The Payroll Report: April 2 to April 6


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Federal:

This week, the Supreme Court ruled in Encino Motorcars LLC v. Navarro that car-dealership service advisers were exempt from overtime pay requirements because they are primarily engaged in servicing automobiles, an overtime-exempt activity under the Fair Labor Standards Act.

The ruling resolved a split among federal appeals courts. The Fourth and Fifth Circuits excluded service advisers from overtime pay in previous rulings, but in early 2017, the federal appeals court for the Ninth Circuit determined that service advisers were eligible for overtime pay.

On April 1, the IRS released Publication 505, Tax Withholding and Estimated Tax, to use in 2018 to determine how much income an employer should withhold for tax payments. The publication was referenced by the IRS as a key resource for employees to use when deciding on allowance amounts to apply on Form W-4, Employee's Withholding Allowance Certificate.

The process allowing professional employer organizations to be certified by the IRS was recently updated, an agency official said April 5. Organizations applying to be certified professional employer organizations that are members of a controlled group may be treated as a single CPEO or applicant for the purposes of submitting financial statements and Form 14751, Certified Professional Employer Organization Surety Bond, the official said.

State:

The New York state legislature on March 30 passed a budget bill (S. 6907) for fiscal 2019 that includes an employer-paid opt-in payroll tax.

The tax is to take effect Jan. 1, 2019, at a rate of 1.5 percent on employee compensation of at least $40,000 a year. The tax rate is to increase to 3 percent in 2020 and 5 percent in 2021, the bill said.

Employers that are required to withhold New York income tax may elect to participate in the payroll tax for one year at a time, the bill said. The first deadline is Dec. 1, 2018, for participation in 2019.

Colorado withholding tables were updated April 2 on the state revenue department's website. The tables are in effect for wages paid April 1 and later.

The updated withholding calculations are to ensure that Colorado employees are not underwithheld because of the federal tax code overhaul (Pub. L. 115-97), the department said.

The Oklahoma tax commission released additional information on its new Form OK-W-4, Employee’s Withholding Allowance Certificate. Only employees who started employment after Feb. 28 or who must update the number of allowances they claim must fill out Form OK-W-4, according to a new version of the state rule governing the form provided by the department on its website.

Proposed rules to implement the District of Columbia's universal paid-leave program were posted March 31 to the Department of Employment Services website. The proposed rules are to be open for public comment until 30 days after appearing in the D.C. Register, which is published every Friday. Comments on notices appearing April 6 in the D.C. Register would be due by May 6.

By Jazlyn Williams

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