2018 W-4 Form, W-4 Requirements Annually, and changes to NYC Legislation

In late February, the IRS released the updated 2018 Form W-4 and an updated tax withholding calculator.  The calculator provides an opportunity for employees to check their 2018 tax withholding after the passage of the Tax Cuts and Jobs Act, prior to filling out a new Form W-4.

2018 Form W-4

IRS Withholding Calculator

Do employee’s need to complete a new Form W-4 annually:

“Not necessarily. A W-4 form remains in effect until an employee submits a new one except when an employee claims to be exempt from income tax withholding.”

Employers should ensure they have new W-4s for:

  1. New employees. Employers should keep copies of the most current W-4s on hand.
  2. Employees who had a change in withholding events during the year.
  3. Employees claiming exemption from withholding. To continue to be exempt from withholding in the next year, employees must give employers a new W-4 claiming exempt status by Feb. 15 of that year. If an employee doesn’t give you a new Form W-4, employers must withhold tax based on the last valid Form W-4 for the employee that doesn’t claim exemption from withholding or, if one doesn’t exist, as if he or she is single with zero withholding allowances.”[i]

 

IRS Publication 15 provides guidelines for employers to remind employees before December 1 of each year to submit a new W-4 form if the withholding allowances changed or will be changing in the next year; due to added dependents, new tax legislation, etc.  As employers, we need to ensure all of our new hire paperwork is up-to-date.  This recent change should be noted as part of your organizations onboarding/new hire process.

 

NYC Evolving Legislative Changes:

NYC Mandates Temporary Schedule Changes 7/18/18

The new law provides employees with additional rights to demand changes to their schedule.  The law permits employees to demand two temporary schedule changes per calendar year for personal events.  The definition of personal events is broad, which leaves room for interpretation.  There are guidelines and certain exemptions to the new rule.  However, it is broad and will cover many organizations.

NYC Mandates “Cooperative Dialogue” 10/15/2018

This law codifies the organizations obligation to engage in a cooperative dialogue with any employee who may be entitled to reasonable accommodation.  “Specifically, you will need to engage in a good faith written or oral “cooperative dialogue” with the employee addressing:

  1. The employee’s accommodation needs.
  2. Potential accommodations that may address the needs, including alternatives to an employee’s requested accommodation.
  3. The difficulties that such potential accommodations may pose for your business.

After a final determination is made at the conclusion of the “cooperative dialogue,” you must provide the employee requesting the accommodation with a final written determination as to whether or not the accommodation is granted.”[v]

The  legislative changes in New York City will not impact employers in the Southern Tier, unless you have employees in the city.  However, as we have seen in the past, changes in NYC make their way to Albany, which result in statewide sweeping legislative changes, which can and do impact organizations in the Southern Tier.  Continue to watch for legal updates at the federal, state and local level.  If you are confused, seek guidance.  Legislative change is a continuous process and it can be complex.  As society evolves, so do our laws and regulations.  Asking questions, attending trainings, working with consultants and attorneys will provide you with a clearer picture of the evolving legislation.

Interested in learning more from me? Check out the options shared here: 

Upcoming Compliance Key Trainings

Elmira College: SHRM Certification Exam Prep Course- Coming in Spring 2019

Upcoming Corning Community College Training’s

[i] https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/cms_015244.aspx

[ii] https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/daylight-saving-time-wage-hour-problems.aspx

[iii] https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/daylight-saving-time-wage-hour-problems.aspx

[iv] Burr Consulting, LLC, “3 Daylight Savings Time Wage & Hour Considerations”, Burrconsultingllc.com, November 6, 2017

[v] https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/new-york-city-employers-reasonable-accommodations.aspx

-Matthew W. Burr

5 Considerations on Bereavement and Funeral Leave

Recently we recorded an Upstate HR Podcast episode discussing bereavement and funeral leave policies within organizations and concerns with not enough time or inconsistencies.  In the unfortunate event an employee needs to use leave for bereavement or funeral leave, organizations need to have policies and processes in place that ensure consistency throughout the workforce.  As family relationships have evolved, so to should our policies and procedures.

