The Internal Revenue Service has released a final Form W-4 for use in 2020. A significant change for the 2020 form is that it does not have withholding allowances because employees may no longer claim personal exemptions or dependency exemptions. Previously, the value of a withholding allowance was tied to the amount of the personal exemption.
For the new form, the following five steps (as opposed to allowances) are completed by the employee to determine their withholding:
Step 1: Personal information (including marital status).
Step 2: Multiple jobs (employee), or whether the employee's spouse works. This step is completed if the employee holds more than one job at a time or is married filing jointly and their spouse also works. The correct amount of withholding depends on income earned from all of these jobs.
Steps 3 and 4: Claim dependents and (optional) other adjustments (specifically (a) other income that is not from jobs, (b) deductions, and (c) extra withholding). Steps 3 and 4(b) are completed on Form W-4 for only one job, and these steps are left blank for the other jobs. (Withholding is most accurate if an employee completes Steps 3 and 4(b) on the Form W-4 for the highest paying job.)
Step 5: Employee signature and date (signifying that all information is true and accurate under penalty of perjury).
Publication 15-T (still in draft form) assists employers in determining the amount of federal income tax to withhold from their employee's wages.
Employees who have submitted Form W-4 in any year before 2020 are not required to submit a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee's most recently submitted Form W-4.
Read about the Form W-4, read FAQs about the form, and read about Publication 15-T.
For more information, contact the Congruity team of professionals at: 844.247.4100
On November 6, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-44 announcing the following limit increases for 2020:
The phase-out ranges for 2020 are as follows:
The income phase-out range for taxpayers making contributions to a Roth IRA is $124,000 to $139,000 for singles and heads of household, up from $122,000 to $137,000. For married couples filing jointly, the income phase-out range is $196,000 to $206,000, up from $193,000 to $203,000. 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 $65,000 for married couples filing jointly, up from $64,000; $48,750 for heads of household, up from $48,000; and $32,500 for singles and married individuals filing separately, up from $32,000.
Of note, the limit on annual contributions to an IRA remains at $6,000 and the additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains at $1,000.
Contact the Congruity team of professionals for more information at: 844.247.4100
On October 22, 2019, the National Safety Council (NSC) released a position/policy statement addressing cannabis impairment in safety sensitive positions and the NSC position that it is unsafe to be under the influence of cannabis while working in a safety sensitive position due to the increased risk of injury or death to the operator and others. Moreover, the NSC believes there is no level of cannabis use that is safe or acceptable for employees who work in safety sensitive positions.
The NSC is “a nonprofit organization with the mission of eliminating preventable deaths at work . . . through leadership, research, education and advocacy.”
Does your company policy adequately address cannabis use in the workplace? Contact the Congruity team of professionals for more information at: 844.247.4100
On September 24, 2019, the U.S. Department of Labor announced a final rule regarding overtime pay. The ruling updates the earnings thresholds necessary to exempt executive, administrative, and professional employees from the Fair Labor Standards Act’s minimum wage and overtime pay requirements, and also allows employers to count a portion of certain bonuses/commissions toward meeting the salary level.
In the final rule:
The final rule is effective on January 1, 2020. For more information, contact the Congruity team of professionals at: 844.247.4100.
Should we include holidays, PTO, vacation, or other leave taken during the workweek in calculating overtime premium pay under FLSA rules?
Because holiday, PTO, and vacation hours are not actually hours worked they do not count towards overtime pay.
Under the Fair Labor Standards Act (FLSA), an employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work. Unless specifically exempted, employees covered by the FLSA must receive overtime pay for hours worked in excess
of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. The key consideration for premium pay under the FLSA is whether or not the employee actually works more than 40 hours in the workweek, not just that he or she is paid for more than 40 hours in the workweek.
For example, an employee is off work for one day for a company-paid holiday and takes the next day as a paid vacation day. He then works 10 hours for the next three days of the workweek. Under the FLSA, he would be paid straight time at his regular rate for the 46 hours recorded for that week as follows: 8 hours of holiday pay + 8 hours of vacation pay + 30 hours of regular pay for time worked = 46 hours at his regular pay rate. Employers should also check state laws for overtime requirements regarding holiday and vacation time. Some states have more employee-generous overtime laws requiring premium pay for time worked; review overtime pay laws for your state; or contact the Congruity team of professionals at: 844.247.4100.
In the process of auditing I-9s, we found some I-9 forms containing incomplete or inaccurate information. What should we do?
If information on an employee’s Form I-9 is incorrect or incomplete, employers can make corrections near the incorrect or incomplete space in the employee’s existing Form I-9. The employer and employee must draw a line through the inaccurate information, write the correct information on the form using a different color pen, and finally initial and date of the correction.
Missing information should be provided, initialed, and dated, and a written explanation as to the reason for the change attached. The employer should also make a note in the file that a self-audit was completed on that date.
Make sure that the signature relates to the attestation (“I attest, under penalty of perjury ...”). If your company is audited, the examiners will want to have proof that you exhibited a good faith effort to audit your records and correct deficiencies.
For more information, contact the Congruity team of professionals at: 844.247.4100.
North Carolina, August 14, 2019 – Inc. magazine today revealed that Congruity HR, a Professional Employer Organization (“PEO”
), is No. 3969 on its annual Inc. 5000 list, the most prestigious ranking of the nation’s fastest-growing private companies. The list represents a unique look at the most successful companies within the American economy’s most dynamic segment—its independent small businesses. Microsoft, Dell, Domino’s Pizza, Pandora, Timberland, LinkedIn, Yelp, Zillow, and many other well-known names gained their first national exposure as honorees on the Inc. 5000.
