ACA – What Now?

First and foremost, just because we had an election doesn’t mean that everything changes immediately.  The Affordable Care Act forms are still going to be required for 2016 reporting.  You do have a one month reprieve:  the forms were originally due to employees on January 31, 2017 and now they are  due on March 2, 2017.  That extra time will be helpful to employers, but perhaps even more helpful is the IRS’s change regarding penalty relief.  Originally the IRS said employers would have to show “reasonable cause” to have penalties waived for 2016 reporting.  Instead, they are extending the good faith penalty relief from 2015 reporting for another year.  Saying ” I though this would go away after the election” will probably not be considered a good faith excuse, however so you should be prepared to take the forms seriously again this year.

There are some changes for 2016 reporting. Most notable is the change to the indicator codes denoting spousal coverage.  Codes 1J and 1K have been added to indicate conditional offers of healthcare coverage to spouses.  The codes go on Part II, Line 14 of Form 1095-C.  These codes will cover situations where coverage is available to the spouse only under certain situations such as when the spouse certifies that he or she is not eligible for other group coverage through an employer or not eligible for Medicare.

The deadlines for filing with the feds remain the same.  The deadline for filing employer copies on paper is February 28, 2917.  The deadline for electronic filing is March 31, 2017.  One reason to consider getting it all done in January is that you can get a special discount if you use the Aatrix tax filing service and are ready to send out W-2’s and 1095-C’s at the same time.

 

 

HR To Do List for November

If you are in Human Resources or upper management you have a busy month ahead of you.  You are probably in the middle of Open Enrollment, you are rgetting ready for your ACA reporting in January, and now you have to get the word out to affected employees that some of them are going to be paid hourly effective December 1, 2016.  Here is a little checklist to help you with that last one.

  • Review all exempt salaried employees who earn less than $47,476 per year or $913 per week.  Determine their new hourly rate.
  • Make sure that they are set up to record time the same way the rest of your hourly employees record time.  Set them up in the timeclock and get their badges ready.
  • Be sure that the managers of the affected employees sit down with them to discuss what will be changing.
  • Don’t assume that they know the rules they will need to follow.  Spell them out in a written communication as well and have them sign an acknowledgement.

Suzanne Lucas has provided an excellent letter example for Inc. Magazine.  Take a look at her example and it will help you with a tough communication.

http://www.inc.com/suzanne-lucas/how-to-tell-your-salaried-employees-they-are-now-hourly.html

Is that Manager Exempt?

There has been a lot of discussion lately about the upcoming changes to the requirements for employees to be considered exempt from the overtime provisions of the Federal Labor Standards Act (FLSA).  While most people know that the salary level test is changing from $23,600 per year ($455 per week) to $47,476 ($913 per week) many may not understand the other requirements.  The FLSA looks at job duties as well, rather than just job titles.  We are going to focus on one of the “Duties” tests.

Perhaps one of the most abused tests is the one for Exempt Managers.  Merely assigning the job title is not enough to qualify as exempt.  The basic job duties are pretty straightforward:

Job duties are exempt Executive/Managerial if:

  1. The employee regularly supervises two or more other employees,
  2. The employee has management as the primary duty of the position.
  3. The employee has some genuine input into the job status of other employees (such as hiring, firing promotions, or assignments).

Let’s look at each of these requirements.

Supervision

This requirement means just that.  Supervision must be a regular part of the employee’s job, and must be of other employees.  Non-employees do not count.  The requirement for two or more employees refers to two or more full-time equivalent employees.  Therefore this requirement could be met by supervising 4 part-time employees working at least half the full time hours.

Management

Merely supervising the day to day duties of employees is not enough.  The employee must have management as the primary duty of the job.  In California this spelled out as being at least 50% of the employee’s work time.  Typical management duties are considered to include:

  • interviewing, selecting, and training employees;
  • setting rates of pay and hours of work;
  • maintaining production or sales records;
  • appraising productivity, handling employee grievances or complaints, or disciplining employees;
  • determining work techniques;
  • planning the work;
  • apportioning work among employees;
  • determining the types of equipment to be used in performing work, or materials needed;
  • planning budgets for work;
  • monitoring work for legal or regulatory compliance;
  • providing for safety and security of the workplace.

Input into Personnel Matters

While the employee may not be the final decision maker on personnel matters, they should be involved in make recommendations regarding hiring, firing, promotions and demotions.  Higher management may make the final approval of such recommendation.

Conclusions

What you call a position does not have any weight when it comes to the exempt classification.  Accurate job descriptions and regular review of job duties will help companies correctly classify their employees and protect them from the inevitable audits that will be occurring with the new focus on overtime.

 

ACA Penalty Relief

For this year only the IRS is granting penalty relief for employers who comply with the reporting deadlines and must later correct errors, providing the employer can demonstrate they made a good faith effort to comply with the reporting requirements for 2015.  Applicable large employers were required to give their employees forms 1095-C by March 31, 2016.  They are also required to file Forms 1094-C and 1095-C with the IRS by May 31, 2016 for paper submissions or June 30, 2016 if filing electronically.

This makes it particularly important to meet all deadlines for filing, even if you must make corrections later.  Further, this relief is for reporting year 2015 only so now is a good time to review the issues that caused problems this year and make changes.  For Employers who have Sage HRMS and either Sage HRMS Payroll or Sage 300 Payroll keeping on top of this information throughout the year is much easier with My Workforce Analyzer.  This module helps track employee eligibility throughout the year and discover issues  that may cause problems at year end.  The module uses information from the HRMS benefits and actual payroll information to generate the 1094-C and 1095-C forms.  It  integrates with Aatrix to provide an additional layer of error checking and electronic filing.  They will also mail the employee copies if you prefer.  This year they offered a package price for employers who were ready to process their W-2’s and 1095-C’s at the same time.  It is anticipated that next year all forms will be due to employees by January 31, 2017 so a package price may be worth considering.

