Just as we layer up to shield against the cold, wrap up warmly in February’s Compliance Update, and get ready to face the challenges that regulatory changes might bring.
Legislation: What’s New and What’s Next?
Canada’s WorkSafeBC
In Canada, WorkSafeBC has updated its definition of assessable earnings for workers’ compensation, applying changes retroactively from January 1, 2024. Employers should note that certain non-cash taxable benefits will now be considered assessable, affecting reports to T4 and T4a boxes. For more details, consult the WorkSafeBC online resources.
Washington D.C. Wage Transparency Act
Pending Congressional approval to be effective on June 30, 2024, Washington D.C. will require salary ranges and healthcare benefits to be included in all job postings and advertisements.
Overtime Tax Breaks
You get a break on your overtime taxes! They get a break on their overtime taxes! Everyone gets a break on their overtime taxes! Following the lead of Alabama HB 217, which went into effect on January 1, 2024, numerous states have introduced legislation that would exempt hourly employees’ overtime earnings from state income taxes, including Illinois, Missouri, Mississippi, New Jersey, South Carolina, West Virginia, and Wisconsin.
Maryland Paid Family Leave
Maryland's Paid Family Leave contributions and benefits face possible postponement. The program was passed in the 2022 General Assembly session, and changes were made to the law in 2023 that pushed the start of contributions to October 2024, with benefits commencing in January 2026. The General Assembly, however, is currently considering a bill to further delay contributions to July 1, 2025, and benefits to July 1, 2026.
California Healthcare Minimum Wages
California is incrementally increasing healthcare workers' minimum wage, affecting various healthcare facility types and sizes starting mid-2024. County-owned or affiliated healthcare facilities are required to implement the appropriate minimum wage schedules, starting January 1, 2025. Skilled nursing facilities have their own wage requirements, tied to patient care spending:
1. For large healthcare facilities (10,000+ employees) and certain dialysis clinics: The minimum wage for healthcare employees would be $23 per hour from June 1, 2024, to May 31, 2025, increasing annually until the minimum wage reaches $25 per hour.
2. For certain hospitals, rural facilities, and smaller county-affiliated facilities: The minimum wage would be $18 per hour from June 1, 2024, to May 31, 2033, increasing to $25 per hour afterward until the minimum wage reaches $25 per hour.
3. For specific clinics meeting criteria: The minimum wage would be $21 per hour from June 1, 2024, to May 31, 2026, then increasing to $25 per hour until the minimum wage reaches $25 per hour.
4. For other healthcare facilities: The minimum wage would be $21 per hour from June 1, 2024, to May 31, 2026, increasing to $23 per hour until May 31, 2028, and finally reaching $25 per hour until the minimum wage reaches $25 per hour.
California Fast Food Minimum Wage
Starting April 1, 2024, California will set the minimum wage for fast food workers at $20 per hour, a rate that exceeds the general state minimum wage of $16 per hour. Additionally, a newly established council is granted the power to further raise this wage annually by as much as 3.5%.
New York City “Workers’ Bill of Rights” Update
New York City will require the NYC Department of Consumer and Worker Protection (DCWP) to publish a "workers' bill of rights" in English and other languages on the city's website no later than March 1, 2024. By July 1, 2024, employers will be required to provide a copy of the bill of rights to all their current employees, and thereafter, to new employees on their first day of work.
Washington State – Hospital Staffing Meal and Rest Periods
Effective July 1, 2024, Washington mandates that hospital staff receive uninterrupted meal and rest breaks, barring emergent or critical clinical situations. Employees and employers can agree to combine meal and rest breaks, with provisions for revocation and payment details specified. Employers must also submit quarterly reports to the state detailing any missed breaks, with deadlines set for report submissions.
Hospital employers must also provide a quarterly report on the total meals and rest periods missed during the quarter covered by the report as well as the total number of meals and rest periods that were required during the quarter. Reports are due 30 calendar days after the conclusion of the quarter.
U.S. Federal Fast Facts
Federal Contractor Pay Equity and Transparency Requirements
On January 30, the Biden Administration proposed new regulations for pay transparency. The rules aim to stop contractors from using job applicants' pay history in employment decisions and require the disclosure of salary offers in job ads for specific roles. Public feedback on these proposals is open until April 1, 2024.
Employee Retention Credit
On January 17, 2024, chairs of the Senate Finance Committee and the House Ways and Means Committee proposed Bill H.R. 7024, Tax Relief for American Families and Workers Act of 2024. If enacted, the proposed bill would accelerate the due date for Employee Retention Credit claims for tax years 2020 and 2021 to January 31, 2024. Currently, the due dates for Employee Retention Credit claims are April 15, 2024, for tax year 2020 claims and April 15, 2025, for tax year 2021 claims.
The Employee Retention Credit under the CARES Act encouraged businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages was paid by an eligible employer whose business had been financially impacted by COVID-19 between March 13, 2020, through December 31, 2021.
U.S. Department of Labor Independent Contractor Rules
January 9 marked a turning point in the gig economy's landscape with the U.S. Department of Labor (DOL) refining the definition of independent contractors. Replacing the 2021 provisions, the DOL introduced a nuanced six-factor economic reality test, focusing on the true nature of the work relationship rather than formalities. This test scrutinizes various aspects including:
- The worker’s opportunity for profit or loss
- Investments by the worker and potential employer
- The degree of permanence of the relationship
- The nature and degree of the potential employer’s control over the work
- The extent to which the work is “integral” to the potential employer’s business
- The worker’s skill or initiative
These factors collectively determine the rightful classification between an independent contractor and an employee.
Navigating the complexities of compliance can be as challenging as weathering a winter storm, but with the right information and the February compliance update on hand, you can chart a course to clear skies.