March 2021 Texas HR Legal Updates

Texas Court Finds Minimum Wage Law Preempts San Antonio Paid Sick Leave Ordinance

Update Applicable to:
Employers within the City of San Antonio.

What happened?
On March 10, 2021, the Texas Fourth Court of Appeals upheld a preliminary injunction preventing San Antonio’s amended Sick and Safe Leave Benefits ordinance from taking effect since December 2019.

What are the details?
In its decision, the appellate court held that San Antonio’s ordinance violates the Texas Minimum Wage Act. As detailed below, this decision is one in a line of decisions that have prevented these kinds of ordinances from taking effect across Texas over the last several years.

The City of San Antonio was the second city in Texas to enact a paid sick and safe leave benefits ordinance, following Austin’s enactment of such an ordinance two years earlier. San Antonio’s ordinance was scheduled to take effect on August 1, 2019 and would have required covered private employers to provide certain paid sick and safe leave benefits to employees based on hours worked within the city limits. The ordinance never took effect, however, because of litigation stemming from fierce opposition to requiring private employers to provide such benefits.

The Fourth Court of Appeals’ decision regarding San Antonio’s ordinance is consistent with its sister court’s ruling regarding the identical ordinance in Austin. On November 16, 2018, the Third Court of Appeals held Austin’s ordinance was unconstitutional for the same reason, resulting in a preliminary injunction that likewise prevented the Austin law from taking effect. Observing the fate of the Austin ordinance, San Antonio officials amended their ordinance and delayed its effective date to overcome the same constitutional scrutiny that doomed the Austin ordinance. This attempt, so far, has failed.

An article covering more about the ongoing lawsuits can be found here.

What do employers need to do?
Texas employers with operations in San Antonio should monitor the situation for any challenges by the local officials.

March 2021 Wisconsin HR Legal Updates

Wisconsin Passes Law Providing Immunity from COVID-19 Liability, With Limited Exceptions

Update Applicable to:
All Employers operating in Wisconsin.

What happened?
On February 25, 2021, Wisconsin enacted a new law designed to help reduce ambiguity regardingCOVID-19-related liability.

What are the details?
The statute (Wis. Stat. § 895.476), which became effective on February 27, 2021, gives certain entities broad immunity from civil liability related to COVID-19 unless they acted recklessly or engaged in wanton conduct or intentional misconduct.. The immunity applies to lawsuits filed after February 27, 2021, asserting claims that accrued on or after March 1, 2020.. The immunity is in addition to any other applicable immunities that may be provided by law.

Entities covered by the statute include partnerships, corporations, associations, governmental entities, tribal governments, tribal entities, or other legal entities.. Covered entities also include schools, institutions of higher education, nonprofit organizations, and any employers covered by the state unemployment insurance laws.. Employers, business owners, employees, agents, or independent contractors of the entities are also covered, regardless of whether the person is paid or is an unpaid volunteer.. Importantly, the immunity applies not only to employers concerning workplace incidents of COVID-19, but also in many other contexts, including, for example, COVID-19-related lawsuits against long-term care providers (e.g., by their patients and/or patients’ families), retail establishments (e.g., by their customers), and universities (e.g., by their students).

Under the statute, covered entities are immune from civil liability for the death of (or injury to) any individual (or other damages) caused by an act or omission related to novel coronavirus exposure (i.e., exposure to SARS-CoV-2 or COVID-19 during, or through the performance or provision of, the entity’s functions or services). The immunity does not apply, however, if the challenged act or omission by the entity involves reckless or wanton conduct or intentional misconduct.

You can read more about the statute here.

What do employers need to do?
Wisconsin employers should review the above information and make any needed changes to the workplace in order to take advantage of the benefits provided by this bill.

March 2021 New York HR Legal Updates

New York Passes COVID-19 Vaccination Paid Leave

Update Applicable to:
All New York Employers.

What happened?
The New York State Senate unanimously voted 62-0 on March 1, 2021, to grant both private and public employees up to four hours of paid leave per injection to receive the COVID-19 vaccine.

