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Welcome to Pay Matters, our monthly roundup of all the payroll and compliance news that you must know.
Stay informed and in compliance with our monthly payroll alerts and insights.
On May 31, the IRS released a draft of the 2020 Form W-4. The revised form has a completely different approach to determining withholding and is intended to make accurate withholding easier following the 2017 Tax Cuts and Jobs Act.
The new form no longer uses withholding allowances, but rather requires employees to consider more detailed tax information, such as other income and expected itemized deductions.
The IRS will be accepting comments until July 1 and expects to release a near-final draft mid-to-late July. The IRS has also released an FAQ with questions oriented toward both employees and employers.
Viventium will continue to monitor the 2020 tax withholding changes and keep you updated on the latest developments.
On May 28, the IRS released the 2020 contributions limits on health savings accounts (HSAs) and high deductible health plans (HDHPs). Check out the chart below for a 2019/2020 comparison.
| 2019 | 2020 | |
| HSA Contribution Limit
(both employee and employer) |
Individual: $3,500
Family: $7,000 |
Individual: $3,550
Family: $7,100 |
| HDHP Minimum Deductibles | Individual: $1,350
Family: $2,700 |
Individual: $1,400
Family: $2,800 |
| HDHP Maximum Out-of-Pocket
(Deductibles, Co-Payments and Other Amounts, but not Premiums) |
Individual: $6,750
Family: $13,500 |
Individual: $6,900
Family: $13,800 |
As in 2019, individuals age 55 or older can contribute an additional $1,000 to their HSA in 2020.
The good news announced for Massachusetts employers who are seeking a private plan exemption under the Massachusetts Paid Family and Medical Leave (PFML) Act.
Under the previous interpretation of PFML law, employers who already have a private paid family and medical leave plan could seek exemption from the PFML law if benefits provided were at least as generous as those required by the PFML at the time the exemption was approved. This meant that for an employer to be approved now for the exemption, they would be required to begin offering benefits immediately, even though benefits under the PFML law do not start until January 1, 2021. The Department of Family and Medical leave has modified this requirement and advised that employers can apply for the exemption now but will not be required to provide benefits until January 1, 2021.
The deadline to apply for a private plan exemption is Friday, September 20, 2019.
Massachusetts has also delayed the deadline for employers to provide written notice to employees explaining their rights and obligations under PFML from May 31, 2019 to June 30, 2019.
For more click here.
New Jersey minimum wage is set to increase from $8.85 per hour to $10.00 per hour effective July 1, 2019. The minimum cash wage for tipped workers will increase from $2.13 to $2.63. Seasonal employers and those with less than 6 employees will not see a change until January 1, 2020.
The minimum wage will continue to increase gradually until reaching $15.00 per hour on January 1, 2024.
For a complete chart of New Jersey, minimum wage increases click here.
On May 17 Connecticut lawmakers passed a bill that will steadily raise minimum wage until it reaches $15 per hour in 2023. On May 28, Governor Ned Lamont signed the bill into law.
Connecticut minimum wage is currently $10.10 per hour and will increase as follows under the bill:
| Date | Minimum Wage |
| October 1, 2019 | $11.00 |
| September 1, 2020 | $12.00 |
| August 1, 2021 | $13.00 |
| July 1, 2022 | $14.00 |
| June 1, 2023 | $15.00 |
*Viventium does not automatically increase the minimum wage for your employees. It is the employer’s responsibility to update employee wage rates in compliance with minimum wage requirements.
The California Department of Fair Employment and Housing (FEH) released a poster detailing employee rights under the New Parent Leave Act. California Employers must display the poster at their worksite.
The FEH has also released a model Certification of Health-Care Provider Form, which can be used by employers at their discretion to request certification from a health-care provider for an employee’s need for leave.
Under the New Parent Leave Act, employers with 20 or more employees must allow employees with at least 12 month’s tenure, to take up to 12 weeks of parental leave for the birth, adoption, or fostering of a child.
For more information on the New Parent Leave Act click here.
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