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Monthly
Newsletter
Brought
to you by Integrated Benefit Solutions
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May 2017 Issue
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2017
'Pay or Play' Penalty and Affordability Amounts Announced
 The IRS has updated its existing Q&As
on the Affordable Care Act's employer shared responsibility ("pay or
play") requirements to reflect adjustments to the pay or play penalty
and affordability amounts. Those adjustments are as follows:
- For calendar year 2017, the
applicable per-employee dollar penalties of $2,000 and $3,000 are
adjusted to $2,260 and $3,390, respectively.
- For plan years beginning in
2017, the affordability threshold for purposes of both the pay or play
affordability safe harbors and the premium tax credit
provisions is 9.69%.
The
Q&As also address what counts as an "offer of coverage" for
purposes of pay or play compliance. Click
here to view the Q&As in their entirety.
Check out
our Pay
or Play section for step-by-step guidance, worksheets, and calculators
that can help employers understand whether they will be subject to a
penalty, and how to calculate it.
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Redesigned
Green Cards Impact Form I-9 Compliance
 U.S. Citizenship and Immigration Services
(USCIS) has announced a redesign to the Permanent
Resident Card ("Green Card") and the Employment
Authorization Document ("EAD"). USCIS is expected to begin
issuing the new Green Cards and EADs on May 1, 2017.
Redesigned Green Cards
The new Green Cards and EADs will:
- Display the
individual's photos on both sides;
- Show a
unique graphic image and color palette:
- Green Cards will have
an image of the Statue of Liberty and a predominately green palette;
and
- EADs will have an
image of a bald eagle and a predominately red palette;
- Have
embedded holographic images; and
- No longer
display the individual's signature.
Also, Green Cards will no longer have an
optical stripe on the back.
What Employers Need to Know
Employers should be aware of the following regarding the redesigned Green
Cards and EADs:
- Both the
existing and the new versions of Green Cards and EADs remain
acceptable for purposes of Form
I-9 and E-Verify
compliance.
- Both the
existing and the new Green Cards and EADs will remain valid
until the expiration date shown on the card.
- Some older
Green Cards, which do not have an expiration date, remain valid.
- Certain EADs
held by individuals with Temporary
Protected Status and other designated categories have been automatically
extended.
- Some Green
Cards and EADs issued after May 1, 2017 may still display the
existing design format, as USCIS will continue using existing card
stock until current supplies are depleted.
Check out our section on Form
I-9 for more information on complying with employment eligibility
verification requirements.
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Avoiding
Employee Misclassification Under the FLSA
 In order for the federal Fair Labor
Standards Act's (FLSA) minimum wage and overtime pay requirements to apply
to a worker, the worker must be an "employee" of the employer, meaning
that an employment relationship must exist between the worker and the
employer. The FLSA defines "employ" as including to "suffer or permit to work," representing
the broadest definition of employment under the law, as it covers work that
the employer directs or allows to take place. Applying the FLSA's
definition, workers who are economically dependent on the business
of the employer, regardless of skill level, are considered to be
employees. On the other hand, independent contractors are workers with
economic independence who are in business for themselves.
While the U.S. Department of Labor (DOL) finds that most
workers are employees under the FLSA, in order to make the
determination of whether a worker is an employee or an independent
contractor, the DOL uses the multi-factor "economic
realities" test, which focuses on whether the worker is
economically dependent on the employer or in business for him or herself.
Each factor of the "economic realities" test is outlined below.
- Is the Work
an Integral Part of the Employer's Business? If the work
performed by a worker is integral to the employer's business, it is
more likely that the worker is economically dependent on the employer.
A true independent contractor's work, on the other hand, is unlikely
to be integral to the employer's business.
- Does the
Worker's Managerial Skill Affect the Worker's Opportunity for Profit
or Loss? This
factor should not focus on the worker's ability to work more hours,
but rather on whether the worker exercises managerial skills and
whether those skills affect the worker's opportunity for both profit
and loss.
- How Does the
Worker's Relative Investment Compare to the Employer's Investment? The worker
should make some investment (and therefore undertake at least some
risk for a loss) in order for there to be an indication that he or she
is involved in an independent business. The worker's investment should
not be relatively minor compared with that of the employer. If the
worker's investment is relatively minor, that suggests that the worker
and the employer are not on similar footings and that the worker may
be economically dependent on the employer.
- Does the
Work Performed Require Special Skill and Initiative? A worker's
business skills, judgment, and initiative, not his or her technical
skills, will aid in determining whether the worker is economically
independent.
- Is the
Relationship Between the Worker and the
Employer Permanent or Indefinite? Permanency or indefiniteness
in the worker's relationship with the employer suggests that the
worker is an employee. However, a lack of permanence or indefiniteness
does not automatically suggest an independent contractor relationship.
The key is whether the lack of permanence or indefiniteness is due to
operational characteristics intrinsic to the industry or the worker's
own business initiative.
- What is the
Nature and Degree of the Employer's Control? The
employer's control should be analyzed in light of the ultimate
determination of whether the worker is economically dependent on the
employer or truly an independent businessperson. The worker must
control meaningful aspects of the work performed such that it is
possible to view the worker as a person conducting his or her own
business.
Our Independent
Contractors section includes more information on how to correctly
determine worker classification.
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President
Trump Signs Repeal of OSHA's 'Volks Rule'
 President Trump has signed into law House
Joint Resolution 83, which repeals the "Volks
Rule," a U.S. Occupational Safety and Health Administration (OSHA)
rule which imposed on employers certain continuing obligations to make and
maintain accurate records of recordable injuries and illnesses. The rule
previously became effective on January 18, 2017.
OSHA Recordkeeping Regulations
OSHA's recordkeeping
regulations require employers to record information about certain
work-related injuries and illnesses on an OSHA
300 Log. Employers must enter each recordable injury or illness on the
OSHA 300 Log, as well as on a supplementary OSHA
301 Incident Report, within 7 calendar days of receiving
information that a recordable injury or illness has occurred. At the
end of each calendar year, employers must create, certify, and post annual
summaries of the cases listed on their 300 Logs for the prior calendar
year. Generally, employers must retain their OSHA Logs, Incident
Reports, and annual summaries for 5 years following the end of the
calendar year that they cover.
If an employer initially fails to record a
recordable injury or illness on the OSHA 300 Log or the corresponding OSHA
301 Incident Report, the employer still has an ongoing duty to record that
case; as long as an employer fails to comply with the ongoing recording
duty, there exists an ongoing violation of OSHA’s recordkeeping
requirements. OSHA can cite employers for such recordkeeping violations for
up to 6 months after the 5-year retention period expires.
'Volks Rule' Explained
OSHA's "Volks Rule
," which became
effective on January 18, 2017, amended OSHA's recordkeeping regulations to
state that:
'Volks Rule' Repealed
On April 3, 2017, President Trump signed into law House Joint Resolution 83 (H.J. Res.
83), which declares the "Volks Rule" to
no longer have force or effect.
To read
more about worker safety and health, please visit our section on Safety & Wellness.
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Firing a Problem Employee
Firing an employee is never easy.
As unpleasant as any layoff or termination situation is, however, handling
one with a problem employee makes the task even more challenging. Watch the
video below to learn the steps an employer should take when firing a
problem employee.
Check out
our Discipline & Termination section
for more helpful tips.
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