Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

2026 Independent Contractor Considerations

Questions to Consider:
 
Behavioral control

  • Instructions: An employee is given instructions on how, when, and where to perform the work, while a contractor is not.
  • Training: The hiring entity does not train an independent contractor on how to do their job; the contractor uses their own methods.
  • Personal services: The contractor usually has the right to hire others to do the work, whereas an employee typically must perform the services personally. 

Financial control

  • Investment: An independent contractor often has a significant investment in tools, equipment, or a business, while an employee does not.
  • Expenses: An independent contractor may have unreimbursed business expenses, while an employee’s expenses are often reimbursed.
  • Opportunity for profit or loss: A contractor’s opportunity to earn a profit or incur a loss based on their managerial skill is a key indicator of independence.
  • Payment: Contractors are often paid a flat fee for a job, while employees are usually paid an hourly or salary wage. 

Type of relationship

  • Permanency: The relationship is typically less permanent for an independent contractor than for an employee.
  • Integration: The work performed by an independent contractor is often not an integral part of the hiring company’s main business activities.
  • Benefits: Independent contractors do not receive employee-type benefits like health insurance or vacation pay.
  • Written contract: A written agreement stating the worker is an independent contractor is considered, but it is not the only factor. 

https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship

“Governor Hochul signed legislation on November 22, 2023, creating protections for independent contractors that are very similar to the requirements of New York City’s Freelance Isn’t Free Act.

The law creates a new section of the New York Labor Law, 191-D, and sets forth wage and job protections for freelance workers in New York State. The law defines “freelance worker” as any person or an organization composed of only one person (in other words, an individual contractor’s corporation) hired as an independent contractor for at least $800. It excludes construction contractors.

The law requires companies who enter into covered agreements with freelance workers to reduce the terms of the agreement to writing, provide a written copy of the contract to the freelance worker, and include the following minimum information in the contract:

  • The name and mailing address of both the hiring party and freelance worker
  • An itemization of all services to be provided by the freelance worker, the value of these services, and the rate and method of compensation
  • The date on which the hiring party must pay the contracted compensation or the mechanism by which such date will be determined (if this provision is not included, then payment must be made no later than 30 days after the completion of the freelance worker’s services)
  • The date by which the freelance worker must submit a list of all services rendered to meet any payment processing deadline of the hiring party

The hiring party is required to keep contracts for at least six years. The bill provides that the failure to produce a freelancer contract upon request by the NY DOL shall give rise to a presumption that the terms that the freelance worker has presented are the agreed upon terms. The law also requires the NY DOL to create template contracts, although companies would not be prohibited from creating or continuing to use their own.

Under the law, any freelance worker can file a confidential complaint with the NY DOL. The bill expressly provides that failure of a hiring party to keep adequate records can expose them to penalties and, in the absence of any records, “the hiring party…shall bear the burden of proving that the complaining employee was paid in accordance with this section.” The bill also gives freelance workers protection from intimidation, harassment, or discrimination for exercising their rights under the law.

Finally, the law provides a private right of action and six-year statute of limitations, except for claims regarding failure to provide a compliant written contract, which have a two-year statute of limitations and require a plaintiff to demonstrate they requested a written contract before the work began. Statutory damages for failing to provide a written contract are set at $250. Liquidated damages and attorney fees are available for a plaintiff who prevails on claims regarding failure to timely pay for services owed or retaliation.

The law takes effect on May 20, 2024, and applies only to contracts entered into on or after that date.” (Morgan Lewis)

https://www.morganlewis.com/pubs/2023/12/new-york-state-year-end-legislative-developments-for-employers-to-know

https://www.jdsupra.com/legalnews/new-york-state-2024-employment-law-6603981/

Additional Freelance Legal Protections by State & City

https://freelancerfiles.com/blogs/news/5-states-cities-are-now-regulating-freelance-work-in-the-us-here-s-what-you-need-to-know

Federal Updates:

The federal article below continues to evolve, expect more changes defining independent contractors at the FEDERAL DOL with the Trump Administration.

Trump DOL Pauses Biden Independent Contractor Rule Defense

The U.S. Department of Labor announced Tuesday a final rule revising its interpretation of the Fair Labor Standards Act’s classification provision to determine whether a worker may be considered an independent contractor.

The final rule largely tracks the agency’s October 2022 proposed rule. It retains the multifactor, “totality-of-the-circumstances” framework for analyzing independent contractors’ status included in that proposal.
Under this framework, DOL will consider six non exhaustive factors when examining the relationship between a worker and a potential employer:

  1. Worker’s opportunity for profit or loss.
  2. Investments made by the worker and the employer.
  3. Degree of permanence of the work relationship.
  4. Nature and degree of control over performance of the work.
  5. Extent to which the work performed is an integral part of the employer’s business.
  6. Use of the worker’s skill and initiative.

The rule will be published in the Federal Register on Wednesday, Jan. 10, and is slated to take effect March 11, officials said. (HR Dive)

Current Independent Factor Test

“An employment relationship under the FLSA must be distinguished from a strictly contractual one. Such a relationship must exist for any provision of the FLSA to apply to any person engaged in work which may otherwise be subject to the Act. In the application of the FLSA an employee, as distinguished from a person who is engaged in a business of his or her own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business which he or she serves. The employer-employee relationship under the FLSA is tested by “economic reality” rather than “technical concepts.” It is not determined by the common law standards relating to master and servant.

The U.S. Supreme Court has on a number of occasions indicated that there is no single rule or test for determining whether an individual is an independent contractor or an employee for purposes of the FLSA. The Court has held that it is the total activity or situation which controls. Among the factors which the Court has considered significant are:

  1. The extent to which the services rendered are an integral part of the principal’s business.
  2. The permanency of the relationship.
  3. The amount of the alleged contractor’s investment in facilities and equipment.
  4. The nature and degree of control by the principal.
  5. The alleged contractor’s opportunities for profit and loss.
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
  7. The degree of independent business organization and operation.

There are certain factors which are immaterial in determining whether there is an employment relationship. Such facts as the place where work is performed, the absence of a formal employment agreement, or whether an alleged independent contractor is licensed by State/local government are not considered to have a bearing on determinations as to whether there is an employment relationship. Additionally, the Supreme Court has held that the time or mode of pay does not control the determination of employee status.

Exempt and nonexempt, hourly, salaried, and salaried nonexempt are definitions that most of us know and currently use to classify the positions in our organizations.  We know that we must classify individuals in an exempt or nonexempt (overtime eligible) position for payroll, overtime and reporting purposes.  There are numerous definitions to define exempt level positions under the current FLSA (federal) regulations. 

Remember that the salary threshold in New York State varies for executive and administrative professionals, when comparing with the federal law.  As leaders, we need to ensure our classifications for each position within our organizations are accurate and our workforce is paid correctly for work performed and hours worked.”

(https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship)

https://www.dol.gov/agencies/whd/fact-sheets/13-flsa-employment-relationship

National Labor Relations Board June 2023 Ruling
“A new ruling from the National Labor Relations Board (NLRB) alters the standard employers must use to determine whether someone qualifies as an independent contractor.

In the June 13 ruling, the board concluded that the makeup artists, wig artists and hairstylists who work at the Atlanta Opera are employees, not independent contractors. The workers had filed an election petition with the board, seeking union representation.

The NLRB rejected the previous ruling in SuperShuttle that entrepreneurial opportunity for gain or loss should be the animating principle of the independent contractor test. Instead, it said entrepreneurial opportunity should be taken into account alongside a list of traditional common-law factors.

Those factors include:

  • The extent of control the employer exercises over the details of the work.
  • Whether the work is usually done under the direction of the employer or without supervision.
  • Whether the worker is engaged in a distinct occupation or business.
  • How much skill is required in the particular occupation.
  • Whether the employer supplies the tools and the place of work.
  • The length of time for which the worker is employed.
  • The method of payment, whether by the hour or by the job.
  • Whether the work is a part of the regular business of the employer.

“Applying this clear standard will ensure that workers who seek to organize or exercise their rights under the National Labor Relations Act (NLRA) are not improperly excluded from its protections,” said NLRB Chairman Lauren McFerran.

The SuperShuttle ruling “cannot be squared with board precedent, with the common law, or with Supreme Court precedent,” the NLRB wrote in its opinion.

In this case, the creative workers did not have true entrepreneurial opportunity because in reality there was no other opera across town that they could take their talents to, according to David Korn, an attorney with Phelps Dunbar in New Orleans.

“Hypothetical opportunity should not be considered,” said James Evans, an attorney with Alston Bird in Los Angeles.

The new ruling “is designed and intended to make it much more difficult for employers to classify workers as independent contractors and therefore avoid the potential for those workers to organize,” said Jason Reisman, an attorney with Blank Rome in Philadelphia. “This new decision will serve potentially as a solid deterrent for many employers and create doubt for others, or at least make them think twice and re-evaluate how and how often they utilize independent contractors.”

In light of the NLRB decision, “it might be time to reevaluate what our written agreement looks like” for independent contractors and how it’s working in practice, said David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis. “Anybody using independent contractors needs to take notice of this. The gig economy is top of mind.”

“Employers should know it is not enough to rely upon the method of payment or industry past practices and norms to classify and treat service providers as independent contractors,” said Michael Gotzler, an attorney with Littler in Madison, Wis. “The legal risks and attendant financial exposure are too great nowadays for any business to ignore this evolving area of law.”

However, Todd Lebowitz, an attorney with BakerHostetler in Cleveland said, “This is a low-impact decision. More than anything else, it just reflects that different board members have different perspectives when applying the same common-law test, just like different judges have different perspectives when applying the same test,”

How Employees Differ from Independent Contractors
Under federal law, employees may be entitled to union rights, minimum wage, overtime pay and other benefits. Independent contractors are not entitled to such benefits, but they generally have more flexibility to set their own schedules and work for multiple companies.

Contractors can’t form unions and can’t file unfair labor practice charges with the NLRB, Pryzbylski said.

SHRM filed a friend-of-the-court brief with the NLRB in favor of keeping the SuperShuttle standard. “In order to recruit and retain the best talent, especially during these challenging economic times, [businesses] must offer a myriad of work relationship options that provide the 21st-century worker the autonomy necessary to make the best decisions for them and their families. To that end, the availability of independent work is not only valuable to workers, but necessary for businesses to compete in today’s global marketplace,” SHRM stated, noting that almost 50 percent of Generation Z and 44 percent of Millennials engage in some form of independent work.” (SHRM)


What Is the Most Common Test for Independent Contractors?The ABC test is the most common test used for determining whether someone is an independent contractor. If an employee meets all three of these conditions, they are considered to be an independent contractor.

Conditions of the ABC test:

  • Condition A — The individual must be free from the direction and control of the hiring entity. This includes the execution of the work and how the employee is supervised.
  • Condition B — Second, the independent contractor has to perform work that is considered to be outside the scope of the hiring entity’s business. For example, a software company may hire someone to fix its plumbing system.
  • Condition C — Finally, the worker must be engaged in an independently established occupation, business, or trade that is the same as the work they are performing.

Condition B is particularly challenging for many contractors to meet and is often criticized as overly restrictive. For example, a self-employed freelance journalist hired by a magazine or website to write an article would be unable to meet Condition B because their line of work is the same as that of the hiring company: producing written content. The same would apply to many temporary workers, including a musician hired to fill in for an unavailable band member, a carpenter hired to help a construction firm build a house, or a baker hired to help a caterer with a particularly large event.