The 5 considerations on bereavement and funeral leave:

  1. Notification Process: If an employee needs to take time off for leave, who should they notify and what is the process for approving the time? Should the employee contact their supervisor or the human resources department?  Does the supervisor contact a manager or the human resources department?  Email, phone, text message, etc.? More than likely the employee will notify their supervisor, but we need to outline the processes in the policy.
  2. Extended Leave: Will we grant extended leave for an employee who needs additional time to cope with the loss or coordinate family affairs? Can the employee use PTO and/or vacation time?  Remember, there might be legal issues, funeral planning, estate meetings, etc. that an employee must deal with in relation to the loss.  Situations will vary.  If the death happens in the winter, will we allow time off in the spring for the burial? These are areas we don’t usually consider but need to recognize.  Most organizations are lenient with granting additional time off, but we should outline it in the policy.
  3. Paid Bereavement Leave: This will vary by organization. Organizations might grant unlimited leave to cope with a loss.  Other organizations have a set number of days based on the relationship in the family.  Below is a simple draft outline to consider as part of your leave policy:
    1. “Employees are allowed up to four consecutive days off from regularly scheduled duty with regular pay in the event of the death of the employee’s spouse, domestic partner, child, stepchild, parent, stepparent, father-in-law, mother, mother-in-law, son-in-law, daughter-in-law, brother, sister, stepbrother, stepsister, or an adult who stood in loco parentis to the employee during childhood.
    2. Employees are allowed one day off from regular scheduled duty with regular pay in the event of death of the employee’s brother-in-law, sister-in-law, aunt, uncle, grandparent, grandchild or spouse’s grandparent.
    3. Employees are allowed up to four hours of bereavement leave to attend the funeral of a fellow regular employee or retiree of the company, provided such absence from duty will not interfere with normal operations of the company.”[i]

Relationships in families vary, the policy needs to be flexible, but consistent.  Ensure you are providing the needed time off for the workforce.

  1. Providing Documentation: Organizations I have worked for in the past have required notice if an employee does ask for bereavement and funeral leave. We have requested obituary notices; newspaper or website and employees have returned with copies of the funeral documentation.  Unfortunately, I have seen employees abuse leave and lie about their need for bereavement leave.  If you do require documentation, ensure you are doing so consistently.
  2. Pay Policy: “Bereavement pay is calculated based on the base pay rate at the time of absence, and it will not include any special forms of compensation, such as incentives, commissions, bonuses, overtime or shift differentials.”[ii] Policies will vary; this sentence is short and covers the details.

The loss of a loved one is challenging for anyone.  The organizational policies are necessary, but showing compassion and understanding is the most important thing we can do for our workforce.  Remember to offer Employee Assistance (EAP) to any employee that is struggling with the loss, as these services provide additional support for our employees and their families.  Be consistent and flexible with the policies.  Ensure that the policy is reviewed and updated.  As always, remember to seek guidance if you need assistance reviewing and updating all policies.

[i] https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/cms_006397.aspx

[ii] https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/cms_006397.aspx

-Matthew W. Burr

7 Factor Test for Internship Programs Under FLSA Determinative Changes in 2018

In January of 2018, the U.S. Department of Labor (DOL) adopted a new primary beneficiary test for determining internships of for-profit employers.  Defining internships under the federal Fair Labor Standards Act (FLSA).  Under the old and new primary beneficiary test, interns and students might not be defined as employees.  Non-employee cases, organizations would not have to compensate these students and interns for work performed, during their time at the internship or for projects they complete.  The new test as defined by the courts, is a flexible test, with no single, determining factor.  Each case will be reviewed on its unique basis and duties.

The seven factors of primary beneficiary test for unpaid interns and students:

  1. “The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.”[i]

Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act

Old Six Factor Test

SHRM Recommendations for Unpaid Internship:

  1. “We recommend employers get something in writing, preferably with the school as well, that lays out everybody’s expectations,” Orr said. “You’d want to consider having something in writing that says there will be no expectation of compensation, that the internship will be limited to a period of beneficial learning and that there is no promise of a job at the end. If you get acknowledgment of those three things in writing and you follow through on them, you will be in good shape.
  2. If they are in a formal education program, find out if they can get credit for the internship,” Olson agreed. “If the person will get academic credit for the internship, that is very supportive of the internship being to the primary benefit of the intern.”[ii]
  3. Knowledge of local and state legislation is necessary for any HR professional or business owner. Many states follow the old six factor test or have another test, similar to the old six factor test.  This means organizations can fall under both federal and state jurisdiction on FLSA legislation and pay vs. unpaid internship obligations.  “In those cases, employers must typically follow whichever law is most generous to workers.”[iii]

