FUTURE COMPLIANCE DATES
JANUARY 22, 2017: Replace Previous Form I-9 with new “Smart Form” I-9
Employers must start using the new version of the Form I-9 no later than January 22, 2017, when all previous versions will be invalid. The new Form I-9 can be downloaded, using Adobe Acrobat to open the file: Form I-9. For additional details, go to I-9 Central.
JANUARY 31, 2017: Due Date for W-2 Copies to Social Security Administration
Employers must provide all employees copies of Form W-2 reporting earnings and taxes for 2016 by January 31, 2017. Employers must also distribute Forms 1099-MISC to applicable vendors and contractors no later than January 31, 2017.
FEBRUARY 1, 2017: Post OSHA Form 300A
Employers with more than 10 employees who are not in exempted low-risk industries must post Form 300A, the annual summary of job-related injuries and illnesses, in a workplace common area from February 1 through April 30, 2017. If there were no recordable injuries or illnesses, applicable companies must still post the form with zeroes on the appropriate lines. See list of exempted industries here: Partially Exempt Industries.
FEBRUARY 28, 2017 or MARCH 31, 2017: Submit ACA Forms 1094 and 1095 to IRS
Applicable Large Employers must submit Forms 1094 and 1095 to the IRS by February 28 if submitting paper forms or March 31 if submitting electronically. If you need assistance with your ACA reporting, contact HR Service at: (855) 447-3375.
MARCH 2, 2017: ACA Forms 1095-C to Employees
Applicable Large Employers must submit Forms 1095-C to employees no later than March 2, 2017. If you need assistance creating ACA forms, contact HR Service at: (855) 447-3375.
FEDERAL COMPLIANCE UPDATES
AGE DISCRIMINATION IN EMPLOYMENT ACT EXPANDED
Under a recent Third Circuit Court ruling, the Age Discrimination in Employment Act (“ADEA”) now permits disparate impact claims by older “subgroups” of workers within the law’s protected 40-and-over class. Workers in their 50s can sue their employer under the ADEA when a policy disfavors employees over 50 years old, even if the policy at issue favors younger co-workers in their 40s.
The case, Karlo v. Pittsburgh Glass Works, LLC, involved an automotive glass manufacturer and its workforce downsizing practices. The company granted broad discretion to unit directors in selecting whom to terminate in the reduction in force (“RIF”). However, the company did not train the unit directors nor did it employ any written guidelines or policies stating why any particular employee was selected for inclusion in the RIF. This practice allegedly resulted in the termination of a disproportionate number of employees over the age of 50. The Third Circuit cited O’Connor v. Consolidated Coin Caterers Corp., where the U.S. Supreme Court held that an ADEA plaintiff can maintain a disparate treatment claim even if his replacement is also more than 40 years old since the statute prohibits discrimination because of an employee’s age.
In light of the new ruling, employers should assess whether RIF selection criteria or other seemingly neutral policies and practices have a potential adverse impact on other age-protected strata, such as those over 50 or older.
Employers also should consider training supervisors for appropriate selection criteria for a RIF, providing written guidelines for a RIF; creating a business plan for a RIF that includes documentation of the reason(s) for the reduction and the selection criteria used; and conducting a disparate impact analysis before implementing a RIF.
CHANGES TO EMPLOYMENT VERIFICATION DISCRIMINATION RULE
Effective January 18, 2017, a new Department of Justice Final Rule clarifies that treating a worker differently when requesting documents during the employment verification process, regardless of whether the intent is to harm or help, is prohibited. The Final Rule also expands the prohibition on discrimination based on national origin or citizenship beyond the I-9 process to also include the E-Verify process and onboarding.
PAYCHECK TRANSPARENCY MANDATED FOR FEDERAL CONTRACTS
Effective January 1, 2017, new paycheck transparency requirements under the “Fair Pay and Safe Workplaces” Executive Order (E.O. 13673) apply to all new federal procurement contracts and subcontracts of $500,000 or more.
Under the new requirements, covered contractors must fulfill four obligations.
- Provide a “wage statement” document for each pay period to each worker performing services under a covered contract and subcontract who is covered by the Fair Labor Standards Act, the ServiceContract Act, or the Davis-Bacon Act.
The document may be provided in electronic form if documents typically are provided to employees electronically, and if the worker can access the document through a device made available by the employer.
The document may be provided in electronic form if documents typically are provided to employees electronically, and if the worker can access the document through a device made available by the employer.
The statement must provide the worker with the following:
- total number of hours worked in the pay period;
- number of those hours that were overtime hours;
- rate of pay;
- gross pay; and
- itemized list of the specific amount of any additions made to or deductions taken from gross pay.