To alleviate for Condition B’s unintentional heavy-handedness, many states pass additional laws, such as California‘s AB 2257, giving certain professions exemptions from Condition B (or the ABC test as a whole).

Common Law Rules for independent contractors:

States that do not use the ABC test typically use the similar Common Law Rules as outlined by the US Internal Revenue Service (IRS). The answers to the common law questions help determine if a worker is considered an independent contractor or a full employee.

  1. Behavioral control: Does the hiring company control the worker and/or the methods they use to complete the work?
  2. Financial control: Does the hiring company control aspects of the worker’s compensation, such as how they are paid, if expenses are reimbursed, and who furnishes needed supplies?
  3. Relational control: Does the hiring company offer the worker benefits such as insurance or vacation pay? Is the work being done part of the hiring company’s main business? Is the working relationship ongoing?

What States Use the ABC Test?

There are several states that commonly use the ABC test to decide whether someone is an independent contractor. These include Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Hawaii, Illinois, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Ohio, Oregon, Rhode Island, Tennessee, Utah, Vermont, Washington, and West Virginia. Anyone working as an independent contractor in these states must pass the ABC test if they want to be classified as such.

Any other states generally have requirements that are very similar, but there may be a few differences. For example, several states require the contractor to meet only conditions A and C of the ABC test or utilize Common Law Rules instead.

https://worldpopulationreview.com/state-rankings/independent-contractor-laws-by-state

Employee or Independent Contractor?
The most basic question about the employment relationship is whether a worker is, in fact, an employee or an independent contractor. As with so many employment law issues, the answer is it depends. In this case, it depends on who is asking: the Internal Revenue Service (IRS), the U.S. Department of Labor (DOL), a workers’ compensation hearing officer and so on. Even courts have admitted that the distinction is not always clear. Regardless of what the employer calls the worker; contractor, freelancer, consultant or gig worker, the same principles apply. SeeNavigating Employment Law in the Gig Economy.

Employee status triggers employer obligations under various federal and state laws that do not apply to independent contractors, and the responsibility for classifying a worker correctly falls squarely on the employer. HR professionals must understand the practical and legal differences between employees and independent contractors.

No bright-line test exists to determine when a worker should be classified as an employee rather than as an independent contractor. However, a wealth of information is readily available to help organizations make the necessary case-by-case determinations. Once the decision has been made to meet a staffing need through independent contractors, organizations can take several practical steps to manage independent contractors effectively.

SeeBLS: Contingent and Alternative Employment Arrangements Summary and Gigs Are the Future of Work: A Q&A with Sarah Kessler.

How to Classify Properly
No legal test applies in every situation when deciding to classify a worker as an independent contractor. For example, the IRS and DOL use different, although similar, analytical frameworks. In fact, the multiplicity of tests defining independent contractor status applied across federal and state laws makes it possible for a worker to be classified as an independent contractor under one law but as an employee under another.

To minimize legal risk, employers are well-advised to ensure that classification as an independent contractor would satisfy every test that may be applicable where the organization does business.

TESTS FOR INDEPENDENT CONTRACTOR STATUS
Various federal government agencies and some states have their own tests to determine independent contractor status.

DOL. According to the DOL’s Fact Sheet 13: Employment Relationship Under the Fair Labor Standards Act, “The U.S. Supreme Court has on a number of occasions indicated that there is no single rule or test for determining whether an individual is an independent contractor or an employee for purposes of the FLSA. The Court has held that it is the total activity or situation which controls.” The following factors have been considered significant in determining independent contractor classification:

  • The extent to which the services rendered are an integral part of the principal’s business.
  • The permanency of the relationship.
  • The amount of the alleged contractor’s investment in facilities and equipment.
  • The nature and degree of control by the principal.
  • The alleged contractor’s opportunities for profit and loss.
  • The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
  • The degree of independent business organization and operation.

SeeMisclassification of Employees as Independent Contractors and DOL Issues Guidance on Independent Contractors.

Additionally, some statutes enforced by the DOL, such as the federal Service Contract Act, contain their own definitions of what constitutes an employee for purposes of the statute. SeeEmployee coverage does not depend on form of employment contract.

IRS. As reflected in Section 2 of its Publication 15-A: Employer’s Supplemental Tax Guide, the IRS now looks at 11 factors (rather than the previous 20 factors) within three areas:

  • Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  • Financial: Are the business aspects of the worker’s job controlled by the payer? (These include such considerations as how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  • Type of Relationship: Are there written contracts or employee-type benefits (e.g., pension plan, insurance, vacation pay, etc.)? Will the relationship continue, and is the work performed a key aspect of the business?

SeeIndependent Contractor (Self-Employed) or Employee?

Organizations or individuals can request an official determination of a worker’s status under the IRS test by filing IRS Form SS-8.

Workers’ compensation laws. The test for independent contractor status under workers’ compensation laws varies from state to state. To find out more about the workers’ compensation test in a given state, employers may contact the state department of industrial relations or the state labor department. See State Workers’ Compensation Officials.

State laws. Some states may have different or more-restrictive independent contractor classification rules. Several states, such as California, use their own three-factor test, also known as an “ABC” test, where three main criteria must be met. Each employer should check the laws in the states in which they wish to hire independent contractors to ensure compliance. SeeHow do I know if an individual is considered an employee or independent contractor in California?

Legal Ramifications of Misclassification
Classifying a gig worker as an independent contractor should always be an informed and bona fide business decision, not a subterfuge to avoid the employer’s obligations to employees. Misclassification of an individual as an independent contractor can give rise to a variety of liabilities. SeeIndependent-Contractor Classifications May Need to Be Reviewed.

If the purported independent contractor arrangement is between two organizations, that is, between the organization receiving the services and the organization that actually engages the workers, there is a risk of being found to be a joint employer—a legal relationship in which both client and contractor can be liable for violations of employment laws. SeeHow to Minimize Staffing Agency Snags.

TAX CONSEQUENCES
Employers are required to withhold income taxes based on information employees provide on IRS Form W-4. If an employer fails to withhold income taxes on behalf of a worker improperly classified as an independent contractor, and the individual has failed to pay the taxes, the employer may be liable for federal or state taxes that were required to be withheld but were not.

Furthermore, independent contractors are not eligible to receive tax-free benefits from the organization. If the company chooses to offer health care benefits to an independent contractor, the contractor must pay income taxes on the value of the benefit. If the company includes an independent contractor in its defined benefit pension plan, it risks losing the tax-exempt status of the plan. SeeWhat Benefits Can Companies Offer Gig Workers?

Additionally, beginning with tax year 2020, employers must use Form 1099-NEC to report nonemployee compensation rather than the 1099-MISC. SeeWhat is the difference between IRS Form 1099-NEC and Form 1099-MISC?

EMPLOYEE BENEFITS OBLIGATIONS
In Vizcaino v. Microsoft Corporation, the court found that Microsoft had mischaracterized certain workers as independent contractors and freelancers. Although the workers had been hired for specific projects, some continued to work on successive projects for several years. They were fully integrated into Microsoft’s workforce, and worked onsite and on work teams along with Microsoft’s regular employees. They also shared the same supervisors, performed identical functions and worked the same core hours as regular employees. Microsoft provided them with admittance card keys, office equipment and supplies. However, as independent contractors, these workers were not eligible for the same employee benefits that Microsoft’s regular employees received. Microsoft reached a settlement for $96.89 million and was subsequently assessed approximately $27.13 million in attorney fees and costs.

WORKERS’ COMPENSATION
A misclassified gig worker can result in the supposed employer being held liable for on-the-job injuries outside the protections of the workers’ compensation system, and for penalties as well.

UNEMPLOYMENT COMPENSATION
A worker may file a claim for unemployment compensation and be granted benefits if the unemployment agency believes that the worker was misclassified as an independent contractor. If the organization misclassified the worker, it may be liable for penalties and interest in addition to unpaid unemployment insurance premiums. SeeNew York Uber Drivers Can Collect Unemployment Benefits.

WAGE AND HOUR LIABILITY
The widespread use of gig workers invites the scrutiny of plaintiffs’ attorneys who may be eager to bring a class- or collective-action suit for unpaid overtime or minimum wage violations under the Fair Labor Standards Act (FLSA) or state wage and hour laws. SeeWage and Hour Class Actions Can Cost Employers Millions.

VICARIOUS LIABILITY
An employer may incur liability for wrongful acts of a worker who it has mistakenly classified as an independent contractor. Even when an individual has been correctly classified as an independent contractor, an employer may still be liable for work that is considered “inherently dangerous activity,” or if the employer exercises control over the work or the activity that caused harm to a third party. (SHRM)

Independent Contractor Tax Information
The 1099-MISC form has been used in the past to report certain payments, including nonemployee compensation (NEC), to the IRS. Beginning with tax year 2020, the 1099-MISC has been redesigned due to the creation of Form 1099-NEC. Employers will no longer report nonemployee compensation, such as payments to independent contractors, on Form 1099-MISC.

Form 1099-NEC
Beginning with tax year 2020, employers must use Form 1099-NEC to report nonemployee compensation. If the following four conditions are met, you must generally report a payment as nonemployee compensation:

  1. You made the payment to someone who is not your employee.
  2. You made the payment for services rendered in the course of your trade or business (including government agencies and nonprofit organizations).
  3. You made the payment to an individual, a partnership, an estate or, in some cases, a corporation.
  4. You made payments to the payee of at least $600 during the year.

Common examples of nonemployee compensation include payments to independent contractors, fees paid for professional services such as of attorneys and accountants, and commissions paid to nonemployee salespersons that are subject to repayment but not repaid during the calendar year.

Employers are required to furnish Form 1099-NEC to the payee and file with the IRS by January 31 (February 1 in 2021, since January 31 falls on a Sunday).

Form 1099-NEC example: 


Form 1099-MISC
According to the IRS, beginning with tax year 2020, you should file Form 1099-MISC for each person to whom you have paid the following in the course of your business during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in the following:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Generally, cash from a notional principal contract to an individual, a partnership or an estate.
    • Any fishing boat proceeds.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Payments to an attorney.
    • Section 409A deferrals.
    • Nonqualified deferred compensation.

Employers must furnish the Form 1099-MISC to the recipient by January 31 and file with the IRS by February 28 (March 31 if filing electronically). For 2021, the due dates are February 1 to the recipient and March 1 to the IRS.
 
For detailed instructions and examples for both forms, see Instructions for Forms 1099-MISC and 1099‑NEC.
 
IRS Independent Contractor Website
 
https://www.irs.gov/forms-pubs/about-form-w-9
 
Checklist: Utilizing Independent Contractors
Contract Development
☐ Review Department of Labor and IRS criteria to ensure an independent contractor relationship.
☐ Use Form SS-8 for IRS determination of independent contractor status if unclear and the determination cannot be made by the business.
☐ Develop a written agreement with an assigned specific scope of work for a specific duration.
☐ Do not have a contractor complete an employment application.
☐ Require the contractor to supply his or her own workers’ compensation and liability insurance.
☐ Require the contractor to supply his or her own equipment and tools.
☐ Establish invoicing requirements and payment dates.
☐ Do not pay contractor expenses; expenses should be built into the contract for the cost of the entire job.
☐ Do not provide continuing education training. The company may provide training specific to the assignment or company procedures.
☐ Do not have contractors perform similar work of employees or perform routine work.
☐ Contractor work should not be close to core business operations and therefore considered employee-type work.  
☐ Require documentation demonstrating an independent contractor relationship, such as a copy of business or professional license, copy of insurance certificates, copies of the independent contractor’s advertising, and copy of the contractor’s business card and stationery. 
 
