2018 Qualified Plan LimitsNovember 2017
Qualified retirement plans, such as Internal Revenue Code sections 401(k) and 403(b) plans, pension and profit sharing plans, individual retirement accounts (IRAs), and health flexible spending accounts (Health FSAs) are subject to various dollar limits on the amount of contributions that can be made or benefits that may accrue under such arrangements. Most of these dollar limits are adjusted annually by the IRS for changes in the “cost of living.”
For 2018, some of the key dollar limits affecting the above plans, IRAs and Health FSAs are as follows:
2018 Dollar Limit
|1. Elective Deferral Contributions (for 401(k) and 403(b) Plans)||$18,500 ($500 increase from 2017)|
|2. Annual Contribution Limit (for defined contribution plans)||$55,000 ($1,000 increase from 2017)|
|3. Annual Benefit Limit (for defined benefit plans)||$220,000 ($5,000 increase from 2017)|
|4. Annual Compensation Limit (for all qualified retirement plans)||$275,000 ($5,000 increase from 2017)|
|5. Catch-Up Deferral Contributions (for plan participants age 50 or older under 401(k) and 403(b) plans)||$6,000 (no change from 2017)|
|6. Highly Compensated Employee definition-compensation threshold (for nondiscrimination testing under all qualified plans, especially 401(k) and 403(b) plans)||$120,000 (no change from 2017)|
|7. Traditional IRA Contribution Limit (IRA contribution deduction amount subject to income based phase-out)||$5,500 (no change from 2017)|
|8. Catch-Up Traditional IRA Contribution (for individuals age 50 or older)||$1,000 (no change from 2017)|
|9. Health FSA Contributions (via employee salary deferrals)||$2,650 ($50 increase from 2017)|
While the above benefit and contribution limits should be, as applicable, reflected in the plan documents for such plans and accounts, and in the operation of such arrangements, it is important to remember that the elective deferral and, as applicable, related catch-up contribution limits apply on an individual basis. Thus, if you change jobs during calendar year 2018 and participate in two or more employer-provided 401(k) and/or 403(b) plans, you are entitled to a maximum aggregate elective deferral and catch-up contribution limit under all such plans for 2018 of $18,500 in elective deferrals and $6,000 in catch-up contributions (i.e., one set of elective deferral and catch-up contribution limits apply per individual per calendar year).
New York City "Freelance Isn't Free Act" Rules Went into Effect July 24, 2017September 2017
As detailed in our last newsletter, New York City (NYC) passed the “Freelance Isn’t Free Act” which went into effect in May and protects freelance workers and independent contractors in several different ways. Since its implementation, the city has published rules intended to clarify certain requirements of the law. One of the more consequential rules is an expansion of the term “hiring parties” to include “their actual or apparent agent, or any other person acting directly or indirectly on behalf of a hiring party.” The rules also restrict the types of terms that can be in a contract with a freelance worker and provide that the contract may not include waivers of rights under the act, class action waivers, or confidentiality provisions that would inhibit a worker from discussing the contract with NYC agencies.
If you engage freelancers in NYC, you need to comply with this new law.
More Changes to the Federal White Collar Overtime Exemptions are on the WayAugust 2017
Many employers agonized about pay adjustments that were necessary to comply with the new overtime exemption salary basis level under the Federal Fair Labor Standards Act (“FLSA”) that was scheduled to go into effect December 1, 2016. Then a Federal court in Texas stayed enforcement of the new salary basis level and the case is still pending. Now, the U.S. Department of Labor has issued a Request for Information (RFI) from any interested parties on what adjustments, if any, should be made to the salary basis level. For information on the RFI or how you can submit comments, click here.
HR Tip of the Month: Don't be a Dope About Opioids in the WorkplaceJuly 2017
The pernicious opioid epidemic sweeping the nation is well known, and at some point employers may have to deal with an employee who has a substance abuse problem. These situations have implications on everything from workplace drug testing, medical leave laws, and reasonable accommodations to employee assistance programs.
Typically, employers will start to notice signs of opioid abuse including frequent lateness, poor attention to detail and a general drop in performance. Nothing prohibits an employer for terminating an employee for poor performance. However, if the employee comes to the employer before the employer takes any disciplinary action and says they have a substance abuse problem, this changes everything and employers must treat the situation delicately.
Generally, employees who are currently using illegal drugs are not considered “individuals with disabilities.” However, individuals addicted to drugs but who are no longer using and receiving treatment for addiction may be protected by disability discrimination laws. Under New Jersey and Federal medical leave laws, employees are generally entitled to job protection if they seek an unpaid leave to attend rehab. When they return, they may need other accommodations. For example, if an employee requests time off or a revised schedule to attend Narcotics Anonymous meetings or other support groups, those requests need to be considered in good faith by an employer as part of the interactive process to determine reasonable accommodations under New Jersey and Federal law.
