Keep Your Business in Compliance

By TEAM Software November 12, 2019 Categories:

Pay attention to these HR, payroll and tax updates.

As a service contractor, you always have a lot of things on your plate — managing a distributed workforce, ensuring you’re meeting customer needs and running a profitable business, to name a few. And, that’s probably not going to change anytime soon. When your to-do list is a mile long, sifting through lengthy articles on tax, payroll and human resources updates can fall to the bottom of the list (or, let’s be honest, off the list completely). That’s why we regularly put together some of the compliance-related topics you should be following.

Form W-4 Updates

The Form W-4 is being updated to ensure the correct Federal Income Tax amount is withheld for employees. It gives employees control over what is being withheld when they have additional withholdings and credits.

The new form is currently in a draft status, however, the agency is not expecting to make any significant changes. The new form is targeted to go into effect on January 1, 2020. It’s important to note existing employees aren’t required to complete the new Form W-4, but all new employees or any changes to existing forms must be completed on the new form after January 1, 2020.

It’s recommended you encourage employees to use the Tax Withholding Estimator before completing the form. WinTeam will support both versions of the Form W-4, with the withholding calculations as defined by the IRS in Publication 15-T. 

Meal and Rest Breaks

Meal and rest break regulations continue to be a popular topic across the country, especially in California. In California, a 30-minute meal break must be provided when a shift is longer than five hours and a second meal break is required if the shift is longer than ten hours. Additionally, 15-minute breaks must be provided if a shift is at least 3.5 hours. During these breaks, employees are to be relieved of all work-related duties.

It’s imperative to stay informed and in compliance when it comes to these labor policies because meal and rest break issues can be subject to class action lawsuits if not followed correctly. Employers should ensure their policies around meal and rest breaks are clear and complete. You should consult with legal counsel if you have questions about your policy. Other ways you can help reduce your risk is by using a solution that provides you with an audit trail if you were to need it. You want to be able to prove you’re providing your employees with the required meal and rest breaks to avoid litigation.

TEAM has been monitoring this legislation and a solution to handle compliance for meal and rest breaks is already well under way. We know many of our customers operate in California and other areas where this legislation exists. We’re committed to helping our customers manage their businesses and remain in compliance through adding key enhancements to their existing solutions.

Predictive Scheduling

New Fair Workweek legislation is coming out of Chicago, Illinois, to ensure hourly workers are guaranteed fair working conditions and scheduling stability. This is important to note because, while this type of legislation has already been enacted in other states for retail and healthcare employees, Chicago is the first city that has added in the category of building service employees. So far, jurisdictions that have some level of predictive scheduling law include two states –– Vermont and Oregon –– and seven other municipalities in addition to Chicago, San Francisco, Berkley, Emeryville, San Jose, Seattle, New York and Philadelphia.

We’re keeping a close eye on this particular legislation from Chicago because we know it impacts our customers. Immediately, our BSC customers who operate out of Chicago will need to familiarize themselves with this legislation, but going forward, it has the potential to become more widespread. A comprehensive scheduling and workforce management solution will be essential to manage these requirements.

The Fair Workweek Ordinance from Chicago provides covered employees with the following:

  • Predictability of pay: employees are entitled to compensation if changes are made to a schedule after the deadline.
  • The right to decline when schedules change: employees may decline additional hours.
  • Choice of additional work hours when available: qualified, existing employees are given first offer of additional shifts.
  • The right to rest and request a flexible working arrangement: employees aren’t required to work a shift less than 10 hours after the end of the previous day’s shift.

This list highlights some of the important U.S. HR, tax and payroll compliance updates we’re tracking. Please continue to use industry resources such as the Society for Human Resource Management (SHRM) and the American Payroll Association (APA) to stay updated on all tax-related compliance changes. TEAM is dedicated to ensuring our software solutions meet the ever-changing compliance needs of our customers. While we’re committed to keeping you informed, it’s important to do your own research, and consult your own legal and tax advisors with specific questions or concerns.