Fall 2017 Updates

New Version of I-9 Form and Instructions
On July 17, 2017, the U.S. Citizenship and Immigration Services released a new version of Form I-9 and accompanying instructions. As of September 18th, employers must use this form, or they may be subject to penalties. While the core aspects of the form have not changed, there are minor revisions, such as the addition of an option for a Consular Report of Birth Abroad to List C, and renumbering of all List C documents except the Social Security Card. The new version of the form can be downloaded here.

Long-Term Capital Gain Tax Reform (Proposal)
There are currently tax reform plans heating up in Congress that would do away with the 0% tax rate on long-term capital gains. The proposal in the House would tax profits from stocks and other assets held for more than a year at 6%, 12.55%, or 16.5%, depending on your tax bracket. While this is below the current top rate of 23.8%, it is not as favorable as 0%. For 2017, those taxpayers who fall into the 10% and 15% tax brackets with taxable income as high as $75,900 married filing jointly qualify for the 0% long-term capital-gains rate. So if you qualify for the 0% rate, make use of it while you still can.

Federal Court Strikes Down Department of Labor’s Overtime Rule
On August 31, 2017, the U.S. District Court for the Eastern District of Texas struck down the Obama administration’s 2016 overtime rule. The rule would have expanded overtime protection for more than four million “white collar” workers including executive, administrative, and professional employees. If the law would have gone into effect, it would have essentially doubled the minimum salary for these overtime exempt employees. In the court’s decision, it held that the Department of Labor exceeded its authority by raising the salary threshold too high by doubling it. This court ruling will likely end the possibility of future litigation over the rule. The Department of Labor is still examining whether to adjust the salary level. For now, these employees will continue to qualify for an exemption from the federal minimum wage and overtime pay requirements, if they are compensated on a salary basis at a rate not less than $455 per week ($23,660 annually) and perform certain job duties, as outlined by the DOL.

NY Paid Family Leave Act Goes Into Effect January 1, 2018
On January 1, 2018, the New York Paid Family Leave Act (“PFLA”) goes into effect. The PFLA allows qualifying employees to take paid family leave for several different situations including the birth of a child, to care for a family member with a serious health condition or due to military deployment for an active duty member of the Armed Forces. All NYS employers are required to provide PFL benefits for their employees on or before January 1, 2018. Employers that are currently covered under NYS Disability Benefits through a private insurance carrier must obtain PFL coverage through the same insurance carrier. Employers that are not covered with Disability Benefits Coverage may purchase private PFL insurance coverage by getting coverage through the NYS Insurance Fund. Prior to January 1, 2018, employers should take the necessary steps to prepare for the implementation of PFLA, such as preparing to collect employee contributions, updating employee handbooks, and posting adequate notice in order to make employees aware of their rights and responsibilities under the PFLA. For more information regarding the PFLA, click here.

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New Version of I-9

New Version of I-9 Form and Instructions
On July 17, 2017, the U.S. Citizenship and Immigration Services released a new version of Form I-9 and accompanying instructions. As of September 18th, employers must use this form, or they may be subject to penalties. While the core aspects of the form have not changed, there are minor revisions, such as the addition of an option for a Consular Report of Birth Abroad to List C, and renumbering of all List C documents except the Social Security Card. The new version of the form can be downloaded here.

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New York State Paid Family Leave

NEW YORK STATE PAID FAMILY LEAVE

Described as the “nation’s strongest and most comprehensive Paid Family Leave policy,” in 2016, Governor Cuomo signed into law the New York State Paid Family Leave (PFL) program. Beginning January 1, 2018, PFL will provide New Yorkers job-protected, paid leave to bond with a new child, care for a loved one with a serious health condition or to help relieve family pressures when someone is called to active military service. Provided though New York State’s existing Disability Benefits Law (DBL), PFL will make paid family leave available for all private sector workers. The program will give eligible employees the right to a leave of absence and guaranteed reinstatement, even if they do not have federal Family and Medical Leave Act (FMLA) protection.