These types of employee issues can be riddled with pitfalls for the unknowing employer and sometimes even the knowledgeable employer. These employee issues are rarely, if ever, resolved at once. Remember to be patient, tread lightly, and always consult with legal counsel before taking any action.
HR Tip of the Month: Understand The Benefits of Severance Pay, The Law And How To Do It RightJune 2017
Generally speaking, the law does not require payment of severance to a terminated employee unless the employer has contractually agreed to do so through some form of agreement or policy. As a result, some employers may question why they should offer severance pay. The most common answer is that the severance pay is conditioned upon the terminated employee providing a release of claims. Therefore, an offer of severance can be a cost-effective means for an employer to avoid the time, expense, disruptions and uncertainties that come with a lawsuit or threatened lawsuit. However, the request for a release of claims will trigger certain legal requirements and obligations. For example, under the federal age discrimination law, employees that are 40 years of age or older must be provided 21 days (and sometimes as much as 45 days) to accept the severance offer and 7 days to revoke their acceptance of said offer. Other laws may limit the employee's ability to release certain claims. Employers should consult with their counsel to insure their severance agreements are legally compliant and to insure that they fully understand the impact of the law on said agreements.
Independent Contractor Protection Law In Effect In New York City As Of May 15June 2017
New York City’s Freelance Workers Protection Law went into effect on May 15, 2017. The law covers “freelance workers,” which includes independent contractors, but excludes lawyers, doctors and sales representatives. The law affords freelance workers who will provide an individual or business more than $800.00 in total services the right to a written agreement which must include:
The name and address of the hiring party and the freelance worker;
An itemization of all services the freelance worker will provide;
The value of those services;
The rate and method by which the worker will be compensated; and
The date on which the hiring party must pay the contracted compensation or the mechanism by which such date will be determined (e.g., within twenty days of invoice)
Any individual or business that fails to comply with the law will be subject to the imposition of significant monetary damages.
New York City Passes Ban On Salary History InquiriesJune 2017
Mayor Bill de Blasio has signed an amendment to the New York City Human Rights Law (“NYCHRL”) which makes it unlawful for employers to ask job applicants about their salary history or to rely on salary history during the hiring process. Not only does the law prohibit asking an applicant or the applicant’s current/former employer about the applicant’s salary, it also prohibits the search or review of public records to obtain such information. Employers may still tell applicants about the salary range for the position for which they applied, and nothing prohibits the employer from considering the applicant’s salary history if the applicant first volunteers such information. New York City employers should insure that their hiring processes, practices and forms are modified to comply with this new law. The law goes into effect on October 31, 2017.
HR Tip of the Month: Getting into the Weed(s) with Medical Marijuana in New JerseyMarch 2017
In 2010, New Jersey passed the New Jersey Compassionate Use Medical Marijuana Act (“NJCUMMA”) which protects the users of medical marijuana “from arrest, prosecution, property forfeiture, and criminal and other penalties.” The law specifically provides that employers are not required to “accommodate the medical use of marijuana in . . . [the] workplace,” but is silent about an employer’s duty to accommodate medical marijuana use outside the workplace. While the New Jersey Law Against Discrimination requires an employer make reasonable accommodations to a disabled employee who can perform the essential functions of the job, the law is hazy when it comes to whether those reasonable accommodations include allowing an employee to use medical marijuana outside of the workplace. This dilemma can present some sticky situations for employers. For example, what is required of an employer who maintains a zero tolerance drug policy, but is confronted with an employee who tests positive for marijuana because of their underlying disability? Given this budding area of the law; for now these situations should be addressed on a case by case basis taking into account the employee’s job description, the underlying disability, the circumstances prompting the drug screen, etc.
New York State Direct Deposit and Debit Card Wage Payment Regulations Invalidated and RevokedMarch 2017
On March 7, 2017, New York employers who paid employees via direct deposit or with wage-based debit card were going to be required to comply with strict notice and consent requirements. However, the New York State Industrial Board of Appeals has found that these new regulations exceeded the rulemaking authority of the New York State Department of Labor and instructed that they be revoked. The good news is that for the time being, New York employers are not subject to these new notice and consent restrictions on direct deposits or payroll debit cards for employees.
Appellate Court Reaffirms Importance of Getting Jury Waiver Language RightFebruary 2017
Employers received another reminder that, although employee jury waivers and arbitration agreements are permitted, if they are not drafted properly they will not be enforced by the courts. In Noren v. Heartland Payment Sys., a trial court ruled that the plaintiff/employee had signed an enforceable jury waiver agreement and, after a full non-jury trial before the judge, a verdict was rendered in favor of the defendant/employer. However, the New Jersey Appellate Court reversed the trial court and found that the signed agreement was not specific enough to constitute a valid waiver of a plaintiff’s right to a jury trial on his whistleblower claim. As a result, the verdict in favor of the defendant/employer was overturned and the employer will now have to defend the whistleblower claim a second time before a jury.
