From Business Journals
The following are some key year-end HR action items to help companies prepare for 2017:
Ensure compliance with federal overtime pay rules; make sure employees are properly classified
Although a federal court recently ruled to temporarily halt the new overtime pay rules scheduled to take effect on Dec. 1, companies should still have a plan to move forward on similar changes in the future.
Under the originally proposed rules, so-called white collar employees who are currently exempt from federal overtime rules would become eligible to earn a weekly salary of at least $913 per week (approximately $47,500 annually), provided the employer wants to maintain the exemption. If the employee does not earn at least $913 per week, then he or she must be reclassified to “non-exempt” status, which means he or she would be paid on an hourly basis and would be entitled to overtime.
A U.S. District Court will make a final determination on the merits of these rules and employer actions in the future. At this time, no changes to employee exemption statuses and/or salaries are required by law, however, companies should closely monitor the court case, the Department of Labor’s response and potential actions announced by the president-elect.
Check and re-check state and local minimum wage laws
Congress has not adjusted the federal minimum wage for quite some time. As a result, states and municipalities are filling the void. In November, voters in Washington, Arizona, Colorado, and Maine all approved measures to raise their state’s minimum wage. Be sure to check the jurisdictions in which your company operates to determine if you must pay a higher minimum wage in 2017.
Employers should also be aware that even if they do not have a physical office or facility in a locality with a higher minimum wage, their business may still be impacted. In some cases, simply sending an employee to a city with a higher minimum wage for a certain amount of time per week is sufficient to require compliance with the law.
Check 401(k) program fees
As a result of a U.S. Supreme Court ruling last year, there has been an uptick in the number of lawsuits filed against employers offering 401(k) plans. The defendants in these lawsuits have been both large multinational corporations and modest-sized businesses. Generally, these lawsuits allege that the employer’s plan charged excessive fees. Be sure to review the company’s offerings and ask your 401(k) plan administrator what can be done to drive down fees.
Affordable Care Act (ACA)
ACA is currently the law of the land. While the new administration may make changes, the current law provides that employers with 50 or more full-time employees (including “full-time equivalents”) may be required to pay an assessment if they: (1) do not offer health insurance to their full-time employees (those working at least 30+ hours per week) and their dependents, (2) offer coverage that is not affordable, or (3) offer coverage that does not provide minimum value.
Large employers who are subject to the current pay or play rule should continue to plan the timely submission of their ACA reporting (IRS Forms 1094/95) following the close of the calendar year. Also, keep in mind that identifying full-time equivalents can be complicated and requires a thorough understanding of ACA, so employers should not attempt to go at it alone.
If a company has anywhere close to 50 employees, they should speak to a benefits professional to determine if they must comply with ACA and/or whether the health plans currently offered to workers are sufficient under the law.
