July 2019 Compliance Updates
APS reports on relevant, impactful compliance updates each month to help keep you at the top of your compliance game. Updates this month include state and local changes as well as updates to state unemployment wage bases. Here are your July compliance updates:
IRS RELEASES NEW WITHHOLDING FORMS
The Internal Revenue Service announced the 2020 version of the Employee’s Withholding Allowance Certificate (Form W-4) will be released late July 2019. The new version of the Form W-4 will no longer allow withholding allowances.
MINIMUM WAGE BILL PASSES IN HOUSE
On July 18, 2019, the House passed legislation that would increase the minimum wage to $15 an hour by October 1, 2025, in several phases. The Raise the Wage Act also increases wages for those under the age of 20 to $5.50 an hour, those who work for tips to $3.60 an hour, and those with disabilities to $4.25 an hour. The bill will also replace these subminimum wages with the new federal minimum wage.
2020 STATE UNEMPLOYMENT WAGE BASES
Three states have announced their unemployment taxable wage bases for 2019. The following states have SUTA wage base changes for 2019 and 2020:
- Iowa - $31,600
- Wyoming - $26,400
- Tennessee - $7,000 (2019)
2020 MINIMUM WAGE CHANGES
One state has announced changes to its minimum wage rates beginning January 1, 2020:
- Alaska - $10.19
EEOC STARTS EMPLOYEE DATA PAY SURVEY & FAQS
EEOC Starts Employee Data Pay Survey
The Equal Employment Opportunity Commission (EEOC) started collecting data on employee pay on July 15, 2019, through their online portal. Login information for the survey was sent to employers with over 100 employees on July 15, 2019, via email and mail. Employers are now required to submit their data from the fourth quarter pay periods of calendar years 2017 and 2018.
New Frequently Asked Questions Added to EEOC Pay-Data Survey
The EEOC announced July 23, 2019, that new FAQS were added to their Pay-Data Reporting resource page to aid employers.
2019 & 2020 STATE UNEMPLOYMENT TAX RATES
The following states have announced their 2019 and 2020 unemployment tax rates:
New Jersey’s unemployment tax rates for 2020 will be the following:
- 0.4 percent to 3 percent for positive-rated employers
- 4.3 percent to 5.4 percent for negative-rated employers
- 2.8 percent for new employers
Tennessee’s unemployment tax rates for the second half of 2019 will be the following:
- 0.01 percent to 2.3 percent for positive-rated employers
- 5 percent to 10 percent for negative-rated employers
KENTUCKY COUNTIES RAISE OCCUPATIONAL TAX RATES
Simpson and Bathe Counties announced they will increase their occupation tax rate one and two percent, respectively, and remove the social security wage gap cap. These changes are expected to go into effect on July 1, 2019.
MASSACHUSETTS MANDATES NOTIFICATION OF CHANGES TO EMPLOYEE LEAVE CONTRIBUTIONS
All Massachusetts employers who notified their employees of the paid leave contribution program before the June 14, 2019 delay announcement, must now notify their employees every time there is a change by September 30, 2019.
OREGON LAWMAKERS PASS NEW PAID FAMILY AND MEDICAL LEAVE MEASURE
Oregon lawmakers passed the measure (HB 2005) on June 30, 2019, for paid family and medical leave for the majority of the state’s employees. Employers with over 24 employees are required to participate with contributions that are not to exceed one percent of wages. It is projected to collect $775 million from employers and $1.5 billion from employees between 2023-2025. The law is set to become effective Jan 1, 2022, with benefits being accessible starting the following year.
YONKERS, NEW YORK EXTENDS INCOME TAX SURCHARGE DEADLINE
New York lawmakers signed a bill (A. 6694) that will extend the deadline income tax surcharge of wages for residents of Yonkers, New York and individuals who work there until December 31, 2021.
CONNECTICUT GOVERNOR VETOES REGULATING TIPPED-WAGES BILL
Connecticut Governor Ned Lamont vetoed a bill (Public Act 19-198) that would allow employers to apply a tip credit to non-service jobs. Currently, the state only allows a tip credit to be applied to service jobs which include: taking orders, delivering food and beverages, removing dirty plates and silverware, and preparing the table for the next guests.
Non-service jobs are considered washing dishes, cleaning restrooms, performing host/hostessing duties, setting up or breaking down a restaurant after hours, and more. Governor Lamont believed the bill would diminish employee’s right to retrieve wages.
