Over the past few months, PrestigePEO has conducted compliance webinars highlighting recent and upcoming laws and regulations impacting employers. As discussed during our webinar series, the federal government has been very busy, and we have been anticipating the US Department of Labor (DOL) and the Federal Trade Commission (FTC) taking action. On Tuesday, April 23, 2024, both agencies released the following final rules:

DOL Final Overtime Rule – Effective as of July 1, 2024

The DOL released its final overtime rule, a copy of which can be found here. The final rule will increase the salary level for employees classified as bona fide executive, administrative, or professional employees exempt from overtime from $35,568/year to $43,888/year, effective July 1, 2024. The new rule also substantially increases the salary level required for highly compensated employees from $107,432/year to $132,964/year, effective July 1, 2024. The rule includes additional substantial increases, effective January 1, 2025.

The new overtime rule will apply as follows*:

*Table available at https://www.dol.gov/agencies/whd/overtime/rulemaking

We anticipate that many employers and advocacy groups will challenge this overtime rule in court, and that a federal court may stay the final rule pending the resolution of potential litigation.

FTC Final Noncompete Rule – Effective Late August 2024

The FTC released its final noncompete rule, a copy of which can be found here. The rule makes almost all existing noncompete agreements unenforceable. There is a limited exception for existing noncompetes for employees in “senior executive” positions, which are defined as those earning more than $151,164/year and who are in “policymaking” positions.

The rule also restricts employers from entering into new noncompetes, including with those who would be considered “senior executives.” The final rule will go into effect at the end of August 2024.

Just as the DOL overtime rule is likely to be challenged in the legal system, the FTC final rule is also expected to be fiercely contested in court.

PrestigePEO is here to help.

Both of these rules have a lot to unpack. PrestigePEO will host an in-depth webinar on May 1, 2024, to explain these rules and provide practical guidance for employers. We will also be keeping our clients updated on any changes or updates to these important rules.

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As previously communicated in our compliance webinar and in our monthly Insights newsletter, as of September 17, 2023, employers with four (4) or more employees must disclose the compensation range or exact compensation for both internal and external job postings on internal platforms and third-party platforms, including but not limited to, newspaper advertisements, printed flyers, social media postings, targeted emails to applicant pools, and/or job posting websites. This law applies to jobs that are physically performed in New York and to jobs that are physically performed outside of New York but report to a supervisor, office, or worksite location located in the State of New York.

The compensation range cannot be open-ended and must include either the minimum and maximum annual salary amount or the hourly range of compensation for the advertised position. Additionally, if there are multiple open positions covered under one job posting based on location or seniority of the position, the compensation range must be provided for each specific location or level of seniority.

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On September 14, 2023, the Internal Revenue Service (IRS) placed a temporary hold on their Employee Retention Tax Credit (ERTC) review process. In its press release, the IRS cited the reason for the hold as its belief that many new ERTC claims might be fraudulent. During the moratorium, the IRS will review outstanding ERTC claims more closely.

Why is the IRS placing a temporary moratorium on new ERTC requests?

During the past few years, many ERTC mills have aggressively pushed small businesses to claim credits they may not be entitled to. Specifically, the IRS has seen many improper claims by companies citing eligibility for the credit due to alleged supply chain issues.

To help businesses identify whether they should be claiming the credit, the IRS has released some new FAQs about supply chain issues and other eligibility questions, which can be found here, and the IRS created a new interactive eligibility checklist, which can be found here.

What Does This Mean for PrestigePEO Clients with Outstanding ERTC Claims?

PrestigePEO has been amending our returns on an ongoing basis over the past three years for clients requesting ERTC. We have submitted amendments for the majority of the ERTC requests we have received. PrestigePEO will continue to submit amendments for ERTC claims during this moratorium for any remaining clients who have requested the credit.

If you submitted a claim a while ago but have yet to receive your ERTC refund, please note that the IRS still had 637,000 unprocessed amendments as of September 6, 2023. The IRS has been reviewing returns and approving credits at its own pace. While the IRS has stated that its review process typically takes four months, the review can and often does take longer and, in some cases, can take well over a year.

What Do I Do If I Discover My Business Has Improperly Claimed ERTC?

Please reach out to PrestigePEO’s ERTC team by emailing them at ERTC@prestigepeo.com. The ERTC team can file an amendment correcting the overclaimed ERTC. If you have already received your ERTC refund, you can return the ERTC refund to us for us to remit back to the IRS.

What Do I Do If I Have Questions about my ERTC claim?