Contract Signed; Contractor Work to Begin
☐ Require the contractor complete Form W-9, Request for Taxpayer Identification Number and Certification. This form can be used to request the correct name and taxpayer identification number, or TIN, of the worker. A TIN may be either a Social Security number (SSN) or an employer identification number (EIN).
☐ Do not complete an I-9 form.
☐ Do not pay contractors from a payroll account.
☐ Do not provide an employee handbook.
☐ Do not allow independent contractors to enroll in any company-sponsored benefit plans or offer other benefits.
☐ Do not invite or permit contractors to attend company parties or special events intended for employees.
☐ Do not issue company business cards or employee ID badges to contractors.
☐ Restrict contractor participation in projects or department meetings.
☐ Do not give independent contractors authority for hiring, disciplinary action or termination decisions.
☐ Do not require the contractor to work “full time” or have set hours. Contractors should control when and how they work.
☐ Do not conduct performance evaluations similar to employee evaluations. Companies should require deadlines and results and can require contractors to follow job and company rules.
 
Contract Work in Progress (1 month to end of contract)
☐ Periodically review the contract and assigned scope of work to ensure contractor is working within the contract scope and maintaining independent contractor status.
☐ Confirm with company contact(s) that the contractor has not been provided additional duties or benefits outside the scope of the contract or anything else that would jeopardize independent contractor status.
☐ Retain records of all transactions with the contractor, such as the contractor’s invoices for billing.

Ongoing
☐ Review IRS criteria to ensure company is maintaining an independent contractor relationship.
☐ Confirm W-9 is on record and retained for four years.
☐ Send form 1099-NEC each year for any contractor (e.g., attorney, accountant, consultant) paid $600 or more for services provided during the year.
☐ Review W-9 Record Retention Schedule to purge unneeded files.
☐ Retain W-9 for four years for future reference in case of any questions from the worker or the IRS. 
☐ Destroy records that have met the retention requirements unless employer is involved in a dispute that has not yet been resolved.
 
Draft Independent Contractor Agreement (Review State or Local Law)
This independent contractor agreement (Agreement) is entered into this ____ day of ______________, 20__, by and between ______________(Corporation), and _______________________________, an independent contractor (Contractor), in consideration of the mutual promises made herein, as follows:

Term of Agreement
This Agreement will become effective on the ______ day of _______________, 20__, and will continue in effect until: ________, 20__.

Services to be Rendered by Contractor
Contractor agrees to provide the following services:
____________________________________________________________________________
 
Method of Performing Services:
Contractor will determine the method, details, and means of performing the above-described services, including the determination of the need for and hiring of assistants at the Contractor’s own expense. The Corporation may not control, direct or otherwise supervise Contractor’s assistants or employees in the performance of those services.

Compensation:
In consideration for the services to be performed by Contractor, Corporation agrees to pay Contractor the sum of ________________________ dollars ($__________), upon completion of the work to be performed.

Tools and Instruments:
Contractor will supply all tools, equipment and supplies required to perform the services under this Agreement.

Workers Compensation:
Contractor agrees to provide workers’ compensation insurance for Contractor’s employees and agents and agrees to hold harmless and indemnify Corporation for any and all claims arising out of any injury, disability, or death of any of Contractor’s employees or agents.

Insurance:
Contractor agrees to maintain a policy of insurance in the minimum amount of _________________ Dollars ($__________) to cover any negligent acts committed by Contractor or Contractor’s employees or agents during the performance of any duties under this Agreement. Contractor further agrees to hold Corporation free and harmless from any and all claims arising from any such negligent act or omission.

Obligations of Corporation
Corporation agrees to meet the terms of all reasonable requests of Contractor necessary to the performance of Contractor’s duties under this Agreement.

Assignment:
Neither this Agreement nor any duties or obligations under this Agreement may be assigned by Corporation or Contractor without the prior written consent of Contractor and Corporation.

Termination of Agreement:
Notwithstanding any other provisions of this Agreement, either party hereto may terminate this Agreement at any time by giving ________ days written notice to the other party.

General Provisions
Notices:
Any notices to be given hereunder by either party to the other may be made either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the following addresses:

Corporation: ______________________________________________________________
Contractor: _______________________________________________________________
Each party may change the above address by written notice in accordance with this paragraph. Notices delivered personally shall be deemed communicated as of the date of actual receipt; mailed notices shall be deemed communicated as of three (3) days after the date of mailing.

Entire Agreement:
This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the performance of services by Contractor for Corporation and contains all of the covenants and agreements between the parties with respect to the rendering of such services in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding. Any modification of this Agreement will be effective only if it is in writing signed by the party to be charged.

Partial Invalidity:
If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

Governing Law:
This Agreement shall be governed by and construed in accordance with the laws of the State of ________________________________.
 
Corporation, by _____________________                Date______________________________
 
Contractor, by ______________________                Date ______________________________
 

Invoice Template
[ADD LOGO/IMAGE] HOURLY CONTRACTOR
INVOICE
 
DETAILS
DATE: 2/1/2025
INVOICE NO. [#]
FROM BILL TO
[COMPANY NAME] [COMPANY NAME]
[ATTN] [ATTN]
[STREET ADDRESS] [STREET ADDRESS]
[CITY, STATE, ZIP CODE] [CITY, STATE, ZIP CODE]
[PHONE] [PHONE]
[E-MAIL] [E-MAIL]
 
DESCRIPTION QUANTITY UNIT PRICE AMOUNT ($)
 
NOTES: ___________________________________________
__________________________________________________
__________________________________________________
 
SUBTOTAL
DISCOUNT
TAX / VAT
TOTAL
 
THANK YOU FOR YOUR BUSINESS

Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

6 Requirements for Employer Related Awards


Many of our organizations award employees based on length of service, safety-achievement, productivity goals, employee of the month, employee of the year, continuous improvement metrics, lean six sigma, spot bonuses, etc.  What are the tax implications on these employer sponsored awards?  Does this impact the employee’s end of the year W-2?  How much can we give as an award without impact to taxes?  Awarding employees for performance is a great idea, if we do this consistent and fairly.  As employers, we need to ensure we follow the IRS guidelines on taxation as well.

Below are 6 requirements for employer related awards:

  1. Employers can deduct a maximum amount for a single employee in a single tax year for both service and safety awards is $400 for an unqualified plan and $1,600 for a qualified plan.
  2. A qualified plan will be established if it is written and if the average combined value of service and safety awards per employee in the given tax year does not exceed $400.
  3. The awards must be defined as “tangible personal property.”  Award certificates, cards or credits are not eligible unless they are redeemable only for tangible personal property.
  4. Length of service awards are recognitions that many of our organizations award to employees that work for several years.  They may be given tax-free to an employee only on a fifth anniversary and then only once every five years after that; ten, fifteen, twenty, etc.  The five-year plan is standard for many organizations.
  5. Safety-achievement awards may be given tax-free to no more than 10 percent of eligible employees in any one years.
  6. Productivity awards are never eligible for tax benefits.

Helpful Link:

IRS Publication 525 (2017), Taxable and Nontaxable Income

Many other restrictions can and do apply to tax implications related to employer related awards.  These are federal IRS guidelines, ensure you review any state and local taxation requirements prior to developing a policy or giving an award.  Safety awards, length of service, spot bonuses are great options for organizations.  However, if we provide a gift card or award to an employee in March and then it shows up on their taxes at the end of the year, the positive momentum can end quick, if the employee was unaware of the added tax accountabilities during the taxation year.  Communicate the tax implications upfront to ensure no confusion or negative feedback.  Develop a policy and practice that is consistent throughout the organization.  Seek guidance on other questions related to employer related awards, the tax laws can be confusing and complex.

IRS Guidance on De Minimis Fringe Benefits

Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

2025 New York State Secure Choice Savings Plans Updates

New York State’s Secure Choice Savings Program was officially launched on October 8, 2025.  This means that employers who don’t already offer a retirement plan must register with Secure Choice and allow their employees to save through the state program before the following deadlines: 

Employer Eligibility

As of October 2025, the following criteria determine employer eligibility for the New York State Secure Choice Savings Program:

  • Business Size: Employers with 10 or more employees who have been in business for at least two years are required to participate in the program if they do not already sponsor a qualified retirement plan.
  • No Existing Retirement Plan: Employers are exempt from participating in Secure Choice if they already offer a qualified retirement plan, such as a 401(k), 403(b), Simplified Employee Pension (SEP) plan, Savings Incentive Match Plan for Employees (SIMPLE) IRA, or a defined benefit plan.
  • Employee Definition: An employee is defined as someone who is at least 18 years old and works at least 20 hours per week.

Employer Responsibilities

Employers subject to the Secure Choice Savings Program have specific responsibilities, including:

  1. Registration: Employers must register with the Secure Choice Savings Program within the timeframe specified by the state. Registration typically involves providing basic business information and employee details.
  2. Employee Notification: Employers are required to notify their employees about the Secure Choice Savings Program and their option to participate. This includes providing employees with program information and enrollment materials.
  3. Facilitating Enrollment: Employers must facilitate employee enrollment in the program. This typically involves providing employees with access to the program’s online enrollment portal or paper enrollment forms.
  4. Payroll Deductions: Employers are responsible for deducting employee contributions from their paychecks and remitting those contributions to the Secure Choice Savings Program.
  5. Maintaining Records: Employers must maintain accurate records of employee participation, contributions, and other relevant information related to the Secure Choice Savings Program.
  6. No Employer Contributions: Employers are not required or permitted to contribute to their employees’ Secure Choice accounts. The program is funded solely by employee contributions.
  7. Neutrality: Employers must remain neutral regarding employee participation in the program. They cannot encourage or discourage employees from enrolling.
  8. Compliance: Employers must comply with all applicable rules and regulations of the Secure Choice Savings Program.

Employee Participation

  • Automatic Enrollment: Employees are automatically enrolled in the Secure Choice Savings Program, but they have the option to opt out.
  • Contribution Rate: The default contribution rate is typically a percentage of the employee’s salary (e.g., 3% or 5%). Employees can choose to adjust their contribution rate or opt out of the program altogether.
  • Investment Options: Employees have access to a range of investment options within the Secure Choice Savings Program, typically including a default investment option (e.g., a target-date fund) and other diversified investment choices.
  • Portability: Employees can take their Secure Choice Savings Program accounts with them if they change jobs.
  • Withdrawals: Employees can typically withdraw funds from their Secure Choice Savings Program accounts, subject to certain restrictions and potential tax penalties.

Important Deadlines
Employers should be aware of the following important deadlines related to the Secure Choice Savings Program:

  • Registration Deadline: Employers must register with the Secure Choice Savings Program by the deadline specified by the state. This deadline may vary depending on the size of the employer.
  • Enrollment Deadline: Employers must facilitate employee enrollment in the program by the deadline specified by the state.
  • Contribution Remittance Deadline: Employers must remit employee contributions to the Secure Choice Savings Program by the deadline specified by the state.

Note: It is crucial for employers to stay informed about these deadlines and ensure that they meet all requirements in a timely manner.

Penalties for Non-Compliance
Employers who fail to comply with the requirements of the Secure Choice Savings Program may be subject to penalties, including:

  • Fines: Employers may be assessed fines for failing to register, enroll employees, or remit contributions in a timely manner.
  • Other Sanctions: The state may impose other sanctions on employers who violate the rules and regulations of the Secure Choice Savings Program.

