Key 2017 Legal Changes that Employers and Federal Contractors Must Know About

Ready or not, 2017 is upon us and with it come many regulatory changes and important deadlines for employers and individuals. Make sure your New Year’s resolutions include compliance with the following changes and deadlines pertinent to employers and federal contractors.

Affordable Care Act

Employer Reporting. In November, the IRS extended the deadline for employers to meet their ACA reporting requirements. Employers required to furnish employees with Forms 1095 now have until March 2, 2017 to do so. The deadline to submit the Forms to the IRS remains February 28, 2017 for paper returns or March 31, 2017 for electronically-filed returns.

Marketplace Insurance. The deadline for individuals to obtain marketplace insurance coverage beginning January 1, 2017 expired on December 15, 2016. Individuals who want to enroll in marketplace insurance coverage for the balance of 2017 must do so by January 31, 2017. After the January 31 deadline, individuals may enroll in marketplace coverage only if they qualify for a Special Enrollment Period.

Required Contribution Percentages. For tax years and plan years beginning on and after January 1, 2017, the IRS increased to 9.69% of employee household income the maximum cost of coverage the employer can charge the employee for purposes of the employer mandate penalty. The IRS also increased to 8.16% of the employee’s household income the maximum cost of coverage the employer can charge the employee for purposes of determining whether the employee is eligible for an affordability exemption from the individual mandate.

IRS 2017 Contribution Limits for Retirement Plans and IRAs

The following are the IRS contribution limits for 2017:

  • 401(k) and 403(b) employee contribution limit: $18,000.
  • 401(k) and 403(b) catch-up contribution limit: $6,000.
  • IRA employee contribution limit: $5,500.
  • IRA employee catch-up contribution limit: $1,000.
  • 401(a)(17) compensation limit: $270,000.

Benefit Plan Changes

In May, the HHS Office of Civil Rights issued final rules implementing Section 1557 of ACA. Health programs must comply with these nondiscrimination rules effective January 1, 2017. Additionally, in May, the EEOC issued rules implementing Title I of the ADA and Title II of GINA as they relate to employer wellness programs. Employers must conform their wellness programs with these rules effective January 1, 2017. Plan sponsors that made material modifications to their benefit plans in the past plan year must provide participants with a Summary of Material Modifications within 210 days after the end of the plan year of the modification. For plan years ending on December 31, 2016, the SMM must be provided by July 30, 2017.

New York Minimum Wage and Overtime Salary Exemption Increase

Effective December 31, 2016, the N.Y. minimum wage and salary threshold exemption for time-and-a-half overtime pay increase based on the employer’s size and region as follows:

Minimum Wage Increase

  • New York City: Large Employer (11 or more employees): $11.00 per hour.
  • New York City: Small Employer (10 or fewer employees): $10.50 per hour.
  • Nassau, Suffolk and Westchester Counties: $10.00 per hour.
  • Remainder of New York: $9.70 per hour.

Overtime Salary Exemption Increase

  • New York City: Large Employer (11 or more employees): $825.00 per week.
  • New York City: Small Employer (10 or fewer employees): $787.50 per week.
  • Nassau, Suffolk and Westchester Counties: $750.00 per week.
  • Remainder of New York: $727.50 per week.

New Jersey Minimum Wage Increase

Effective January 1, 2017, the New Jersey minimum wage increases to $8.44 per hour.

EEO-1 Report

During 2017, no federal contractor or subcontractor is required to file an EEO-1 Report with the EEOC or DOL Office of Federal Contract Compliance Programs. The next filing date is March 31, 2018. For the March 31, 2018 filing and all future filings, EEOC and DOL will not accept paper filings. All filings must be done online. Finally, the snapshot pay period for the EEO-1 Report due on March 31, 2018 will be from October 1 to December 31, 2017 instead of July 1 to September 30.

Pay Transparency

Beginning January 1, 2017, pursuant to E.O. 13673 and the DOL Final Rule, a federal contractor or subcontractor must furnish a wage statement to each individual performing work under the federal contract if the individual is subject to the wage requirements of the FLSA, the Davis Bacon Act or the Service Contract Act. The wage statement must be provided each pay period and must include 1) the number of straight time hours worked; 2) the number of overtime hours worked; 3) the rate of pay; 4) gross pay; and 5) itemized additions to or deductions from gross pay. The federal contractor or subcontractor must inform an overtime-exempt individual in writing of the exempt status. For individuals treated as independent contractors, the federal contractor or subcontractor must provide a written notice that the individual is classified as an independent contractor.

Paid Sick Leave

Beginning January 1, 2017, pursuant to E.O. 13706 and the DOL Final Rule, a federal contractor or subcontractor must provide an employee with at least 56 hours per year of paid sick leave or permit an employee to accrue not less than one hour of paid sick leave for every 30 hours worked under a covered federal contract.

If you have any questions or would like to discuss how these changes and dates affect you or your business, please contact Patrick W. McGovern, Esq. at 973-535-7129 or pmcgovern@nullgenovaburns.com, or Nicole L. Leitner, Esq. at 973-387-7897 or nleitner@nullgenovaburns.com.