If you have any questions about the status of your ERTC return, please know that your request is important to us. We are responding as quickly as we can. While we often have limited information from the IRS on the status of a return under review with the IRS, you are welcome to check in with your Payroll Specialist or HRBP on the status of your ERTC claim.

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On Wednesday, August 30, 2023, the U.S. Department of Labor (DOL) issued a proposed rule that updates and revises federal regulations on exemptions from minimum wage and overtime pay requirements. The proposed rule seeks to change the salary threshold for overtime exemptions from its current rate of $684/week to $1,059/week. On an annual basis, this proposed rule would raise the federal salary base for exempt employees from $35,568/year to $55,068/year. As a result, employees who do not make at least $55,068/year would be entitled to overtime pay for any hours worked over 40 hours in the week. The DOL estimates this change will impact over 3.6 million salaried workers.

Once the DOL publishes the proposed rule in the Federal Register, the public will have 60 days to comment. The DOL will consider feedback on the proposed rule before issuing a final rule. The proposed rule will likely receive strong push-back from the business community and may also face legal challenges.

What does this potential federal law change mean for employers?

If a new federal salary base is enacted, employers wanting to claim an overtime exemption for salaried employees must offer a minimum of $55,068/year. Notably, some states already have a higher threshold for overtime-exempt employees. For example, in New York, New York City, Westchester, and Long Island employers must pay exempt employees a minimum of $58,500/year. Employers with salaried employees in other states will want to review their salary bases to plan for changes. Employers should determine (1) if they prefer to change salaried employees to non-exempt positions, which would then require overtime payments for any hours worked over 40, or (2) if they want to increase these employees’ salaries to maintain their exemption.

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In an effort to keep you informed of the latest compliance updates, below are two recent announcements regarding changes to the Form I-9 in-person verification requirement and the New Jersey unemployment compensation requirements.

Form I-9 In-Person Verification Requirement Changes

On July 25, 2023, the Department of Homeland Security published a new Form I-9 rule. Under the rule, effective August 1, 2023, the U.S. Citizenship and Immigration Services (USCIS) will allow employers to participate in an alternative verification procedure for remote employees if such employers and employees qualify to use the E-Verify platform for verification.

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Changes to the NJ Unemployment Compensation Requirements

New Jersey employers previously received a compliance alert regarding New Jersey’s new unemployment compensation filing requirements that were scheduled to take effect on July 31, 2023. The State of New Jersey has provided an update informing employers that it is delaying enforcement of the law.

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As always, please reach out to your HR Business Partner with any questions or concerns. Thank you.

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Effective July 31, 2023, New Jersey employers must comply with new unemployment filing requirements. The unemployment requirements are the following:

1. Not only must employers still give all separated employees a separation notice, BC- 10, but they must now also “immediately and simultaneously” send the notice to the NJ Department of Labor & Workforce Development’s Division of Unemployment Insurance (LWD).
2. Employers need to complete a new form that will soon be released by LWD; we will update you once it is released. This form will be used to make the determination for unemployment benefit eligibility. Then, the employer must provide this completed form to LWD when submitting Form BC-10, regardless of whether the employee decides on applying for unemployment benefits. Employers must also provide a copy of the completed form to the separated employee.

In addition, there will now be shorter turnaround times to respond to unemployment claim information requests. Therefore, if we ask you for information, please make sure to respond promptly.

Penalties

If an employer fails to timely submit the information to LWD, the employer will face either a $500 fine or a fine equal to 25% of the “amount fraudulently withheld,” whichever is greater. This law now also includes actionable offenses for failure to immediately provide information during the employee’s separation of employment.

Your Responsibilities

• Immediately notify your HR Business Partner of a termination.
• Provide the form referenced above to the separated employee, the state, and your HR Business Partner.

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Oregon has significantly increased its civil penalties for workplace safety violations. This is a tremendous change from its historically low penalties; therefore, employers must remain informed and, now more than ever, ensure compliance with the Oregon Occupational Safety and Health Administration (OSHA) regulations.

The following are the changes that are now in effect:

• The maximum penalty for a non-serious violation is $15,625 per violation.
• The penalty for serious violations, not involving death, range from $1,116 to $15,625 per violation.
• The penalty for serious violations linked to the death of an employee range from $20,000 to $50,000 per violation.
• The penalty for willful or repeat violations range from $11,162 to $156,259 per violation.
• The penalty for willful or repeated violations linked to the death of an employee is $50,000 to $250,000 for each violation.
• The penalty for not correcting violations after receiving a citation is a maximum of $15,625 per day that the violation has not been corrected.

