As another year comes to a close, we recommend finding time to reflect on 2021…
The Biden administration plans to rescind the COVID-19 international travel bans imposed in 2020 and replace them with vaccination and testing requirements to enter the U.S., beginning in November. Earlier this month, the U.S. Department of Health and Human Services, U.S. Department of Labor and U.S. Department of the Treasury jointly issued FAQs relating to COVID-19 vaccine incentives and surcharges. Under the guidance, employers may provide incentives such as premium discounts or surcharges through group health plans to incentivize COVID-19 vaccines, provided the incentive complies with the activity-only wellness program regulations.
Federal law allows employers to mandate COVID-19 vaccines for employees who’ve been infected with COVID-19 and those who haven’t, and the Biden administration’s vaccine-or-testing mandate won’t likely create an exception for those with “natural immunity.” More employers nationwide are firing workers who defy mandates to get vaccinated against COVID-19. While the total number of dismissed employees is low so far, the efforts seem to be driving more unvaccinated workers to get a shot. Moreover, legislation reintroduced in the U.S. House of Representatives last month, if enacted, could simplify employers’ annual Affordable Care Act (ACA) reporting of health plan information to the IRS. The Office for Civil Rights (OCR), the agency responsible for enforcing the HIPAA privacy and security rules (the “HIPAA rules”), recently issued guidance, and here’s a summary.
The U.S. Department of Labor (DOL) may fine employers in more circumstances when they violate federal tip-sharing regulations under a recently issued rule. The rule, going into effect on November 23rd, also clarifies when managers and supervisors can keep gratuities they received. An employer that pays its tipped employees the full minimum wage and does not take a tip credit may impose a tip pooling arrangement that includes dishwashers, cooks, or other employees who are not employed in an occupation in which employees customarily and regularly receive tips. An employer may not receive tips from such a tip pool and may not allow supervisors and managers to receive tips from the tip pool. Employers are prohibited, regardless of whether they take a tip credit, from keeping tips received by employees, including allowing managers or supervisors to keep any portion of employees’ tips. A manager or supervisor is an individual who meets the “executive” employee duties test for overtime exemption.
Meanwhile, more and more states have modified their minimum wage. Florida has increased their minimum wage to $10 an hour. Additionally, Florida businesses will now be required to submit new hire information for their independent contractors to the Florida Department of Revenue. This is a significant change for business in Florida as previously reporting of independent contractors by a business was optional.
For those of you that took advantage of the ERTC tax credits for 2020 and 2021, the law stated that these will end after 2021; however, in the reconciliation package, part of the way Congress is balancing the budget is to take away any of these ERTC tax credits in the 4th quarter of 2021. We are highly recommending if you have your tax credits turned on currently, to turn them off. The law specifically says you will have to pay these taxes back if they make it retro to October 1st. anyone that has questions about this tax credit, or any others please don’t hesitate to reach out to our team. Another friendly reminder that the FFCRA tax credits for eSick Pay and eFMLA ended on September 30th, as well. You are allowed to pay people in October if they missed work for COVID-related reasons in September, but don’t try and use it for any people out due to COVID in the 4th quarter 2021.
FUTA reduction credits are going into effect January 1, 2022. As you may be aware, the gross FUTA tax rate is 6% and is paid on the first $7000 of wages. Each state is afforded a 5.4% FUTA tax credit when they file their Form 940, resulting in a net FUTA tax rate of .6%. Any state that has an outstanding FUTA loan balance on January 1 for two consecutive years that does not repay the balance by November 10th of the 2nd year, will be subject to a credit reduction of .3% for that year and an additional credit reduction of .3% for each year thereafter.