FLSA Amendments to Tip Sharing Provisions

On March 23, 2018, Pres­i­dent Trump signed leg­is­la­tion (H.R. 1625) amend­ing the fed­er­al Fair Labor Stan­dards Act (FLSA) by pro­hibit­ing employ­ers from keep­ing tips received by employ­ees for any pur­pose. This includes pro­hibit­ing man­agers or super­vi­sors from keep­ing any por­tion of employ­ees’ tips, regard­less of whether the employ­er takes a tip cred­it. Employ­ers in vio­la­tion of these pro­tec­tions are liable to the affect­ed employee(s) for the sum of any tip cred­it tak­en, and all tips unlaw­ful­ly kept, in addi­tion to an equal amount as liq­ui­dat­ed dam­ages. Regard­ing will­ful vio­la­tions of the employ­ment of minors pro­vi­sions (at 29 U.S.C. § 216©), any per­son in vio­la­tion of the law will be sub­ject to a civ­il penal­ty of up to $1,100 for each vio­la­tion and will be liable to the affect­ed employee(s) for all tips unlaw­ful­ly kept and an addi­tion­al equal amount as liq­ui­dat­ed damages.

The law is cur­rent­ly effective.

Read US H.R. 1625

Postponement of E‑Verify Temporary Unavailability

On March 15, 2018, the U.S. Cit­i­zen­ship and Immi­gra­tion Ser­vices (USCIS) announced via fact sheet that E‑Verify and E‑Verify Ser­vices would be tem­porar­i­ly unavail­able from 12 a.m. March 23 to 8 a.m. March 26 East­ern Time for sys­tem enhance­ments. How­ev­er, on March 22 the USCIS released an email stat­ing that the enhance­ments were “still in the works,” and the mod­ern­iza­tion launch was post­poned. Sub­se­quent­ly, E‑Verify will remain avail­able, and all reg­u­lar employ­ment eli­gi­bil­i­ty ver­i­fi­ca­tion time­lines con­tin­ue to apply.

Read about the planned enhance­ments

IRS Adjusts 2018 Inflation Amounts for Health Savings Accounts

On March 5, 2018, the fed­er­al Inter­nal Rev­enue Ser­vice (IRS) announced 2018 annu­al lim­its on deduc­tions for indi­vid­u­als cov­ered under a high deductible health plan (HDHP) in Rev. Proc. 2018–18. The deduc­tion lim­it is $3,450 for an indi­vid­ual with self-only cov­er­age and $6,850 for an indi­vid­ual with fam­i­ly coverage.

Addi­tion­al­ly, for cal­en­dar year 2018, an HDHP is defined as a health plan with an annu­al deductible that is not less than $1,350 for self-only cov­er­age or $2,700 for fam­i­ly cov­er­age, and the annu­al out-of-pock­et expens­es (deductibles, co-pay­ments, and oth­er amounts, exclud­ing pre­mi­ums) do not exceed $6,650 for self-only cov­er­age or $13,300 for fam­i­ly coverage.

Read Rev. Proc. 2018–18

EEO‑1 Reporting and Employees Who Regularly Report to Client Sites

The por­tal for 2017 EEO‑1 report­ing is open and reports must be sub­mit­ted and cer­ti­fied by March 31, 2018 at the latest.

The fed­er­al Equal Employ­ment Oppor­tu­ni­ty Com­mis­sion (EEOC) has addressed the issue that there may be some con­fu­sion as to how employ­ers are to report employ­ees work­ing at client sites (a work­place the employ­er does not own but where the employ­ee reports for work). Accord­ing to the EEOC’s 2017 EEO‑1 User Guide (see page 132), employ­ers must still sub­mit an EEO‑1 report under the address of the client site for those employ­ees, as opposed to the employer’s own address.

See How to File an EEO‑1 Report

IRS Updates Withholding Calculator and Releases New Form W‑4

On Feb­ru­ary 28, 2018, the fed­er­al Inter­nal Rev­enue Ser­vice (IRS) released an updat­ed With­hold­ing Cal­cu­la­tor and a new ver­sion of Form W‑4 fol­low­ing pas­sage of the Tax Cuts and Jobs Act in December.

The Tax Cuts and Jobs Act made changes to the tax law, includ­ing increas­ing the stan­dard deduc­tion, remov­ing per­son­al exemp­tions, increas­ing the child tax cred­it, lim­it­ing or dis­con­tin­u­ing cer­tain deduc­tions, and chang­ing the tax rates and brackets.

If changes to with­hold­ing should be made, the With­hold­ing Cal­cu­la­tor gives employ­ees the infor­ma­tion they need to fill out a new Form W‑4, Employee’s With­hold­ing Allowance Cer­tifi­cate.

More infor­ma­tion is avail­able at the IRS page, With­hold­ing Cal­cu­la­tor Fre­quent­ly Asked Ques­tions.

Read the press release

NLRB Vacates Hy-Brand and Browning-Ferris Joint Employment Standard Reinstated

On Feb­ru­ary 26, 2018, the Nation­al Labor Rela­tions Board (NLRB) announced that it vacat­ed its Decem­ber 14, 2017 deci­sion in Hy-Brand Indus­tri­al Con­trac­tors regard­ing the joint employ­ment stan­dard. As a result, the Oba­ma-era, employ­ee-friend­ly joint employ­ment stan­dard estab­lished by Brown­ing-Fer­ris Indus­tries was rein­stat­ed. Under the rein­stat­ed Brown­ing-Fer­ris stan­dard, a com­pa­ny can be found to be a joint employ­er based on the poten­tial of its abil­i­ty to exer­cise con­trol over terms and con­di­tions of employ­ment, regard­less of whether the actu­al author­i­ty is exer­cised. This is an “indi­rect con­trol” stan­dard and is con­sid­ered the main fac­tor in deter­min­ing whether a joint employ­er rela­tion­ship exists, and thus lia­bil­i­ty, under the Nation­al Labor Rela­tions Act (NLRA).

Accord­ing to the NLRB, Hy-Brand was vacat­ed due a deter­mi­na­tion by the board’s des­ig­nat­ed agency ethics offi­cial that mem­ber William Emanuel is, and should have been, dis­qual­i­fied from par­tic­i­pat­ing in the Hy-Brand pro­ceed­ing. In a mem­o­ran­dum issued on Feb­ru­ary 9, 2018, the U.S. Inspec­tor Gen­er­al found that Emmanuel’s for­mer law firm was involved in the orig­i­nal Brown­ing-Fer­ris deci­sion, and sub­se­quent­ly, he should have recused him­self from the Hy-Brand decision.

Because the Board’s Deci­sion and Order in Hy-Brand has been vacat­ed, the over­rul­ing of the Board’s deci­sion in Brown­ing-Fer­ris Indus­tries, 362 NLRB No. 186 (2015), is of no force or effect.

Read the press release and order