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Pay Matters! April 2017

04-04-2017

Welcome to the April 2017 Issue of Pay Matters – a collection of payroll news and developments that may affect your company. Visit our blog daily for more updates like these.

Read on to stay informed and stay in compliance with relevant alerts and insights that matter most for your payroll.


FEDERAL UPDATES

Congress Tries Again with Bill to Simplify Withholding for Mobile Workers

Over recent years, several bills have been proposed to help simplify the taxation of mobile workers who work for a limited time in various states. Though none of these bills have become law, Congress is now trying again.

On March 7, the Mobile Workforce State Income Tax Simplification Act of 2017 was introduced in Congress. Under the bill, states would be barred from assessing income tax liabilities on nonresidents working in a state for up to 30 days in a year. This would allow for simpler taxation and withholding for mobile workers who work for short periods in various states.

The bill would not cover professional athletes, entertainers and others who perform in states on a per-event basis.

For a copy of the bill click here.

IRS Circulates Process to Report Data Breaches

In response to increased cybercriminal activity, the IRS has released a reporting process for employers who discover a data breach.

The IRS continues to issue warnings regarding an email scam that uses corporate officers’ names to request W-2 information from company payroll or HR departments. This “spoofing” email appears to be coming from a chief executive officer and requests lists of employees and W-2 information. The scam was also used last year and gave cybercriminals access to SSNs, names, and income information, which they used to file fraudulent tax returns.

Employers who recognize a data breach should quickly report the breach to the IRS using the procedures found here.  If notified in time, the IRS can take steps to prevent employees from being victimized by identity thieves filing fraudulent returns in their names.


STATE UPDATES

Pennsylvania Clarifies Debit Card Law

Pennsylvania employers can now end the guessing game when it comes to paying their employees.

Recent legislation provides Pennsylvania employers with clarity that payroll debit cards are a permissible method of wage payment. Prior to this clarification, there had been disputes about the circumstances under which the use of payroll debit cards was lawful.

Effective May 5, 2017, Pennsylvania employers may pay wages via payroll debit card if the following conditions are met:

  • payment via debit card is optional for employees
  • the employer complies with notice requirements
  • employees can check their card balances by phone or electronically without fees
  • employees are allowed one free withdrawal of all wages per pay period
  • there are no fees for using a payroll debit card

For a copy of the legislation click here.

Arizona Supreme Court Upholds Minimum Wage and Paid Sick Leave Law

On March 14th, the Arizona Supreme Court ruled the new Arizona minimum wage and paid sick leave law to be constitutional.

Under the law, Arizona minimum wage increased to $10.00 per hour effective January 1, 2017, and will continue to increase incrementally to $12.00 per hour by 2020. The law also institutes a paid sick leave law effective July 1, 2017, requiring employers to accrue and provide paid sick leave to their employees.

The ruling was a blow to a group of business interests led by the Arizona Chamber of Commerce and Industries, who filed a lawsuit challenging the constitutionality of the law back in December.

Arizona employers have been waiting for the outcome to determine whether they must soon institute paid sick leave plans. With the Supreme Court’s decision now clear, Arizona employers must now take steps to establish compliant plans by July 1, 2017.


LOCAL MINIMUM WAGE UPDATES

Flagstaff, Arizona has lowered its minimum wage. Under the original measure, minimum wage was scheduled to rise to $12.00 per hour, effective July 1, 2017. Under a new modified ordinance, minimum wage will rise to $10.50 per hour.

Minimum wage will continue to rise to $11 on January 1, 2018, to $12 on January 1, 2019, to $13 on January 1, 2020, to $15 on January 1, 2021 and to $15.50 on January 1, 2022.

Baltimore City, Maryland approved a measure to increase minimum wage steadily until reaching $15.00 in 2022.

However, on April 4, Baltimore City Mayor Catherine Pugh vetoed the bill. The council has 5-20 days to decide to override the veto. 12 city council member votes are required for a successful override.

Currently, workers in Baltimore County are covered by the state minimum wage of $8.75.  Under state law, minimum wage will increase to $10.10 by July 1, 2018. Under the Baltimore City legislation, minimum wage would continue to rise until it reaches $15.00.


UPCOMING WEBINAR

Understanding Harassment Laws

Thursday, April 20, 2017 at 1:00pm EST

When does certain behavior cross the line into unlawful harassment? Join us as we define unlawful harassment and provide insight into the legal obligations of employers and managers. With a focus on the Equal Employment Opportunity Commission’s definitions and regulations, you’ll walk away with a solid understanding of federal laws and tips on the most effective steps to prevent and correct unlawful harassment.

Register for this webinar over on our webinar page.

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