Originally part of the failed American Jobs Act, the bill establishes tax credits for businesses that hire unemployed veterans and was included as an amendment to tax legislation that passed earlier this fall.

The measure provides up to a $5,600 tax credit for employers that hire veterans who have been unemployed for six months or more. For veterans unemployed for at least four weeks but for less than six months, the credit is $2,400. The bill also increases the amount under the Wounded Warriors Tax Credit to $9,600 for employers who hire veterans with service-related disabilities who have been unemployed for six months or longer.

Employers should also be cognizant of servicemembers' rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA), which guarantees job protection and reinstatement rights to employees who are called to active duty. Toward this end, Personnel Concepts recommends acquiring a copy of our USERRA Leave Rights Compliance Program and putting it into effect.

There are strings attached, of course. The company applying for the amnesty cannot be undergoing any current IRS or Department of Labor (DOL) audit over its classification of workers.

The plan is called the Voluntary Classification Settlement Program and was announced just this past week.

Under terms of the program, the organization agrees to pay 10 percent of otherwise applicable employment tax for the immediately preceding year, using Section 3509's reduced rates for cases of honest misclassification. No penalties or interest for that year may be imposed and all other prior years are "closed" for employment tax audit purposes. However, the organization must agree to an extended statute of limitations (six years as opposed to the usual three) for employment tax assessments for the first three years beginning after the closing agreement is signed.

The states will be able to collect unemployment insurance (IU) premiums and penalties, the DOL will assess federal fines and penalties, and the IRS will go after back payroll taxes.

As Patricia Smith, Labor's top lawyer, put it: "There's more of an incentive to be in compliance because the cost of what we consider to be illegal activity has increased."

The DOL has published several tests for what constitutes an independent contractor (IC), and most companies using the IC status as a gateway to full-time employment routinely violate them. For instance, an IC must work with no supervision at his or her own hours and place of operation.

"The urgency of addressing this issue has become more pronounced because we're seeing these illegal business practices used by more and more industries, like restaurants," said Nancy Leppink, head of the department's Wage and Hour Division.

States that so far have agreed to work with the Labor Department so far include Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington. New York plans to sign up in the near future. Others are being solicited.

These summaries of benefits were mandated by the Patient Protection and Affordable Care Act (PPACA) and must be fully implemented by the 24-month anniversary of that act, which falls on March 23, 2012. (HHS has hinted at an extension,  however.)

The statements, which will assume a mandated standard format, are referred to in full as Summary of Benefits and Coverage (SBC). Insurers must issue SBCs free of charge to all plan sponsors (employers) and plan participants (employees) on a yearly basis. Failure to provide the statements can result in fines of $1,000 for each SBC not issued.

Employers, be sure your employees know their rights and obligations under PPACA. Order a copy of Personnel Concepts' Health Care Reform Employee Information Poster today and display it prominently.

In practice the provision would have forced companies to issue 1099s, for instance, to hotels for road trips, to catering companies for banquets, to paper companies for copy paper, and so on. Now everything reverts to the status quo ante—1099s are for payments for labor and services provided for outside of the company payroll.

A good way to keep your workforce fully informed of the provisions of PPACA is by purchasing and posting Personnel Concepts' Health Care Reform Employee Information Poster. Get yours today.

According to consulting firm Towers Watson, nearly one-quarter of Fortune 100 companies offer hybrid plans, and it is estimated that nearly one-third of all participants in defined-benefit plans belong to the hybrid variety.

One of the longstanding complaints about such plans is that they discriminate against older workers, but the IRS regulations make it clear that these hybrids cannot discriminate. The regs also clear up confusion regarding the "market rate" at which plan sponsors must set the interest rate for hybrid accounts.

The firm Towers Watson is predicting that more companies will take a look at hybrid pension plans now that the IRS has cleared up confusion about implementing the plans.

You can keep up with this and other developments in the field of workplace benefits with a subscription to Personnel Concepts' Benefits Law Quarterly, which comes as part of our HIPAA Compliance Poster Subscription and Newsletter package.
 Get yours today.

Previously, this requirement had applied only to self-insured plans, but come the New Year, it was to apply to all non-grandfathered plans.

Just a few days before Christmas, however, the Internal Revenue Service (IRS) announced that it would not be enforcing this nondiscrimination provision, as it is called, nor levying fines. Instead, it would commence a public commentary period running through March 11, 2011.

The agency added that the provision would still be enacted at a future date, but at the start of the next insurance plan year (effectively Jan. 1, 2012, for most companies).

Employers, keep your workforces informed of relevant provisions and obligations of PPACA by purchasing and posting Personnel Concepts’ Health Care Reform Employee Information Poster.

For instance, the limit for 401(k), 457(b) and 403(b) plans remains unchanged at $16,500, with health savings accounts (HSA) holding steady at $3,050 for individuals and $6,150 for families.

In addition, the IRS left the maximum income for FICA tax purposes unchanged at $106,800, meaning that no Social Security taxes will be paid past that amount.

You can stay up to date on all benefit changes with Personnel Concepts’ Benefits Law Quarterly, which comes along with your purchase of the HIPAA Compliance Poster Subscription and Newsletter. Get yours today.

Senator Sherrod Brown, D.-Ohio, has introduced the Employee Misclassification Protection Act (EMPA), which amends the FLSA to require employees to notify newly hired independent contractors in writing of their status.

The law would require employers to retain a record of each notification and specifies that the absence of this record immediately makes the contractor a regular employee of the company. The bill also comes packed with a set of fines and other consequences.

The legislation follows last year’s introduction by Senator John Kerry, D.-Massachusetts, of the Taxpayer Responsibility, Accountability and Consistency Act (TRAC?), which would remove the safe harbor provision of the Revenue Act of 1978 regarding employee misclassification.

DOL Secretary Hilda Solis immediately hailed the EMPA for addressing "this significant and troubling issue" of worker misclassification.

Thus far the DOL under Secretary Solis has targeted interns, independent contractors and non-exempt employees who are misclassified and not paid overtime as the focus of their wage and hour enforcement.

Employers, don’t fly by the seat of your pants in this important area of worker classification. If you get it wrong, you could be subject to back overtime wages and other penalties. Get yourself a copy of Personnel Concepts’ FLSA Overtime Rules Compliance Kit and ensure your employees are classified and paid correctly.

Plans also call for adding another 90 inspectors to the Wage and Hour Division (WHD) after the addition of 250 in fiscal 2010. WHD inspectors check out employee claims of unpaid overtime, minimum wage violations and other wage disputes.

Along with the Internal Revenue Service (IRS), which is auditing 6,000 businesses in the next three years over the misclassification of employees, DOL agents also will be looking for cases of employers labeling employees independent contractors to avoid their share of payroll taxes (as well as paying benefits).

Another trap: Employers often misclassify employees as exempt when in fact they are non-exempt and subject to overtime pay. Avoid this trap by getting a copy of Personnel Concepts’ FLSA Overtime Rules Compliance Kit and then properly classifying–and paying–your employees.