| Special #66 - September 4, 2020 |
| | | | You’re invited to join the U.S. Department of Labor for “Advancing Compliance Solutions for Today’s Workplace, Two Years and Counting,” a summit showcasing the Department’s ongoing efforts to help employers comply with federal labor laws and inform workers about their rights through its modernized tools and employer recognition award programs. The event will take place on Monday, September 14, 2020.
Hosted by the Department’s Office of Compliance Initiatives, the event will feature conversations on the Department’s voluntary compliance assistance and award programs, including the:- Wage and Hour Division’s (WHD) Payroll Audit Independent Determination program;
- Veterans’ Employment and Training Service’s HIRE Vets Medallion Award program; and
- Office of Federal Contract Compliance Programs’ (OFCCP) Excellence in Disability Inclusion Award.
It will also highlight the Department’s innovative and modernized compliance assistance tools through a conversation with panelists from the Office of Disability Employment Policy, OFCCP, and WHD. Remarks and panel discussions will be livestreamed at dol.gov/summit.
Following a one-hour break, participants will be able to participate in virtual breakout sessions with the agency of their choice.
WHAT: Advancing Compliance Solutions for Today’s Workplace, Two Years and Counting
WHEN: Monday, September 14, 2020
Remarks and panels: 10 a.m. – 12:30 p.m. EDT
Virtual breakout sessions: 1:30 – 2:30 p.m. EDT
WHERE: dol.gov/summit
RSVP: Please register for the summit here.
Find a full schedule of the program at dol.gov/summit and register to participate in a breakout session. If you can’t join the live event, register now and we’ll let you know when the recorded webcast is available to watch at your convenience. If you have questions, please contact compliance@dol.gov
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| HR and Employment Law News |
| - Constangy.com News & Analysis: IRS issues guidance on President Trump’s payroll tax memorandum 9.2.20 - HRDive.com BRIEF - BetterUp: Resilient managers are retaining talent, reducing burnout Sept. 3, 2020- HRDive.com BRIEF - Do employers deepen gender inequity by giving moms more leave? Sept. 2, 2020- ¶47,244 New WHD opinion letters discuss exemptions, OT pay calculations, delivery driver reimbursements — AGENCY GUIDANCE, Sep. 2, 2020- Georgia Department of Public Health COVID-19 Daily Status Report
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Constangy.com News & Analysis: IRS issues guidance on President Trump’s payroll tax memorandum
By Deborah Hembree / Birmingham Office &
Graham Newsome and Jeff Thompson / Macon Office
9.2.20
On August 8, President Trump issued a memorandum directing the Secretary of the Treasury, Steven Mnuchin, to use his authority to defer certain payroll tax obligations in an effort to provide individuals with additional COVID-19 relief. The Memorandum further directed Secretary Mnuchin to issue rules and regulations pertaining to the deferral.
On Friday, the Internal Revenue Service issued Notice 2020-65, which provides some guidance in interpreting President Trump’s Memorandum. According to the IRS, the deadline for withholding, and thus the related payment of, the employee’s share of Social Security taxes (or railroad retirement taxes) on “Applicable Wages” is postponed until the first quarter of 2021.
“Applicable Wages” is defined as the wages or other compensation paid to the employee on a pay date in the fourth quarter of 2020, up to a maximum of $4,000 in a single pay period. This is based on a bi-weekly pay period, so if the employer uses a different pay period, the threshold amount for its employees’ Applicable Wages will need to be adjusted.
This is one area where the added clarity of the IRS Notice could cause headaches and confusion with payroll providers. The Notice clarifies that the deferral of payroll taxes is available only if the amount of wages or compensation for a bi-weekly pay period is less than the “threshold” amount of $4,000. Since this determination is made separately for each employee in each pay period, the deferral could be available to an employee for one pay period but not another. For example, an employee with bi-weekly pay of $3,500 in the first pay period after implementation of the deferral would be eligible for deferral of the applicable payroll taxes, but then ineligible in the next pay period when his or her bi-weekly pay increases to $4,500. This is likely to cause confusion with employers’ payroll systems, even if those systems are provided by third parties. Continued monitoring would be required.
