Archive Monthly Archives: November 2018

November Congruity

November Congruity Q&A: What Information Should Be Included In An Employee File?

Question:
Should an employee's background check, interview notes, and benefit information be kept separate from the personnel file?

Answer:
"Yes". As a best practice, background checks and interview notes should be kept separately from the employee’s personnel file because those documents were part of the pre-employment 

process and serve a purpose that differs from ongoing employment. Other sensitive or highly-confidential benefits and personal information should also be maintained separately from the regular personnel file.

The rationale is that the personnel file is generally used by managers to review historical performance, training records, or other pertinent employee accomplishments for making employment decisions. Benefits and other confidential personal data should not be a factor in those decisions.

The personnel file generally contains the following documents:

  • Job description for the employment position and job advertisements. 
  • Offer of employment. 
  • Employment contract (if applicable). 
  • Job application. 
  • Employee’s resume. 
  • Signed employee handbook acknowledgement. 
  • Forms providing next of kin and emergency contacts. 
  • Documents acknowledging receipt and review of other employer policies, such as nondisclosure, arbitration of employment disputes, safety practices, or other company-specific rules. 
  • Performance reviews and other performance-related documentation. 
  • Certifications, training taken, awards, etc.

Types of separate confidential files:

  • Pre-employment file, including background checks, interview notes, assessment results, work samples, and other information used in the selection process. 
  • Payroll file, including Form W-4 and other payroll-related information. 
  • Benefits file, including benefits enrollment, beneficiary designations, leave of absence forms, or other confidential medical information. 
  • Forms I-9 verifying employment eligibility. 
  • Investigation files (if applicable). 
  • EEO records.

If you still have concerns about how to file documents, consider the following questions:

  • Will a supervisor or manager have access to the document?
  • ​Is the information contained in the document relevant to an employment decision?
  • Is it related to the employee’s performance, knowledge, skills, abilities, or behavior?

If the answer is "yes" to these questions, then the document likely belongs in the employee’s personnel file. If the answer is "no" to any of the questions, then it’s better to err on the side of caution and maintain the document in a confidential file.

For more information contact Congruity's team of professionals at: 844.247.4100.

IRA Limit Increase

401(k) & IRA Limits Increase for 2019

On November 1, 2018, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019 along with technical guidance in Notice 2018-83.

Highlights of Changes for 2019

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increases from $18,500 to $19,000. 

The limit on annual contributions to an Individual Retirement Arrangement (IRA), which last increased in 2013, increases from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

The income ranges for determining eligibility to make deductible contributions to traditional IRAs, to contribute to Roth IRAs, and to claim the saver’s credit all increase for 2019.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)

The phase-out ranges for 2019 are as follows:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $64,000 to $74,000, up from $63,000 to $73,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $103,000 to $123,000, up from $101,000 to $121,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000, up from $189,000 and $199,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $64,000 for married couples filing jointly, up from $63,000; $48,000 for heads of household, up from $47,250; and $32,000 for singles and married individuals filing separately, up from $31,500.

For questions, or additional information contact Team of Professionals at Congruity HR: 844.247.4100