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Year End is Here! Our Year-End edition of Pay Matters brings you key updates to ensure a smooth transition to 2018. Read on to stay informed and stay in compliance with relevant year-end alerts and insights that matter most for your payroll.
FEDERAL UPDATES
On May 4, the IRS published the 2018 health savings account (HSA) contribution limits. An HSA allows taxpayers enrolled in high-deductible health plans to set aside money for medical expenses on a pre-tax basis. The following chart compares the 2017 and 2018 annual limits:
| 2018 | 2017 | |
| HSA Contribution Limit
(both employee and employer) |
Individual: $3,450
Family: $6,900 |
Individual: $3,400
Family: $6,750 |
| HDHP Minimum Deductibles | Individual: $1,350
Family: $2,700 |
Individual: $1,300
Family: $2,600 |
| HDHP Maximum Out-of-Pocket
(Deductibles, Co-Payments, and Other Amounts, but not Premiums) |
Individual: $6,650
Family: $13,300 |
Individual: $6,550
Family: $13,100 |
Final 2017 FUTA Credit Reduction States
On November 13, the US Department of Labor announced the following 2017 FUTA Credit Reduction states.
| State | Normal FUTA Rate | Credit Reduction | Total FUTA Rate | Total tax per employee* |
| California | 0.6% | 2.1% | 2.7% | $189 |
| Virgin Islands | 0.6% | 2.1% | 2.7% | $189 |
* For employees earning at least $7,000
The FUTA tax rate is 6.0%. However, employers who pay their state unemployment tax in time can take a 5.4% credit, resulting in an effective FUTA rate of 0.6%. Credit reduction occurs when a state fails to repay loans from the federal government by November 10. Employers in those states cannot take the entire 5.4% credit. The credit is reduced by 0.3% each year the state remains in debt.
2017 marks the seventh year of credit reduction for California and the Virgin Islands. They were also potentially subject to a “Benefit-Cost Ratio” (BCR) add-on tax which would have further increased their FUTA rate. However, both California and the Virgin Islands were granted waivers for the BCR add-on.
If you have employees in a credit reduction state, you will owe additional FUTA (940) taxes at the end of the fourth quarter of 2017. If you are a tax service client, you will be debited in January for the applicable percentage of your FUTA taxable payroll. Viventium will notify you of the exact amount of the additional debt prior to the date.
Social Security Wage Base to Increase in 2018
The Social Security Administration announced an increase in the social security wage base in 2018.
Effective January 1, 2018, the wage base will increase from $127,200 to $128,400. The maximum tax payable by each employee will be $7,960.80 or 6.2% of the wage base. Employers match the employee amount with an equal contribution.
Both the employee and the employer Medicare tax rate for 2017 will remain at 1.45%, and there is no wage base for Medicare. Employers are required to withhold an additional 0.9% in Medicare taxes on wages earned by employees in excess of $200,000 in a calendar year. Employers are not required to match this 2.35% employee rate but will continue to pay 1.45% in Medicare taxes on all subject wages earned by employees.
For more information and a history of the social security wage base click here.
2018 Commuter Limits
The 2018 excludable amount for employer-provided “qualified transportation fringe benefits” will increase from $255 to $260 per month for qualified parking. The monthly limit for transit passes and vanpooling will also increase to $260 per month.
2018 Pension Plan Limits
The IRS has announced that it will not change most pension plan limits for the coming year.
The 2018 limits on the exclusion for elective deferrals for 401(k), 403(b), and 457 plans will increase from $18,000 to $18,500. The catch-up contribution for those ages 50 and older will remain at $6,000.
The limit on annual contributions to an individual retirement account is $5,500, unchanged from 2017. The additional catch-up contribution limit to an individual retirement account for those 50 and older is $1,000, unchanged from 2017.
For more click here.
STATE UPDATES
New York Overtime Exemption Thresholds are Increasing
The New York Department of Labor is legally required to maintain a weekly overtime exemption threshold that is 75 times the hourly minimum wage. Since minimum wage is increasing across the state, overtime exemption thresholds will increase as well. Employers in New York may need to increase the salaries of exempt executive and administrative employees by December 31 to comply with state regulations.
The scheduled salary threshold increases vary based on geographic location. Also, note that in New York City the changes are based on employer size. The scheduled salary threshold increases, based on location and employer size, will take effect as follows:
New York City
Large employers (11 or more employees)
Small employers (10 or fewer employees)
Nassau, Suffolk, and Westchester Counties
Remainder of the State
Note that many industries in New York have separate wage orders regarding minimum wage and salary threshold increases. We encourage all employers to educate themselves regarding Wage Orders affecting their businesses.