It is important for both employers and employees to understand that the relief provided here is only a deferral of the applicable payroll tax withholding and payment to a later date. Despite mention in the President’s Memorandum of a desire to eliminate the eventual payment of any deferred payroll taxes under this guidance, the IRS Notice does not provide for any tax forgiveness. Instead, the deferred withholding from the fourth quarter of 2020 must be withheld and paid on a pro rata basis from wages and compensation paid in the first quarter of 2021. Interest and penalties will begin to accrue on May 1, 2021, for any deferred amounts that are not paid by the end of the first quarter of 2021. This means that employees who may see additional monies in their paychecks in the fourth quarter of 2020 because applicable withholdings are not made will in turn see less in their paychecks in the first quarter of 2021, when employers withhold both the deferred and current payroll taxes.
The deferral of payroll tax withholding until the first quarter of 2021 also raises the question of what happens when an employee whose withholdings were deferred terminates employment before the deferred amounts can be later withheld and paid. Unfortunately, the IRS Notice does not provide guidance for employers whose employees’ withholding was deferred in the last quarter of 2020 and who are on unpaid leaves of absence, terminate employment, or otherwise do not have enough wages to “repay” the deferred amounts in the first quarter of 2021. The IRS Notice does provide that employers may make arrangements to “otherwise” collect the deferred amounts from the affected employees, but there is no specific guidance as to how an employer should go about collecting the deferred amounts from its employees.
Perhaps the most important item to be gleaned from the IRS Notice is that the Notice does not expressly require an employer to defer the payment of employee payroll taxes. Employers were hopeful that the IRS would specifically address whether deferral was required, in light of the language in the Presidential Memorandum that the deferral “shall” be made available to applicable employees. Instead, employers are left to interpret the intent of the IRS. Some commentators have said that deferral is not required based on Secretary Mnuchin’s unofficial media comments that the IRS cannot “force” employers to defer withholdings, as well as language in the IRS press release accompanying its Notice indicating that employers are “allowed” to defer withholding and payment of the applicable payroll taxes. The IRS press release indicating that relief is “available” to employers and its Notice indicating that those employers who are otherwise required to withhold and pay the employee share of the applicable taxes are the ones to whom the relief is made available read as though the deferral of payroll taxes is optional on the part of the employer. In addition, the IRS Notice does not indicate that any penalties will be imposed against employers who choose not to defer withholding of the applicable payroll taxes. Additional guidance in this area would certainly be welcome.
Questions abound as to how employers will implement this new IRS guidance. If employers defer withholdings for one employee, must they do it for all employees? Can employees opt in or opt out of having withholdings deferred? At this point, it appears that much of that decision-making will have to be done by the employer and its payroll provider. We hope that the IRS will issue more guidance related to the Presidential Memorandum in the near future.
For a printer-friendly copy, click here.
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| | | HRDive.com BRIEF
BetterUp: Resilient managers are retaining talent, reducing burnout
AUTHOR Aman Kidwai PUBLISHED Sept. 3, 2020
Dive Brief:
- Developing resilience within a company can pay off in the form of revenue growth driven by increased innovation and engagement, according to a study by BetterUp.
- The direct reports of highly resilient managers experience 52% less burnout and are 78% less likely to leave the organization. They also report 57% greater purpose in their work and more than double the levels of resilience compared to the direct reports of low-resilience leaders.
- Resilient workers are also scoring nearly 20% higher than their peers in cognitive flexibility and team creativity. They are also earning more income, more likely to be engaged in physical activity, getting better sleep and reporting higher productivity, according to the BetterUp study.
Dive Insight:
Early on in the pandemic, employers and workers were aware of the importance of resilience. In April, Udemy reported its growth mindset course, which teaches a "willingness and resilience to deal with change," grew by 231%. LinkedIn Learning also saw significant growth for related courses. The BetterUp study provides evidence to the value of developing resilience internally, while also noting that it is a skill which can be learned.
In the early stages of the pandemic in the U.S., workers questioned their employers’ capacity for resilience against unprecedented challenges. In fact, 32% of employees in an Eagle Hill Consulting survey said they trusted their organizational leadership’s ability to handle the pandemic, while just 24% said their organizations have the culture for innovation to withstand the times.
Those sentiments have improved, according to more recent research. Eighty percent of respondents in a Randstad employee survey were pleased with their employer's COVID-19 response to their professional needs and 76% reported satisfaction with their employer's actions to meet personal needs as well.