NY State Wage Requirements for Interns in For-Profit Businesses

Wage Requirements for Interns in Not-For-Profit Businesses

My research shows Pennsylvania using the old 6-factor test

These changes can impact your organization.  Many colleges and universities offer credit for internships, work with the career services office prior to hiring an intern and fully the process.  Ensure a contract is in place, agreed upon and expectations are clearly communicated from both the school and workplace.  If your organization does hire an intern, provide feedback throughout to both the intern and academic institution.  In my experience, there is a feedback evaluation form to complete at the end of the internship, as part of the credit approval process.  Students can also be required to write a paper or keep a journal of experiences.  If you are confused on the new requirements, seek guidance.  Ensure that your organization is compliant under all laws.  If you can afford to pay an intern, great.  We all see the amounts of debt students are saddled with upon completion graduation and non-completion.  However, experience paid or unpaid will add value to both academic and professional opportunities for any student.

[i] https://www.dol.gov/whd/regs/compliance/whdfs71.htm

[ii] https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/unpaid-internships-new-dol-intern-test.aspx

[iii] https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/unpaid-internships-new-dol-intern-test.aspx

3 Thoughts on What Should and Should Not Be Included in the Personnel Files

In a March 2015 article written by the Society of Human Resource Management, the article provided guidance on separating employee files for relevancy and confidentiality.  Employee records can be separated into three types of files.  “A general personnel file, a confidential employee file and a common file.”[i]  Organizations should always consider and be aware of sensitive information (date of birth, marital status, Social Security numbers, HIPAA protected information, criminal history, court orders, financial history, etc.), that can be included in any of the three separated files.  Other considerations should include relevancy to the supervisor or management of the workforce.  “Is it related to the employee’s performance, knowledge skills, abilities or behavior?”[ii]  This should also be a determining factor, when separating information and organizing new files.  Does the supervisor or manager need access to all the information?

The Basic Personnel File (supervisor and manager relevant):

  • Recruiting information, resumes, job application and academic transcripts
  • Job descriptions (signed)
  • Job offer, promotion, rates of pay, compensation information, training records
  • Handbook and policy acknowledgements (including revised policies)
  • Recognition
  • Disciplinary information, warnings, coaching and counseling
  • Performance evaluations
  • Termination records, exit interview, closure of the file (goes without writing)

The Confidential Personnel File:

  • EEO records
  • Reference and background checks
  • Drug test results
  • Medical and insurance records
  • Child support and garnishments
  • Legal documents
  • Workers compensation and short-term disability claims
  • Investigation notes
  • Form I-9*

The Common File:

  • Form I-9 Audits
  • Form I-9’s* (my recommendation is to put active employee’s I-9’s in a binder that is accessible, confidential and locked in a cabinet, for auditing and reviews).

Regardless of the filing process(s) your organization has implemented, the information contained in any of the employee files needs to be kept confidential and locked in secure filing cabinets.  During trainings with supervisors and managers, my statement is simple, treat your employee’s information as it is your own confidential information.  The last thing we want is open personnel files on desks, doctor’s notes attached to calendars and unlocked filing cabinets.  When an employee exits the organization, I consolidate all files and information into one folder and store in a terminated employee file section, with the exit interview (if applicable).  “Maintaining records in separate files as discussed above allows managers, employees and outside auditors to see the information they need to make decisions, yet does not allow inappropriate access.”[iii]  Filing and organizing paperwork is not always fun, but it is necessary to ensure legality and confidentiality.  If you are confused on employee files and appropriate storage, seek guidance.  Electronic files and legal requirements related to electronic filing can vary by state, a thorough understanding of these laws is necessary prior to implementing an electronic filing system.  We should be proactive and take all precautions, related to employee records and record retention.

[iv]

[i] https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/includedinpersonnelfile.aspx

[ii] https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/includedinpersonnelfile.aspx

[iii] https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/includedinpersonnelfile.aspx

[iv] http://cyquesthr.com/access-personnel-files-laws-50-states/