Note that these penalties will be adjusted every year for inflation. Also, unless the business agrees to additional abatement measures, there will be no employer-size-based penalty adjustments for willful or fatality-related citations.

In addition, the Director of the Department of Consumer and Business Services (DCBS) can conduct comprehensive inspections in any workplace. There must be a comprehensive inspection when there is evidence from an accident investigation that a violation caused or contributed to a work-related fatality and if three or more willful or repeated violations occurred within one year.

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As a PrestigePEO benefits recipient, you are entitled to receive a copy of the annual benefits Form 5500. This form is used to report our plan’s financial condition, qualifications, operations, and investments to the federal government U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS). The form aims to ensure agencies that we protect participants’ rights and manage benefits according to prescribed regulations.

The Summary Annual Report (SAR) contains:

• Administrative fees paid from plan assets
• Distributions paid to participants and beneficiaries
• The total value of the plan
• Each participant’s right to request a full copy of Form 5500

Please click below to download the 2021-2022 SAR. If you have any questions or concerns about the SAR, please contact our benefits department at (866) 521-5953.

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The California Attorney General (AG) announced that his office will conduct an investigative sweep to ensure businesses comply with the California Consumer Privacy Act (CCPA) requirements. The California Consumer Privacy Act (CCPA) is a state statute intended to enhance privacy rights and consumer protection for residents of the state of California in the United States.

Although the enforcement date of the CCPA has been delayed, it is still essential that all businesses subject to the CCPA remain compliant. As part of the investigative sweep, the AG stated that his office will send inquiry letters to large California employers and scrutinize the employers’ responses. While it is unlikely your business will be contacted by the state as part of this investigation, if you receive a letter from the AG’s office as part of this investigative sweep, please notify your HR Business Partner to discuss the next steps.

By now, you should have received the CCPA Addendum from PrestigePEO. If you have not signed it, please do so in furtherance of our mutual compliance efforts.

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As of July 1, 2023, the state of Washington requires that employers collect employee premiums to fund the Washington Cares Fund, a long-term care insurance. All Washington employees, regardless of their employer’s size or location, are required to make contributions via payroll tax. Employee contributions, also referred to as premium payments, will be 0.58% of an employee’s gross wages. Employers do not contribute to this fund. Benefits become available to workers on July 1, 2026.

Employee Exemptions

Employees may choose to apply for an exemption from the WA Cares Fund through the Employment Security Department (ESD). If their exemption is approved, then they must promptly notify their employer and provide a copy of their approval letter. The approval letter will state the date the exemption takes effect so that they do not continue paying premiums.

Please note that employees that had long-term care insurance before Nov 1, 2021, were eligible to apply to the ESD for an exemption from the WA Cares Fund until Dec. 31, 2022.

These exemptions are still valid. It is the employee’s responsibility to provide their employer with an approval letter for the exemption.

Your Responsibilities

As part of your client relationship with PrestigePEO, we will be applying the required payroll deductions. It is your responsibility to immediately notify your HR Business Partner whenever an employee provides you with an exemption approval letter from the EDS so that we can apply the exemption accordingly. Also, please make sure to keep the approval letter copy on file.

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As a follow-up to our May Insights newsletter, the NYC Local Law 144 of 2021 which regulates the use of automated employment decision tools (AEDTs) to screen candidates for employment and promotion decisions is scheduled for enforcement on July 5th, 2023. The purpose of this law is to prevent discrimination in the selection process by regulating the use of automated employment decision tools (AEDTs) to screen candidates for hiring or promotion.

Who must comply?

All employers using an AEDT for a position located in New York City must comply with this law. If the position is remote, but the employer has one office in NYC, then the employer must also comply. If the position is remote, but the employer has offices in NYC, and outside NYC, then there needs to be a fact-specific analysis on which office the remote worker will be performing work for and whether the worker would ever have to visit an office location.

How do you ensure compliance?

If you use AEDTs, you must comply with the following:

