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6 Compliance Changes to Check in 2017

6 Compliance Changes to Check in 2017

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Compliance Deadlines and Issues to Watch in 2017

Employers can expect developments  in 2017 related to the Fair Labor Standards Act (FLSA), the Affordable Care Act (ACA), Equal Employment Opportunity Commission (EEOC) requirements and several other workplace regulations concerning compliance. Here’s a closer look.

 

  1. Fair Labor Standards Act

On Nov. 22, 2016, Judge Amos L. Mazzant III of the U.S. District Court for the Eastern District of Texas issued an injunction delaying the effective date of the new overtime rule. The rule would have raised the minimum salary threshold for exempt executive, administrative and professional employees to $913 per week, from $455 per week and the minimum annual salary threshold for highly compensated employees to $134,004, from $100,000.

How long the injunction will remain in place – and the fate of the rule – is anyone’s guess. Meanwhile, employers should adhere to current FLSA requirements and keep an eye out for the outcome of the Department of Labor’s current appeal.

 

  1. Affordable Care Act

Although the leadership in the House of Representatives currently is attempting to repeal ACA, for now, employers still remain responsible for all ACA tracking and reporting requirements. The deadline for issuing ACA forms 1095-B and -C to employees has been extended from Jan. 31, 2017 to March 2, 2017. However, the due date for filing ACA forms with the Internal Revenue Service (IRS) is unchanged. For 2016 tax year, applicable large employers must:

  • Submit paper forms 1094-B and -C and 1095-B and -C by Feb. 28, 2017

 

  • Submit electronic forms 1094-B and -C and 1095-B and -C by March 31, 2017

 

The IRS has extended the “good faith effort” penalty waiver to 2017. Employers who submit inaccurate or incomplete reporting information may be relieved from penalties, as long as they can show they made a “good faith effort” to comply with the ACA’s requirements.

Note that although the 40-percent “Cadillac” tax on high-cost employer health plans has been delayed until 2020, employers should consider assessing the impact of the tax on future business goals now. Once the impact is understood, a feasible strategy can be put in place.

 

  1. Equal Employment Opportunity Reporting

The EEOC has revised the Employer Information Report (EEO-1) to include collecting pay data from employers, including federal contractors, with over 100 employees.

Under the original proposal, employers would submit their annual EEO-1 report – which would include W-2 pay data and hours worked – to the Joint Reporting Committee by September 30 of each year. However, the EEOC has issued an updated proposal that would move the due date for the 2017 report from Sept. 30, 2017 to March 31, 2018. In subsequent years, the deadline will be March 31.

Be sure to monitor the revisions to the EEO-1 report, and prepare a strategy for implementation in case the changes are enacted.

 

  1. Citizenship and Immigration Services Reporting

U.S. Citizenship and Immigration Services recently updated Form I-9. After Jan. 21, 2017, employers must start using the new form.

 

  1. Minimum Wage and Paid Sick Leave

Many states, cities and counties have approved minimum wage increases and mandatory paid sick leave, some of which will take effect in 2017.

 

  1. Federal Contract Workers

The minimum wage for federal contract workers increases to $10.20 per hour Jan. 1, 2017. Certain federal contractors also must provide their employees with up to seven days of paid sick leave per year.

Staying ahead of potential and actual regulatory changes is easy with an HR and payroll system that generates the necessary forms and enables electronic filing to simplify reporting. It’s also important to partner with an HR technology provider who stays abreast of tentative regulatory matters and quickly updates their system accordingly, so that you have the right tools for any changes.

 

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.


Heidi Lively

by Heidi Lively


Author Bio:

Heidi Lively serves as Paycom’s Additional Business Manager, where she focuses on the compliance and service of additional business products. Previously, she served customers in the Paycom Service Department where she quickly rose through the ranks to earn a team leader position. Having performed in a leadership position for a number of years, Heidi has been able to cultivate and influence others through Paycom’s leadership initiatives. Heidi earned her bachelor’s degree from the University of Central Oklahoma.

