Payroll and Tax Updates

January 2015

Retroactive Transportation Fringe Parity Legislation Passed for 2014

On December 19, President Obama signed legislation to renew more than 50 tax breaks for the year 2014. These tax breaks include an increase in the 2014 qualified transportation and van pool fringe benefit limit.

Under the new legislation, the 2014 limit increases from $130 per month to $250 per month for 2014. This tax break is retroactive and allows taxpayers to claim the tax breaks during the 2015 filing season. The legislation does not change the 2015 limit which is currently set at $130 per month.

Employers and employees may not retroactively increase their 2014 monthly transit exclusion. However, employers who allowed employees to make after tax transportation deductions in 2014 for amounts in excess of the $130 limit (up to $250), are required to make adjustments on their quarterly and annual filings. Employers must reimburse their affected employees for the over collected FICA for all four quarters of 2014 and show the adjustments on the 4th quarter 941. Employers must also adjust Form W-2 to remove the wages from Boxes 1, 3 and 5. If the 4th quarter 941 and the W-2s have already been filed, employers should make the adjustments by filing amendments.

For more details please click here

If you have any questions regarding making the necessary adjustments, please contact you Client Services representative at BDB.


District Court Overturns U.S. DOL Home Health Agencies Overtime Ruling

On 1/14/15, the U.S. District Court for the District of Columbia struck down the DOL’s new Companionship Services/Overtime rule in a triumphant win for providers of home health care. The new rule would have defined ‘companionship services’ to be primarily “fellowship” and “protection” and would have required almost all home health care workers in NY to be paid overtime at time-and-one-half of their regular rate. The District Court ruling completely invalidates the rule, allowing for the current practices of payment for workers to remain in place indefinitely. In NY, the effect will be that all home health care workers (including non-live-in) will continue to be paid overtime at time and one half of the NY minimum wage which is $8.75, and NOT time and one half of their regular rate. BDB has been closely following the developments in this issue, and is pleased to update you on this final decision.

As always, we advise you to seek competent legal counsel regarding establishing OT pay rates. For more information visit https://medium.com/pay-matters/dol-delays-home-care-law-enforcement-b172dfe3f75e.


NY Annual Pay Rate Notices No Longer Required

On December 29, Governor Cuomo signed legislation eliminating the annual NY DOL requirement to notify and receive written acknowledgment from every worker regarding rate of pay, allowances, pay day, etc. This bill is effective for the year 2015 and all future years.

Employers are still required to provide employees with a pay rate notice at the time of hire.

BDB can keep you in compliance with our Auto Pay Rate Notice Service. Notices will automatically be sent with your payroll reports each time you hire a new employee.

To sign up please click here.

For more information on the recent legislation please click here.


Minimum Wage Updates

Federal Update

Pursuant to an Executive Order signed by President Obama earlier this year, the minimum wage for federal contractors increased to $10.10 per hour as of January 1, 2015. This applies to all employers covered by the Service Contract Act or any employer who handles concessions and services in connection with Federal property or lands. The initial scope of this Order, however, is limited; it only apply to employees employed under new and replacement federal contracts and who would otherwise make under $10.10 an hour. Contracts that were in place prior to January 1, 2015 are not affected.

The general federal minimum wage remains unchanged at $7.25 per hour.

Last Hour Colorado Increase for 2015

Effective January 1, 2015, the Colorado minimum wage increased from $8.00 to $8.23 per hour. The tipped minimum wage increased from $4.98 to $5.21 per hour.

For more information please visit https://www.colorado.gov/cdle/labor.

For a complete listing of all Federal and state minimum wage laws please click here.


IRS Publications 15, 15-A for 2015

On December 23, the IRS released the 2015 Publication 15 (Circular E), Employer’s Tax Guide, and the accompanying Publication 15-A, Employer’s Supplemental Tax Guide.

Publication 15 covers employers’ employment tax responsibilities and includes the 2015 wage bracket and percentage-method income tax withholding tables. Publication 15 also includes information about recent changes affecting employers, the Social Security tax wage base of $118,500, adjusting tax returns, and deposit rules.

The publications can be found on our website here.