We further encourage employers to evaluate their exempt executive and administrative employees to determine if any worker earning under the applicable state threshold should be 1) converted to nonexempt status or 2) given a pay increase to comply with the regulations.
Reminder: Paid Family Leave Effective 1/1/18
Paid Family Leave is coming to New York.
Beginning in 2018, employees who have worked 6 months for their employers are eligible to receive 50% of their average weekly wage (capped at 50% of the statewide average weekly wage) for each of their allowed 8 weeks of leave. By 2021, the percentage will increase to 67% of their average weekly wage, capped at 67% of the statewide average weekly wage, for each of their allowed 12 weeks of leave.
Employers may deduct 0.126% of their employees’ weekly wages (up to, but not to exceed, 0.126% of the statewide average weekly wage (SAWW)). The SAWW to use for deductions from July 1, 2017, through June 30, 2018, is $1,305.92.
This means that the maximum weekly contribution for employees earning more than $1,305.92 per week is $1.65. For employees earning less than $1,305.92 per week, the contribution is 0.126% of their weekly wage.
Employers were permitted to commence making such payroll deductions for PFL insurance premiums as early as July 1, 2017.
Employers will use these funds to provide employees with paid family leave through either a self-insured plan or a rider to their existing third-party disability benefit plan. If you’ve not already done so, it is important that you reach out to your insurance provider to confirm that they will add paid family leave insurance to your plan and to clarify the impact on your premium.
Click here for more information on the requirements and benefits under the New York Paid Family Leave law.
2018 Wage Parity Rates
On October 31, New York State Department of Health announced new wage parity rates in effect for 2018, reflecting increases to the NYS minimum wage.
Effective December 31, 2017 (not January 1!) until December 30, 2018, wage parity rates will be:
| NYC Large Employer | NYC Small Employer | Nassau, Suffolk, Westchester | |
| Base | $13.00 | $12.00 | $11.00 |
| Additional | $1.69 | $1.69 | ----- |
| Supplemental | $2.40 | $2.40 | $3.22 |
For the full text of the notices, see the NYC notice and the Nassau, Suffolk, and Westchester notices.
LOCAL UPDATES
New York City Expands Paid Sick Leave Protections
On November 6, Mayor Bill de Blasio signed legislation expanding the paid sick leave law to cover victims of domestic violence, sexual assault, stalking, and human trafficking Designating the paid leave for these abuses as “safe” hours, employees can use earned sick time to obtain services from a domestic abuse shelter, meet with attorneys or social service providers, relocate, or take other actions to ensure their own safety or the safety of a family member. The legislation also changes the name of the Act from the “Earned Sick Time Act” to the “Earned Sick and Safe Time Act.”
Prior to this legislation, employees could take earned sick time for various health-related needs, but not for abuse-related issues. The expanded protection is effective 180 days after becoming law.
For more click here.
ACA UPDATES
Penalty Notices Have Arrived
As promised by the IRS, employers have started receiving Letter 226J, assessing potential ACA penalties for 2015.
Letter 226J contains a table showing the proposed amount and type of penalty for each month of 2015. Also included is Form 14765, “Employee Premium Tax Credit (PTC) List” showing for each month which full-time employees received a premium tax credit and the Series 1 and 2 codes (Lines 14 and 16) that appeared on their 2015 Form 1095-C.
What are the Penalties?
There are two types of penalties for 2017:
The letter also contains Form 14764, ESRP Response, which is due in 30 days, if you disagree with the penalty.
2018 Affordability Threshold
The IRS has announced that the 2018 ACA affordability threshold will be 9.56%, a decrease from the 2017 threshold of 9.69%. This means that to be considered affordable, an employee’s health care contribution cannot exceed 9.56% of his household income.
For more click here.
2018 Increased Penalties
On October 19, the IRS announced the increased penalty amounts for failure to file and furnish Forms W-2 and 1095-C for the year 2018. Check out our chart below to compare the penalty amounts from 2017 to 2018.
| Penalty Per Return | 2017 Forms- Due January 31, 2018 | 2018 Forms- Due January 31, 2019 |
| Failure to File/Furnish | $260 per Form | $270 per Form |
| Penalty if corrected within 30 days | $50 per Form | $50 per Form |
| Penalty if corrected by August 1 | $100 per Form | $100 per Form |
The IRS places annual caps on the penalty amount that varies based on a company’s gross receipts. For more details click here.