What are the details?
The bill amends the New York Labor Law (NYLL) to add Section 196-C, requiring that all private employers provide their employees with a “sufficient period of time,” up to four hours, of paid leave to receive the COVID-19 vaccine. The leave is four hours per injection, meaning employees who receive a two-dose vaccine can potentially be entitled to up to eight hours of paid time off under the law. The leave cannot be charged against any other leave to which the employee is entitled, including the recently enacted paid sick leave requirements. Employees may also use the

The entire period of leave must be provided at an employee’s regular rate of pay. The requirements of the law, however, can be waived by a collective bargaining agreement if it explicitly references NYLL 196-C. The bill also forbids an employer from discriminating against, retaliating against, or interfering with an employee exercising their rights under the law, including requesting paid leave to be vaccinated.

The requirement to provide this leave will expire on December 31, 2022.

The information was provided by Fisher Phillips and Littler Mendelson P.C., whose articles can be found here and here, respectively.

What do employers need to do?
New York employers should read the above information and update their workplace leave policy to accommodate employee’s vaccine needs.

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New York City Issues Final Rule Regarding Religious and Race Hairstyle Discrimination

Update Applicable to:
All New York City Employers.

What happened?
Effective January 30, 2021, the New York City Commission on Human Rights (“Commission”) amended Title 47 of the Rules of the City of New York to provide an example and add exceptions to clarify protections based on race, creed, and religion, related to hair textures, hairstyles, including the use of head coverings, and hair lengths, which are commonly or historically associated with a particular race, creed, or religion.

What are the details?
This Final Rule codifies much of the Commission’s enforcement guidance that was released in 2019 regarding race-based hairstyle discrimination. The Final Rule also sought to codify that hair textures, hairstyles, head coverings, and hair length can be elements of an individual’s religious practices such that discrimination based on hair can function as a proxy for religious discrimination and constitute a form of unlawful stereotyping.

The Final Rule provides that, while a “legitimate health or safety concern” can provide a defense against a discrimination claim, “speculative health or safety concerns may not be used as a pretext for religious discrimination.”  Therefore, the Commission will consider the following factors in determining whether a restriction or prohibition constitutes a pretext for discrimination or is based on legitimate health or safety concerns:

  • the nature of the articulated health or safety concern;
  • whether the restriction or prohibition is narrowly tailored to address the concern;
  • the availability of alternatives to the restriction or prohibition; and
  • whether the restriction or prohibition has been applied in a discriminatory manner.

Notwithstanding the possible defense for health or safety concerns, the Final Rule unequivocally states that “it is not a defense that a restriction or prohibition is based on customer preference or based on a perception that a person’s hair is ‘unprofessional,’ a ‘distraction,’ or inconsistent with a covered entity’s image.”  Thus, the Commission rejects the notion that a “professional image” can serve as an undue hardship defense against a religious discrimination claim based on religious hairstyle or head coverings.  The Commission further rejects “trivial or minor losses of efficiency” as a possible undue hardship defense in this context.

More details about the final rule may be found here.

What do employers need to do?
New York City employers should review the above information and update any applicable workplace practices that may violate this final ruling.

March 2021 Colorado HR Legal Updates

Colorado Provides Clarity on Paid Sick Leave Obligations for New Hires

Update Applicable to:
All Employers operating in Colorado.

What happened?
On February 23, 2021, the Colorado Department of Labor and Employment (“CDLE” or the “Division”) issued revisions to the Wage Protection Rules, 7 CCR 1103-7, relating to Colorado employers’ paid sick leave obligations under the Healthy Families and Workplaces Act (“HFWA”).

What are the details?
The HFWA requires Colorado employers to provide at least 48 hours of paid sick and safe leave (“PSSL”) each year on either an accrual basis based on hours worked or frontloaded annually. The new rules do not in any way alter this requirement.

In addition to this requirement, though, the law also requires all Colorado employers to provide employees access to up to 80-hours of public health emergency leave (“PHEL”) upon the declaration of a public health emergency by federal, state, or local authorities. In its last iteration of the Wage Protection Rules, the CDLE confirmed that the current COVID-19 public health emergency triggers the requirement to provide PHEL. There remained several ambiguities in the text of the rules, however, particularly concerning how much PHEL new hires or part-time employees are entitled under the law. While some ambiguities remain, the CDLE clarified some issues for employers.

