September HR Updates
Payroll Tax Holiday
The payroll tax cut issued through an executive memorandum begins on September 1, 2020, until December 31, 2020. It is a temporary payroll tax cut to the Social Security tax of 6.2%.
The payroll tax cut applies to individual employees who earn less than $4000 before taxes, during any bi-weekly paycheck period. This equals $104,000 per year for a salaried employee.
Employers will be responsible to pay the deferred payroll tax between January 1, 2021, and April 30, 2021. This means eligible employees may have higher paychecks for the remainder of this calendar year but their paycheck will be lower from January 1, 2021 through April 30, 2021. This is because employers will deduct the normal payroll taxes but will also withhold the payroll tax that was deferred in 2020. There will not be any penalties for the delay in paying the tax so you can think of it as an interest-free loan.
Employers are not required to participate in the payroll tax holiday and there are currently no penalties associated with non-participation. This may or may not change in the future so it is a good idea to keep an eye on this.
The IRS has issued some guidance on the payroll tax holiday however, we are hoping they will release more information in the near future as there are still some questions that need to be answered. For example, one question that is not currently addressed in the IRS guidelines is if an employee makes less than $4000 in a bi-weekly pay period but then makes more than $4000 in the next bi-weekly pay period.
Newly Updated FMLA Forms
The Federal DOL has issued updated FMLA forms including the Notice of Eligibility & Responsibilities, Designation Notice and Medical Certification Forms. To obtain a copy of these forms, visit our SDHR Consulting HR Toolbox and review the resources under ‘Leaves”.
As a reminder, California employers are not allowed to use any forms or documents where diagnosis for the employee’s condition is requested from the employee or their healthcare provider.
To ensure you are providing the required leaves as well as have the proper forms and processes for your company and your State, contact SDHRC and we will ensure you stay compliant!
California Legislature Watch
As those of us who practice HR in California know, the CA State Legislature always has a lot going on! The California Constitution requires that most legislative business in the second year of a two-year session be concluded before the first day of September. There are currently many pieces of legislation being considered and we may not see them again until next year but we are keeping track of them in case they appear sooner.
Due to the high volume of bills in consideration, it can be a challenge to keep track of it all but we are here to help so you can be sure not to miss anything important.
The current bills that have been sent to the governor for signature this week are:
AB979 – Diversity on Boards of Directors
AB979 would require publicly held companies headquartered in California to have at least one director from an underrepresented community by the end of 2021. The bill is modeled on the 2018 law that requires a minimum number of women on corporate boards.
The legislation would require corporate boards to include at least one board member who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiin, Alaska Native or as gay, lesbian, bisexual or transgender.
By the end of 2022, corporate boards would also be required to include a minimum of three directors from underrepresented communities if the board has nine members or more. If a board has five to nine members, it must have at least two directors from underrepresented communities.
AB2992 – Crime Victim Rights
AB 2992 proposes to expand the rights of employees who are crime victims to take time off from work. Currently, an employee can take unscheduled time off from work, if the employee provides written documentation of the need for leave in the form of a police report, court order, or medical note. The bill proposes to allow the time off where the employee provides his or her own written statement certifying the basis for the time off.
We have also listed some of the other important bills being considered. They have not been passed into law but we are keeping an eye on them for you!
Updates to AB5 – Independent Contractors
As we mentioned in our last newsletter, the CA Legislature has been very active with reviewing bills that would make updates to AB5. Most of these would expand the list of occupations a company can consider to be an independent contractor. Others are designed to change worker classifications in California. For example, one of the bills introduced would repeal AB5 and replace it with a looser standard. Another bill would add a third classification of ‘independent workers’ for those who voluntarily choose it and would include some basic rights and protections such as minimum wage and occupational accident coverage.
Uber and Lyft had announced they would suspend operations in California based on a preliminary injunction requiring the companies to reclassify their CA drivers as employees within 10 days. However, they were able to secure a temporary stay of this order through the appeals court. The court gave the company’s time to come up with plans for how they would comply with the law.
Several gig-economy companies have sponsored a ballot measure, Proposition 22, to establish a separate category of workers that would be eligible for certain minimum compensation and benefits. The ballot measure received the required signatures and will appear on this November’s ballot.
AB 5 remains an ever-evolving part of employment law companies need to ensure they understand, as misclassification can cause major fines and headaches for the employer. SDHRC can help audit your employee and independent contractor statuses’ and ensure you are compliant and up to date on the most current legislation around this.
SB729 – Meal and Rest Breaks: Remote Work
The CA Senate is considering a bill that could be advantageous to employers during a time when a lot of employees have been working from home. It would prohibit an employee from recovering civil penalties from an employer under the Private Attorneys General Act of 2004 for violations of the provisions requiring the employer to provide meal and rest breaks if the employee engaged in remote work. All these conditions would need to apply:
- On or after March 19, 2020, for reasons related to the COVID-19 pandemic, the employee began to work from home at the employer’s direction or in agreement with the employer.
- The alleged violations occurred between March 19, 2020, and December 31, 2022, and are for meal or rest breaks the employer failed to provide to an employee while that employee was working for the employer from home.
- The employee does not reside on property owned by the employer or provided by the employer to the employee.
SB1383 – Expansion of CFRA
A bill is pending seeking to amend the California Family Rights Act (FCRA). SB1383 would expand CFRA to small employers with five or more employees. Currently, CFRA applies to employers with 50 or more employees within a 75-mile radius. It would also expand to cover leaves for care for domestic partners, grandparents, grandchildren, siblings and parents-in-law.
It would also add military exigency leave related to the covered active duty or call to active duty of an employee’s spouse, domestic partner, child or parent in the Armed Forces of the United States. The proposed coverage is similar to leave currently provided by the Federal FMLA.
At times, these ever-changing regulations and changes to legislation may seem daunting, but rest assured in knowing you have a trusted HR partner on your side. We are here to keep you informed and in compliance every step of the way.
Contact us today to learn more about our services and get a free consultation.
About the Author
Traci Hagan, “Treasure Trove”
Traci is an HR Consultant who has been with SDHRC for over 2 years but has over 32 years of experience in employee relations, conflict resolution benefits administration, training and development, workers’ comp and staffing! Traci is also a Professor who enjoys traveling and spending time with her 16-year-old “puppy”.