Act, which allows states to extend the definition of small employer to cover businesses with 100 or fewer employees.
If your business does not qualify as a small employer, it’s important to understand how these Affordable Care Act rules may apply and how the payment amounts could be calculated. Businesses that qualify as small employers in their state are generally not affected by the employer shared responsibility rules.
Retirement Plan Contributions. The taxpayer contribution limit for 401(k) and 403(b) plans did not change from 2015 and remains at $18,000.
Individuals who are age 50 and over at the end of the calendar year can make annual catch-up contributions that exceed the $18,000 threshold. The catch-up contribution limit for employees age 50 and over who participate in 401(k) and 403(b) plans remains unchanged at $6,000.
The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals age 50 and over remains at $1,000.
For further details on limitations for pension plans and other retirement-related items, visit the IRS website.
Social Security Administration
Maximum Wages Subject to Social Security Taxes. Since there is no cost-of-living adjustment for 2016, the maximum amount of wages subject to Social Security taxes will remain at $118,500 for 2016. Earnings above this amount are not subject to the Social Security portion of the payroll tax or used to calculate retirement payouts.
Check the Social Security Administration’s website for further details on Social Security taxes.
Employers must complete an I-9 Form for every person hired to work in the United States in return for wages or other remuneration. The current I-9 was revised March 8, 2013, and expires March 30, 2016.
When U.S. Citizenship and Immigration Services introduces a new Form I-9, you will need to update your procedures to ensure you’re properly verifying employment eligibility for every new hire. Check U.S. Citizenship and Immigration Services’ website for information on any Form I-9 or other changes.
A Look Ahead
The Department of Labor (DOL) announced that it expects to release in July 2016 its final rule on which white collar workers – executive, administrative, and professional employees – are entitled to the minimum wage and overtime pay protections under the Fair Labor Standards Act (FLSA). For further details on these changes, visit the DOL’s website.
A Reminder for the New Year
Review and Revise Your Employee Handbook. Chances are your company policies have changed over the past year – whether to reflect changes in law, adaptation to industry trends, new workplace challenges, or even adoption of some of the tips in PHCC articles. It bears repeating that your employee handbook could stand to be reviewed, updated, and redistributed, and that this should be done regularly. The start of the New Year presents the perfect opportunity for action.
Employment law is always changing – and that goes for states and localities as well. So make sure you’re checking not only on the agencies and topics listed here, but also on your state and locality and other high-risk areas for your business.
Be sure to work with an employment attorney, since this article does not constitute legal advice. And remember to always seek counsel from local HR professionals. By keeping these areas in mind and conducting the appropriate due diligence, you’ll be much more likely to maintain a compliant workplace.
This content was developed for the PHCC Educational Foundation by TPO, Inc. (www.tpo-inc.com). Please consult your HR professional or attorney for further advice, as laws may differ in each state. Laws continue to evolve; the information presented is as of December, 2015. Any omission or inclusion of incorrect data is unintentional. Please note this article is not intended to provide legal advice or to substitute for supervisor employment law training.
The PHCC Educational Foundation, a partnership of contractors, manufacturers and wholesalers was founded in 1987 to serve the plumbing-heating-cooling industry by preparing contractors and their employees to meet the challenges of a constantly changing marketplace. If you found this article helpful, please consider supporting the Foundation by making a contribution at http://www.phccfoundation.org
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