If the pay period is not weekly, the statement also must break out the hours worked and overtime hours to correspond to the period for which overtime is calculated and paid (typically, weekly).
- Statements for FLSA-exempt employees do not need to include hours worked if the employees are notified in writing of their exempt status, either before the work begins on a covered contract or subcontract or in the first statement issued under the covered contract or subcontract.
- The wage statement does not need to be provided to an independent contractor working under a covered contract or subcontract. However, contactors must provide each individual contractor with notice that he or she is being treated as an independent contractor. Requirements for the notice include:
- must be a written document
- must be provided at the time the independent contractor relationship is established, but must be a standalone document
- must be provided before the individual begins work on a covered contract
- must be provided for each covered contract, even if the individual has been notified of independent contractor status under other covered contracts;
- if an employee converts to independent contractor status during performance of a covered contract, the notice must be provided before the individual does any work under the contract as a contractor
- Include flow-down (under FAR 52.222-60) from prime contracts to covered subcontracts.
These requirements are not retroactive and do not apply to any existing contracts or subcontracts.
CORRECTION
In our December 2016 Legal Update, there was an error on the article, “21ST CENTURY CURES ACTENACTED WITH HRA PROVISIONS.” The article stated, “…the new provision also provides that employees that are covered by this HRA will not be eligible for subsidies for health insurance purchased under an exchange during the months that they are covered by the employer’s HRA.”
Upon further research and review of the Act, we confirmed with multiple sources that HRAs created under the “21st Century Cures Act” are indeed eligible for subsidies for health insurance purchased under an exchange.
The Department of Labor has since issued a Frequently Asked Questions document that provides clarification about the effect of the Act on HRAs. The document can be downloaded here: FAQs.
STATE-BY-STATE COMPLIANCE
CALIFORNIA
All Single-User Bathrooms Must Be Designated All-Gender
Effective March 1, 2017, AB 1732 requires all single-user toilet facilities in any business establishment, place of public accommodation, or government agency to be identified as all-gender toilet facilities.
California Employers Issuing W-2 or 1099 Must Issue Earned Income Tax Credit Notice
Effective January 1, 2017, California law AB 1847 requires employers to notify employees that they may be eligible for the California Earned Income Tax Credit (“EITC”) within one week (before or after) that the employer provides an annual wage summary such as a Form W-2 or a Form 1099 to any employee.
San Jose Ordinance
Effective March 8, 2017, San Jose employers with 36 or more employees conducting business within San Jose’s city limits must offer additional work hours to qualified existing employees before hiring new employees, subcontractors or temporary workers. The work hours do not have to be offered to existing employees if it would require an employee to work overtime or be paid at a premium rate.
Applicable employers must also display a poster describing the requirements. Employers will also have to create and retain records proving that the hours new hires are scheduled to work were first offered to existing employees.
Los Angeles Enacts “Ban the Box”
Effective January 22, 2017, the Los Angeles Fair Chance Initiative for Hiring (Ban the Box) restricts private employers with at least 10 employees from asking a job applicant about his or her criminal history until a conditional offer of employment has been made.
Four common-sense exceptions to the prohibitions are:
- an employer is required by law to run a criminal background check on an applicant to obtain information on an applicant’s conviction;
- the job sought requires the possession or use of a gun;
- a person who has been convicted of a crime is prohibited by law from holding the position sought; and
- an employer is prohibited by law from hiring an applicant who has been convicted of a crime.
Prior to taking any adverse action against an applicant with a criminal conviction, the employer must:
- perform a “written assessment” that links the specific aspects of the applicant’s criminal history with the risks inherent in the duties of the position sought.
- provide the applicant with written notification of the proposed action, a copy of the written assessment, and any other information or documentation supporting the employer’s proposed adverse action;
- wait at least five business days after the applicant is informed of the proposed adverse action before taking any adverse action or filling the employment position; and
- if the applicant provides the employer with any information or documentation pursuant to the Fair Chance Process, the employer must consider that information and perform a “written reassessment” of the proposed adverse action. If the employer still elects to take the adverse action after such reassessment, it must notify the applicant of the decision and provide the applicant with a copy of the written reassessment.
Employers must post a notice about the law in a conspicuous place at every workplace, job site, or other City location under the employer’s control and visited by applicants. In addition, a copy of the notice must be sent to the appropriate labor unions. Employers must also retain documents related to applicants’ employment applications and any written assessment and reassessment performed for three years.
The Ordinance does not apply to the City of Los Angeles or another local, state, or federal government unit.