Ultimately, training and development are gaining heightened importance due to the new set of skills employers need within their ranks. Usage of e-learning is on the rise significantly, according to a survey by the Association for Talent Development and, more broadly, adoption of learning technology is expected to make a rapid leap forward in response to the need to upskill today’s newly remote, distributed workforces.
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| | | | HRDive.com BRIEF
Do employers deepen gender inequity by giving moms more leave?
AUTHOR Sheryl Estrada PUBLISHED Sept. 2, 2020
Dive Brief: - Employer parental leave policies may contribute to gender inequality by favoring leave for women over men, according to a study published Aug. 6 in the Community, Work and Family journal. The research also reveals that Fortune 500 companies are leading the pack in providing paid parental leave policies. It's the first study to systematically compare parental leave policies offered by top U.S. companies, co-authors Davidson College sociology professor Gayle Kaufman and Ball State University sociology professor Richard Petts stated in the report. "When companies have gender unequal paid parental leave policies, they are signaling that mothers are the ones who should take time off while fathers are simply helpers or secondary parents, not to mention the dismissal of gay and lesbian couples," Kaufman told HR Dive in an email.
- Paid parental leave policies are common among the highest revenue companies, according to the research. About 72% of the 353 companies of which the authors obtained full data had a paid parental leave policy for employees. The authors verified through a website or confirmed by phone or email that 24 additional companies in the data set provided some form of paid parental leave. In all, 74% of Fortune 500 companies that provide information on leave provided some form of paid parental leave to employees.
- However, most Fortune 500 companies that offer paid leave tend to have longer parental leaves for mothers, according to the study. Overall, mothers on average receive 10 weeks of leave. Meanwhile, fathers, on average receive less than five weeks of leave. But fathers receive the longest average leaves in companies classified as having gender equal policies (eight weeks) and gender modified policies (nine weeks), according to the report.
Dive Insight:
As working parents make back-to-school plans deciding between in-person school and online learning options, employees seek flexibility as the relevance of paid leave policies remains at the forefront.
"Fortune 500 companies, particularly the largest companies and tech companies, are more likely to offer paid parental leave, [but] keep in mind only 18% of private industry employees have access to paid family leave," Kaufman told HR Dive. "The fact that many of the top companies in the U.S. don't offer paid parental leave is bad news for their employees."
The 500 companies that made the Fortune's 2020 list represent "two-thirds of the U.S. economy, with $14.2 trillion in revenue," according to Fortune. "Companies should absolutely invest in their employees and offering paid parental leave is one way of doing this that also tends to pay dividends for the company in terms of recruitment and retention," Kaufman said. Companies with headquarters in a state that offers paid family leave are more likely to offer paid parental leave, according to the study. "Still, part of the problem with the U.S. is the reliance on industry over government to take up employer policies that will benefit individuals, families and ultimately society," Kaufman said.
But as Fortune 500 companies decide upon paid parental leave policies, more focus may need to be placed on whether or not the policies are gender unequal, according to Kaufman. "This can result in gender inequality in carework, which often then persists past the first year," Kaufman said. "This can then, in turn, have a negative impact on women's advancement in the workplace. These policies, that are often meant to help women remain in the workplace, would be more effective if they treated all parents equally."
Amid the COVID-19 pandemic, the federal government passed an unprecedented paid leave law to accommodate the calls for social distancing. TAt companies with fewer than 500 employees, the Families First Coronavirus Response Act (FFCRA) expands was created to expand family and medical leave and guarantee paid sick leave for U.S. workers at companies with fewer than 500 employees. As the pandemic has continued, however, the limited nature of the law has required new guidance from the government. However, guidance released Aug. 27 by the U.S. Department of Labor explained that if a parent chooses online learning for a child where in-person instruction is an option, the parent may not take paid leave under FFCRA, with some exceptions.
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| ¶47,244 New WHD opinion letters discuss exemptions, OT pay calculations, delivery driver reimbursements — AGENCY GUIDANCE,
Sep. 2, 2020
from GEA HR Answers Now
The DOL’s Wage and Hour Division has issued four new opinion letters addressing FLSA compliance issues. In those August 31, 2020, opinion letters, Wage and Hour Administrator Sheryl M. Stanton discusses the retail or service establishment exemptions, reimbursement of business-related expenses for pizza delivery drivers, the learned professional exemption and highly compensated employee test, and the fluctuating workweek method of calculating overtime pay.
