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The Workers’ Benefit Fund (WBF) assessment rate that employers use in 2013 depends on whether the WBF assessment is paid quarterly or annually. For employers that report the WBF assessment quarterly, there is a change to the WBF assessment rate that went into effect April 1, 2013. The WBF assessment rate for first quarter 2013 (January – March) remains at 2.8 cents per hour, which is the same as the 2007-2012 rate. Effective April 1, 2013, the Department of Consumer & Business Services has set the WBF assessment rate at 3.3 cents per hour. The 3.3 cents-per-hour rate should be used to calculate the WBF assessment for hours paid in second quarter 2013 through the remainder of the calendar year. For agricultural and domestic employers that report the WBF assessment annually, the WBF assessment rate is 3.2 cents per hour for all of 2013. (Oregon Workers’ Benefit Fund Assessment, May, 2013.)
(Read Intelliconnect) »The Working Families Flexibility Act of 2013, HR 1406, a measure that would amend the FLSA to allow private employers to offer comp time to employees in lieu of overtime, passed the House on Wednesday, May 8.
Comp time rather than overtime pay. The bill would give private-sector employers and employees an option under the FLSA that federal, state, and local governments have had for many years. The compensatory time provisions already applicable to employees of federal, state, and local governments would not be affected. The bill would permit private-sector employers to offer their employees the option of selecting compensatory time off in lieu of receiving cash overtime wages. An employee would be able to choose, based upon an agreement with his or her employer, to have his or her overtime compensated with paid time off.
40-hour work week stays. The bill would not change the 40-hour workweek to affect the manner in which overtime is calculated. ‘‘Non-exempt’’ employees who work more than 40 hours within a seven-day period would continue to receive overtime compensation at a rate not less than one and one-half times an employee’s regular rate of pay. If an employer and an employee agree on compensatory time, then the paid time off would be granted at the rate of not less than one and onehalf hours for each hour of overtime worked.
New employee protections. New employee protections would be provided, in addition to those contained in current law, to prevent the coercive use of compensatory time. The bill requires any arrangement for the use of compensatory time to be an express mutual agreement between the employer and the employee. In the case of employees represented by a recognized or certified labor organization, the agreement must be between the employer and the labor organization. In other cases, the agreement is with an individual employee, must be entered into knowingly and voluntarily by the employee, and may not be a condition of employment.
Eligibility. To be eligible to choose compensatory time, an employee must have worked at least 1,000 hours in a period of continuous employment with the employer during the 12-month period preceding the date the employee agrees to receive or receives compensatory time. An agreement for the use of compensatory time between an individual employee and his or her employer must be affirmed by a written or otherwise verifiable statement. The agreement must be made, kept, and preserved in accordance with the recordkeeping requirements under Section 11(c) of the Fair Labor Standards Act (FLSA).
160 hours could be accrued. An employee could accrue up to 160 hours of compensatory time each year. Any accrued compensatory time that has not been used by the employee by the end of each year (or an alternative 12- month period as designated by the employer) must be paid for by the employer to the employee in the form of monetary compensation. Likewise, any unused accrued compensatory time would be cashed out at the end of an employee’s employment with the employer, whether voluntary or involuntary. At any time, an employee may also submit a written request to receive monetary compensation for accrued compensatory time. In all cases, the compensatory time would be cashed out at either the regular rate received by the employee when the compensatory time was earned or at the final regular rate received by the employee, whichever is higher. An employee may submit a written request to withdraw from a compensatory time agreement with his or her employer at any time. Within 30 days of receiving such a request, the employer shall provide the employee with monetary compensation for the accrued compensatory time.
30 day notice required. A private-sector employer must provide an employee with 30 days’ notice prior to cashing out an employee’s accrued compensatory time. However, an employer may only cash out compensatory time accrued by an employee in excess of 80 hours, unless the cash out is employee-initiated. A private-sector employer must also provide employees with 30 days’ notice prior to discontinuing a policy of offering compensatory time to employees.
Comp time equals wages. Any accrued compensatory time would be considered to be the same as wages owed to the employee. For the purposes of enforcement, as with any other violation of the FLSA, all of the remedies under the law would apply. In addition, any employer who directly or indirectly intimidates, threatens, or coerces any employee into selecting compensatory time off in lieu of cash compensation, or who forces an employee to use accrued compensatory time would be liable to the employee for the cash value of the accrued compensatory time, plus an additional equal amount as liquidated damages, reduced by the amount of compensatory time already used by the employee.
Sunset provision. The bill contains a sunset provision whereby the legislation would cease to exist five years after the date of its enactment. This will allow Congress to review the use of compensatory time by private-sector employers and employees and, if need be, to make adjustments in the legislation authorizing its use.
(Read Intelliconnect) »An employer’s cash payments to an employee in lieu of health benefits was included in the employee’s gross income. The payments were regular wages reported on a Form W-2, even though the health benefits themselves may have been excluded from gross income. A payment that was subject to taxation was not rendered exempt from tax because it was made in lieu of an obligation that, had it been paid, would not have been taxed. (IRS Letter Ruling 201319015, May 15, 2013.)
(Read Intelliconnect) »The IRS has published final regulations on procedures for obtaining an employer identification number (EIN). Under the previous procedure, EIN applications often authorized an individual (a "nominee") to act on the applicant's behalf for purposes of obtaining the EIN. The nominee's authority, however, was often temporary and did not last beyond the application process. As a result, the IRS has revised the EIN application form, Form SS-4, to require disclosure of the EIN applicant's "responsible party" and that party's identifying number. The identifying number refers to the party who has control over the business, whether that be a corporate principal officer, a general partner, or the owner of a disregarded entity.
Regs become applicable on January 1, 2014
Under the final amendments to regulations under IRC Sec. 6109, any individual issued an EIN must provide the IRS with updated information in the manner specified by the agency, including the name and taxpayer identification number of the responsible party. The updated regulations became effective on May 6, 2013, but are applicable as of January 1, 2014, so that the IRS may publish the relevant form and instructions in advance of the applicability date (78 Fed. Reg. 26244, May 6, 2013). See ¶15,134C.
(Read Intelliconnect) »
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