MD Payroll Advisors Headline News
2017 Social Security Wage Base Increases to $127,200
The Social Security Wage Base increases to $127,200 for 2017. The Social Security Administration (SSA) announced that the 2017 social security wage base will increase from the $118,500 amount set in 2015 and also in 2016, which is an increase of $8,700. The social security wage base for self-employed individuals in 2017 will also be $127,200.
Business Standard Mileage Rate Decreases in 2017
The IRS has announced that the business standard mileage rate for transportation expenses paid or incurred beginning January 1, 2017, will be 53.5 cents per mile, down one half cent from the 54 cent rate in effect during 2016.
In addition, the 2016 standard rate for miles driven for medical or moving purposes will decrease to 17 cents per mile, down from the 19 cents per mile rate in effect during 2016.
Finally, the standard mileage rate for operating a passenger car for charitable purposes, which is set by law, will stay at 14 cents per mile in 2017.
Federal Judge Blocks Overtime Rule
Tuesday, November 22, 2016 - Just 10 days before the implementation date, a federal judge put the brakes on the Department of Labor's new federal overtime rule, which would have doubled the Fair Labor Standards Act's salary threshold for exemption from overtime pay.
For now, the overtime rule will not take effect as planned December 1, but it could still be implemented later down the road.
For more information on the proposed ruling, see "New Overtime Legislation" below.
Revised Form I-9
The Office of Management and Budget (OMB) has approved a revised Form I-9, Employment Eligibility Verification. Employers may continue using the current version of Form I-9 with a revision date of 03/08/2013 until January 21, 2017. After January 21, 2017, previous versions of the form may not be used for newly hired employees.
A few important notes about this new form:
- While the new I-9 is intended to be completed as a fillable PDF to reduce errors, it should not be confused with an electronic I-9. An employer must still print the completed I-9, obtain the appropriate signatures (which are not fillable via PDF), monitor reverifications, and retain the form for the proper retention period. Employers and employees may choose to complete any or all of the form by typing into the fillable PDF or using a pen to fill out sections after the document has been printed. Documents that are partly printed and partly handwritten are acceptable. If using an electronic version of the I-9, employers must still comply with the U.S. Citizenship and Immigration Services’ criteria to be certain of the integrity of the electronic system.
- Do not reverify current employees due to the new form. Use the new I-9 only for newly hired employees and when you are required to reverify temporary work authorization. Additionally, all previous forms must still be retained for the proper retention period. The form must be retained for as long as the employee works for you, plus three years after their hire date or one year after their termination date, whichever is later.
- To download the form from the USCIS website (uscis.gov/i-9), right click on the link to the new form—“Form I-9 (PDF, 535 KB)” – and select the “Save link as” option. This will allow you to save the PDF and open it in a PDF reader. Clicking to open it in a web browser (as you would with most links) will result in an error page.
Minimum Wage Law, New Rates Effective Aug. 1, 2016
For information on the new Minnesota minimum wage law, which originally took effect on August 1, 2014, please follow the links below or contact our office for additional information:
New Overtime Legislation
On May 17, 2016, the Obama Administration announced a new final Labor Department regulation which substantially changes the salary required for certain exempt employees.
Previously, certain employees were exempt from overtime rules if they earned a salary of at least $23,660 per year, or $455 per week. The new rule increases the salary required for these exempt employees to $47,476 per year, or $913 per week.
This means that certain formerly-exempt employees who earn salaries of less than $47,476 will be eligible for overtime pay. Employers will need to analyze their exempt positions carefully to determine whether it will be more cost-effective to increase an employee's annual salary to at least $47,476, or to pay an employee earning less than that amount an hourly wage plus overtime at 1.5 times the hourly wage for hours worked over 40 hours in a work week, or cap that employee's hours worked at 40 hours per work week.
The new rule also requires that the salary threshold will increase automatically every three years and also allows bonuses and incentive payments to count toward up to 10% of the new salary level.
Watch this short video from the Department of Labor for more information https://youtu.be/UFJaDm720FU
The new rule will take effect December 1, 2016. If you need assistance analyzing this issue for your workforce, call one of our payroll doctors at 507-625-2526.
Affordable Care Act
Beginning January 1, 2014, individuals and employees of small businesses will have access to affordable coverage through a new competitive private health insurance market - the Health Insurance Marketplace. The Marketplace offers "one-stop shopping" to find and compare private health insurance options.
Here are just a few of the things you need to know now regarding the Health Care Law:
- Your employment levels in 2014 determine whether you're subject to the law's employer mandate in 2015. Employers who average 50 or more full-time-equivalent employees over the 12 months of 2014 are considered "applicable large employers" for 2015 and will be required to offer full-time employees and their dependents the opportunity to enroll in a qualifying health plan starting in 2015, or face possible penalties.
- If your business averages fewer than 50 full-time-equivalent employees in a calendar year, you are considered a small employer under the 2010 health care law for the following calendar year. Small employers aren't required to offer employees health benefits, and won't face tax penalties if any employees get federal subsidies to help them buy private health insurance through government-run exchanges.
The Health Care Law, including your responsibilities as an employer, is very complex. By no means is this a summary of the law. For more information regarding your responsibilities as an employer, please contact your insurance provider or visit the Department of Labor website here.
Deferred Compensation and Pension Plan Limit
The 2017 annual contribution limits for the most common deferred compensation and pension plans are listed on our 2017 Quick Reference Guide. This guide can be found on our website by selecting “Forms” from the MD Payroll Advisors drop-down menu.