Resources for Employers
Employers can access a variety of resources to help them understand and comply with the Secure Choice Savings Program, including:

Additional State Information:

All active state mandate programs 
The following states have enacted legislation and have either implemented or are in the process of implementing a state-mandated program. 

California

  • Plan Name: CalSavers
  • Status: Mandate in place
  • Deadlines: Deadline passed for 5+ employees; December 31, 2025, for 1-4 employees
  • Details: Not all employers are required to participate. Only employers who do not sponsor a retirement plan and have one or more California employees must join CalSavers.
  • Fines: $250 per eligible employee

Illinois

  • Plan Name: Illinois Secure Choice
  • Status: Mandate in place
  • Deadlines: Deadline passed for 5+ employees
  • Details: Not all employers are eligible. Only private-sector employers who do not offer a qualified retirement plan, had at least five employees in every quarter of the previous calendar year, and have been in business for at least two years must facilitate Illinois Secure Choice.
  • Fines: $250 per employee for the first calendar year the employer is non-compliant

Oregon

  • Plan Name: OregonSaves
  • Status: Mandate in place
  • Deadlines: Deadline passed for 1+ employees
  • Details: All Oregon employers are required by law to facilitate OregonSaves if they don’t offer a retirement plan for their employees.
  • Fines: $100 per affected employee, with a $5,000 maximum fine per year

Connecticut

  • Plan Name: MyCTSavings
  • Status: Mandate in place
  • Deadlines: Deadline passed for 5+ employees
  • Details: Eligible Connecticut businesses are required to facilitate MyCTSavings if they don’t offer a retirement plan and have 5 or more employees.
  • Fines: Penalties may be imposed. Bill is currently in the legislature.

Colorado

  • Plan Name: Colorado SecureSavings Program
  • Status: Mandate in place
  • Deadlines: Deadline passed for 5+ employees
  • Details: All Colorado employers who have been in business for at least 2 years, have 5 or more employees, and don’t offer a qualified retirement plan for their employees are required by law to facilitate Colorado SecureSavings.
  • Fines: $100 per affected employee with $5,000 maximum fine per year

Maine

  • Plan Name: Maine Retirement Savings Program
  • Status: Mandate in place
  • Deadlines: Deadline passed for 5+ employees
  • Details: Every Maine employer with 5 or more employees will need to facilitate the program if they don’t already offer their own qualified retirement savings plan.
  • Fines: Penalties for failing to enroll employees go into effect on July 1, 2025, as follows:
    • $20 per employee from July 1, 2025, to July 30, 2026
    • $50 per employee from July 1, 2026, to July 30, 2027
    • $100 per employee on or after July 1, 2027

Virginia

  • Plan Name: RetirePath
  • Status: Mandate in place
  • Deadlines: Deadline passed for 25+ employees
  • Details: State law requires Virginia employers with 25 or more eligible employees who have operated for 2 or more years and not offered a qualified, employer-sponsored retirement plan must now register and facilitate RetirePath.
  • Fines: $200 per eligible employee

New Jersey

  • Plan Name: RetireReady NJ
  • Status: Mandate in place
  • Deadlines: Deadline passed for 40+ employees; November 15, 24 for 25+ employees
  • Details: Every New Jersey employer with 25 or more employees will need to register with the program if they don’t already offer their own qualified retirement savings plan.
  • Fines: Businesses that don’t follow state-mandated retirement legislation within one year will receive a written warning. Each following year of non-compliance will result in fines of:
    • 2nd year: $100 per employee
    • 3rd and 4th years: $250 per employee
    • 5th year and beyond: $500 per employee

Delaware

  • Plan Name: Delaware EARNS
  • Status: Mandate in place
  • Deadlines: October 15, 2024 for 5+ employees
  • Details: Every Delaware employer with five or more employees will need to facilitate the program if they don’t already offer their own tax-qualified retirement plan.
  • Fines: $250 per affected employee, with $5,000 maximum fine per year

Maryland

  • Plan Name: Maryland Saves
  • Status: Mandate in place
  • Deadlines: December 31, 2024 for 1+ employees
  • Details: Businesses are required to register if they have been in operation for at least 2 calendar years, have at least one employee over the age of 18, and use an automated payroll system.
  • Fines: Maryland does not impose a penalty, instead, they use an incentive, offering businesses that enroll $300 per year, waiving the annual filing fee for Maryland businesses.

Vermont

  • Plan Name: Vermont Saves
  • Status: Mandatory for Vermont employers with 5+ employees who do not offer a qualified retirement plan. 
  • Deadlines: March 1, 2025 for 5+ employees 
  • Details: Employees are automatically enrolled in a Roth IRA with a default contribution rate of 5% that increases by 1% annually up to 8%, unless they opt out or select a different rate. Employers are not required to contribute but must facilitate payroll deductions. The program is free for employers and integrates with existing payroll systems. 
  • Fines: $10 per employee before October 1, 2025, then $20 per employee until September 30, 2026. After October 1, 2026 employers could pay up to  $75 per employee.

In-progress state mandate programs

Nevada

  • Plan Name: Nevada Employee Savings Trust
  • Status: Will be mandatory
  • Deadlines: July 1, 2025 for 1,000+ employees; January 1, 2026 for 500-999 employees; July 1, 2026 for 100-499 employees; Jan 1, 2027 for <100 employees
  • Details: In 2023, the Nevada legislature passed SB305 which mandates the establishment of a retirement savings program for private sector employees.
  • Fines: Information not available at this time.

Massachusetts

  • Plan Name: Massachusetts Defined Contribution CORE Plan
  • Status: Nonprofit mandatory only
  • Deadlines: Currently effective, but no deadline yet
  • Details: Massachusetts nonprofit organizations with 20 employees or fewer may be eligible to adopt the CORE Plan. The CORE Plan is structured as a 401(k) Multiple Employer Plan (MEP). The MEP structure allows each adopting employer to join the CORE Plan under one plan and trust by executing a Participation Agreement.
  • Fines: Not applicable.

New York

  • Plan Name: New York State Secure Choice Savings Program
  • Status: Will be mandatory
  • Deadlines: The SCSP is under development and there is no enrollment requirement at this time.
  • Details: If you’re an employer in New York, state laws require you to offer the Secure Choice Savings Program if you have had 10 or more employees during the entire prior calendar year, have been in business for at least two years, and have not offered a qualified retirement plan during the prior two years.
  • Fines: Information not available at this time.

Minnesota

  • Plan Name: Minnesota Secure Choice Retirement Program Act
  • Status: Will be mandatory
  • Deadlines: Expected to launch by Jan 1, 2025
  • Details: On May 19, 2023, Governor Walz signed into law a bill establishing the Minnesota Secure Choice Retirement Program. Employers with 5 or more covered employees that do not sponsor a retirement plan for their employees are required to participate in the plan.
  • Fines: Information not available at this time.

Hawaii

  • Plan Name: Hawaii Retirement Savings Program
  • Status: Will be mandatory
  • Deadlines: Implementation in progress
  • Details: The Hawaii Retirement Savings Program is a state-facilitated payroll-deduction retirement savings plan where individuals can choose to opt into the program. Employers will be required to provide covered employees with written notice that they may opt into the program, withhold covered employees’ contribution amount from their salary or wages, and transmit covered employees’ payroll deduction contributions to the program.
  • Fines: Information not available at this time.

Rhode Island

  • Plan Name: Rhode Island Secure Choice Retirement Savings Program Act
  • Status: Will be mandatory
  • Deadlines: Implementation in progress
  • Details: Private-sector employers with five or more employees will be required to offer a qualified retirement plan or opt into the state-run program.
  • Fines: Information not available at this time.

Washington

  • Plan Name: Washington Saves
  • Status: Will be mandatory
  • Deadlines: Expected to launch Jan 1, 2027
  • Details: Employers must offer their employees access to a state-facilitated IRA if they don’t offer a retirement savings plan. Employees would be enrolled automatically unless they opt out. The program is slated to launch in 2027 and Washington will continue to offer its small-business retirement marketplace in the meantime.
  • Fines: Penalties beginning after January 1, 2030.

New Mexico

  • Plan Name: New Mexico Work and Save IRA
  • Status: Voluntary
  • Deadlines: 7/1/24 deadline, but still voluntary
  • Details: Work and Save is a voluntary savings program for private-sector and nonprofit employers and employees and the self-employed facilitated through a Roth Individual Retirement Account.
  • Fines: Not applicable.

Missouri

  • Plan Name: Missouri Show-Me MyRetirement Savings Plan
  • Status: Voluntary
  • Deadlines: Expected to launch September 1, 2025
  • Details: Missouri introduced HB 1732 in 2022, which would create a voluntary MEP for small employers with 50 or fewer employees.
  • Fines: Not applicable. 

Pennsylvania

  • Plan Name: Keystone Saves
  • Status: Will be mandatory
  • Deadlines: To be determined pending bill passage by Pennsylvania State Senate
  • Details: Employers will be required to offer a state-sponsored IRA or other qualified retirement plan. Employers do not have to participate if they have an established retirement program, have fewer than five employees, or have been in business less than 15 months.
  • Fines: According to the current bill,  covered employers shall not be subject to a penalty for not participating in the program.

Georgia

  • Plan Name: Peach State Saves
  • Status: Voluntary
  • Deadlines: To be determined pending bill passage
  • Details: In February 2025, Georgia introduced SB 226, requiring businesses with 5+ employees and over one year in operation to offer a state-sponsored IRA or another retirement plan unless they already have one.The default payroll deduction is a Roth IRA with a 5% contribution rate. The state may add a traditional IRA option and adjust the contribution rate, increasing it annually by up to 1% (maximum 10%).
  • Fines: Not applicable.

States with legislation being considered
The following states have legislation currently being considered for state-mandated reprograms: 
Alaska, Arizona, Arkansas, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Utah, West Virginia, Wisconsin, Wyoming

Unknown state mandate programs 
The following states have not yet made clear if they intend to mandate a state retirement program. We will actively update this article as legislation changes.

  • Alabama
  • Florida
  • South Dakota

Original 2022 Article

New York State Secure Choice Savings Plan Legislation

In late 2021, new legislation was signed into law, requiring private employers who do not sponsor a retirement plan to automatically enroll their employees into the State’s new program.  The New York State Secure Choice Savings Plan (Program). The savings plan is an IRA program funded through payroll deferrals.  The plans are portable and can move from one employer to another if an employee change organization. 

“Eligible Employers
The Program covers employers who have employed at least 10 employees in New York State at all times during the previous calendar year, that have been in business at least two years, and have not sponsored a qualified retirement plan for their employees in the preceding two years. Employers include all persons or entities engaged in a business, industry, profession, trade or other enterprise in New York state – including both for profit and nonprofit organizations. 

Employers are prohibited from terminating their own retirement plan in order to join the Program, and, to this end, the Program specifically excludes employers who have offered a qualified retirement plan in the prior two years. 

Eligible Employees
Eligible employees will be automatically enrolled into the Program, with a deferral rate of 3%, and may change this rate at any time (subject to rules set by the Board). Participating employees will be able to make elective deferrals up to the maximum limits under Internal Revenue Code (Code) Section 219 ($6,000 + $1,000 catch up – although catch up contributions are not mentioned in the statute). Employees who opt out may re-enroll again during an open enrollment period (at least once per year). 

