What’s New?

Maryland Paid Leave Law Effective 2/11/18

MarylandWith the passage of the Maryland Healthy Working Families Act (House Bill 1) on January 12, 2018, Maryland has joined the ranks of states requiring paid sick and parental leave. California, Rhode Island, Washington, New Jersey, New York and the District of Columbia already have paid leave laws in effect.

The Act becomes effective on 2/11/18. The new law will require employers with 15 or more employees to offer 40 hours of paid “sick and safe” leave per year. Employers with 14 or less employees are required to offer the same 40 hours of “sick and safe” leave, however this leave would be unpaid.

Certain categories of employees may be exempt from the requirement including but not limited to: temporary agency employees on assignment, “as needed” (PRN) employees working in the health or human service sector and agricultural employees. Other exemptions for exist for employees under the age of 18, employees working regularly less than 12 hours per week, and some segments of the construction industry.

All full-time, part-time, temporary and season employees would be counted in determining employee census. The Act requires that employees accrue one hour of leave for every 30 hours worked – not to exceed 40 hours per year. The accrual requirements assume that exempt employees work 40 hours per week. Employers can restrict or prohibit use of leave for new hires during their first 106 calendar days of employment. Employers also have the option of awarding the 40 hours per week at the beginning of the year, or at the time of hire. This approach does simplify tracking of the benefit, particularly for smaller employers with limited resources.

This leave is not available to just anyone who has the time available. There must also be a “qualifying event” that triggers the eligibility for the leave. Some of these events include (1) maternity or paternity leave (2) to care for their own illness, injury or condition, or that of a family member (3) to get preventative medical care for themselves or a family member (4) when necessary due to sexual assault, domestic violence or stalking against the employee or a family member.

Mandatory Notice to each employee must be provided by February 11, 2018.

Maryland’s Department of Labor and Industry has indicated that they will issue a suggested copy of the notice and copy of the policies on the State website. There is also a possibility that implementation of the Act may be delayed so that the State can get regulations in order, and this will also allow employers more time to comply with the new payroll and mandatory notice requirements.

If you have any questions regarding the Maryland Healthy Working Families Act (House Bill 1), please contact small.business@maryland.gov.


Unemployment Tax Update:

New York Rocks With Opportunities!

ny_sa_logo_290The New York Notice of Unemployment Tax Rates (Rate Notices) should be issued in late February or early March.   New York is by far the most difficult to evaluate and the best opportunity or group of opportunities to request.   New York provides employers with the option for a voluntary contribution, forming or adding to a joint account, a provision to write-off a portion of the negative reserve balance, a rate with allowing the improvement of the ratio by four brackets.  Some of these opportunities can be combined to maximize an employer’s savings.

The voluntary contribution and the joint account option are left up to the employer to determine the profitability.   Employers are allowed to buy down their rate (termed a voluntary contribution).  The opportunity is evaluated based on whether the savings exceeds the amount of the voluntary contribution.  The joint account option allows employers with multiple accounts to combine them for rating purposes.    An employer can have more than one joint account group in New York.   Each grouping should be reviewed separately to determine which joint account group, if any, is the most lucrative.  The voluntary contribution option can be evaluated for each joint account grouping.

To avoid a negative write off, an employer has the option to pay an amount requested by the state.  If the amount requested is not paid, the state will automatically write off a portion of the negative account balance. The employer will be assigned the maximum for three years.   In some cases, it is favorable to pay the amount being written off by the state to obtain a more favorable rate for the following year.   In other instances, the maximum rate for three years is more beneficial.

The final opportunity for an “Improved Rate” is driven by New York.  If an employer has a negative balance and their preceding payroll year wages are greater than or equal to 80% of the average taxable payroll, the state will issue a Rate Notice with a special paragraph stating that the reserve ratios has been improved by four percentage points.   The limitation on this by the state is that the employer’s normal rate cannot be less than 6.1%.

So how can an employer be sure they are taking the correct steps to obtain the most favorable opportunity for savings?   The Tax Analyst at Corporate Cost Control are ready to analyze all opportunities for savings.   In February, we will receive the transcripts for all New York employers who have our service.  The transcripts provide information that is not printed on the Rate Notice and a breakdown of the combined figures.  Each opportunity is evaluated separately and in conjunction with other opportunities.

If you have any questions, please contact your Tax Analyst or the Tax Director, Norma Green, at (800) 207- 6926, Ext 418 or ngreen@corporatecostcontrol.com.


Guideline

5 Tax Credits to Reduce Your Business Taxes

Tax credits often get confused with tax deductions. Tax credit incentives are earned by businesses for certain activities, like hiring or expansion and they are loftier in savings to tax deductions. Tax credits give businesses an incentive to act in a way that benefits the economy, the environment, business development or other business purposes and credits are deducted from income before income tax is determined.

For additional information on how we can assist your organizations contact CCC at 800.207.6926 or contact@corporatecostcontrol.com.

 

 


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