New QSEHRA Guidance
The IRS has issued guidance on the requirements for providing a qualified small employer health reimbursement arrangement (QSEHRA). The guidance applies to plans starting on and after November 20, 2017.
Effective January 1, 2017, small employers (non-ALEs) who don’t offer health coverage to any employee could offer Qualified Small Employer Health Reimbursement Arrangements. QSEHRAs must be funded by the employer only, with no employee contributions, and may reimburse employees for medical expenses, including health insurance premiums.
The new guidance covers topics such as eligibility, the statutory dollar limit, written notice requirements, reporting, and coordination with the premium tax credit and health savings account requirements.
Under the original guidance, employers had to provide written notice to employees at least 90 days before the start of the plan. The new guidance relaxes this requirement for 2018, extending the deadline for furnishing the initial written notice to eligible employees by the later of (a) February 19, 2018, or (b) 90 days before the first day of the plan year of the QSEHRA.
The value of the QSEHRA benefit will be reported in Box 12 code FF on Forms W-2 beginning with the 2017 filings, due in 2018.
For more details on requirements under QSEHRA, click here.
This information is for educational purposes only, and not to provide specific legal advice. This may not reflect the most recent developments in the law and may not be applicable to a particular situation or jurisdiction.
Viventium Software Inc. is a SaaS-based human capital management solution that provides a remarkable user experience and award- winning software. Viventium provides flexible software and expert guidance so clients can be sure their payroll is done right.
Viventium offers specialized solutions in the health services markets which include home care agencies and skilled nursing facilities. Viventium Software supports all fifty of the United States with payroll and HR solutions.
Relax – you’re with Viventium.
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Licenses: Viventium HCM LLC NMLS ID: 2094503
Overtime, oh, it’s a complicated game, Different rules in every state, it’s never the same, Multiply by 1.5, but there’s more to see, In this overtime equation, it’s not that easy, you see.
VERSE 1
In the world of work, there’s a tale to be told, About overtime hours, and the payroll gold, A consistent paycheck, that’s the worker’s dream, But when it comes to overtime, it’s not as easy as it seems.
PRE-CHORUS
Oh, Susie worked hard in San Francisco town, But the rules around overtime, they had her feeling down, 42 hours this week, she gave her all, Now it’s time to calculate, let the numbers fall.
CHORUS
Overtime, oh, it’s a complicated game, Different rules in every state, it’s never the same, Multiply by 1.5, but there’s more to see, In this overtime equation, it’s not that easy, you see.
VERSE 2
Exempt or non-exempt, the title they hold, Where they work, where you’re based, it’s all in the fold, California or New York, the laws they diverge, For payroll admins, it’s a never-ending surge.
PRE-CHORUS
Oh, the DOL’s website, a labyrinth to explore, State regulations galore, it’s quite a chore, Staying compliant, it’s a tricky art, Missing out on requirements can break your heart.
CHORUS
Overtime, oh, it’s a complicated game, Different rules in every state, it’s never the same, Multiply by 1.5, but there’s more to see, In this overtime equation, it’s not that easy, you see.
BRIDGE
But here’s a method that can save the day, A payroll software, to keep errors at bay, Input the info right, integrate with ease, No more manual labor, no more overtime fees.
VERSE 3
Back to Susie’s story, she’s owed her due, According to FLSA, it seems we have a clue, $860 on the table, that’s what we’d say, But California’s got its rules, changing the way.
PRE-CHORUS
Oh, California says, hours past eight, Are overtime-eligible, don’t underestimate, Now Susie’s owed $900, that’s the decree, In this overtime puzzle, you gotta set it free.
CHORUS
Overtime, oh, it’s a complicated game, Different rules in every state, it’s never the same, Multiply by 1.5, but there’s more to see, In this overtime equation, it’s not that easy, you see.
OUTRO
So when it’s overtime, and the rules entwine, Choose a payroll software, let it all align, Viventium’s the name, we’ve got the key, To make overtime calculations a breeze, you’ll see.
ENDING
Don’t overwork yourself, don’t you fret, With Viventium by your side, it’s a safe bet, Relax, you’re with us, in this overtime fight, With the right tools in hand, everything’s gonna be alright.