Program Highlights

  • Investment Options – The Program will contain various types of investment options intended to offer returns on employee contributions, with the long-term goal of utilizing these account balances to secure retirement income without incurring debt or liabilities to New York State.
    • Default Investment Option. The Program will employ a default investment option that will take into account various factors, including cost, risk, benefit level and ease of enrollment. 
    • Other investment options under consideration include: a conservative principal protection fund; a growth fund; a secure return fund; an annuity fund; a growth and income fund; and a life cycle fund with a target date based upon factors determined by the Board. 
  • Use of Third-Party Service Providers. The Program will contract with necessary service providers to offer retirement benefits, including investment managers, financial organizations, other financial service providers, consultants, actuaries, counsel, auditors, third-party administrators and other professionals as necessary. 
  • Performance Reviews. Financial organizations’ performance will be periodically reviewed, including reviews of returns, fees and customer service, with reviews posted to the Program’s website. 
  • Plan Administration Reviews. The Program’s enrollment process will be monitored, including such aspects as employee opt-in procedures, setting contribution rates, selecting investment options and termination of participation in the Program.
  • Financial Education. The Program will facilitate education and outreach for both employers and employees.
  • Disclosures. The Board will design and disseminate informational materials, which shall include background information on the Program as well as necessary disclosures as required by law. 
  • In-Service Withdrawals. The Board will also consider withdrawal provisions (i.e., economic hardships, plan loans, portability, leakage). However, no such provisions will be available at inception. 
  • Program Fees and Expenses. Program fees will initially come from New York state funds, but ultimately be paid out of future employee contributions. 

Required Disclosures
 Employers must provide employees with informational materials, including a disclosure form explaining many facets of the program, addressing: 

  • the benefits and risks associated with making contributions to the Program; 
  • the process for making contributions to the Program; 
  • how to opt out of the Program at any time; 
  • the process by which an employee can change the contribution rate from 3%; 
  • that employees are not required to participate in the Program or contribute more than 3%; 
  • the process for withdrawal of retirement savings;
  • the process for selecting beneficiaries of their retirement account;
  • how to obtain additional information about the Program; 
  • an advisory informing employees to contact financial advisors for financial advice, as employers are not liable for investment decisions;
  • information on how to access any available financial literacy programs; and
  • a notice that the Program fund is not guaranteed by the State. 

Employers must also provide a form to employees allowing them to elect to either opt-out or select a deferral rate other than 3%. 
As a matter of first impression, these forms and disclosures appear to be similar to those associated with qualified retirement plans, such as a summary plan description. The Board will develop informational materials for use by employers. 

NYS Secure Choice Savings Plan vs. NYC Retirement Security for All Act
Earlier in 2021, Mayor DeBlasio enacted the New York City Retirement Security For All Act (NYC Act), which contained similar provisions to the Program, but was limited to New York City employers. Some of the key differences between the two legislative packages are:

NYS Secure ChoiceNYC Retirement for All
Applies to employers who at all times during the previous calendar year employed at least 10 employees in New York State, and have been in business at least two years.Applies to employers with at least five employees in NYC
Covered employees include those 18 years of age or older, employed by a NY employer, earning wages in New York StateCovered employees include those working 20+ hours per week, age 21+, with regular work duties in NYC
Automatically enroll eligible employees at 3%Automatically enroll eligible employees at 5%
No penalties listedPenalties for noncompliance

“ (JDSUPRA)

NYC Retirement Security for All Act
This document outlines the key provisions and potential impact of the proposed NYC Retirement Security for All Act. The Act aims to address the retirement savings gap among private-sector workers in New York City by establishing a city-sponsored retirement savings program. This program would automatically enroll eligible employees, offering them a pathway to build retirement savings through payroll deductions. The document will explore the eligibility criteria, contribution mechanisms, investment options, and potential benefits and challenges associated with the implementation of this Act.

Overview of the Act
The NYC Retirement Security for All Act proposes the creation of a retirement savings program for private-sector employees in New York City who do not have access to a retirement plan through their employer. The program, often referred to as “NYC Secure Choice,” is designed to be a simple, accessible, and portable retirement savings option.

Eligibility
The Act targets employees who meet the following criteria:

  • Working for a Covered Employer: The employee must work for a private-sector employer in New York City that does not offer a qualified retirement plan (e.g., 401(k), 403(b), pension plan).
  • Employment Status: The employee must be at least 18 years old and work at least 20 hours per week.
  • Exclusions: Certain categories of workers may be excluded, such as independent contractors or those covered by collective bargaining agreements that provide for retirement benefits.

Enrollment

  • Automatic Enrollment: Eligible employees will be automatically enrolled in the program.
  • Opt-Out Option: Employees have the right to opt-out of the program if they choose. They can also re-enroll at a later date.
  • Employer Responsibilities: Employers are responsible for facilitating the program by:
    • Enrolling eligible employees.
    • Deducting contributions from employee paychecks.
    • Remitting contributions to the program administrator.
    • Providing employees with information about the program.
Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

Daylight Saving Time FLSA Questions to Consider


The clocks will be set back one hour at 2 a.m. on Sunday, November 2, 2025, causing confusion and challenges for employers with nonexempt employees who were working during the time the clocks turned forward.  How do we pay employees during this time?  What is our legal obligation related to hours worked and paid?

On November 2, 2025, Daylight Saving Time ends in the U.S. and clocks will “fall back” one hour at 2 a.m. local time, which is a requirement under the Fair Labor Standards Act (FLSA) for employers to pay employees for all hours worked. This means employees working an overnight shift that includes this change will work one hour longer than usual and must be compensated for that extra hour, with potential overtime implications if the extra hour puts them over 40 hours for the week. 

Daylight Saving Time Change

  • Date and time: Clocks will be set back one hour at 2 a.m. local time on Sunday, November 2, 2025.
  • Effect: This will result in one additional hour being worked for those on overnight shifts, and an earlier sunrise. 

FLSA and Payroll Considerations

  • Guaranteed hours: Under the FLSA, employees must be paid for all hours they actually work.
  • Overnight shifts: Employees on overnight shifts that cross the time change will work an extra hour. This hour must be paid.
  • Overtime pay: If the extra hour pushes an employee’s total hours for the week over 40, they must be paid overtime for that hour as well.
  • Employer responsibility: Employers must ensure their payroll systems accurately account for this change and that employees are compensated correctly. 

The AI Answer

What Employers Should Do for Daylight Saving Time in November 2025


Employer Considerations:

  1. Adjust Work Schedules:
    • Since clocks fall back one hour at 2 a.m. on November 2, employees working overnight shifts that span this time will effectively work an extra hour.
    • Employers should decide how to handle this extra hour—whether to pay for it, treat it as overtime, or adjust schedules accordingly.
  2. Communicate Clearly:
    • Notify employees ahead of time about the time change and how it affects their work hours.
    • Remind employees to set their clocks back before going to bed on Saturday, November 1, 2025, to avoid confusion.
  3. Update Systems and Devices:
    • Many digital devices update automatically, but analog clocks, ovens, and some machinery may need manual adjustment.
    • Employers should ensure all timekeeping systems, security systems, and scheduling software reflect the time change accurately.
  4. Consider Safety and Productivity:
    • The time change can affect sleep patterns and alertness. Employers might want to be mindful of potential impacts on employee safety and productivity immediately following the time change 
  5. Review Policies:
    • Check company policies regarding pay and hours worked during DST changes to ensure compliance with labor laws and fairness.

Below are three wage and hour answers, for daylight saving time change(s):
Pay and Hours Worked:  Employers are required to pay employees for all hours worked.  Nonexempt employees working last night at 2:00 a.m. must be paid one additional hour of pay, unless the start/end times of their shifts are adjusted in anticipation of the time change.  In essence, such an employee will have worked the hour from 1:00 a.m. to 2:00 a.m. twice.”[i]

Overtime:  The one additional hour must be considered into the overtime compensation/calculation for the entire week.  If the nonexempt employee is scheduled for 40-hours this week, the additional hour would put the employee at 41-hours, one hour of overtime, at least time and one-half the normal hourly rate. 

Overtime Rate: “In addition, employers must take this additional hour of work into account when computing the employee’s regular rate of pay for purposes of calculating the employee’s overtime rate.”[ii]

Additionally, ensure that your payroll systems fall back during the time change on Sunday.  I have seen issues with timekeeping and payroll systems not resetting for the one-hour time change, which will cause additional issues when processing payroll. 

“Previously, employment law experts told HR Dive that managers should be mindful of giving employees proper break times if shifts encompass daylight saving transitions. So, for example, if supervisors typically rely on computers to automate break times, this would be an instance where manual timekeeping is encouraged.
Additionally, HR should look into whether there are any wage and hour provisions in their workers’ collective bargaining agreement that addresses the daylight-saving time change.

Employers should ensure that they are following any provisions in a collective bargaining agreement that addresses wage and hour provisions for time change. Ultimately, the employment attorney who spoke to HR Dive reaffirmed the DOL’s guidance: Timekeeping is about “staying true” to the hours worked.

Another compliance consideration is workplace safety: A 2018 National Safety Council study found that post-daylight saving transition fatigue leads to an annual uptick in accidents, due to “circadian misalignment” or talent fighting to stay awake.” (HR Dive)

FLSA Hours Worked Advisor
Daylight Saving Time
Most states participate in daylight saving time. Those employees working the graveyard shift when Daylight Saving Time begins work one hour less because the clocks are set ahead one hour. Those employees working the graveyard shift when Daylight Saving Time ends work an extra hour because the clocks are set back one hour at 2:00 a.m.

For example:
The scheduled shift starts at 11:00 p.m. and ends at 7:30 a.m. The next day, your employee works an eight- hour shift and receives a 30-minute lunch break.

  • On Sunday Daylight Saving Time starts at 2:00 a.m., the employee does not work the hours from 2:00 a.m. to 3:00 a.m. because at 2:00 a.m. all of the clocks are turned forward to 3:00 a.m. Thus, on this day the employee only worked 7 hours, even though the schedule was for 8 hours.
  • On the Sunday that Daylight Saving Time ends at 2:00 a.m., the employee works the hour from 1:00 a.m. to 2:00 a.m. twice because at 2:00 a.m. all of the clocks are turned back to 1:00 a.m. Thus, on this day the employee worked 9 hours, even though the schedule only reflected 8 hours.

The FLSA requires that employees must be credited with all of the hours actually worked. Therefore, if the employee is in a work situation similar to that described in the above example, he or she worked 7 hours on the day that Daylight Saving Time begins and 9 hours on the day that Daylight Saving Time ends. This assumes, of course, that the employee actually worked the scheduled shift as in our example.

https://webapps.dol.gov/elaws/whd/flsa/hoursworked/screener11.asp

“Unanticipated challenges”

That extra hour of work can present several unanticipated challenges, in addition to an unpaid hour:

  • Breaks. In states requiring that employees take breaks at a certain point in their shifts, workers may not automatically get that time, says Caroline Brown, of counsel at Fisher Phillips. “For that day, back off of relying on the time keeping computer so much,” Brown suggests, and figure out the time manually.
  • Overtime. If that additional hour puts an employee at more than 40 hours during that workweek, the Fair Labor Standards Act requires the employee be paid overtime. Employees who fall under the “8 and 80” system — or in states that require daily overtime — may be eligible for overtime for that day.
  • Collective Bargaining Agreements. Employers should ensure that they are following any provisions in a collective bargaining agreement that addresses wage and hour provisions for time change.

Making Adjustments
Although appropriate tracking for the seasonal time change is frequently forgotten, it can be easily remedied, says Green.

The best approach is to go back to basics, Brown suggests. “There is a tendency for employers to focus on days and shifts when it comes to wage and hour requirements, when it’s really about staying true to the time of how many hours someone did the work.”