First, the rules make clear that the amount of PHEL to which part-time employees are entitled is tied to when the employee requests PHEL. Full-time employees (employees who work at least 40-hours per week) are entitled to 80-hours of PHEL under the law, but it was previously unclear what amount of PHEL employers needed to provide to part-time employees. The statute’s text and the prior version of the rules provided that such employees were entitled to leave equal to the amount they work in a 14-days, but it was unclear to which 14-days this language referred. The rules now provide that part-time employees receive PHEL in “the greater of the number of hours the employee (a) is scheduled for work or paid leave in the 14-days after the leave request, or (b) actually worked in the 14-days prior to the declaration of the public health emergency or the leave request, whichever is later.”

Having the amount of PHEL part-time employees receive tied to when they request PHEL makes compliance less challenging and fosters administrative ease for employers. By pegging the calculation to an employee’s “live” need for leave, the calculation produces a result that represents the employee’s current working situation, unlike, for example, what the employee might have been working months ago. Importantly, by tying the calculation to an actual need to use leave, employers can reduce the time staff must spend calculating leave that might never be used and instead can more effectively use their time addressing critical business needs during a public health emergency and assisting employees with their actual needs.

The second change makes clear that employees who are hired during a public health emergency are entitled to PHEL. A plain reading of the prior version of the rules—which tied PHEL entitlement to the number of hours an employee worked before the declaration of a public health emergency, or 14-days before or after January 1, 2021—would have excluded employees hired on or after January 15, 2021 from being eligible for PHEL. Thus, the CDLE’s revised language makes clear that all employees are entitled to PHEL regardless of their date of hire because PHEL eligibility is linked to when the employee requests leave.

You can read more about the rule revisions here.  

What do employers need to do?
Employers operating within Colorado should review the above changes to the existing PHEL rules and determine if any changes need to be made to workplace policies.

March 2021 California HR Legal Updates

California Cities Continue Introducing Hero Pay Ordinances

Update Applicable to:
Large retail employers operating in Pomona or Santa Ana.

What happened?
Cities across California continue to pass ordinances requiring large retail and grocery stores to provide a paid premium to their employees, as they work through the pandemic.

The ordinance requires that employers notify covered workers in writing about their rights. The notice must include information regarding (a) the right to premium pay guaranteed by the ordinance; (b) the right to be protected from retaliation; and (c) the right to bring a civil action for an employer’s violation of the ordinance. Employers must post the required notice in a location that employees use for breaks, as well as in an electronic format accessible to the covered workers via a smartphone application or an online web portal. Employers must provide the notice in English and any language known by the employers to be the covered workers’ primary language.

What are the details?
Pomona defines a covered employer as: “Retail establishments” that employ 300 or more employees nationwide and employ more than 10 employees per location in Pomona. Pomona. Additionally, “any grocery store, retail pharmacy or ‘big box retailer’ who employs 300 or more employees nationally and employs more than 10 employees per location in the City.” (Emphasis in original).

Santa Ana defines a covered employer as: grocery store or retail pharmacy “hiring entities” that employ more than 300 workers nationally and more than 15 employees per grocery store or pharmacy in the City of Santa Ana.

Both cities are requiring employers to pay the same premium to their employees. Each employee working in the applicable location will need to pay a premium of $4.00 an hour.

The ordinance includes provisions to protect workers. The protections bar employers from reducing employees’ hours, altering their employment status, or limiting their earning capacity in response to the passage of the ordinance.

Employers are required to keep records showing compliance with the ordinances for up to two years.

An article going more in-depth for the Santa Ana ordinance can be found here. The article for the City of Pomona can be found here.

What do employers need to do?
Large grocery store or retail employers should review the linked articles to review the needed changes that may be required of them in various locations.

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New California COVID-19 Paid Sick Leave Requirements Update

The Labor Commissioner’s Office has made the required notice available online, here. Employers will need to post the notice in the workplace or distribute the notice via other means, like email, to any employees that are unlikely to see the notice in the workplace.

The original post regarding SB-95 can be found here.

March 2021 Federal HR Updates

E-Verify Adds New myUploads Feature

Update Applicable to:
All employers utilizing E-verify.

What happened?
On March 10, 2021, the United States Citizenship and Immigration Services announced the new myUploads feature to be included in the use of E-verify.

