Pay Matters: Fall 2022
Welcome to our Fall 2022 edition of Pay Matters – our roundup of all the payroll and compliance news that you must know.
Read on to stay informed and in compliance with relevant alerts and insights that matter most for your payroll.
IRS Announces Widespread Penalty Relief Due to COVID-19 Pandemic
On August 24, the IRS issued Notice 2022-36, announcing broad-based penalty relief for thousands of taxpayers struggling due to the COVID-19 pandemic.
The relief applies for the years 2019 and 2020 for Forms 1040 and 1120, as well as others specified in the notice. Penalties are typically assessed at 5% per month and up to 25% of the unpaid tax, when a tax return is filed late. To qualify for this relief, any eligible income tax return must be filed on or before September 30, 2022.
In addition, the IRS is providing relief for various employer information returns for the years 2019 and 2020, including the 1099 series. The notice states that to qualify for relief, eligible 2019 returns must have been filed by August 1, 2020, and eligible 2020 returns must have been filed by August 1, 2021.
Penalty relief is automatic, and the IRS estimates 1.6 million taxpayers will receive $1.2 billion in refunds by the end of September.
IRS Issues Reduced 2023 ACA Affordability Rate
The IRS announced that the 2023 affordability threshold will be 9.12%, down from the 2022 limit of 9.61%.
The affordability threshold is used to determine if an employer’s lowest cost health plan employee premium meets affordability standards under ACA regulations. It is adjusted annually based on health premium growth in relation to income growth.
IRS Mailing SSEC Deferral Letters in September and October
The IRS has stated that in September and October 2022, it will be mailing notices of amounts due to all employers who deferred employer social security tax in 2020 under COVID relief in the CARES Act.
The second half of the deferred employer social security tax is due by January 3, 2023. The IRS had provided instructions on how to make the deposit of the first deferral amount and will presumably update those instructions for the second deposit.
State and Local
Extension Granted for New York HWB Program Submissions
The New York State Department of Health has announced that the deadline for submitting bonus claims for the Health Care Worker Bonus (HWB) Program has been extended from September 2, 2022, to October 31, 2022. Thus, employers who were unable to meet the original deadline for Vesting Period 1 must submit claims between October 1 and October 31, 2022, for employees qualifying under Vesting Period 1 and/or Vesting Period 2. )The submissions portal closed on September 3 and will reopen on October 1.) Personal care aides, personal assistants, and home health aides are not eligible for this bonus. The New York State Department of Health has posted a list of qualifying job titles as well as an FAQ.
For more information on the HWB program, check out our article The New York Health Care Worker Bonus Program: Dispelling the Myths; Explaining the Facts.
For a detailed analysis on the New York HWB, don’t miss our webinar New York Health Worker Bonus Program: Getting It Straight.
Reminder: New York Minimum Wage Is Increasing for HHAs October 1
Effective October 1, 2022, minimum wage for home health aides and certain other qualified workers in New York City, Long Island, and Westchester will increase from $15 per hour to $17 per hour. Minimum wage for home health aides and certain other qualified workers in other parts of New York State will increase from $13.20 per hour to $15.20 per hour.
What This Means for Wage Parity
For employees covered by wage parity provisions, the base wage is defined as the current state minimum wage for the applicable region. That means aides in NYC, Long Island, and Westchester will have a base wage of $17 per hour while supplemental/additional rates (as applicable) will remain the same as they were before the minimum wage increase.
NY DOH Delays Due Date for Wage Parity Certifications
The New York State Department of Health (DOH) announced that the first compliance date for worker wage parity certification has been extended once again, this time to December 1, 2022. Therefore, Form LS300 is not due until December 1, 2022. In addition, Form LS301 and the accompanying independently audited financial statements verifying wage parity expenses for calendar year 2021 have been further delayed. Statements for calendar years 2021 and 2022 are now both due on October 1, 2023.
As we communicated previously, the deadline had been June 1, 2022, and was then extended to October 1, 2022. However, many open issues and questions remain regarding the requirements.
The DOH and DOL intend to use the additional time to consider the concerns of industry stakeholders regarding the new requirements. The DOL plans to post a revised LS300 on its website in the coming weeks.
Viventium is monitoring developments closely, and we’ll continue to update you.
New York Announces Paid Family Leave Rate for 2023
New York has announced a decrease in the paid family leave tax rate for 2023.
Effective January 1, 2023, the PFL rate will decrease from 0.511% to 0.455% of employees’ gross wages up to the NYS Average Weekly Wage. The NYS Average Weekly Wage will increase from $1,594.57 to $1,688.19. This means the annual maximum employee withholding for 2023 will decrease from $423.71 to $399.43. If the annual max is reached before the end of the year, no further deductions may be made from the employee’s wages.
For more information, click here.
Upcoming New York City Salary Disclosure Requirements
Effective November 1, 2022, employers with 4 or more employees must disclose minimum and maximum salary ranges for all job postings for jobs to be performed, at least in part, in New York City. The law applies to both hourly and salary positions as well as internal promotion or transfer opportunities.
Bonuses, PTO, and other forms of compensation do not have to be posted.
For more information, click here.
Calsavers to Expand to More Employees
California is expanding its CalSavers mandatory retirement plan to cover more employees.
Governor Gavin Newsom signed legislation amending the CalSavers program, requiring participation by all employers in the state with at least 1 worker. The current threshold is 5 employees. The Treasurer’s Office estimates this amendment would cover an additional 750,000 workers.
Employers with their own retirement plans need not enroll in CalSavers.
The new regulation is expected to take effect January 1, 2023.
New Hampshire Voluntary Paid Family Leave
New Hampshire has enacted legislation instituting The Granite State Family Leave Plan. Private employers who do not yet offer paid leave benefits may voluntarily opt into the state plan. The program provides New Hampshire workers with 60% wage replacement for up to 6 weeks of work for a year.
Eligible covered employees may take leave for the following reasons:
- To care for the birth, adoption, or foster placement of a new child;
- To care for a family member with a serious health condition;
- For qualifying military exigency leave; or
- For the care of a service member’s serious injury or illness.
New Hampshire is expected to release more details regarding participation in the program. For the provisions of the law, click here.
Minimum Wage Updates
- Monterey Park and Long Beach, CA, have both passed identical ordinances raising the minimum wage for health care workers to $25 per hour.
Eligible workers must be employed at a covered health care facility to be eligible for the increase. Eligible job titles include clinicians, aides, nurses, janitors, maintenance workers, laundry workers, pharmacists, and others.
- Burlingame, CA, hourly minimum wage will rise to $16.47 from $15.60 effective Jan. 1, 2023
Effective January 1, 2023, St. Paul will be increasing its minimum wage from $15.00 per hour to $15.19 per hour for businesses with more than 10,000 employees.
Minimum wage is increasing effective October 1, 2022.
Under HB 2150, HI minimum wage will increase from its current $10.10 per hour as per the following schedule:
- $12.00 per hour beginning October 1, 2022
- $14.00 per hour beginning January 1, 2024
- $16.00 per hour beginning January 1, 2026
- $18.00 per hour beginning January 1, 2028