The Payroll Report: April 30 to May 4


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Here is a roundup of payroll issues occurring in the past week:

Federal

The IRS revised Publication 1494, used to compute the amount of wages, salaries, and other income that is exempt from a notice of levy to collect delinquent taxes. The revision was released May 2.

The previous version of the publication, released in early January, was only adjusted for inflation and did not account for the removal of personal exemptions, which are suspended from 2018 to 2025 under the new tax law (Pub. L. 115-97).

The updated amounts were effective immediately, the IRS said.

The IRS also said that forms and more information on a new employer credit under the Family Medical and Leave Act are to be released this summer.  The credit, which was introduced as part of the new tax law, is effective for wages paid in tax years 2018 and 2019. The credit may be claimed by employers that provide at least two weeks of paid family and medical leave a year to qualifying employees at a rate of at least 50 percent of the employee’s normal wages.

The deadline for employers with at least 100 employees to report W-2 pay data as part of an Equal Employment Opportunity Commission survey was extended to June 1 from March 31, the agency said. The survey tracks compliance with federal nondiscrimination laws by asking employers to provide W-2 and hours-worked data and to detail the sex, ethnicity, and race of their workforces.

State                                                                                                                         

Idaho released 2018 income tax withholding tables April 27. Each of the income tax rates was decreased by 0.475 percent to implement a bill (H.B. 463) signed March 12 by Gov. Butch Otter (R).

Additionally, employees are recommended to update federal Form W-4, Employee’s Withholding Allowance Certificate, because the state now notes the employee’s number of state allowances on the form. The number of state allowances is the same as the number of the employee’s children who qualify for a new state child tax credit, which was also introduced in H.B. 463. An allowance is valued at $2,960 in 2018.

The California Supreme Court ruled April 30 that a three-condition test is to be used to classify workers. Workers must meet all three conditions of the test to be considered an independent contractor.

The state Supreme Court’s ruling, which upheld a lower court’s decision, resolved a class action lawsuit brought by delivery drivers who claimed they were misclassified as independent contractors by a nationwide package and document-delivery company. The workers claimed the employer violated state wage orders imposing minimum wage, maximum work hours, and break requirements for the transportation industry.

A bill requiring private New Jersey employers to provide paid sick leave was signed May 2 by Gov. Phil Murphy (D). 

Effective Oct. 29, 2018, employers must provide one hour of sick leave for every 30 hours worked, up to 40 hours in a year. The sick leave may be used to care for the employee’s health or that of family members, to handle domestic or sexual violence matters, to attend school meetings, or if a workplace, school, or childcare center is closed because of a public health concern.

By Jamie Rathjen

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