What are the details?
myUploads is a new feature from myE-Verify that helps employees and individuals electronically resolve their E-Verify DHS Tentative Nonconfirmations (TNCs) by uploading images of their documentation as a JPEG, PNG, or PDF through a computer or smart device. This new free feature may help expedite employment eligibility confirmation and resolve TNCs. In the case of an E-Verify TNC, the E-Verify employer must privately notify the employee and provide a Further Action Notice (FAN) to help the employee understand the TNC process. The FAN will include information on how to use myUploads. Employees are required to contact DHS after uploading their documents, and E-Verify employers are still required to process and close DHS TNC cases within E-Verify’s timelines. 

myUploads requires users to have a myE-Verify account and to successfully pass a two-factor identity assurance process. Those logging into myE-Verify for the first time since April 28, 2019, must access myE-Verify with their USCIS online account. Fax is still available.

myUploads is a free service available to all users, however, employers may not require employees to use myUploads, myE-Verify or Self Check to resolve a TNC or to precheck their employment authorization.

What do employers need to do?
No action required. The use of myUploads is optional.

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The Department of Labor Establishes New Whistleblower Protocols

Update Applicable to:
All employers.

What happened?
On February 19, 2021, the U.S. Department of Labor announced that the Occupational Safety and Health Administration (OSHA) will oversee worker retaliation complaints filed under the Criminal Antitrust Anti-Retaliation Act (CAARA) and the Anti-Money Laundering Act (AMLA).

What are the details?
The CAARA, signed into law on December 23, 2020, prohibits employers from taking adverse employment action against covered individuals who report criminal antitrust violations to their employer or the federal government, or who participate in a federal governmental criminal antitrust investigation or proceeding.

The AMLA, enacted on January 1, 2021, as part of the National Defense Authorization Act, is the most expansive anti-money laundering statute since the USA Patriot Act of 2001. The statute bars employers from retaliating against employees who report money laundering and Bank Secrecy Act (BSA) violations to their employer or the federal government, or who participate in a Treasury Department or Justice Department investigation or proceeding based upon the information.

In addition to announcing that probes of whistleblower complaints under CAARA and the AMLA will fall under OSHA’s purview, the DOL advised that OSHA will process such complaints using the procedures outlined in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21)3 until the Agency issues interim final rules. AIR21 was enacted to protect employees who provide information relating to air carrier safety violations. Like the more than 20 other statutes whose whistleblower provisions are administered by OSHA, AIR21 has well-established complaint reporting and investigative mechanisms.

Applying the AIR21 framework to CAARA and AMLA whistleblower claims, employees who believe they were discharged or otherwise discriminated against for reporting a violation of either law may file a complaint with the secretary of labor within 90 days after the date on which the violation occurs.

Further reading can be found in this article.

What do employers need to do?
Employers should be aware of the changes to whistleblower-related laws to prevent violations. 

8 Trends to Shape the Workplace in 2021

Young female employee hosting video conference with team

COVID-19 has undoubtedly impacted businesses and individuals all over the world. From economic and finances, to social and well-being, the COVID-19 pandemic has changed how business operate, as well as priorities for the years to come. Here are eight trends that will shape the workplace in 2021 and years to follow.

1) Employee Experience to Employee Life Experience

COVID-19 has provided business owners insight into employees’ personal lives, exposing the unique impact the pandemic has had on them personally and professionally. As a result, many business owners are recognizing that their employees are seeking support in their personal lives, and doing so may offer them improved personal and professional situations, as well as increase productivity and engagement.

Employers who support employees with life experiences reported improved employee mental health (23%), physical health (17%), and performance (21%). Prioritizing employee mental health, financial wellness, and life experiences will allow employers to reap the benefits of healthier, happier employees.

2) Employer to Take Stance on Current Affairs

As social and political issues have become more predominant in media and involved community members, more employees are seeking employment with organizations that align with their personal values. In fact, 2020 research reported 74% of employees expect their employer to be actively involved in cultural affairs for which many industry experts explain that taking a stance and/or showing support is likely to become the “new normal” for workplace culture.

Additionally, businesses have seen the impact their support has provided employees with a recent survey showing that 60% of employees were more engaged when their employer provided support regarding recent social issues.

