May 2018 Focus

Paid-Leave Tax Credit for Employers

On May 4th, the IRS released the Tax Reform Tax Tip 2018-69, giving employers more clarity on the new tax credit for paid family and medical leave. This tax credit, which was created by the 2017 Tax Cuts and Jobs Act, allows employers to claim a portion of wages paid to employees for any family and medical leave taken between January 1, 2018 and December 31, 2019. The credit will range from 12.5% to 25%, dependent upon how much an employee’s regular earnings are compensated. Simply put, the government will cover 12.5% if compensation equals half of their regular earnings, and will increase up to 25% if they receive their entire regular earnings.

To claim this credit, employers are subject to the following conditions:

  • Must have a current family and medical paid-leave policy in place that offers up to 12 weeks of paid leave
  • Must provide qualifying employees under the Fair Labor Standards Act (FLSA) at least two weeks of paid leave
  • Compensation must be at least 50% of the employee’s regular earnings
  • Employee must not have been paid more than $72,000 in 2017 (or prior year, going forward)

Employers who wish to take advantage of the paid leave tax credit should review their current leave policies to ensure the required guidelines for the program are met. Employers must also verify that state and local paid leave legislation does not conflict with the program. For more information, click here to view some FAQs posted by the IRS.

Payroll Audit Independent Determination (PAID) Program

On April 3, 2018, the Wage and Hour Division (WHD) of the Department of Labor launched a six-month nationwide pilot program, intended to relieve employers of any overtime and minimum wage violations under the FLSA. Under the PAID program, employers will conduct self-audits, and report any discovered violations to the WHD themselves. The WHD has announced they will not impose any penalties upon employers who elect to participate in the PAID program and will work directly with them to correct and resolve any potential compensatory errors. Employers are encouraged to take advantage of this opportunity in order to learn from their mistakes without fear of repercussion.

OSHA’s Electronic Recordkeeping Rule

The deadline for companies to post their 2017 Form 300A data onsite has come and gone. However, under OSHA’s Electronic Recordkeeping Rule, adopted January 1, 2017, certain establishments are also required to electronically share their Form 300A data through their online Injury Tracking Application (ITA). The deadline to submit 2017 Form 300A information is July 1, 2018, but beginning in 2019 and every year thereafter, the deadline will be March 2. It is recommended, however, that employers wait until closer to the deadline to submit their information. There has been much discussion about OSHA releasing a notice of proposed rulemaking to reconsider, revise, or withdraw it altogether.

For more details on this matter, employers may view OSHA’s Fact Sheet, which is a brief overview of the rulemaking in its entirety.

ProSential Group Webinars for May

As a client of MWG Employer Services, we are pleased to offer free, monthly educational webinars through ProSential Group. Previous webinars are available through the ProSential Group Client Portal. To register for this month’s webinars, click on the links below.

Effective Interviews: The Dos and Don’ts of Employee Selection

Tuesday, May 22nd

Register Online

HSAs, HDHPs and Account Based Plans (HRAs, FSAs)

Tuesday, May 29th

Register Online