• Bias Audit
  • Employers must hire an independent auditor to conduct a bias audit on the AEDT. The auditor may not have a prior connection to the employer, AEDT, or vendor. Employers should not use or continue to use an AEDT if it’s been more than 1 year since its last bias audit.
  • If the AEDT is used to select candidates for employment or promotion, the bias audit must calculate how this tool impacts individuals in each EEO category. The bias audit must at least calculate (1) the selection rate of each category and (2) the impact ratio for each category. These calculations must apply to the following categories: sex, race/ethnicity, and intersectional categories of sex, ethnicity, and race (e.g., African American femalecandidates).
  • If the AEDT is classifying individuals for employment or promotion into specific groups (e.g., leadership styles), then employers must ensure that the calculations mentioned above are applied to each classification group. The audit must also include the number of individuals the AEDT assessed that were not included in the calculations due to falling within an unknown category.
  • If the AEDT scores job candidates or employees considered for promotion, the bias audit must at least calculate (1) the medium score for the full sample of individuals, (2) the scoring rate for individuals in each category, and (3) the impact ratio for each category. These calculations must apply to the following categories: sex, race/ethnicity, and intersectional categories of sex, ethnicity, and race (e.g., African American female candidates). The audit must also include the number of individuals the AEDT assessed that were not included in the calculations due to falling within an unknown category.
• Publish Results
  • Prior to the use of an AEDT, employers must post, in a conspicuous manner on the employment section of their website, the date of the last bias audit, with the summary of the results and the distribution date of the AEDT.
• Advance Notice to Candidates & Employees
  • Ten business days before the use of the AEDT, employers must notify candidates considered for employment or promotion of the use of the tool; what job qualifications and characteristics the tool will be analyzing; and the employer’s data retention policy, the type of data it collects, and the source of the data.
• Offer an Alternative
  • The employer must give the opportunity for candidates to request an alternative selection process, as well as an opportunity for those with a disability to request a reasonable accommodation.

Enforcement and violations of Local Law 144 are costly.

Failure to comply with this law results in a civil penalty of $375 for the first violation. For any subsequent violation, there is a civil penalty of at least $500 and no more than $1,500.

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The Chicago Human Rights Ordinance provides that all employees complete the yearly Sexual Harassment Prevention & Bystander Intervention training by June 30, 2023. The City of Chicago’s sexual harassment laws require employers with 1 or more employees working in the city of Chicago to provide Sexual Harassment and Bystander Intervention training to its employees. The following are the training requirements:

1. Non-supervisory employees must complete 1 hour of Sexual Harassment training per year;
2. Supervisors must complete 2 hours of Sexual Harassment training per year; and
3. All employees must complete 1 hour of Bystander Intervention training per year.

Along with other requirements, employers must post a written notice in a conspicuous place that states the city’s prohibition of sexual harassment. The city notice is included with the federal and state posters provided by PrestigePEO.

Failure to comply with the law’s requirements may result in fines from $500 – $1,000 per day.

You may visit the city’s website for more information on Chicago’s Human Rights Ordinance.

Need Access to Sexual Harassment & Bystander Intervention Trainings?

PrestigePEO provides these trainings through BLR, our trusted learning management tool. For questions regarding employee login and training access, please contact your HR Business Partner.

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This is your friendly reminder to review the minimum wage requirements listed by state in the chart below. Some updates will take effect in the next few weeks and months that will require payroll updates if you have employees working in those places.

For quick reference:

• Connecticut will increase to $15/hr on 6/1/2023
• Nevada (No Health Benefits Offered) will increase to $11.25/hr on 7/1/2023
• Nevada (Health Benefits offered) will increase to $10.25/hr on 7/1/2023
• Puerto Rico will increase to $9.50/hr on 7/1/2023
• Florida will increase to $12.00/hr on 9/30/2023

CLICK HERE

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Effective July 1, 2023, private employers operating in Florida with 25 or more employees must use E-Verify during their onboarding process. Previously, the E-Verify requirement only applied to public employers, contractors, and subcontractors, while private employers were required to either comply with Form I-9 requirements or use E-Verify.

What is E-Verify?

E-Verify is a digital employment eligibility tool that verifies if the newly hired employee is authorized to work in the United States.

To Whom Does This Law Apply?

This requirement applies to Florida private employers with 25 or more employees. Employers with less than 25 employees are encouraged to use E-Verify but are not required to do so. Employers are not required to utilize E-Verify on independent contractors since they are not considered employees.

Moving Forward: What Are Employers Required to Do?

Florida private employers should update their onboarding process, if necessary, to incorporate the new E-Verify requirement in conjunction with Form I-9 in anticipation of the July 1, 2023, deadline. Employers must verify employment eligibility within three business days of the new hire’s start date.

Record-Keeping Requirements and Certification

Employers must maintain a copy of the documentation provided for Form I-9 and E-Verify and any official verification for three years after the employee’s start date.

Penalties

Beginning July 1, 2024, if the Florida Department of Economic Opportunity (DEO) finds that an employer has knowingly hired someone who is not authorized and did not verify the employee’s employment eligibility, the DEO can impose civil penalties on the employer, including the repayment of any economic development incentive and the DEO will put the employer on probation for one year, requiring the employer to demonstrate compliance every quarter. In addition, if another violation occurs within 24 months, the DEO is authorized to suspend or revoke all Florida-issued licenses.