Deadline Extended

Employer Deadline Extended for Furnishing 2017 ACA Forms

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Distribution of 2017 Affordable Care Act (ACA) Forms 1095-B or -C to your employees has been extended.

As issued in Notice 2018-06, the IRS has extended the deadline from Jan. 31 to March 2. (However, the deadline to provide Forms W-2 and 1099 to employees and contract workers remains as Jan. 31.)

Filing deadlines unchanged

While the deadline to furnish forms was extended, the filing deadlines remain the same: Feb. 28 for paper forms, and April 2 for electronic forms.

IRS Notice 2018-06 emphasizes that employers who do not comply with the due dates for furnishing or filing are subject to penalties under sections 6722 or 6721.

Good-faith transition relief extended

The IRS also announced the extension of good-faith transition relief. This may allow an employer to avoid some penalties if it can show that it made good-faith efforts to comply with the information reporting requirements for 2017.

This relief applies only to incorrect and incomplete information reported on the ACA forms, and not to a failure to file or furnish the forms in a timely manner. Additionally, the IRS stated it does not anticipate extending either the good-faith transition relief or the furnishing deadline in future years.

Contact a trusted tax professional if you have questions on how this may affect your business specifically.

Click here to read more about how the ACA is affect by the new Tax Cuts and Jobs Act.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

Employers Unaffected by ACA Changes in New Tax Law

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On December 22, President Trump signed the Tax Cuts and Jobs Act. The bill includes a provision that reduces the penalty for not complying with the Affordable Care Act’s (ACA) individual mandate to $0, effectively removing the penalty for individuals who do not have health insurance coverage after the effective date of Jan. 1, 2019.

However, this update will not impact employers, since the law does not remove the employer mandate (the requirement that large employers offer health insurance coverage to their full-time employees or pay a penalty) or the associated employer reporting requirements. Large employers subject to the mandate still face penalties if they fail to comply with either, and the IRS has begun sending out notices with preliminary assessments of the employer shared responsibility penalty for tax year 2015.

Employers subject to the employer mandate should continue to comply and be prepared to file Forms 1094 and 1095 with the IRS in accordance with the normal deadlines.

For the 2017 tax year, the deadlines to provide Forms 1095-C to employees is Jan. 31, 2018.  The deadline to file Forms 1094-C and 1095-C with the IRS is Feb. 28, 2018 if filing paper forms, and April 2, 2018, if filing electronically.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

ACA Employer Shared Responsibility Payments

IRS Quietly Prepares to Assess ACA Employer Shared Responsibility Payments

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Late last week, without announcement, the IRS amended a FAQ about its planned process for assessing employer shared responsibility payments (ESRPs) under the Affordable Care Act (ACA). Previously, the document suggested that further guidance would be forthcoming, prior to notifying affected applicable large employers (ALEs) about potential penalties owed under the federal health care law’s employer mandate.

That statement is now gone. In its place are several questions and answers detailing how the IRS will notify companies that they may owe an ESRP. In addition, the IRS intends to send assessments for the 2015 tax year in “late 2017,” which gives the agency approximately six weeks to do so.

Deadlines

The IRS notification will take the form of Letter 226J, which will include a month-by-month payment summary and a list of employees who:

  • were full-time employees for at least one month of the tax year
  • also received a premium tax credit
  • and did not allow the employer to qualify for an affordability safe harbor or other relief

While Letter 226J will indicate the employer’s deadline to respond, recipients generally will have 30 days from the letter’s printed date to contest its information. Then, following correspondence between the IRS and the ALE, if the agency determines the employer indeed is liable for an ESRP, the IRS will issue a demand and instructions for payment, via Notice CP 220J.

The FAQ’s changes to describe specific procedures and deadlines represent the clearest indication we have received that the IRS soon will notify ALEs that they may owe an ESRP for 2015. If such notifications are sent within the next few weeks, it will mark significant news.

For more on ACA, check out the October 2017 article: Trump Announces 2 Changes to ACA 

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Posted in ACA, Blog, Featured

Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

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