“We are truly honored to be included in this year’s Inc. 5000,” said Congruity HR President Darrin Hunter. “Congruity HR operates under the simple premise that the strength of our company is our people. They are our most powerful asset; and it is our people- not our products and services - that ultimately define who we are, and how successful we’ll be in today's marketplace. Congruity HR has experienced incredible growth over the last three years, and we proudly boast a client retention rate of just under 99%. Our people are doing something right; and it shows. I couldn’t be more proud.”
Not only have the companies on the 2019 Inc. 5000 (which are listed online at Inc.com, with the top 500 companies featured in the September issue of Inc., available on newsstands August 20) been very competitive within their markets, but the list as a whole shows staggering growth compared with prior lists. The 2019 Inc. 5000 achieved an astounding three-year average growth of 454 percent, and a median rate of 157 percent. The Inc. 5000’s aggregate revenue was $237.7 billion in 2018, accounting for 1,216,308 jobs over the past three years.
Complete results of the Inc. 5000, including company profiles and an interactive database that can be sorted by industry, region, and other criteria, can be found at www.inc.com/inc5000.
“The companies on this year’s Inc. 5000 have followed so many different paths to success,” says Inc. editor in chief James Ledbetter. “There’s no single course you can follow or investment you can take that will guarantee this kind of spectacular growth. But what they have in common is persistence and seizing opportunities.”
The annual Inc. 5000 event honoring the companies on the list will be held October 10 to 12, 2019, at the JW Marriott Desert Ridge Resort and Spa in Phoenix, Arizona. As always, speakers include some of the greatest innovators and business leaders of our generation.
About Congruity HR
Founded in 2011 Congruity HR is an HR managed services company, providing comprehensive, industry-specific PEO and ASO solutions to small business owners across 38 states of operation. Unlike any provider in the marketplace, Congruity HR strives to create value for its customers by delivering a truly unique, client-centric experience that helps them accomplish their desired goals, inspires performance, engages their employees on a more personal level and fosters a positive culture. Services include: Human Resources & Compliance, Payroll & Tax Administration, Employee Benefits, Risk Management and Workers’ Compensation Insurance. For more information about Congruity HR, visit www.congruityhr.com or e-mail Chief Marketing Officer Jon Scoggins at: firstname.lastname@example.org.
About Inc. Media
Founded in 1979 and acquired in 2005 by Mansueto Ventures, Inc. is the only major brand dedicated exclusively to owners and managers of growing private companies, with the aim to deliver real solutions for today’s innovative company builders. Inc. took home the National Magazine Award for General Excellence in both 2014 and 2012. The total monthly audience reach for the brand has been growing significantly, from 2,000,000 in 2010 to more than 20,000,000 today. For more information, visit www.inc.com.
The Inc. 5000 is a list of the fastest-growing private companies in the nation. Started in 1982, this prestigious list has become the hallmark of entrepreneurial success. The Inc. 5000 Conference & Awards Ceremony is an annual event that celebrates the remarkable achievements of these companies. The event also offers informative workshops, celebrated keynote speakers, and evening functions. For more information on Inc. and the Inc. 5000 Conference, visit http://conference.inc.com/.
May an employer delay designating paid leave as FMLA leave or permit employees to expand their FMLA leave beyond the statutory 12-week entitlement?
No. According to a U.S. Department of Labor (DOL) opinion letter released March 14, 2019, an employer may not delay the designation of Family and Medical Leave Act (FMLA)-qualifying leave nor designate more than 12 weeks of leave (or 26 weeks of military caregiver leave) as FMLA leave.
Once an eligible employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline or delay FMLA protection for that leave. Employees cannot waive their rights under the FMLA and employers cannot induce them to do so. When an employer determines that the leave is for an FMLA-qualifying reason, the leave is FMLA-protected and counts toward the employee’s FMLA leave entitlement.
If an employee substitutes paid leave for unpaid FMLA leave, the employee’s paid leave counts toward and runs concurrently with their 12-week (or 26-week) FMLA entitlement and does not expand that entitlement. Specifically, the opinion letter states, “the employer may not delay designating leave as FMLA-qualifying, even if the employee would prefer that it delay the designation.”
An employer may require, or employee may elect, to substitute accrued paid leave to cover any part of the unpaid FMLA entitlement period. The opinion letter discusses the definition of “substitute” under the FMLA as meaning “that the paid leave provided by the employer runs concurrentlywith the unpaid FMLA-designated leave.” In other words, the paid leave does not take the place of FMLA-leave, rather it gives the employees an opportunity to receive payment for the leave period (because FMLA leave is unpaid).
Also, an employer is permitted to provide a leave policy that is more generous than the FMLA requires; however, it may not designate more than 12 weeks of leave (or more than 26 weeks of military caregiver leave) as FMLA-protected.
For more information about this topic, we encourage you to consult with Congruity's team of professionals at: 844.247.4100.
On May 28, 2019, the Internal Revenue Service (IRS) announced (Rev. Proc. 2019-25) the 2020 inflation-adjusted amounts for health savings accounts (HSAs) as determined under I.R.C. § 223. For calendar year 2020, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,550. For calendar year 2020, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,100.
For calendar year 2020, a high deductible health plan is a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts — but not premiums) do not exceed $6,900 for self-only coverage or $13,800 for family coverage.
The revenue procedure is effective for calendar year 2020. For more information about this topic, we encourage you to consult with Congruity's team of professionals at: 844.247.4100.
What determines if an employee falls within one of the white collar exemptions?
Under the Fair Labor Standards Act (FLSA), to qualify for exemption, a white collar employee generally must:
Certain white collar employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers, outside salespeople, and lawyers). For more information about this topic, we encourage you to consult with Congruity's team of professionals at: 844.247.4100.