3) Gender Pay Gap Continues to Rise

Some organizations have implemented, and some are planning to implement, a hybrid workforce where employees may work from the office headquarters or from an alternative remote location (i.e., home, coffeeshop, co-working space).

Many chief human resource officers have reported employee surveys revealing men are more likely to return to the office setting than women. A recent survey provided that 64% of managers believe in-office employees perform better than remote workers and are more likely to give in-office workers a higher compensatory promotion than remote workers. Conversely, research from both pre-pandemic and current pandemic times have proven the opposite – full-time remote workers are 5% more likely to perform higher than full-time in-office employees.

Given the recent research, if employers are more likely to act on bias towards in-office workers and men are more likely to return to the office, the prediction is that men will be favored for higher compensation raises than females. This will result in an increase in the gender pay gap when COVID-19 has already had a disproportionate impact on women.

4) Employee Monitoring Limitations

As a direct result of COVID-19, one out of four businesses invested in new technology to track and monitor employees. Unfortunately, many business owners are not versed in employee privacy laws and regulations regarding technology. Recent research reported 50% of employees trust their employer with their data and 44% do not receive data collection information from their employer.

New local and state regulations will likely limit what employee information employers are permitted to track. Businesses should prepare to adapt to these new regulations that will likely restrict their employee monitoring capabilities across their organization.

5) Transitioning from Location to Time Flexibility

Working remotely may have become the “new normal” for business operations, but the next challenge is addressing the specific business hours employees will be required to work. Recent studies have shown that employers who provide flexibility on location, schedule, and hours worked report 55% of their workforce as high performers. Industry experts predict employers shifting from monitoring hours worked to measuring employee productivity.

6) Prioritizing Mental Health

It likely comes as no surprise that the pandemic’s physical distancing and deterrence of social gatherings has impacted individuals’ mental health. As a result, a separate mental health pandemic emerged. In response, many employers have fought diligently to prioritize mental health through additional benefits to support employees. Pre-pandemic research showed that 45% of increased budgets for employee well-being were to mental and emotional wellness programs.

In March 2020, 68% of businesses implemented at least one wellness benefit to support employees during COVID-19. Industry experts predict that 2021 will push employers to continue destigmatizing mental health via expanded benefit offerings and “mental health days” to foster mental health awareness across organizations.

7) Employee Leasing to Temporarily Address Skills Gap

Recent analysis shows 33% more skills on job ads in 2020 compared to 2017, which infers that businesses are struggling to reskill or upskill existing employees to meet the organization’s evolving needs. Businesses have turned to employee leasing to temporarily address the skills gap, meaning they are investing in employees with those skills when the demand is present. Other businesses have opted to invest in gig workers or independent contractors or seek partnerships with third-party organizations to “rent” employees for a limited time to fulfill skills gap.

8) Remote Work Becomes “New Normal” for Talent Acquisition

Throughout the years, states and cities have provided businesses incentives to relocate to their jurisdictions based on the belief that relocating businesses will bring jobs with them. However, remote and hybrid work will likely change this approach where an employee’s state or city of residence will not be as impactful to the employer location. States and cities are predicted to expand tax-related incentives for employees to relocate to their jurisdictions. For example, some jurisdictions are offering remote employees a relocation fund to move to the employer’s state or city.

Any change to the way businesses operate can be difficult to navigate on your own. Be proactive in aligning yourself with these 2021 trends by reaching out to VensureHR. Our team of human resource experts can provide you the expertise, tools, resources, and support to ensure you maintain your business’s success in 2021 and beyond.

Source:
Harvard Business Review


Gartner’s 2020 ReimagineHR Employee Survey

Harvard Business Review

March 2021: New California COVID-19 Paid Sick Leave Requirements (SB-95 Update)

New COVID-19 Paid Sick Leave

Update Applicable to:
All California employers with more than 25 employees.

What happened?
On March 19, 2021, SB-95 was signed by Governor Newsom and has an effective date of March 29, 2021.

What are the details?
SB-95 acts as a revamp to the previously provided COVID-19-related paid sick leave that California mandated for employers. This time around there are several expansions to the requirements, and even more employers will be required to provide this leave. The bill also applies retroactively, back to January 1, 2021. The act will expire on September 30, 2021.