Retail or service establishment exemption. In opinion letter FLSA2020-11, the question is whether a private "oilfield service company" that provides waste-removal services for oilfield operators may qualify as a "retail or service establishment" eligible to claim the FLSA’s Section 7(i) exemption for certain truck drivers whom it employs. The drivers, who were paid solely on commission basis, were paid 27 percent of the total revenue received for each truck drive—no matter how many hours are worked per week. Drivers worked about 60 hours per week in five 12-hour shifts per week. Their regular pay exceeded one-and-a-half times the federal minimum wage.
Here, the Administrator concluded that provided the employer’s waste removal services were not different from general waste removal services provided to the public and that its services were recognized as retail within the waste-removal industry, the oilfield service company may qualify as a "retail or service establishment" to claim the exemption.
Delivery driver vehicle-related reimbursements. Opinion letter FLSA2020-12 considers an employer’s compliance with the FLSA’s minimum wage requirements when reimbursing pizza delivery drivers for business-related expenses incurred while using their personal vehicles during the course of their employment.
Answering several related questions, the Administrator concluded that WHD regulations permit reimbursement of a reasonable approximation of actual expenses incurred by employees for the benefit of the employer under any appropriate methodology. The IRS standard business mileage rate is not mandated under WHD regulations, but it is presumptively reasonable. Applicable regulation Section 778.217(c) states that reimbursements at the same or less than the IRS rate can qualify as reasonable per se, or that employers may use the actual or a reasonable approximation of the expense.
The WHD letter refused to approve or disapprove of any of the methods or sources the employer offered as to drivers’ vehicle expenses, noting that "to the extent that some or all of these methods may reasonable approximate actual business expenses incurred by employees under certain circumstances, they will comply with the Act. To the extent that these methods fail to reasonably approximate such expenses, they will not." Ultimately, the reasonableness depends on a "myriad of particulars." Further, reimbursement for fixed and variable vehicle expenses hinges on whether the cost at issue primarily benefits the employer—only to the extent that the employee uses the vehicle as "a tool of the trade."
Learned professional exemption, highly compensated employee test. In opinion letter FLSA2020-13, the question is whether part-time employees, who provided corporate-management training and were paid a day rate with additional hourly compensation, qualified for the learned professional exemption and the highly compensated employee test under Section 13(a)(1) of the FLSA.
Here, the Administrator concluded that the employees likely perform exempt learned professional duties. However, the employer’s payments for delivery work (presenting the educational program to clients, using interactive models that are part of the program, and evaluating participants’ results) did not satisfy the salary duties test. Further, payments for development work (creating new content and interactive models for the program) would not result in the otherwise-applicable professional exemption. Finally, the highly compensated employee test cannot be satisfied by payments proportional to the amount of work performed by a part-time employee.
Fluctuating work week overtime calculation. Opinion letter FLSA2020-14 considers whether employees’ hours must fluctuate above and below 40 hours per week to qualify for the fluctuating workweek method of calculating overtime pay. Here, the Administrator clarified that the fluctuating workweek method requires only that an employee’s work hours fluctuate from week to week, not above and below 40 hours per week. Thus, assuming all other conditions for using the fluctuating work week method are satisfied, an employee may qualify for the fluctuating work week method if their hours fluctuate only above 40 hours a week.
The Administrator also reaffirmed that employers using the fluctuating work week method may not make deductions from an employee’s pay for absences occasioned by the employee, except for occasional disciplinary deductions for willful tardiness, absences, or infractions of major workplace rules.
Official opinions. The WHD noted that an opinion letter is an official, written opinion by the WHD on how a particular law applies in specific circumstances presented by the person or entity that requested the letter. The divisions has issued 65 opinion letters since January 20, 2017.
"As businesses continue to reopen and rebuild, the Wage and Hour Division will continue to make clear the rules of the road during the economic recovery allowing workers to return to work and prosper again," Stanton said in a press release.
Source: Written by Pamela Wolf, J.D.
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Georgia Department of Public Health COVID-19 Daily Status Report: Updated 3pm daily
Update from 09/03/2020 (State of Georgia) - Confirmed Cases 274,613
- Deaths 5,795
- Hospitalizations 25,025
- ICU Admissions 4,588
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Georgia Employers' Association |
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