NJ Department of Labor’s Paid Sick Law Now in Effect

October 29, 2018 marked the beginning of time when all New Jersey private and non-profit employers must follow the new Earned Sick Leave Act for all employees, whether full time or part time. In addition, Pennsylvania and other states’ employers with employees performing “all of their work in New Jersey” must also be following the new law*. Construction industry employees who work under a collective bargaining agreement, per diem healthcare employees, and public employees with sick leave benefits in place are exempt from the law.

If this applies to any of your employees, you must provide those employees with a copy of the Notice of Employee Rights about the law no later than November 29, 2018, and this notice must also be posted in a conspicuous place (e.g., with your other required employer posters). New employees must get the notice at time of hire.

If the law applies to your employees, you must be tracking the employees’ hours and accruing paid sick leave at the rate of one hour for every 30 hours worked as of October 29, 2018. Employers may set a maximum limit of 40 paid sick leave hours per employee (regardless of part-time or full-time status).

In addition, the employer needs to come up with a benefit year to track future sick leave accruals. That might be October 29 through October 28, January 1 through December 31, or another 12 consecutive-month period that follows your other benefits annual renewal year. This benefit year is how you will track your current/long-term employees, but all new employees begin accruing sick leave on their first day of work, and then fall into place with your benefit year end date.

Employers are allowed to require a 120-day (or something less) eligibility period, which would stipulate that an employee will not receive paid sick leave before that eligibility period, but the time still must begin accruing on their first day of work.

The law stipulates the circumstances for which employees must be allowed to take paid sick leave, how sick time is carried over and/or paid out at the end of the benefit year period, and limits the requirements an employer can put on any advance-notice rules employees must follow. Employers are prohibited from requiring employees to “find a replacement” for their shift if they are using paid sick leave, and employers are required to keep time and pay records for a minimum of five years.

*New Jersey has not yet published the final regulations on this law, so many employers, administrators, and even employment attorneys have unanswered questions, but it is clear that employers must now be providing the paid sick leave to eligible employees.

If this law applies to your employees and you need further clarification of how your company needs to comply with the law, including re-writing of your sick paid leave policy, or need a copy of the Notice of Employee Rights please contact Jill Scheetz at [email protected] or 215-997-7270.

This is a good time to remind PA employers that if you have employees working in Philadelphia but you are not a Philadelphia-based employer, you must still be following the Philadelphia Sick Leave law for those employees.

By Jill Scheetz, PHR, SHRM-CP

A New Way of Comparing Financing Without Hurting Your Credit Score

Credit Karma has rolled out a new service that allows members to compare credit cards and
loans without going through the three credit bureaus.

As you may be aware, when one applies for credit, the lender will request information about
the lender’s creditworthiness from the credit bureaus. This “hard inquiry” impacts your new
credit portion of your credit score. A hard inquiry will impact those with a short credit history
more than it does those with a long credit history.

Credit Karma’s “Marketplace” service utilizes their partnership with lenders and by-passes the
hard inquiry process with the credit bureaus thereby not impacting your credit score. Credit
Karma does the work of comparing the credit cards and other loan products for which a
particular borrower would have a high likelihood of being qualified. In other words, the service
saves you time and a ding to your credit score.

More information can be found at www.creditkarma.com.

Complimentary Lunch and Learn for CASI Clients

Thursday, November 15, 2018
12:00 – 1:00 (Lunch provided)

PA Unemployment Comp

  • Basics of the law
  • How to prevent your company from having claims against it
  • Tips for the appeals and hearing process

This is event is free to CASI clients, but a reservation is required.  Email [email protected] or call 215-997-7270.

Arrive at 11:45 to get your lunch, materials, and to find a seat.  Program will end promptly at 1:00.

Have You Checked your 2018 Federal Tax Withholding?

A government report was recently issued estimating 30 million people (over 21% of taxpayers) will find they have had too little federal tax withheld and will owe money when they file their 2018 income tax returns.  As you may recall, the federal withholding tables were updated in March 2018 as a result of the Tax Cuts and Jobs Act passed in 2017.  Employers should have had all employees complete a new W-4 in March, but the responsibility falls to each taxpayer to make sure they’re withholding the proper amount.  Request a copy of your W-4 from your employer to ensure you’re using the 2018 version.

Due to the major tax law and the withholding table changes the IRS is urging everyone do a “paycheck checkup” as soon as possible.  This paycheck checkup the IRS has recommend would involve working through the 2018 Form W-4 or working though the IRS’s Withholding Calculator that can be accessed through the IRS website at https://apps.irs.gov/app/withholdingcalculator/.

So now that we’re well into the dog days of summer (although it seems more like monsoon season) and you’re probably stuck inside with air conditioning anyway, what could possibly be more fun than to think about your tax situation?  Take one of your missed opportunities to sit poolside or under the beach umbrella to do a paycheck checkup by visiting the IRS website and make sure you’re having the proper amount of federal income tax withheld from your paycheck.