Covered Employers
The bill impacts employers with more than 25 employees.

Covered Employees
Any employee that is unable to work remotely or telework.  However, the legislation does add a provision for in-home supportive services, meaning that they will now be included in the coverage of the legislation.

Qualified Reasons
Covered employees will be able to utilize the COVID-19-related paid sick leave for the following reasons:

  • The covered employee or provider “is subject to a quarantine or isolation period related to COVID-19” as defined by an order or guidelines of the California Department of Public Health, the U.S. Centers for Disease Control and Prevention, “or a local health officer who has jurisdiction over the workplace.”
  • A health care provider has advised the covered employee or provider to self-quarantine because of COVID-19–related concerns.
  • The covered employee or provider “is attending an appointment to receive” a COVID-19 vaccine.
  • The covered employee or provider “is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.”
  • The covered employee or provider is experiencing COVID-19 symptoms and is seeking a medical diagnosis.
  • “The covered employee is caring for a family member … who is subject to an order or guidelines described” in qualifying reason (1), or who a health care provider has advised to self-quarantine, as described in qualifying reason (2), SB-95 defines family members to include the employee’s spouse, registered domestic partner, parent (including parents-in-law), child (regardless of age or dependency), grandparent, grandchild, and sibling.
  • The covered employee or provider “is caring for a child … whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.”

Entitlement Amount
Full-time employees will generally receive 80 hours of paid sick leave in most cases, and part-time workers will receive an average of their last two week’s hours worked. Workers are entitled to the 80 hours if the company considers the employee to be full-time, or if the employee works at least 40 hours per week in the two previous weeks before the usage of their paid sick leave. Part-time employees will have their leave entitlement calculated based on the following:

  1. “If the covered employee has a normal weekly schedule, the total number of hours the covered employee is normally scheduled to work for the employer over two weeks.”
  2. “If the covered employee works a variable number of hours, 14 times the average number of hours the covered employee worked each day for the employer in the six months preceding the date the covered employee took COVID-19 supplemental paid sick leave. If the covered employee has worked for the employer over fewer than six months but more than 14 days, this calculation shall instead be made over the entire period the covered employee has worked for the employer.”
  3. “If the covered employee works a variable number of hours and has worked for the employer for14 days or fewer, the total number of hours the covered employee has worked for that employer.”

Retroactive Leave Provision
SB-95’s retroactive provision allows employees to replace hours they had used since January 1, 2021, of paid leave, and instead to use the COVID-19 related paid sick leave. This allows employees to regain the hours of paid leave they may have used in the past, by instead reducing their amount of COVID-19-related paid sick leave. The retroactive provision may only apply for the qualifying leave reasons that are listed above. Once an employee makes an oral or written request for such, the employer must make this payment on or before the payday for the next full pay period after the employee makes the oral or written request. The employee’s wage statement must separately show and list the payment and reflect the hours available, rate of pay, and corresponding COVID-19-related paid sick leave balance after this type of request.

Leave Credit
Employers who were still offering Families First Coronavirus Response Act (FFCRA) leave after December 31, 2020, may credit the amount of FFCRA paid sick leave used by employees against the required hours to be provided by this legislation. These credits only apply for FFCRA usage that took place after December 31, 2020.

Pay Calculation and Cap
SB-95 requires employers to calculate their nonexempt employees pay when using the paid sick leave to be the higher of the following four calculations:

  1. The employee’s “regular rate of pay for the workweek in which” COVID-19 SPSL was taken, regardless of whether the employee worked overtime in that workweek;”
  2. “The covered employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment;”
  3. The California minimum wage; or
  4. The local minimum wage.

The bill requires employers to pay their exempt employees the same as they would for the usage of other paid leaves the employer offers. Employee pay for usage of COVID-19 related paid sick leave is capped at $511 per day and $5,110 in the aggregate for each covered employee.

Usage of Other Paid Leave
Employers may not force employees to use their other forms of paid leave they might have banked before their usage of the COVID-19-related paid sick leave. However, employers may require employees to use their COVID-19-related paid sick leave before utilizing the exclusionary pay required by the California Division of Occupational Safety and Health’s, or Cal/OSHA’s, COVID-19 Emergency Temporary Standard (ETS).