We will continue to monitor any changes in the Affordable Care Act and how HR and Payroll information is affected.

 

 

Sage Employer Resources

Do you know about Sage Employer Resources?  If you are a Gold Business Care customer for Abra Suite or Sage HRMS you may have this benefit and not even know it.  Sage Employer Resources in a website powered by HR360.  In it you will find everything you need to deal with your employer compliance issues.  Main topics include Employee Benefits, Healthcare Reform, Human Resources, Recruitment & Hiring, Discipline & Termination, State Laws, Forms & Policies, HR Apps & Tools, Resource Center, Safety & Wellness, and HR Training.  When you sign up for your user ID and password you can login and setup your account to customize it for yourself.  For example, you can identify the states that you are most concerned about.  Then you can set up the topics for which you would like to receive Alerts.  You will receive email alerts on changes and legislation that affect the states that you work in without getting an avalanche of information that does not affect you.

In the HR Apps and Tools there are a number of interactive tools to help you analyze your company’s compliance.  For example, there is a great tool that helps you analyze your Federal Poster compliance.  Here is an excerpt:

Federal Poster Advisor

Whether your company is small or large, the U.S. Department of Labor (DOL) requires that you display a number of different posters in your workplace where employees can easily observe them. The Poster Advisor can help you identify the required posters for your company, including:

  • Fair Labor Standards and Minimum Wage
  • Equal Employment Opportunity
  • Family and Medical Leave Act
  • OSHA Job Safety and Health Protection
  • Employee Polygraph Protection Act
  • Uniformed Services Employment and Reemployment Rights Act

Based on the information you provide in response to various questions, the Poster Advisor generates a list of federal laws administered by the DOL which have poster requirements that likely apply to your business, along with links to download printable posters at no charge.

 

Need help with setting up this benefit?  Let us know. Arlie.Skory@wacptrs.com

My Workforce Analyzer

The end of the year is fast approaching and if you have not yet figured out how you are going to handle the forms required by the Affordable Care Act you have no time to lose.  These requirements are somewhat tricky because they depend on information regarding your health benefit enrollments and payroll information.  If you have a self funded health plan they require information about your employees’ enrolled dependents as well.  If you have Sage HRMS or Sage Abra Suite you are fortunate because all of the information you need resides in your current systems.  Then the Sage My Workforce Analyzer module gathers it together in easily understood dashboards to help you manage your employee eligibility information throughout the year.  At year end it produces the forms you need for your employees and the government.  It even connects to the Aatrix tax filing service to handle all the paper pushing at year end.

 

If you are stuggling to deal with employee compliance issues this may be your answer.  For more information see My Workforce Analyzer.

Overtime in the news

Just as we have all been busy trying to figure out how to deal with reporting for the Affordable Care Act, another major project for Human Resources and top management is looming.  The Obama Administration has proposed updated overtime rules that could become law as early as January 2016.  Under the current overtime rules employees making under $455 per week ($23,660/year) are automatically considered non-exempt and eligible for overtime.  For employees above this pay level the overtime classification is based on what is called the “duties test.”  The duties test is designed to determine whether a job is exempt from the overtime requirement due to classification as Executive, Administrative, Professional or Outside Sales.

Under the proposed rules changes, the compensation test would be based on a salary level equal to the 40th percentile of earnings for full-time salaried workers.  That works out to $970 per week or $50,440 annually or thereabouts for 2016.

What should you be doing?

  • Now is definitely time to review your current job classifications, especially those jobs that are paid between $23,660 and $50,000 per year.
  • Take a look at your other policies – Do you have benefits that are different for Salaried and Hourly employees?  How many employees will be affected?
  • Consider what time keeping policies will need to be changed.
  • Decide whether some salaries will need to change to maintain and exempt status.

Above all, you should pay attention to the news about the proposed overtime rule changes.  We are now in the comment period and changes could still be made.  No matter what, however, you can expect increased attention as to who should be getting overtime pay in your company.

 

 

Ask Yourself Why

Many times we get into a rut and we do the same things the same way because that is what we have been doing for as long as we can remember.  Moving to a new software platform is a great time to take a look at many of your long standing “traditions” to see if they still serve a purpose.  Ask yourself “WHY” are you doing those routine parts of your job that your new system is affecting.  Here are some of the reasons you may come up with.

  • “It was easier to do things this way when we were manual.”
    • Many times trying to emulate an old manual system is more cumbersome and less accurate than letting your new system calculate for you more often.  For example, in a manual system we might accrue vacation on a quarterly basis because it is time consuming or cumbersome.  Then we develop “work arounds” to try to be more fair to employees who lose out based on their hire date.  Allowing your system to accrue every pay period can be  automated and much fairer to employees.
  • “So-and-so in accounting needed this report for their system.”
    • Have you asked if they still need the report?  Are they still using the same system?  Are they doing things to the data you give them that you can automate in a custom report?  Does “So-an-so” still work there?  Take the time to find out what other people are doing with the information you are giving them.
  • ” I don’t know how to do it any other way.”
    • Implementing a new system is a good time to review and get trained to thoroughly understand the capabilities you now have.  That new, strange looking report might actually be better than the one it is replacing.  This is a time to take advantage of all the training that is offered to you – you are likely to find new ways of doing things that are more efficient.

You system consultant has many years of experience in a variety of past implementations.  They can be a source of information on best practices and improving work flow, as long as you are open to the new possibilities.

Written by Arlie Skory

Partner, WAC Solution Partners- Employer Solutions