Category: Employment Law
The 2019 Wage Theft Law – This Law Should Really Be Called the Employer Paperwork Creation And Administrator Blood Pressure Elevation Plus Wage Theft Act
June 14, 2019 | Scott M. LepakBack in the good old days wage theft was best described as taking employee payroll and putting it on horse number 5 in the 7th race at Canterbury Park. Starting next month (July 1, 2019), wage theft has gotten a new expansive meaning. The 2019 Wage Theft Law is a greatly expanded approach to employment record keeping. Employers are required to provide lots of information to new employees, create lengthy payroll earning statements and maintain (and make available) additional employer records. The “wage theft” part of the law relates to the potential criminal penalties for an employer’s failure to comply. These criminal laws become effective in August 2019. The new provisions fall into some basic categories: Additional information Employers are required to provide employees when they start work: The new employee hire letter must now include a written notice to employees about their employment status and terms of employment, including wages, hours and benefits. It must be provided at the start of employment. Specific information must include: • Employee’s employment status • Whether an employee is exempt from minimum wage, overtime and other state wage and hour laws, and on what basis • Number of days in the employee’s pay period and the regularly scheduled payday • Date the employee will receive the…
Read MoreIRS Expands Self-Correction of Plan Qualification Errors
May 14, 2019 | Barna, Guzy & Steffen, Ltd.In 2018, the IRS modified its program for correction of plan qualification failures to significantly increase the fees for getting approval of corrections under the Voluntary Compliance Program (“VCP”). Since that occurred, the IRS has issued expanded permissible self-correction methods under Revenue Procedure 2019-19. This new Procedure provides many new ways in which a plan sponsor may act independently to fix errors to retain the plan’s tax qualification, without IRS filings, user fees, or other involvement. The new procedure permits plans to self-correct failures in two categories that previously required VCP filings: problems with participant loans and plan amendments. 1. In regards to loan failures, the new procedure permits self-correction of loan failures if the failure relates to • A default on loan payments (if the five-year maximum repayment period has not expired); • Allowing participants to have multiple loans even though not permitted under the plan or loan procedure; • Providing a loan when the plan does not permit (which was allowed under the old procedure, and continues under the new); or • The failure to obtain spousal consent (assuming that the spouse is now willing to provide that consent—if not, VCP is required to repair this failure). A loan failure correction of the above can either result in participant avoiding being…
Read MoreSignificant Changes to Retirement Plans Proposed
April 3, 2019 | Barna, Guzy & Steffen, Ltd.As of April 2, 2019, there are two bills rapidly moving through Congress with bipartisan support. The Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE”) passed the House and the Senate has proposed the Retirement Enhancement Security Act of 2019 (“RESA”). The bills are very similar and because there is bipartisan support it is likely that something will be passed soon. Some of the proposed changes are as follows: 1. Encourage employees to participate in automatic contributions in 401(k) plans and require employers to provide estimates of how much an employee’s account would provide employees if it were invested in an annuity. 2. Make it easier for small employers to join other employers in multiple-employer plans. 3. Easing nondiscrimination rules for frozen defined benefit plans. 4. Adding a safe harbor for selecting lifetime income providers in defined contribution plans. 5. Increase the automatic enrollment safe harbor cap from 10{a0c01d20c42349884e67ff80c137866b0a9fe47aaae8f8a86a605a369ae487c3} to 15{a0c01d20c42349884e67ff80c137866b0a9fe47aaae8f8a86a605a369ae487c3}. 6. Require employers to allow long time, part time employees to participate in their 401(k) plans. 7. SECURE would change the required minimum distribution age that distributions must begin from age 70 ½ to 72 years old. RESA does not include this provision.
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