HR Tip of the Month: Autism Awareness MonthMarch 2016
April is Autism awareness month – but what does that have to do with managing your workforce? If you are asking that question, it is time for a refresher on employees’ intermittent leave rights under the Federal Family and Medical Leave Act (“FMLA”) (and, for New Jersey employers, the New Jersey Family Leave Act (“FLA”)). Under the FMLA, employees may take leave in separate blocks of time due to a single qualifying reason, and the leave may be taken in blocks as little as one hour of time. The basis for this leave may include the need to provide psychological comfort to a covered family member with a serious health condition. For example, if an employee’s child suffers from autism, that employee may be eligible to take intermittent leave to care for his child with little or no advance notice.
Employers that do not understand their employees’ rights in intermittent leave in these types of situations may unintentionally interfere with an employee’s right to job protected intermittent leave. Proper training of the employees tasked with receiving employee leave requests or late call-ins, must be trained to identify when an employee’s particular situation may justify designating intermittent leave under the FMLA. Failure to do so will very likely result in violation of the FMLA and cause an otherwise preventable claim.
Federal Court of Appeals Reinforces the Critical Importance of Employer Compliance with All FMLA RegulationsSeptember 2015
The Family and Medical Leave Act (the “FMLA”) generally applies to employers with 50 or more employees and guarantees eligible employees 12 weeks of job-protected leave under certain conditions. In Hansler v. Lehigh Valley Hospital Network, a Federal Court of Appeals determined that an employer’s failure to comply with the applicable FMLA regulations can provide the basis for a claim that the employer unlawfully interfered with the employee’s rights under the FMLA. In Hansler, the employer failed to comply with the FMLA regulation which obligated it to: (1) notify the employee that the medical certification submitted by employee’s doctor was insufficient and/or incomplete; (2) state in writing what additional information was necessary to make the certification sufficient or complete; and (3) allow the employee 7 calendar days to cure the deficiency. The aforementioned regulation is simply one of the many regulations promulgated under the FMLA. This decision serves as yet another reminder of the difficult burden placed on employers and the significant risk of litigation that employers face when they are not fully familiar with and complying with all applicable FMLA regulations.
US DOL Issues Revised FMLA Leave Designation NoticesJune 2015
The U.S. Department of Labor (DOL) recently amended several FMLA leave related forms that employers rely upon in complying with their FMLA obligations. The revisions add language complying with the Federal Genetic Information Non-Discrimination Act (GINA). The forms that were revised are: the Certification of Health Care Provider for Employee’s Serious Health Condition (Form WH-380-E); Certification of Health Care Provider for Family Member’s Serious Health Condition (Form WH-380-F); Certification for Serious Injury or Illness of a Current Servicemember for Military Family Leave (Form WH-385); and Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave (Form WH-385-V).
HR Tip of the Month: Are You Sure Your Company is Complying With Family Leave Laws?June 2015
Although the Federal Family Medical Leave Act (FMLA) has been around for over twenty years, many employers still do not get it right when it comes to their obligations to notify their employees generally of their rights, respond correctly to employee requests for leave, correctly calculate and designate leave to which an employee is entitled, or to reinstate an employee when legally required to do so. And in New Jersey, like several other states, employers are doubly tripped up on the interplay of the New Jersey Family Leave Act (FLA), which in some situations runs concurrent with the federal FMLA yet does not in other situations. Compounding the compliance conundrum in states like New Jersey is the further interaction of the Temporary Disability Benefits Law and the Paid Family Leave Law.
Compliance with these laws - and more importantly working with counsel to ensure your human resources professionals do not get tripped up by the constantly shifting sands in this area - is imperative to avoid claims by employees of failure to provide leave, interference with leave rights, and retaliation for taking leave. Considering that such claims are usually accompanied by a companion discrimination claim, employers must prioritize compliance with the web of federal and state leave laws.
Definition of “Spouse” Under the FMLA Now Includes Same-Sex Spouses No Matter Where They LiveMarch 2015
The U.S. Department of Labor’s (“DOL”) new rule broadening the definition of “spouse” under the federal Family and Medical Leave Act (“FMLA”) is effective March 27, 2015. The new rule amends the definition of “spouse” under the FMLA such that eligible employees in legal same-sex marriages will be able to take FMLA leave to care for their spouse or family member, regardless of where they live. New Jersey had previously recognized same-sex marriage and civil union partners under the New Jersey Family Leave Act (“NJFLA”). Employers can now be confident that both FMLA and NJFLA time periods may run concurrently with respect to same-sex spouses, i.e. an employee caring for a same-sex spouse may only take 12 total weeks of leave, provided the leave is for an event covered by both laws.