Government regulations will continue to have an impact on employee benefits in 2016, and employers, HR staff, and benefits administrators need to pay attention to the following issues.
The Affordable Care Act
Employers got small relief from ACA pressures on December 28, 2015 when the IRS extended reporting deadlines for the 2015 tax year. Businesses now have until March 31, 2016 to deliver the 2015 Forms 1095-C to affected employees and until May 31, 2016 to manually file the 2015 Forms 1094-C and 1095-C with the IRS.
Employers should be prepared to take immediate action to comply with the Department of Labor’s Highly Compensated Employee exemption and annual indexing of applicable salary thresholds when final rules are released this spring. Revised salary thresholds for federal overtime regulations for Executive, Professional and Administrative white collar exemptions were released in June 2015 with the DOL proposed Overtime Rule.
Minimum wage increases, equal pay laws, and paid sick time laws put in place in recent years mean employers have to adjust pay practices, such as the minimum wage increase for fast food workers in New York and the strictest equal pay law in the country for employers in California. Oregon, Washington, New Jersey, and Maryland mean employers have to implement new paid sick leave policies and comply with mandatory notice and recordkeeping requirements in 2016.
Federal requirements for filing W-2 forms will change for tax year 2016, with forms due to the federal government by January 31, 2017. This means less time to prepare and file year-end payroll tax records and employers have to prepare to comply.
Workers Compensation and OSHA
The Occupational Safety and Health Administration (OSHA) implemented new injury and illness recordkeeping and reporting rules in 2015 to better prevent fatalities and serious work-related injuries and illnesses. Additionally, Congress is considering Federal intercession for worker’s compensation insurance for worker protection. Employers will need to understand and monitor their responsibilities for OSHA reporting and any changes in worker’s compensation administration.
In 2016, the Department of Labor is expected to release a final rule on the proposed fiduciary rule that will reduce or eliminate conflicts of interest in retirement planning advice and sales, expanding the types of retirement advice covered by fiduciary protections. States could require employers who don’t provide 401(k) or other retirement plans to direct employees to state plans. This means employers have to pay attention to new requirements and exemptions and prepare compliance efforts.
Employers have to pay strict attention to employee classification and third-party relationships because of factors like DOL enforcement of worker misclassification issues and changing economic conditions from disruptive business models like Uber and Airbnb. That includes watching state and federal agency efforts on worker classification.
Compliance with state, federal, and applicable international mandates for privacy and security will become even more important in 2016 due to recently enacted and pending privacy and security laws and regulations. That means attention to minimum levels of encryption and security controls, stricter notification processes and remediation for data breaches.
Businesses that process credit card payments are facing a major shift in accountability from the October 2015 EMV standard, a global standard for credit cards with computer chip technology for fraud control. Merchants will have to install the new EMV technology and equipment or face liability for credit and debit card fraud.
Online Sales Tax
There’s a good possibility that taxation of online sales across the country will be mandated in 2016, rather than just in states where sellers have a significant physical presence. This may gain momentum in 2016 due to recent changes in Congressional leadership, including a concession by Senate Majority Leader Mitch McConnell to hold a vote on it this year.
What This Means to You
The ongoing evolution of these regulatory issues means businesses will have to pay close attention to them, learn and understand what applies to them, and know how to comply.
How PAYDAY Can Help
PAYDAY staff and HR partners stay up-to-date on all current and pending regulatory issues that affect your business and provide support, education, and information to help you understand and manage compliance. You can trust us to help you understand current and upcoming issues that affect you and your business.