Whether timekeeping is manual or automatic, grab a pen and paper if necessary, and figure out the actual hours for that day, Brown says; “Give that payroll a glance to make sure everything lines up.” The same goes when spring rolls around: an employee working 11 p.m. to 7 a.m. when we turn the clocks forward must be paid for only seven hours of work.

It’s worth noting that not all states and regions observe Daylight Saving Time, but if yours is one that does, be prepared so you — and your employees — can avoid any unpleasant wage and hour surprises.” (HR Dive)

States That Deviate from the Daylight Saving Standard
Note that Arizona (with the exception of the Navajo Nation) and Hawaii do not observe daylight saving time. Not to be outdone, Florida and Nevada have passed bills that would ensure that daylight saving time is observed year-round. Though their respective state legislatures approved these bills, and their governors signed them, they are still awaiting federal approval. And, of course, there’s California, which just a few days after the end of daylight-saving time will vote on a proposition to move the state to year-round daylight-saving time as well. Even if that proposition passes, it will require congressional approval for the change to become permanent.” (JDSUPRA)

Additional Considerations

  1. Ensure timeclocks adjusted.
  2. Camera’s need to align with timeclock.
  3. The payroll smartphone app time alignment
  4. Computer system time updates
  5. Communication on pay and policies.
  6. Smart phones, computers, etc.

Additional Legislative Information:

Introduced in House (01/03/2025)
Sunshine Protection Act of 2025
This bill makes daylight saving time the new, permanent standard time.
States with areas exempt from daylight saving time may choose the standard time for those areas.

https://www.congress.gov/bill/119th-congress/house-bill/139

Eighteen states have enacted legislation or passed resolutions to provide for year-round daylight-saving time if Congress were to allow such a change. Will that eventually happen? Only time will tell.

Daylight-saving State Legislation Link

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

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

Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

Unemployment Benefits Increase 72% in New York, Effective October 1, 2025

As of October 1, 2025, the maximum weekly unemployment benefit in New York will increase from $504 to $869. This is the first increase since 2019, as the state’s unemployment trust fund had a federal debt from the COVID-19 pandemic. 

Key details about the unemployment increase:

·        Maximum weekly benefit: The cap will be raised to $869, an increase of over 70%.

·        Effective date: October 1, 2025.

·        Funding and trust fund: The 2025 state budget included using up to $8 billion from rainy-day funds to pay off the federal debt and return the trust fund to solvency.

·        Benefit indexing: After the initial increase, the maximum benefit will be indexed annually at 50% of the state’s average weekly wage.

·        Employer tax relief: Paying off the federal debt will also eliminate the annual “Interest Assessment Surcharge” for New York businesses.

·        Striking workers: The budget agreement reduces the waiting period for striking workers to receive unemployment benefits from three weeks to two. 

https://dol.ny.gov/unemployment-insurance-ui-trust-fund-faq
https://www.governor.ny.gov/news/governor-hochul-and-business-and-union-leaders-celebrate-new-york-state-paying-multi-billion

2023 New York State Unemployment Notice Requirement

Beginning November 13, 2023, the law will require every employer who is obligated to contribute to the unemployment insurance system to notify their employees about their right to apply for unemployment benefits, when applicable.

That statute will now require employers to provide specific notifications to employees regarding their potential eligibility for unemployment benefits.

New York employers have already been expected to provide employees with a Record of Employment upon separation, the law will now require notification in more situations that don’t necessarily involve termination of employment.

When Is the Unemployment Notice Required?

Employers must provide this unemployment notice:

  • At the time of each permanent or indefinite separation from employment.
  • During a reduction in hours.
  • During a temporary separation.
  • For any other interruption of continued employment resulting in total or partial unemployment.

Unfortunately, the above terms are not specifically defined in the amended statute.

What Should the Unemployment Notice Include?

The required notice must be in writing and should be on a form either furnished or approved by the New York Department of Labor.

The notice must contain:

  1. Employer’s Details: This includes the employer’s name and registration number.
  2. Address for Communication: The notice should specify the address of the employer to which any request for remuneration and employment information regarding the employee should be directed.
  3. Additional Information: Any other information as required by the Department of Labor should also be included.

So far, the DOL has not yet released the required notice form. It is hoped that when it does so, the DOL will better explain the circumstances where notice must be provided short of permanent employment separation.

Implications for Employers

This new unemployment notice provision emphasizes the state’s commitment to ensuring that employees are well-informed about their rights. For employers, it means:

  • Being Proactive: Employers should be ready with the required forms and processes in place by November 13, 2023.
  • Training HR Teams: HR teams should be trained to understand the nuances of the new unemployment notice provision and ensure compliance.
  • Avoiding Penalties: Non-compliance could lead to negative consequences regarding unemployment claims. It’s crucial for employers to adhere to these new unemployment notice requirements diligently. (Horton PLLC)

NYS Assembly Bill

NYS Unemployment Website

Advice on Fighting Unemployment Claims

When Should Employers Contest Unemployment Claims?

  • Serious Misconduct or Voluntary Quit:
    Employers should generally only contest claims if the employee was terminated for serious misconduct (such as theft, violence, or repeated policy violations) or if the employee quit without a compelling reason. Contesting claims in other situations can be time-consuming and may not be successful.
  • Clear Documentation:
    Only proceed if you have solid documentation supporting your case, such as written warnings, termination letters, or evidence of policy violations.

Why Employers Should Rarely Fight Claims

  • Cost vs. Benefit:
    While unjustified claims can increase your unemployment insurance costs, fighting every claim is rarely cost-effective. Most HR experts recommend contesting only in clear-cut cases of misconduct or fraud.
  • Employee Relations:
    Aggressively contesting claims can harm your reputation and employee morale. It’s often better to reserve challenges for the most egregious cases.

How to Contest an Unemployment Claim

  1. Respond Promptly:
    When you receive notice of a claim, respond within the required timeframe and provide all requested information.
  2. Present Evidence:
    Be prepared to present evidence that the employee was terminated for misconduct or quit without good cause. This may include documentation of the employee’s duties, violations, and any warnings given.
  3. Participate in Hearings:
    If the claim is appealed, you may need to participate in a hearing. Bring witnesses and documentation to support your case.
  4. Be Honest and Consistent:
    Ensure all statements and evidence are truthful and consistent with previous records. Inconsistencies can undermine your credibility.

Best Practices

  • Maintain Thorough Records:
    Keep detailed records of employee performance, disciplinary actions, and reasons for separation.
  • Evaluate Each Case Individually:
    Assess the merits of each claim before deciding to contest. Blanket opposition to all claims is discouraged.
  • Consult Legal or HR Experts:
    When in doubt, seek advice from HR professionals or legal counsel to ensure compliance with state laws and best practices.
StateMaximum Unemployment BenefitState Agency Website and Phone Number
Alabama$275/weekAlabama DOL
(334)242-8025
Alaska$370/weekAlaska DOL
(907)269-4700
Arizona$240/weekArizona: How to Apply for UI
(877)600-2722
Arkansas$451/weekArkansas DOL
(501)682-2121
California$750/week through September 6, 2021
After this, it will come down to $451/week		California DOL
1(800)300-5616
Colorado$918/week through September 6, 2021
After this, it will come down to $618/week		Colorado DOL
(303)318-8000
Connecticut$949/week through September 6, 2021
After this, it will come down to $649/week		Connecticut DOL
(203)941-6868
Delaware$700/week through September 6, 2021
Then it will come down to $400/week		Delaware DOL
1(800)794-3032
D.C.$744/week through September 6, 2021
After this, it will come down to $444/week		D.C. DOES
(202)724-7000
Florida$275/weekFlorida DEO
1(833)352-7759
Georgia$365/weekGeorgia DOL
1(877)709-8185
Hawaii$948/week through September 6, 2021
After this, it will come down to $648/week		Hawaii DOL
Oahu: (808)586-8970
Hilo: (808)974-4086
Kona: (808)322-4822
Maui: (808)984-8400
Kauai: (808)274-3043
Idaho$463/weekIdaho DOL
(208)332-8942
Illinois$784/week through September 6, 2021
After this, it will come down to $484/week		Illinois DES
1(800)244-5631
Indiana$690/week through September 6, 2021
After this, it will come down to $390/week		Indiana DOL
1(800)891-6499
Iowa$481/weekIowa Workforce Development
1(866)239-0843
Kansas$788/week through September 6, 2021
After this, it will come down to $488/week		Kansas DOL
1(800)292-6333
Kentucky$852/week through September 6, 2021
After this, it will come down to $552/week		Kentucky Career Center
(502)875-0442
LouisianaLouisiana Workforce Commission
1(866)783-5567
Maine$745/week through September 6, 2021
After this, it will come down to $445/week		Maine DOL
1(800)593-7660
Maryland$730/week through September 6, 2021
After this, it will come to $430/week		Maryland DOL
Contact Info
Massachusetts$1,123/week through September 6, 2021
After this, it will come down to $823/week		Mass DUA
1(877)636-6800
Michigan$662/week through September 6, 2021
After this, it will come down to $362/week		Michigan Department of Labor and Opportunity
Contact Info
Minnesota$1,040/week through September 6, 2021
After this, it will come down to $740/week		Minnesota Unemployment Insurance
1-877-898-9090
Mississippi$235/weekMississippi DES
601-321-6000
Missouri$320/weekMissouri DOL
Contact Info
Montana$872/week through June 27, 2021
After this, it will come down to $552/week		Montana Unemployment Insurance Division
406-444-2545
Nebraska$440/weekNE Works
855-995-8863
Nevada$769/week through September 6, 2021
After this, it will come down to $469/week		Nevada DOL
Contact Info
New Hampshire$427/weekNew Hampshire Workforce Connect
1(800)852-3400
New Jersey$1,013/week through September 6, 2021
After this, it will come down to $713/week		New Jersey DOL
Contact Info
New Mexico$811/week through September 6, 2021
After this, it will come down to $511/week		New Mexico Workforce Connection
Contact Info
New York$804/week through September 6, 2021
After this, it will come down to $504/week		New York DOL
1(888)581-5812
North Carolina$650/week through September 6, 2021
After this, it will come down to $350/week		North Carolina DES
1(888)737-0259
North Dakota$618/weekNorth Dakota DOL
(701) 328-4995
Ohio$498/weekOhio Department of Job and Family Services
1(877)644-6562
Oklahoma$539/weekOklahoma ESC
1(800)555-1554
Oregon$973/week through September 6, 2021
After this, it will come down to $673/week		Oregon Employment Department
1(877)345-3484
Pennsylvania$872/week through September 6, 2021
After this, it will come down to $572/week		Pennsylvania Office of Unemployment Compensation
Contact Info
Rhode Island$886/week through September 6, 2021
After this, it will come down to $586/week		Rhode Island DLT
(401)415-6772
South Carolina$326/weekSouth Carolina Department of Employment and Workforce
1(866)831-1724
South Dakota$428/weekSouth Dakota Department of Labor & Regulation
(605)626-2452
Tennessee$275/weekTennessee Department of Labor & Workforce Development
1(877)813-0950
Texas$535/weekTexas Workforce Commission
1(800)628-5115
Utah$580/weekUtah Workforce Services
(801)526-9675
Vermont$831/week through September 6, 2021
After this, it will come down to $531/week		Vermont DOL
1(877) 214-3332
Virginia$678/week through September 6, 2021
After this, it will come down to $378/week		Virginia Employment Commission
Contact Info
Washington$1,144/week through September 6, 2021
After this, it will come down to $844/week		Washington Employment Security Department
1(800)318-6022
West Virginia$424/weekWorkforce West Virginia
1(800)379-1032
Wisconsin$670/week through September 6, 2021
After this, it will come down to $370/week		Wisconsin Department of Workforce Development
(608) 266-3131
Wyoming$508/weekWYUI
(307)473-3789

If the employee is the one asking for time off, though, the requirement is not triggered. This can include a leave of absence, vacation, parental leave, personal leave, or any other type of paid or unpaid leave.

https://gusto.com/resources/articles/benefits/covid-state-unemployment-insurance-benefits

Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

4 Thoughts on Employer, Employees and Social Media Workplace Expectations: Anticipate Changes Under the New Labor Board (NLRB)

2025 NYS Jury Duty Daily Rate Change

“For the first time in decades, the New York State Legislature and governor amended Sections 519 and 521 of the Judiciary Law, to increase the daily rate of pay for trial and grand jurors serving in New York State, from $40 to $72. This amendment was enacted through the New York State Budget for fiscal year 2025-2026, which was signed into law on May 9, 2025. Accordingly, as of June 8, 2025, most employers with 11 or more employees must pay their employees who are absent for jury duty at a daily rate of $72 for the first three days of jury duty…As a reminder, employers are also required to comply with Section 519 of the Judiciary Law, which provides that “any person who is summoned to serve as a juror [] and who notifies their employer to that effect prior to the commencement of a term of service shall not, on account of absence from employment by reason of such jury service, be subject to discharge or penalty.”