Additionally, if the DEO finds that an employer failed to use the E-Verify system, it will notify the employer and give them 30 days to rectify the non-compliance. If the DEO finds that the employer has not used the E-Verify system 3 times within a 24-month period, the DEO can fine the employer $1,000 per day until the employer provides proof that it has rectified the non-compliance.

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The purpose of this communication is to give you a summary of the 2023 due dates for the 2022 Occupational Safety and Health Administration (OSHA) record-keeping. Please note that if your company is required to comply with the OSHA record-keeping guidelines,

PrestigePEO will provide a separate email with detailed instructions and forms. If you don’t receive another email regarding OSHA from PrestigePEO, your company is exempt from filing.

Additionally, please remember to report all workplace injuries immediately to PrestigePEO. ALL employers are expected to contact OSHA within business hours in the event of the following:

1. Any time there is a work-related death: any death must be reported to OSHA within 8 hours.
2. In-patient hospitalization: hospitalizations must be reported to OSHA within 24 hours.
3. Amputation or loss of an eye: loss of a limb or eye must be reported to OSHA within 24 hours.

Failure to comply can lead to serious consequences, including fines. Please click on the following link for more information regarding severe injury reporting: OSHA Fatality and Severe Injury Reporting Link and FAQs

OSHA record-keeping guidelines: https://www.osha.gov/recordkeeping

OSHA record-keeping is required for employers with 11 or more employees at any time during the prior calendar year unless the employer’s industry code is listed on the Partial Exempt List. (OSHA 300a Posting by February 1, 2023). Please click on the following link for the list of partially exempt industries: https://www.osha.gov/recordkeeping/presentations/exempttable.

If you are an employer with 20 – 249 employees (in certain industries), or an employer with 250 employees or more in ANY industry, you are required to annually file the OSHA 300a electronically by March 2, 2023. Please click on the following link for the list of industries with mandatory electronic reporting:O SHA Electronic Submission 20 to 249 employees industry list

If you have any further questions, please feel free to email me at philbert@prestigepeo.com or call me direct at 917-789-5036.

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Effective January 31, 2023, the Arizona Department of Revenue is requiring all employees to submit a revised Form A-4. Arizona law requires your employer to withhold Arizona income tax from your wages for work done in Arizona. The amount withheld is applied to your Arizona income tax due when you file your tax return. The amount withheld is a percentage of your gross taxable wages from every paycheck. Employees may also withhold an extra amount from each paycheck if they wish using Form A-4.

Complete this form in PrestigePRO to select a percentage and any extra amount to be withheld from each paycheck. An example of what this form looks like is above. Once you log in to PrestigePRO, look at the column on the left and expand the section under “Taxes.” From there, click “Tax Withholding” to complete Form A-4.

If this form is not completed by January 31, 2023, PrestigePEO will be required to withhold Arizona state income tax at the default rate of 2%.

For frequently asked questions, visit the Arizona Department of Revenue website, or contact your Payroll Specialist.

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As your PEO, we are always here to fully support all of your HR needs, including compliance. In order to maintain proper workplace compliance, we want to make sure you are aware of your legal responsibility to have all workplace compliance posters or labor law postings visible and/or accessible to each of your employees. Regardless of whether they are in office or telecommuting, it is imperative that your staff can review the federal and state information available on these posters at any time.

Traditionally, these posters have been posted in a public forum inside offices nationwide, often in a break area that all employees have access to. They contain such information as the Whistleblower Protection Law, Minimum Wage notices, and other items like FMLA and FLSA.

In addition to the physical workplace posters, digital poster copies are available to access via the PrestigePRO employee portal. Please share this information with your employees to ensure they are aware of how they can review and/or access them at any time. By providing this information to your staff, you are fulfilling your legal requirement to make them aware of the information in these posters.

How employees can access current state and federal labor law posters:

1. Log in to the PrestigePRO employee portal.
2. Scroll down on the left-hand sidebar and click on “Federal/State Posting Notices”.
3. This will bring you to a new page titled “Employee Poster Viewing Center”.
4. Click on the dropdown box beneath this heading and select the state from which you
5. physically work.
6. Once you select your state, you’ll see the following options:
7. State
8. Federal
9. Local (if applicable)
10. Click through your options to review each notice and download the files if you wish
11. to keep them as references.

In addition, any newly hired employees will automatically receive an email notification when they start regarding compliance posters with directions on how to access them in their PrestigePRO employee portal.

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