MINNESOTA SET TO PENALIZE EMPLOYERS FOR WAGE VIOLATIONS
Governor Tim Walz signed a budget allowing employers to be penalized for workers pay violations. The Department of Labor will now have investigators that can subpoena records and testimony from employers and enter businesses during business hours to investigate possible violations.
NEW YORK FARM WORKERS OBTAIN PROTECTIONS
New York’s governor passed a measure (A.B. 8419) that requires farmworkers to receive a 24-hour day off once a week, overtime compensation, paid disability, paid family leave, and unemployment benefits. Farmworkers can choose to work on their day off for overtime pay. Notice of new law must be posted in an open area in English and Spanish at the place of business. This measure will take effect on January 1, 2020.
MISSOURI TAX FILING EXTENSIONS & TAX FILING THRESHOLD
Missouri Granted Tax Filing Extension
The IRS announced employers have received an extension for filing and payment of business tax returns in the following counties: Andrew, Atchison, Boone, Buchanan, Carroll, Chariton, Cole, Greene, Holt, Jackson, Jasper, Lafayette, Lincoln, Livingston, Miller, Osage, Pike, Platte, Pulaski, and St. Charles. The Tax filing deadline has been extended to August 31, 2019.
Missouri Drops Threshold for Tax Filings
Governor Mike Parson passed a bill (S.B. 90) that will reduce the requirement of employers with 250 employees to file unemployment taxes and wage reports to employers with 50 employees. This measure takes effect on August 28, 2019, and employers will be required to submit reports starting with the first quarter of 2019.
OHIO SCHOOL DISTRICT & MUNICIPALITY INTRODUCE INCOME TAX
Ohio School District Introduces Income Tax
Alexander school district will now have an income tax rate of 1 percent starting January 1, 2020. The measure passed in May’s primary election.
Ohio Municipality Set to Pass New Income Tax
According to a newly released ordinance, Belmont County’s municipality of Bridgeport is expected to pass a new income tax law with an initial rate of 1 percent and excludes credit for taxes paid to other.
WISCONSIN'S WITHHOLDING METHODS & INCOME TAX BILL
Changes in Wisconsin’s Withholding Methods
The state’s governor passed a bill that changes withholding methods to now include tax cuts starting 2020. The budget also decreases its second-lowest tax bracket to 5.21 percent. The new budget will be effective from July 1, 2019, to June 30, 2021. This new requirement will take effect starting April 1, 2020.
Income Tax Bill Passes In Wisconsin
Wisconsin’s governor signed a related bill (A.B. 25) that mandates the state to offset the income tax rates based on revenue gained from the out-of-state retailer’s sales tax.
NEW LAWSUIT CHALLENGES PAID SICK LEAVE IN SAN ANTONIO
A group of businesses in San Antonio is suing the city of San Antonio over mandated paid sick leave. The group believes the law violates Texas minimum wage law and legislature did not follow correct procedures for passing an ordinance. San Antonio’s mandate is set to take effect starting on August 1, 2019.
PITTSBURGH SUPREME COURT OVERRULES ON PAID SICK LEAVE MEASURE
The Supreme Court in Pittsburgh rules that mandated paid leave is lawful under the Disease Prevention and Control Law. The law requires employers with more than 15 employers to offer 1 hour of paid leave for every 35 hours worked with a cap at 40 hours of paid leave and employers with fewer than 15 workers can cap at 24 hours of paid leave.
OHIO PASSES BUDGET IMPACTING TAX RATES AND BRACKETS
Ohio’s new budget has eliminated the lowest two of its seven tax brackets. The new budget will take effect July 1, 2019, and run through January 1, 2021. The new tax bracket has decreased rates to the following: 2.85 percent, 3.326 percent, 3.802 percent, 4.413 percent, and 4.797 percent.
CHICAGO PASSES NEW SCHEDULING ORDINANCE
Chicago’s city council passed their new Fair Workweek Ordinance that will require employers to post their employees’ work schedule 10 days in advance starting July 1, 2020. The ordinance is meant to protect workers from unfair scheduling by their employers. The measure covers the building services, health care, hotels, manufacturing, restaurants, retail, and warehouse services industries. If the ordinance is violated, employers face up to a $500 fine.
MAINE CONSIDERS PAY CARDS UNCLAIMED PROPERTY
Beginning October 1, 2019, employers must file unclaimed paycards as unclaimed property in the state of Maine. If the paycard is not claimed within three years, it is considered abandoned.