GSBE Construction Update 01/30/2019
Starting January 24th Employers Face Higher OSHA Penalties
Despite no federal funding, it appears that the Office of Federal Register is operational. Today, the Federal Register published the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2019. This final rule increases civil penalties the Department of Labor assesses including those assessed by OSHA. The rule is effective January 24th and the increased penalty rates will apply to any penalties assessed after the effective date of the rule.
Employers who have open and ongoing OSHA inspections can expect that any citations issued by OSHA after today will reflect the increased penalties.
The new 2019 maximum penalties are as follows:
- Other-than-Serious: $13,260
- Serious: $13,260
- Repeat : $132,589
- Willful: $132,589
Off-the-Clock Work
With the increased use of technology, more employees are working after regular business hours, and “off-the-clock” lawsuits continue to rise, noted Stéphanie Smith, an attorney with Casner & Edwards in Boston.
Off-the-clock lawsuits are particularly likely in California in light of a 2018 ruling that pre- and post-shift activities may be compensable even if they are for minimal periods of time. As a result of this decision, training supervisors about off-the-clock work is even more important in California, noted John Kuenstler, an attorney with Barnes & Thornburg in Chicago and Los Angeles. But regardless of where supervisors are located, they shouldn’t encourage off-the-clock work by nonexempt employees, he said.
At Tax Time, Urge Review of Paycheck Withholding and Retirement Savings
As employees look over their W-2 earned-income forms, due to them by Jan. 31, and prepare to file income taxes by April 15, HR departments can advise them to review their paycheck withholding and consider increasing their contributions to tax-advantaged retirement accounts, tax advisors say.
Withholding Review
Due to changes under the Tax Cuts and Jobs Act, which took effect in 2018, many employees may find that their withholding is not enough to offset their income taxes this year. Others may discover they’ve withheld too much, said Tom DiLorenzo, senior manager at consultancy EY’s employee financial services.
“While tax rates were lowered in 2018, previously popular deductions are no longer available,” DiLorenzo noted. For instance, the deduction for personal exemptions, which had been $4,050 for 2017, has been suspended for taxable years through 2025, but the size of the standard deduction has increased.
Tax season is prime time for employees to fill out and submit to their HR or payroll departments a revised Form W-4 for paycheck withholding “so that, come tax time next year, they’re not put in a situation where they have tax due,” DiLorenzo said.
“Few Americans actually withhold the right amount from their paycheck to cover their taxes,” said Eric Bronnenkant, head of tax atBetterment for Business, which provides retirement plan services. That’s why reminding employees to evaluate paycheck withholding and review Form W-4 elections—and outlining the steps in a withholding checkup—can be so helpful.
The IRS is encouraging employees, especially anyone who is now facing an unexpected tax bill, to do a paycheck checkup of their withholding for 2019. Those most at risk of having too little withheld from their pay, the IRS stated, include:
- Taxpayers who itemized in the past but now take the increased standard deduction.
- Two-wage-earner households.
- Employees with nonwage sources of income.
- Those with complex tax situations.
To help taxpayers get their withholding right in 2019, an updated version of the agency’s online withholding calculator is available on www.IRS.gov.
By using the calculator, employees can see if they’ve withheld the correct amount of income tax from their paychecks for 2018 and what adjustments they may want to consider for 2019. Based on this information, employees can provide their employers with an updated Form W-4.
“This is especially helpful if there have been changes in household incomes, such as getting married, having a child or even a new promotion,” said Samantha Malovrh, an employee benefits attorney at HR advisory firm OneDigital.
If employees without savings find that they haven’t withheld enough from their paychecks, DiLorenzo said, they may have to take out a loan to cover the bill, “including a loan from their 401(k) account, which can mean that their retirement savings take a hit.”