Wage Statement Requirement
Wage statements have not changed since the requirements from last year. Employers must show the balance of available COVID-19-related paid sick leave on the employee’s wage statement as a distinct line item. It must be separated from other forms of paid sick leave the employee may have. The wage statement requirement becomes effective the first full pay period after the statute’s effective date.

Notice Requirement
Finally, the bill will include a posting and notice requirement. Employers will need to post a notice of the COVID-19-related paid sick leave in a conspicuous place in the workplace. The model notice will be provided by the labor commissioner within seven days of the statute’s enactment. If the covered employees are not likely to see the notice in the workplace, the employer may satisfy the notice requirement by distributing the notice through electronic means, such as email.

Applicable Links
The full legislation of SB-95 can be found here.

Articles summarizing the bill can be found here and here.

A nearly identical bill is making its way through the California legislature and may pass as well, this one under the name AB-84. It contains the same requirements as SB-95, but as of March 19, 2021, the bill has only just finished review by a committee. AB-84 can be read and tracked here.

What do employers need to do?
Covered California Employers should review the above information and update their workplace practices to reflect the requirements. Training for management staff may be needed to ensure employees are not accidentally denied a leave they are entitled to. Employers should keep a watch on the Labor Commissioner’s website to ensure they receive the required notice as soon as possible. The required posting may be placed online at this address.

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Update

The Labor Commissioner’s Office has made the required notice available online, here. Employers will need to post the notice in the workplace or distribute the notice via other means, like email, to any employees that are unlikely to see the notice in the workplace

Common Tax Errors and Tips for Employers

Young accountant reviewing business finances

Tax season is typically a time of the year many individuals and businesses dread as it requires tedious review of documentation and ensuring accuracy to avoid penalties and fees. To help prevent common tax mistakes, here are some of the common tax errors employer make and tips to streamline tax season.

Common Tax Mistakes to Avoid

Misclassifying Workers

One of the most common tax mistakes business owners make is misclassifying their workers. Understanding the difference between 1099 employees and W-2 employees is imperative for business owners to ensure each worker’s classification is accurate.

A misclassified worker can result in liability for employee-related costs. Fines and backpay costs may include a $50 fine for each W-2 not filed, 1.5% of employee’s wages plus interest, 40% of employee’s Federal Insurance Contributions Act (FICA) tax contributions, and the full employer-matching FICA contributions. If the Department of Labor believes the employee misclassification was intentional, additional fees include 20% of all employee wages paid, all employee and employer FICA contributions, up to $1,000 criminal penalty fee for each misclassified employee, and up to one year in prison.

Misclassification repercussions do not end at paying fines or facing criminal penalties, but may also entail repaying benefits owed to each misclassified employee, such as retirement savings contributions, healthcare coverage, stock choices, overtime, paid time off, and break periods.

Insufficient Payroll Records

The IRS recommends business owners to maintain payroll records for four years minimum, which may include:

  • Time sheets
  • Expenses accounts
  • Copies of W-2 forms
  • Job evaluations

Business owners can subject themselves to audits and fines if they have insufficient payroll records. For this reason, some business experts recommend keeping payroll and employment records up to seven years for auditing purposes. Depending on your business’s record, the purpose of maintaining appropriate payroll and employment records may vary and thus, will determine your time frame for recordkeeping.

Compensating Creditors First

When cash flow slows, business owners oftentimes pay off creditors before the IRS. However, payroll factoring can be a more effective solution. Payroll factoring is when an invoice factoring business, like LSQ, buys a business’s outstanding invoices and advances up to 95% of the total funds for a lower rate. This offers immediate relief without incurring additional debt.

Form 941 (Employer’s Quarterly Federal Tax Return) Errors

Businesses who file taxes quarterly file a Form 941. However, many businesses make error when filing a Form 941. Here are some of the common Form 941 errors and how to avoid them.

  • Reporting advances requested: If the advance payment of credit requested is not received, the employer should not report it on Form 941. Only advance payments of credits received should be reported on Form 941.
  • Incorrectly reconciling the advance payment of the credit: If the advance payment of credit requested is received, employers must report the advance payments received on line 13f and claim the eligible credits on lines 11b, 11c, 13c and 13d of Form 941.
  • Using Form 7200: Form 7200 is for the request for advance payment of employer credit.
    • If an advance payment of credit is received and the employer does not report it on Form 941, the employer may receive a balance due notice. If a balance due notice is received, employers must file Form 941-X, which is an amended return reporting advance payments and claiming eligible credits.

