Department of Labor Standards Enforcement (DLSE) Issues Required Notice for Pay Rate Changes and New Employees
Effective 1/1/12 all California employers are required to provide a newly hired non-exempt employee with additional information about the terms of their employment. The DLSE has issued a new notice that encompasses this information. This notice must be provided non-exempt employees who have a pay rate change, and to all new employees as of 1/1/12.
Click here to obtain the new notice form
AB 22 Restriction of the Use of a Credit Report for Employment Purposes
With the passage of AB22, there are significant restrictions for employers who run background checks on employment candidates as well as employees. The new law severlely restricts an employer's ability to obtain a credit report for employment purposes.
For more information, click here.
Increase in Minimum Wage for 9 States
The new year brings an increase in the minimum wage for 9 states which includes an increase for the city and county of San Francisco which has announced an increase in their minimum wage will increase from $9.92 to $10.24 an hour.
To see the increases
click here.
AB 469 Wage Payment Details
AB 469 imposes new requirement for employers at the time of hire of an employee to provide a written notice with specific details regarding the terms of employment. Click here for a list of required items for the written notice.
The law also requires employers to provide written notice within 7 days of any change in the terms of employment required to be included in the notice at the time of hire, unless the changes are reflected on a timely wage notice or other formal written document.
The law increases penalties for wage violations and provides that the employer must make restitution for certain wage deficiencies and extends the period for which an employee may bring a wage claim with the Division of Labor Standards enforcement from one year to a three year statute of limitation.
IRS Confirms the 2012 Reimbursement Rate
The IRS announced the new business mileage reimbursement rate for 2012 will remain at the rate of 55.5 cents per mile.
Increased as well is the IRS rate per mile for deductible medical and moving miles to a rate of 23.5 cents per mile for 2012. Mileage for charitable activitites remains the same at 14 cents per mile.
Deferred Compensation Limits for 2012
The I.R.S. has announced new wage and contribution limits for 2012 for deferred compensation under plans such as a 401(k), SIMPLE IRA or pension plan.
Click here to see the changes.
NLRB Poster Deadline 1/31/2012
As of January 31, 2012, most private sector employers are required to post a notice advising employees of their rights under the National Labor Relations Act.
The notice should be posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted.
Click here for a copy of the required posting
New Computer Professionals Exemption rates Announced for 2012
The California Department of Industrial Relations announced a rate change for the computer software exemption effective 1/1/2012.
The minimum hourly rate for the computer exemption increased from $37.94 per hour to $ 38.89 per hour.
The minimum monthly salary per month was increased from $6,587.50 to $6,752.19.
The minimum annual salary to qualify for the exemption was increased from $79,050.00 to $81,026.25.
New Rate of Exemption for Physician and Surgeons for 2012
The minimum hourly rate of pay to meet the professional exemption for physicians and surgeons was increased from $69.13 per hour to $70.86 per hour.
Clarification for Organ and Bone Marrow Donation Time
SB 272 provides clarification that California employees are entitled to up to 30 work days of protected time off work per year when the employee is a organ donor, and up to 5 work days off work when the employees is a bone marrow donor. There is added clarification that the days of protected time per year will be measured going forward from the first day of the leave for either organ or bone marrow donation.
The law also clarifies that the employer may condition the approval of the protected time off upon the employee's use of a specific number of days of earned but unused time off prior to the beginning of the protected leave time.
The law still requires the employer to treat the leave in a manner as to not have it be a break in service for the purposes of salary adjustments, or the employee's right to time off accruals such as vacation, sick or PTO accruals.
AB 1236 Use of E-Verify System
This new law provides that State agencies, cities, counties and other public entities may not require a private employer to use the Federal E-Verify system to qualify or as part of a contract.
The private employer may not be required to verify the legal employment status of employees through the E-Verify system except in the case of a Federal contract or as required by Federal law.
Reporting of Health Insurance Benefits
Under the Affordable Care Act, starting in tax year 2011, employers with 250 or more employees will be required to report the value of employer sponsored group health insurance plans on the employee's W-2 for 2012. Employers with less than 250 employees will be granted additional time to become compliant with this requirement, and will be required to report the value of the employer sponsored group health plan as of 2012.
This reporting requirement is for informational purposes only and does not not affect tax liability, as the value of the employer contribution to employee group health benefits continues to excluded from the employee's taxable income.
I.R.S. Announces New Wage Limit for Social Security Tax for 2012
The I.R.S. has announced that the employer and well as employee rate for social security tax for 2012 will be 6.2% of wages, up to a limit of $110,100.00 of wages. Employers should be aware of the change from 2011, where employees where contributing at a lower rate as part of President Obama's economic stimulus agenda. As of 1/1/2012, the rate for employees goes back to the 6.2% that it was before the economic stimulus change.
Medi-care remains at 1.45% for both the employee and the employer and does not have a wage ceiling, but instead the tax is paid on all wages earned. |
Increase in FUTA Tax Rate Retroactive to 1/1/2011
The U.S. Department of Labor recently announced an increase in the Federal unemployment rate for 21 states who failed to repay their outstanding federal unemployment account loans. This change will be retro active back to 1/1/2011.
Employers should be prepared to pay the additional tax in their quarter 4 tax filing for the entire year of 2011. Those employers who work with a payroll vendor should check with their payroll vendor for help in calculating the amount of the additional tax, and then with their accounting department to ensure the funds are available for the payroll vendor at the time of the filing of the quarter 4 2011 tax filing.
For more detail on the retro active tax increase click here