Pursuant to Section 750 of the Judiciary Law, an employer may be “punish[ed] for a criminal contempt” if they are found guilty of “subjection of an employee to discharge or penalty on account of his absence from employment by reason of jury or subpoenaed witness service.” Section 751 of the Judiciary Law provides that such punishment may be by fine, up to $1,000, or by imprisonment for up to 30 days, or both….If an employer has questions about its obligations to an employee when it receives notice that its employee has been summoned to serve as a juror or witness, please contact counsel.” https://www.jdsupra.com/legalnews/nys-legislature-increases-daily-jury-1498682/

And now social media…

Social media in the workplace and outside of the workplace can be a complicated area for employers to manage, if we see certain posts by employees.  Is an employee protected if the post disparaging content about an employer or another employee on social media?  It depends on the post.  Employees are free to complain about terms and conditions of employment under Section 7 of the National Labor Relations Act (Wagner Act).  Under the Trump Administration and National Labor Relations Board (NLRB), some of the broad Section 7 social media content is being reduced, pro-employer rules on social media content.  However, the employee still has a protected right to complain or discuss terms and conditions of employment (wages, benefits, working conditions, hours of work, seniority, safety issues, grievance and arbitration process, leave of absence, performance reviews, respect, integrity and culture issues) on social media, “water cooler talk.”  With the NLRB turnover, expect changes to current policy expectations and rules at the federal level, which can and will vary from state or local level. 

Creating a Workplace Culture:

  1. Eliminate the Need to Complain on social media: Create a culture that there is an open channel of communication and employees have the opportunity to ask questions and discuss concerns with leadership. 
  • Social Media Compliance Policy: The policy needs to clearly communicate anti-harassment, anti-discrimination, anti-bullying, sexual harassment, retaliation, etc.  The policy should also include a social media use policy in the workplace.  The policy cannot be overly broad; this can impact employee’s Section 7 rights.  As social media evolves, so should our policies.  I’m happy to work on a policy for any organization.
  • Create a Culture: A safe and open workplace that encourages employees to speak about any aspect of the work environment.  Not only a safe and open workplace, but a workplace that closes the loop on communication and concerns are addressed with follow-up back to the employee.  Internal complaint procedures (required in New York State for sexual harassment), whistleblower hotlines/policy, supervisor training and an active HR department are suggestions to build a culture such as this.
  • Training & Awareness: Writing policies is great, I see misses on setting the expectation, training and being consistent with expectations throughout the organization.  What does leadership need to understand and what do the employees need to understand?  Are we consistent?  Have we communicated the policies, rules and expectations?  Do we need an annual training or reminder?

These are a few suggestions for improving an organization and being consistent with a social media policy in the workplace.  Have the social media policy reviewed prior to implementation in the workplace, once it is implemented, communicate and train employees on the new policy.

New York Labor Law Section 201-d:

This labor law prohibits employers from refusing to hire individuals because of lawful; off-duty recreational activities.  What does this mean for our organizations?  If you review social media or conduct Google searches on applicants prior to the making an offer, be aware of this law.  Social media reviews or research can lead to bias decision making. 

“What to Include

Alexiou recommends that social media policies include the following elements:

  • Roles. Identify the two main roles of employees on social media: official and unofficial. Make it clear that only the former can speak on behalf of the company.
  • Acceptable conduct and content. What can and can’t your employees post online? For example, employees must be respectful of others, be honest and transparent about their role, maintain workplace confidentiality, and so on. Prohibit online spats about the company and inflammatory or disrespectful language.
  • Regulations, legal restrictions and sensitive information. Make sure your employees are fully aware of the kinds of content they can and cannot post per industry regulations.
  • Procedure for conflict or crisis. Make it clear what your employees should do in these situations, including who they should reach out to for guidance and under what circumstances.
  • Call to action for participation. Explain that their participation in social media can help them build their personal brand, help the company recruit top talent, and drive the company’s sales and marketing activities. Encourage your employees to share why they enjoy working for you, how they feel supported by their manager or mentor, and customer testimonies about how your product or service impacted their life.

Arkansas: Prohibits employers from suggesting that an employee should disclose his or her social media username and password, add the employer as a social media contact, or change his or her social media privacy settings (2013).

California: Prohibits employers from requiring or requesting employees or applicants to disclose their username or password for their social media account and also prohibits employers from requiring the employee or applicant access his or her social media account in the presence of the employer. However, employers may make a reasonable request that an employee divulge personal social media account information, as is relevant to an investigation of employee misconduct (2012).

Colorado: Prohibits employers from requiring an employee or applicant to disclose a username, password or other means of accessing a personal account, unless an employer is conducting an investigation for legal compliance purposes (2013).

Connecticut: Prohibits an employer from requiring or requesting an employee or applicant to provide it with a username and password or to access a personal online account in the presence of the employer (effective Oct. 1, 2015).

Illinois: Bars employers from demanding employees or applicants reveal their usernames or passwords linked to social networking sites; also prohibits employers from forcing employees to display their social networking profiles for review (2012).

Louisiana: Employers cannot require prospective or current employees to disclose their username, password, or other login information that allows access to or observation of personal social media accounts (2014).

Maryland: Prohibits employers from requesting or requiring the disclosure of usernames or passwords to personal social media accounts and prohibits employers from taking or threatening to take any disciplinary action against employees or applicants who refuse to disclose such information (2012).

Michigan: Prohibits employers from asking for an employee’s or applicant’s personal Internet account information; does not prohibit an employer from conducting a work-related investigation into activity on an employee’s personal Internet account (2012).

Montana: Prohibits an employer from requiring or requesting an employee or applicant to disclose a username or password, access social media in the presence of the employer, or divulge information in a social media account as a condition of employment (2015).

Nevada: Prohibits employers from requiring access to an employee’s social media account as a condition of employment (2013).

New Hampshire: Employers cannot require prospective or current employees to disclose their username, password or other login information for personal social media accounts (2014).

New Jersey: Employers cannot require prospective or current employees to disclose their username, password or other means for accessing an electronic account or service (2013).

New Mexico: Employers are prohibited from requesting or requiring that prospective employees provide passwords or access to their social networking accounts (2013).

Oklahoma: Employers cannot require prospective or current employees to disclose their username, password or other login information to personal social media accounts or require prospective or current employees to log in to personal social media accounts in the presence of the employer (2014).

Oregon: It is unlawful for an employer to request that an employee or applicant disclose his or her username and password or add the employer to his or her list of contacts (2013).

Rhode Island: Employers cannot require or request prospective or current employees to disclose personal social media account information (2014).

Tennessee: Employers cannot require or request prospective or current employees to disclose login information to personal social media accounts or require prospective or current employees to log in to personal social media accounts in the presence of the employer (2015).

Utah: Generally prohibits employers from requesting information related to personal Internet accounts, including usernames and passwords; allows employers to investigate specific information on the employee’s personal Internet account to ensure compliance with certain laws (2013).

Virginia: Prohibits employers from requiring prospective or current employees to disclose the username and password to their social media accounts (effective July 1, 2015).

Washington: Prohibits employers from requesting personal social networking account login information from employees or applicants; allows employers to require disclosure of employees’ social media content in situations where necessary to comply with a federal law (2013).

Wisconsin: Employers cannot require or request prospective or current employees to disclose login information to personal social media accounts, or require prospective or current employees to allow employers to observe their personal social media account in the employer’s presence (2014).” (SHRM)

Additional Information

More Information

Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

5 Thoughts on Payroll Debit Cards

Original post date: December 10, 2024

Many organizations are moving to a payroll debit card model for employee payments in lieu of cash (yes cash), checks or direct deposit.  Debit cards and direct deposit are two options many organizations are offering and will continue to offer.  We need to be aware of laws that regulate the use of the payroll debit cards and provide alternative options, per federal and state guidelines.  One of the concerns at the federal level with these cards is that an organization cannot mandate where the funds can be redeemed.  This mandate would violate the Electronic Fund Transfer Act (EFTA).  Payroll debit card laws are written and enforced at the state level, some states prohibit employers from using pay cards without consent, place limitations on fees that can be charged and impose disclosure requirements.  New York State is a state that requires consent and there have been recent court cases on this issue. 

Below are 5 considerations on payroll debit cards:

  1. “Do not make their use mandatory.  This is simple advice but necessary, provide options for the workforce to utilize a direct deposit option.  Working with a local bank or credit union is a great way to ensure employees understand direct deposit, checking and savings accounts.
  2. Limit fees.  If it was my money or paycheck, I wouldn’t be happy seeing a fee associated with withdrawals or moving money from one account to another.  Limit or eliminate fees, fees might not be legal in your state.
  3. Disclose every detail.  This doesn’t mean provide a 30-page contract that details everything in legal terms.  Ensure employees can understand the detail and have the option to ask questions.  A frequently asked question list is a great place to start with disclosing details in an easy to understand format.  Work with the debit card company to ensure accuracy and legality. 
  4. Ensure that the full amount can be withdrawn each pay period in multiple withdrawals without fees.  This harkens back to the second suggestion.  If it was my money, I wouldn’t be happy with any fees.  It’s the employee’s money, ensure they can access and move it around as needed.    
  5. Ensure that there is a reasonable number of establishments nearby from which money can be withdrawn.”[i]  Working with a local bank or credit union with easy to access ATM machines and multiple locations is a great option.  Having a map with locations is another solution to assist employees withdraw cash or bank.  Negotiating zero fees with the financial institution is an option, or at least a question to ask.  Again, create a process that assists employees with the money withdrawal.  Provide alternatives and options for employees.