Tax Checklist for Employers

If you are preparing to file your taxes or want a simple checklist to better understand taxes and avoid making common tax errors, here are a few tips.

Determine Your Business Type

There are different business types that require different tax forms. Here is a glossary of business types.

  • Sole Proprietorship: An unincorporated business owned by a sole individual.
  • Partnership: Two or more individuals who run a trade or business together.
  • International Business: A business with activities in the United States or a U.S.-based business with activities in another country.
  • Corporation: An entity independent from its owner.
  • S Corporation: A corporation that pass corporate income, losses, deductions, and credits through shareholders for federal tax purposes.
  • Limited Liability Company (LLC): A corporation where members of the company cannot be held liable for business debts or liabilities.

Understand What Each Deadline Entails

If you file taxes annually, you will need to mark your calendar for March 31.

If you file taxes quarterly, you will need to mark your calendar for April 30, July 31, October 31, and January 31.

Collect All the Documentation and Forms

The type of business will determine which forms you need to file for taxes. For example, if you have a C corporation or an S corporation, you may need to file:

  • Form 1120: U.S. Corporation Income Tax Return
  • Form 1120-W: Estimated Tax for Corporations
  • Form 940: Employer’s Annual Federal Unemployment (FUTA) Tax Return
  • Form 941: Employer’s Quarterly Federal Tax Return
  • Form 943: Employer’s Annual Federal Tax Return for Agricultural Employees*
  • Excise Taxes*

*NOTE: These are only applicable if you conduct business in specific industries (i.e., Form 943 if you have farm employees, excise taxes on specific goods or activities).

If you’re not sure the best way to tackle your taxes or have questions regarding COVID-19 relief that may impact taxes, contact VensureHR. Our team of payroll services technicians and human resources specialists can ensure you stay up to date on the latest legal updates and remain compliant. Contact us today to learn more.

 

Sources:
Business Factors
Internal Revenue Service: Employment Tax Due Dates
Internal Revenue Service: Tax Information for Businesses
Internal Revenue Service: Common errors businesses should avoid when claiming employer tax credits
Maslow Media Group
Small Business Chronicle

March 2021: New COVID-19 Stimulus Bill: The American Rescue Plan

Congress Passes American Rescue Plan

Update Applicable to:
All employers operating within the United States.

What happened?
The American Rescue Plan, the second COVID-19 related stimulus bill, has passed with multiple changes that will impact businesses across the country, with a focus on the Families First Coronavirus Response Act (FFCRA).

What are the details?
Signed into effect on March 11, 2021, the American Rescue Plan impacts many aspects of the previous stimulus bill. Included in this is a revamped FFCRA, an extension to tax credits related to paid leave, and discrimination protections for workers.

The FFCRA has been revamped to again provide employees 80 hours of COVID-19 related paid sick leave, as well as family leave, effective March 31, 2021. This leave is still optional for employers to provide and is not a mandatory requirement. If used, the additional 80 hours of leave provided allow employers the option to utilize the 80 hours for tax purposes. Additionally, the FFCRA will now cover individuals taking leave to attend vaccine appointments, as well as dealing with complications due to receiving the vaccine. Employers will again enjoy the tax benefits when utilizing the federal paid sick leave, extending their usage to September 30, 2021.

The updates to the FFCRA will also include protection for workers in the form of a non-discriminatory clause related to the denial of COVID-19 paid sick leave usage. Employers will no longer be able to claim the provided tax credit if they do not uniformly provide leave to all employees. Businesses will be barred from the tax credit if they are found to be providing the paid sick leave to only certain categories of workers instead of their entire workforce.

Additional reading on the American Rescue Plan can be found from multiple sources: Husch Blackwell, Fisher Phillips, HR Drive, Morgan Lewis, and SHRM.

What do employers need to do?
Employers utilizing the FFCRA leave should update their workplace leave policies to reflect the new requirements of the bill.  If you have any questions regarding this update, please contact your human resource or client relations representatives.