Plainfield Becomes New Jersey’s 12th Municipality to Require Paid Sick Leave

On March 14, 2016, the City of Plainfield became the 12th municipality in New Jersey to require private sector employers to provide paid sick leave to their employees. The paid sick leave, which ranges from 24 to 40 hours a year, can be used by employees for their own illness, to care for an ill family member, or to care for a child in the event of certain school closures.  The law will take effect on July 12, 2016.

Amount of Sick Leave

Plainfield’s Sick Leave Law sets forth different obligations for small and large employers.  Small employers, or those with less than 10 employees, must give a maximum of 24 hours of paid sick leave per year.  Large employers, or those with 10 or more employees, must provide a maximum of 40 hours of paid sick leave per year.  All employees accrue 1 hour of paid sick leave for every 30 hours worked each calendar year. Exceptions apply to child care, home health care, and food service workers, who are entitled to accrue a maximum of 40 hours of paid sick leave, despite the size of their employer.

Plainfield’s Paid Sick Leave Law entitles employees to carry over a maximum of 40 hours of paid sick leave from year to year.  Despite this carry-over provision, an employer can limit the use of paid sick leave to just 40 hours a year.  The Paid Sick Leave Law also contains two other significant provisions.  First, if an employer already offers a paid time off policy that is just as generous as the new law, an employer need not provide additional leave.  Second, the Paid Sick Leave Law does not require employers to pay employees for unused sick time upon termination of employment.

Eligibility For Paid Sick Leave

An employee must work 80 hours in a year to be eligible for paid sick leave.  As to employer size, which dictates the amount of sick leave an employee can accrue (either 24 or 40 hours), an employer must count all employees performing work for compensation on a full-time, part-time, or temporary basis. Employers with more than 10 employees, in total, will be considered a large employer. Those employers with a fluctuating number of employees should use the average number of employees employed during the preceding calendar year to determine size.

Use of Paid Sick Leave

Employees in Plainfield can use paid sick leave to care for themselves or a family member with a mental or physical illness, injury or health condition.  This care includes time off for medical diagnosis, treatment, or preventative medical care for a condition.  It may also be used for the closure of the employee’s place of work, or the employee’s child’s school or place of care, due to a public health emergency or to care for a family member who has been exposed to a communicable disease. An employee may use paid sick leave in increments as small as the employer’s payroll system uses to account for other absences.

If an employee seeks to use sick time, and the need for the use is foreseeable, an employer may require seven days advance notice from the employee.  If the need for paid sick leave is unforeseeable, an employer may require notice before the beginning of the employees’ shift, or in emergent circumstances, as soon as practicable.  After an absence, an employer may also require the employee to submit written confirmation that the time used was in fact used for the purposes authorized under the Paid Sick Leave Law.  Further, after three consecutive days or instances of sick leave, the employer may require documentation from a healthcare provider to confirm that the employee’s absence was necessary; the employer must not require details of the health condition or the nature of the illness.

Notice and Posting Requirements

Plainfield employers must provide written notice (available on the City’s website) to employees explaining their rights upon hire or, for current employees, as soon as practicable after July 12, 2016. Employers must also post the notice a conspicuous and accessible location at the work place.  The notices must be in English and in any language that is the first language of at least 10% of the employer’s workforce.

Fines and Penalties

Penalties include a fine not exceeding $750 for each day of the violation, and restitution in the amount of any paid sick time unlawfully withheld.  The Paid Sick Leave Law also prohibits employers from retaliating against any employee for taking leave or for interfering with the employee’s rights in connection with that law.

For more information regarding implementing Plainfield’s paid sick leave or how our business can develop a compliant paid sick leave policy, please Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777 or Nicole M. Amato, Esq., Associate, in the firm’s Human Resources Practices Group at nmamato@nullgenovaburns.com.

NYC To Provide Municipal Employees With Six Weeks of Paid Maternity, Paternity, Adoption And Foster-Care Leave As of January 1, 2016

On December 22, 2015, New York City Mayor Bill de Blasio announced that he will sign an Executive Order granting municipal managers and non-unionized workers up to 6 weeks of paid maternity, paternity, adoption and foster-care leaves.  Starting on January 1, 2016, New York City employees are eligible to take the 6 weeks of paid leave at 100 percent of salary and it can also be combined with accrued sick leave and/or accrued vacation – so that employees will be able to take up to 12 weeks maternity, paternity, adoption, or foster care leave without losing pay.

To cover the $15 million cost, all non-union employees will see their vacation time reduced by two days, from 27 to 25 and the City will be repurposing the existing managerial raise of 0.47 percent scheduled for July 2017. The City’s unionized workers are not covered, unless a deal is reached with their representatives through collective bargaining. The new policy puts New York City at the forefront of city and state policies around the country.  New York City joins Portland, San Francisco and Cincinnati which have also recently approved paid parental leave policies.  In the private sector, companies such as Facebook, Amazon, Apple, Twitter and Netflix have also joined the growing trend to provide workers with paid paternal leave.

For more information regarding how your business can implement paid sick leave, please Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.