Capital Summit Sets By Curtis Tatum, Esq.
Stage for Annual Congress
During APA's Capital Summit, which was held on March 2-3 in Washington, D.C., government representatives provided insight into the latest developments affecting the payroll profession. Several speakers raised issues expected to be discussed or promoted at APA's 33rd Annual Congress, May 5-9 in Las Vegas.
DOL Expects 'White Collar Exemption' Regs Soon
Mark Lara, a District Director in the DOL's Wage and Hour Division, said he checked his email before taking the stage to see if the highly anticipated proposed changes to the FLSA white collar exemption regulations had been released. He indicated the proposed rule was "really close" to being finalized and that he expected it would be released in time for discussion at Congress. While he could not address the substance of the changes, he did confirm that the "exemptions are not going away" but the "qualifications are likely to change."
Regarding the DOL's investigation and enforcement of worker misclassifications, Lara noted that one way to avoid problems is to make all payroll information clearly understandable.
"The most dangerous employee is a confused employee," he said.
For employers that are in compliance, a confused worker who contacts the DOL could lead to needless complications that otherwise would have been prevented with clear information at the outset.
With only 1,600 people in the Wage and Hour Division, the DOL can't investigate every employer, Lara said. However, it does target certain industries with a vulnerable workforce, including restaurants and agriculture. When asked how the DOL handles complaints from industries outside the targeted enforcement industries, Lara acknowledged that the DOL's "action may be limited," but he indicated the DOL will do something to try to resolve the issue.
Lara also noted a recent change to the Family and Medical Leave Act (FMLA). On March 27, a final rule will go into effect that changes the definition of spouse from "state of residence" to "place of celebration." This aligns the DOL with several other federal agencies and provides FMLA rights to same-sex spouses who were married in a location recognizing same-sex marriage. Since that time, a federal court ruled that DOL overstepped its bounds in issuing the new revised rule, so its fate is not yet settled.
my Social Security Account Sign-up Available at Congress
Tom Bricker, Program Analyst at the SSA, provided an update on recent SSA developments and encouraged everyone to sign up for a my Social Security account.
He said the most recent updates in the SSA's ongoing redesign process, which began in 2013, were implemented in January. These updates include the transfer of third-party sick pay recap reporting to the IRS, "simplified and streamlined processing" to minimize delays in processing, and zero tolerance for formatting errors. He explained that the SSA will "discontinue changing W-2 money, 'Medicare edit' and the 'Nanny Tax edit,' and instead will reject electronic and paper reports." He noted several scenarios that will result in rejections, including:
- Where the W-2 social security tax is greater than zero and the sum of social security wages and tips is zero;
- Where the W-2 Medicare tax is greater than zero and Medicare wages and tips is zero; and
- Where the W-2 Medicare wages and tips is less than the sum of social security wages and tips.
Thanking the APA's Government Relations Task Force's SSA Wage Reporting Redesign Subcommittee for its guidance as SSA works through the redesign process, Bricker noted that he looks forward to the subcommittee's meeting during APA's Annual Congress. Bricker and his SSA colleague Mark Ruley will discuss additional SSA developments
at Congress in a session titled "What's Old and New at SSA!" SSA will also participate in the Forum on Federal Payroll Issues.
Bricker announced SSA representatives will also be available during the APA Congress Expo to sign up attendees for my Social Security accounts
. Account holders have the ability to view their social security statements, obtain a benefit verification letter, check benefit and payment records, and change direct deposit information. The social security statement includes estimated future benefits, an earnings history, and estimated social security and Medicare taxes paid both by the employer and the account holder.myRA Information Available During Congress Expo
Mark Iwry, a Senior Adviser to the Secretary of the Treasury and Deputy Assistant Secretary for Retirement and Health Policy, marveled at the power of payroll deductions in the workplace to promote retirement savings. One program that the Treasury is implementing to harness this power is myRA, which is intended to "invite nonsavers into the system," Iwry said. myRA is a voluntary program run by the U.S. Treasury. Designed as an "easy way to save," the program will allow individuals to open an account via the myRA website and then have funds deposited into their accounts through payroll direct deposit. The accounts will be backed by the Treasury, making them safe for "those who have never saved or invested." So far, the Treasury has made it available to a limited number of employers. Iwry indicated that the initial testing has gone well and that the Treasury is "happy the way things are shaping up." Looking ahead, Iwry said "now that we see it is working with a small group," the next step will be to "make it available more broadly."
The APA's GRTF Subcommittee on myRA worked to find volunteers for Treasury's initial testing of the program and continues to provide technical guidance as the program is developed further. Acknowledging the subcommittee's efforts, Iwry said "we very much appreciate the support we have received from the APA." As the program expands, the subcommittee will continue to look for ways to help promote the accounts. Treasury will have representatives available during the APA's Congress Expo
to answer questions about the myRA program.OCSE Celebrates 40 Years
In recognition of the 40th Anniversary of the enactment of Title IV-D of the Social Security Act and the creation of the Office of Child Support Enforcement (OCSE), Sherri Grigsby, Manager of OCSE's Employer Services Team, offered a look back at many child support milestones and a preview of things to come. In addition to the creation of OCSE, Title IV-D also mandated that states establish child support programs and made federal employees subject to child support garnishments. Wage withholding, which now accounts for more than 74% of all child support payments, was implemented through the Family Support Act of 1988. In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act added new tools for child support processing and enforcement. These included the establishment of the New Hire Directory; a requirement for states to establish State Disbursement Units (SDU); passport denial; and interception of funds, such as unemployment benefits and lottery winnings. More recently, in 2011, the Income Withholding for Support (IWO) was revised to provide clear guidance on when an invalid order may be rejected. OCSE also implemented lump sum reporting through its Child Support Portal. Additional electronic reporting became available in 2014 with OCSE's eTerm, which allows employers to report terminations.
In the immediate future, states that have not implemented OCSE's Electronic Withholding Order (e-IWO) must do so by October 1. Looking ahead, Grigsby described an expanded portal that would allow employers to report additional data, including: contact information, health insurance, and other benefit information. "We want to make things easier for employers," she said.
Help OCSE celebrate its 40th Anniversary, or get answers to your child support questions, by stopping by their booth during the APA's Congress Expo
. Grigsby will also participate in the Forum on Federal Payroll Issues, where some especially tricky child support questions will be answered.