Health Insurance Options

Are you a sole proprietor or small-business employer? Is your health insurance too expensive or completely unaffordable? Keep your eyes open for more information on new entities known as association health plans. The President signed an executive order last year and the Department of Labor issued its ruling. The changes may provide opportunities for lower-cost group health insurance. Different states may also have different rules that you should become familiar with. You should certainly do your own analysis of your specific situation, and your insurance provider may be able to advise you in this area. As always, you may contact our firm for additional consultation.

July 2018 starts the penalty phase of new PA 1099-MISC rules

Earlier this year we announced the changes that the Pennsylvania Department of Revenue was making with Form 1099-MISC reporting through our newsletter and our website (see February blog post below).  This change applies to businesses operating in PA who pay non-employee compensation or business income to individuals or entities outside PA or to disregarded entities (such as LLCs) who have a non-PA resident member.   (Think about those to whom you issue a 1099-MISC with Box 7 payments.)  This change also applies to lease payments made in the course of a trade or business to a non-PA resident lessor who is an individual, trust, or an estate by a lessee of PA real estate.  (Think about those to whom you issue a 1099-MISC with Box 1 payments.)

We wanted to take this time to remind you that if the above scenario applies to you, you should be withholding 3.07% PA tax on payments to these individuals or entities.  Although PA had not been assessing penalties for failure to file for the first two quarters of this year*, PA will start assessing penalties beginning with the third quarter.  If you need help better understanding the impact on your company/entity, please don’t hesitate to contact us or go the PA Department of Revenue website.  (*If the 3.07% tax was withheld in the first or second quarter, you were/are required to make timely deposits and reporting.)

It’s important to note that although the due date for Form 1099-MISC filing isn’t until January 31, 2019, you need to take action on this immediately if you haven’t already.  Our blog post from February gives some helpful reminders on how to stay on top of these vendor payments throughout the year.  You can find the official guidance on Act 43 here.

 

Philadelphia Wage Tax

The Philadelphia wage tax rate changes each year on July 1st. Every paycheck dated after June 30th must be taxed at the new wage tax rate. The new reduced tax rate for Philadelphia residents is 3.8809%; non-residents subject to Philadelphia wage tax will now be taxed at the rate of 3.4567%. Although a wage tax reduction may be exciting to hear there will be no noticeable change in your paycheck.

New Jersey Employers Should Prepare Now for July 1, 2018

Jill Scheetz, PHR, SHRM-CP

On July 1, 2018 the Diane B. Allen Equal Pay Act (new EPA) becomes effective.  At first blush, you might think your company has nothing to worry about.  However, when the prize for plaintiffs who win a jury’s (or the NJ Division of Civil Rights’) opinion is treble damages, employers should be doing their due diligence to ensure their pay practices comply before the law goes into effect.

The Diane B. Allen Equal Pay Act amends the New Jersey Law Against Discrimination (NJ LAD), making discrimination in wages on the basis of any protected class (not just gender) an unlawful employment practice.  Under the NJ LAD, employers are prohibited from discriminating in the rate or method of wages against an individual based on race, creed, color national origin, nationality, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy, sex, gender identity or gender expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces.  The new EPA looks not only at wages but includes benefits as well when considering “compensation.”

If you haven’t already, business owners should be working with your HR and/or payroll staff to analyze current pay rates and benefits for all employees.  Ensure job descriptions and the company’s tracking system for education, training, certifications, and experience are up to date.  In addition, the company should be using a tracking system for production quantity and/or quality levels if these could be used in determining pay rates.  Once you determine which employees are performing “substantially similar work,” you need to look at pay rates and benefits and ensure that these employees are compensated at the same rate, unless there is a legitimate business necessity that warrants the differential.  Further, the company should review their employee handbook and company policies to ensure future compensation rates are calculated equitably for employees performing substantially similar work and that any differences are well documented.  The employee handbook and company policies also need to make clear that retaliation against employees who request, discuss, or disclose compensation or compensation differentials to coworkers, an attorney, or government officials is subject to corrective action, up to and including termination.  This is because treble damages may be awarded to an employee who wins a claim of employer retaliation for such disclosures.

A final note on the new EPA is that the law allows for a statute of limitations of six years (versus two years for the NJ LAD), and that an unlawful employment practice occurs each time the employee experiences compensation discrimination; i.e., each paycheck paid to an employee is a separate act.  Therefore, employers should take reasonable action to comply with the new EPA now to help limit your liability.

New W-4 Form for 2018

The IRS has released the 2018 W-4 form, which reflects the changes in the Tax Cuts and Jobs Act. We encourage employers to have all employees complete the new W-4 form so that their employees might not have too much nor too little tax withheld from their paychecks during a year when many are uncertain of how they will be impacted when they file their 2018 individual tax returns.

You can download the new form at the IRS website https://www.irs.gov/pub/irs-pdf/fw4.pdf.