New York State Area’s to Consider:

“Beyond the notice and consent requirements, the additional restrictions applicable to using payroll debit cards included:

  1. Imposition of a seven-business day waiting period from execution of consent to initial payment by means of payroll debit card.
  2. A prohibition on a laundry list of potential fees.
  3. Requiring that wages paid by payroll debit card may not be linked to any form of credit.
  4. A prohibition on employers passing on costs associated with payroll debit card accounts or otherwise receiving kickbacks from third parties associated with payroll debit card programs.
  5. A prohibition on expiration of wages.
  6. An additional notice requirement if there are changes in the terms and conditions of the card accounts or fees charged to employees.
  7. A requirement that union approval be obtained for unionized employees.
  8. Providing a detailed written notice to employees.
  9. Obtaining voluntary consent prior to payment by either of these methods.”[ii]

Additional information on New York State:

New York State Rulemaking Activity

New York State Supreme Court Case Ruling

New York State Notice and Consent Direct Deposit Model Form

New York State Notice and Consent Payroll Debit Cards Model Form

Pennsylvania Regulations:

“The new amendments resolve the uncertainty. Under the new law, the use of payroll debit cards is permitted if, among other things:

  1. The employer does not mandate the use of payroll debit cards.
  2. The employer complies with stringent notice requirements.
  3. The employee is allowed one free withdrawal of all wages earned per pay period.
  4. The employee is provided a free method of checking the balance on the card electronically or by telephone.
  5. There are no fees for using the payroll card.”[iii]

Federal Bulletin on Payroll Debit Cards

The laws and regulations vary on payroll debit cards from state-to-state and will continue to evolve as payment options and technology evolves.  Be aware of the regulations in each state you operate in.  My recommendation is to make this an option for employees, just as direct deposit is an option (but strongly preferred).  Don’t force employees into using a payroll debit card or direct deposit, it could violate the law.  Seek guidance prior to implementing payroll debit cards and work with a reputable company.  SHRM’s vendor directory has four options to choose from and there are multiple websites that rank these organizations, based on service, size and reputation.  This should not be a one size fits all model, benchmark and find a solution that works best for your organization.  Your payroll provider and/or local bank might have suggestions on preferred vendors to consider or suggested alternatives.

New York State Department of Labor Drops Proposal Regarding Call-In Pay

“The New York State Department of Labor announced recently that it does not intend to implement its proposed regulations that would have imposed burdensome requirements on employers to provide call-in pay to employees under a variety of circumstances not currently covered under existing regulations. The regulations were initially proposed in November 2017, and then were revised in December 2018 after public comments were received and reviewed. The NYSDOL now intends to let the regulatory process expire with respect to the proposed regulations and potentially revisit this issue in the future.”[iv]  Continue to watch for the revisit in the future, this will impact most organizations in New York State.

NYC Mandates Workplace Lactation Room March 18, 2019

“Beginning March 18, 2019, employers in the Big Apple with at least four workers must provide lactation rooms and create a written lactation-accommodation policy that must be given to workers when they are hired. The city’s human rights commission will release a model policy before the effective date.”[v]

[i] https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/employers-payroll-debit-cards-.aspx

[ii] https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/new-york-state-regulations-governing-payroll-debit-cards-revoked.aspx

[iii] https://www.shrm.org/ResourcesAndTools/legal-and-compliance/state-and-local-updates/pages/pennsylvania-law-clarifies-payroll-debit-card-use.aspx

[iv] https://www.bsk.com/news-insights/new-york-state-department-of-labor-drops-proposal-regarding-call-in-pay-for-now

[v] SHRM email

Mathew W. Burr, MJ-LEL, MBA, MHRIR, GPHR, SHRM-SCP, SPHR, CPHR-INT, Chartered CIPD Uncategorized

2025 New York State Paid Family Leave and Workers Compensation Rates

Original Post Date: 10/15/2024

Up to 12 weeks of leave

New York State Paid Family Leave provides eligible employees with up to 12 weeks of job protected, paid time off to bond with a new child, care for a family member with a serious health condition, or to assist loved ones when a family member is deployed abroad on active military service. This time can be taken all at once, or in increments of full days.

At 67% of pay (up to a cap)

Employees taking Paid Family Leave receive 67% of their average weekly wage, up to a cap of 67% of the current New York State Average Weekly Wage (NYSAWW). For 2025, the NYSAWW is $1,757.19, which means the maximum weekly benefit is $1,177.32. This is $26.16 more than the maximum weekly benefit for 2024.

Employees can get an estimate of their benefits using the PFL 2025 Benefits Calculator.

 Paid Family Leave Benefits Examples
Worker’s Average Weekly WageWeekly PFL Benefit*
$600$402
$1,000$670
$2,000$1,177.32

*The weekly PFL benefit is capped at $1,177.32(67% of the NYSAWW).
 

2023 Paid Family Leave Expansion

Through Legislation S.2928-A/A.06098-A, the definition of “family members” expands to include siblings. This includes biological siblings, adopted siblings, step-siblings and half-siblings. These family members can live outside of New York State, and even outside of the country.

Employer Resources

There are several resources to help employers understand and communicate New York Paid Family Leave benefit updates to their employees.

Draft PFL Policy Language:

NEW YORK STATE PAID FAMILY LEAVE

New York Paid Family Leave provides job-protected, paid time off so employees can:

  • bond with a newly born, adopted, or fostered child.
  • care for a close relative with a serious health condition; or
  • Assist loved ones when a family member is deployed abroad on active military service.

By NYS PFL Definition:

  • spouse
  • domestic partner (including same and different gender couples; legal registration not required)
  • child/stepchild and anyone for whom you have legal custody
  • parent/stepparent
  • parent-in-law
  • grandparent
  • grandchild
  • sibling (starting in 2023) Workers should check with their employer’s Paid Family Leave insurer to learn when sibling care goes into effect for their policy. For employees who work for self-insured employers, coverage begins January 1, 2023.

Employees who believe they are eligible for Paid Family Leave should contact their _______ as soon as possible. More information can be found at www.ny.gov/programs/new-york-state-paid-family-leave. Organization will abide by all changes to NYSPFL and communicate such changes to the employees.  For additional information please alert your President, or the Statement of Rights Posting on Paid Family Leave.

Legal Area’s and Changes to Remember and Communicate:

  1. Employees have job protection, similar to FMLA.
  2. Paid Sick Leave policies and procedures.
  3. Right to keep their health insurance while on leave.
  4. No retaliation or discrimination against those who take leave.
  5. Citizenship is never a factor in eligibility for NYSPFL.
  6. Review the language contained in your employee handbook, policy, or policy manual.  Update FMLA and NYSPFL language to reflect changes and communicate the policy to the workforce.
  7. Communicate PFL payroll deductions for 2020 to the workforce now or during open enrolment.  My recommendation is to do this in writing via a template and obtain a signature.  NYS has a PDF template referenced above.
  8. Ensure the NYS PFL statement of rights for Paid Family Leave in 2023 is up-to-date and communicated to the workforce.  This includes the postings; disability provider or state is providing these postings to employers.  Watch the expiration dates on the postings, this is a common area in an audit that needs to be corrected.
  9. A proper call-in procedure for intermittent leave is necessary.  Do you accept text messages?  What about emails?  This should all be clearly communicated in a policy or procedure.  How much notice?
  10. New York State Paid Sick Leave

I am happy to work with any employer’s on ensuring policy, communication mechanisms, postings and other NYSPFL material is legal and up to date.  Ensure you are reviewing this information annually and communicating changes to PFL rates annually.  Work with your payroll provider to ensure and verify the percentage deductions are accurate and live in the payroll system.  Remember interns and seasonal employees and communicate if they do or do not qualify for PFL.  There are forms to fill out online if they do not qualify to ensure the deduction is not taken.

Frequently Asked Questions

How many weeks of Paid Family Leave are available to employees? Eligible employees can take up to 12 weeks of Paid Family Leave.

How much will employees get paid when taking Paid Family Leave? Employees taking Paid Family Leave in 2025 will get 67% of their average weekly wage, up to a cap of 67% of the NYSAWW of $1,757.19.

What is the maximum weekly benefit? The maximum weekly benefit for 2025 is $1,177.32.

If I start my continuous leave in one year and it extends into the next, what will my benefit rate be? You get the benefit rate in effect on the first day of your leave.

If I start my intermittent leave in 2024, and it extends into 2025, am I eligible for the benefits at the 2025 rate? You get the benefit rate in effect on the first day of a period of leave. When more than three months pass between days of Paid Family Leave, your next day or period of Paid Family Leave is considered a new claim under the law. This means you will need to file a new request for Paid Family Leave and that you may be eligible for the increased benefits available should that day or period of Paid Family Leave begin in 2025.

I am having a baby in 2024; can I wait until 2025 to take Paid Family Leave? Yes, you can take (and must complete) Paid Family Leave for bonding with a new child at any time within the first 12 months of the child’s birth, adoption, or foster care placement, provided that you remain an eligible, covered employee.

I used all 12 weeks of Paid Family Leave in the last year; can I take more Paid Family Leave this year if I experience another qualifying event? You may take up to 12 weeks of Paid Family Leave in every 52-week period based on a rolling calendar. This means that if you used the full 12 weeks of leave, the next time you would be eligible to take Paid Family Leave again is one year from your first day of leave.

What is the weekly employee contribution rate? If you are paid weekly, the payroll contribution is 0.388% of your gross weekly wages and is capped at an annual maximum of $354.53. If your gross weekly wages are less than the NYSAWW ($1,757.19 per week), you will have an annual contribution amount less than the annual cap of $354.53, consistent with your actual wages.

For example, if you earn about $27,000 a year ($519 a week), you will contribute about $2.01 per week.

If you are not paid weekly, the payroll contribution will be 0.388% of your gross wages for the pay period.

What is the maximum amount employees will pay for Paid Family Leave? The maximum employee contribution for 2025 is $354.53.

On March 31, 2024, New York updated the NYSAWW. When does this NYSAWW take effect for Paid Family Leave deduction and benefit caps? The new NYSAWW only applies to the 2025 benefit and will not affect Paid Family Leave deductions or benefits until January 1, 2025, if leave was begun on or after that date. The new NYSAWW does not have any impact on Paid Family Leave benefits in 2024.

What is the NYSAWW that will be used for Paid Family Leave benefits in 2025? $1,757.19.

Fully funded by employees

New York State Paid Family Leave is insurance that may be funded by employees through payroll deductions. For 2025, employees will contribute 0.388% of their gross wages per pay period, with a maximum annual contribution of $354.53.

Employees earning less than the current NYSAWW of $1,757.19 will contribute less than the annual cap of $354.53, consistent with their actual wages.

Here are some contribution and benefit examples at different income levels:

  1. Employees earning $519 a week (about $27,000 a year) will contribute about $2.01 from their gross wages each week ($519 x 0.388%). When taking the benefit, these employees will receive $347.73 per week, up to a maximum total benefit of $4,172.76.
  2. Employees earning $1,000 a week ($52,000 a year) will contribute about $3.88 from their gross wages each week ($1,000 x 0.388%). When taking the benefit, these employees will receive $670 per week, up to a maximum total benefit of $8,040.
  3. Employees earning the NYSAWW of $1,757.19 (about $91,300 a year) or more will contribute 0.388% from their gross wages each pay period until they reach the maximum of $354.53. When taking the benefit, these employees will receive $1,177.32, up to a maximum total benefit of $14,127.84.

Employees can get an estimate of their deductions using the PFL 2025 Payroll Deduction Calculator.

Paid Family Leave by State & City

Workers Comp Rates

The maximum weekly benefit rate for workers’ compensation claimants is two-thirds of the New York State average weekly wage for the previous calendar year, as determined by the New York State Department of Labor (Workers’ Compensation Law §§ 2[16] and 15[6]).

https://www.wcb.ny.gov/content/main/Workers/ScheduleMaxWeeklyBenefit.jsp