Employers that are covered under PFL are those that have one or more employees employed in New York on each of at least 30 days in any calendar year. Employees for a qualifying employer must meet the following minimum qualification period guidelines:

•Full-time employees (20 hours or more per week) must work at least 26 consecutive weeks at their current employer to qualify.
•Part-time employees must complete at least 175 days at their current employer to qualify.
*Currently it is unclear whether the 175-day period means work days or calendar days.

If employees have met the criteria for their given qualification period come January 1, 2018, they are eligible to file PFL claims on day 1. Under PFL qualifying employees have the right to take off for the following reasons:

•To care for a family member with a serious health condition

•To bond with a new child during the first 12 months after the child’s birth or after the placement of the child for adoption or foster care

•To handle certain obligations arising from a family member’s military service or deployment

*For purposes of PFL, a “family member” is defined as a child, parent, grandparent, grandchild, spouse or domestic partner.

PFL does not cover leave for an employee’s illness or medical condition. It is only meant for caring for a “family member” as defined above. The weekly contribution rate for PFL is currently set at 0.126% of employee’s weekly wage (capped at New York State’s current Average Weekly Wage of $1,305.92). This in turn represents a maximum contribution of $1.65 per week per employee in 2018.

The legislation also provides for a timeline indicating the increases in the amount of time off and benefits available to be phased in over the next few years. The timeline under PFL consists of the following:

Employer Obligations

1) Prior to the effective date of 1/1/18, Employers must obtain Paid Family Leave Coverage and implement a PFL program. An employer’s PFL rider will run in conjunction with company’s disability insurance policy. Employers will have the option to purchase PFL from the New York State Insurance Fund (NYSIF) or through an insured private plan. However, the legislation requires that employer’s NY DBL and PFL coverage are through the same insurer or administrator. Insurance carriers that currently provide DBL plans will be required to also offer PFL plans or withdraw from the DBL market.

2) Effective 1/1/18 employers must commence deducting and remitting the employee PFL contribution. Employers must ensure appropriate processes are implemented in commencing the payroll deduction by the mandatory start date of 1/1/18. Note: NYS PFL insurance coverage is designed to be funded through employee payroll deductions; however, employers may choose to cover the premium payments, and not deduct contributions from the employees.

3) Post a PFL Poster in plain view at the Employer’s establishments where all employees and applicants can readily see it with information about PFL, including on how to file a complaint.

4) Complete Employer portion of PFL claim forms as soon as possible to avoid delays in benefit.

5) Provide employees a written notice of their PFL rights, including on how to file a complaint.

6) Maintain the employee’s health insurance while out on PFL leave.

7) Restore the employee to the same or comparable position held by the employee prior to taking the leave.
There will be no grace period with regard to an implementation date and any employer that fails to comply with the requirements of the Paid Family Leave law is guilty of a misdemeanor and may face penalties, including fines and imprisonment.

Much attention has been drawn to the fact that employers are permitted to voluntarily early implement withholding from employees for PFL purposes beginning July 1, 2017. However, Employers do not have to implement Paid Family Leave until 1/1/18, which is when the benefit starts. This means that by January 1, 2018, all Employers must begin payroll withholding, update their employee handbooks with PFL information and be ready to administer and track paid family leave taken by their employees. Please note that the current regulations of the legislation require employers to update their employee handbooks or provide written guidance to all employees concerning employee’s rights and obligations under PFL, including information on how to file a claim.
The intention of the New York State’s Paid Family Leave Policy is for it to be primarily funded by employees. However at this time final drafts of the regulations and legislation have yet to be issued that clarify this intention. There are several elements of PFL that hope to be cleared up in near future. Once the final regulations have been released and the legislation enacted, we will update you accordingly.

What Should You Do Now?

•Employers should contact their current New York Disability Benefits carrier to learn more about adding PFL coverage and to make sure their carrier will be offering PFL and continuing to offer DBL policies.

•Employers should begin to review and revise their PTO policies, family and medical leave policies, employment agreements and employee handbooks with the help of employment counsel to ensure full compliance with all of the new PFL program’s requirements.

•If an Employer currently offers a paid family leave benefit, it should be reviewed by counsel for compliance to meet the minimum requirements of the current PFL Law.

For more information, please refer to New York State’s Paid Family Leave website:
https://www.ny.gov/programs/new-york-state-paid-family-leave

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