Take back time, like a winding clock, Retroactive pay, mending every block. Calculate the hours, with precision and grace, In the world of care, in this payroll space.
VERSE 1
In the world of care, where time slips away, Caregivers dedicate, every single day. But when the hours are missed, in the daily race, Retroactive pay, steps up to embrace.
PRE-CHORUS
A caregiver tired, at the week’s end, Forgot to log hours, a mistake to mend. Admins face the challenge, calculations to make, To set it right, for the caregiver’s sake.
CHORUS
Take back time, like a winding clock, Retroactive pay, mending every block. Calculate the hours, with precision and grace, In the world of care, in this payroll space.
VERSE 2
Manual calculations, prone to a flaw, Dealing with shifts, odd hours, and the law. As your business grows, the cost takes flight, Automated solutions, shining bright.
PRE-CHORUS
Compliance is key, with FLSA’s might, Calculate and compensate, get it right. Avoid the audit’s gaze, fines and the cost, Retroactive pay, no longer lost.
CHORUS
Take back time, like a winding clock, Retroactive pay, mending every block. Calculate the hours, with precision and grace, In the world of care, in this payroll space.
BRIDGE
Employee satisfaction, a crucial part, Resolve mistakes, a work of heart. Relationships flourish, in pay’s embrace, A payroll software, creating a trace.
VERSE 3
Star caregivers, valued and strong, Retention and recruiting, where they belong. Automated solution, a total pay dance, Establish your business, a work-life romance.
PRE-CHORUS
A self-winding watch, Viventium’s grace, Optimizing payroll, in every case. No more struggles, in the payroll game, In it with you, time and time again.
CHORUS
Take back time, like a winding clock, Retroactive pay, mending every block. Calculate the hours, with precision and grace, In the world of care, in this payroll space.
OUTRO
As your business grows, in the hustle and fight, Viventium by your side, making it right. No more worries, in the payroll chain, In it with you, time and time again.
Geo Tax, oh Geo Tax, our savior in the night, Guiding us through tax laws, shining a bright light. No more payroll worries, no more sleepless nights, With Viventium’s help, we’ll be alright.
VERSE 1
In the world of business, we all aim to thrive, Year after year, our dreams taking flight. But as we soar higher, we start to see, More money, more problems, just like B.I.G. Outgrowing our shell, it’s an exciting phase, But it brings with it some challenging days. Solutions we had, now show their flaws, As we push the boundaries, breaking through the walls.
CHORUS
Geo Tax, oh Geo Tax, our savior in the night, Guiding us through tax laws, shining a bright light. No more payroll worries, no more sleepless nights, With Viventium’s help, we’ll be alright.
VERSE 2
Employees across states, in different localities, Tax laws aplenty, creating complexities. Our old software’s limits, we’ve begun to see, Scaling up our business, we need to break free. Calculating pay and taxes, where it all begins, Errors in this process, lead to countless sins. Employees rely on us, trust in our might, To withhold what’s needed, get it just right.
CHORUS
Geo Tax, oh Geo Tax, our savior in the night, Guiding us through tax laws, shining a bright light. No more payroll worries, no more sleepless nights, With Viventium’s help, we’ll be alright.
BRIDGE
Taxes, they’re not simple, that’s for sure, A world of complexity, there’s always more. But Viventium stands with us, in this fight, Geo Tax, our ally, making everything right.
VERSE 3
CPAs may struggle, and admins too, Keeping up with taxes, what can they do? The rules keep changing, it’s hard to keep pace, But Viventium’s here, in this challenging space.
CHORUS
Geo Tax, oh Geo Tax, our savior in the night, Guiding us through tax laws, shining a bright light. No more payroll worries, no more sleepless nights, With Viventium’s help, we’ll be alright.
OUTRO
So relax, dear business, and set your mind free, With Geo Tax on our side, we’re the best that we can be. Viventium’s got us, in this tax-filled fight, No more worries, no more sleepless nights.
REPEAT CHORUS
Geo Tax, oh Geo Tax, our savior in the night, Guiding us through tax laws, shining a bright light. No more payroll worries, no more sleepless nights, With Viventium’s help, we’ll be alright.
Configurable Payroll Grids, a helping hand in sight, In the realm of admin life, where details are rife. With custom views and filters, they navigate through the night, Let’s celebrate this feature, it’s the heart of our work life.
VERSE 1
In the world of admin tasks, where changes often arise, There’s a tool that’s been a savior, under office fluorescent skies. With flexibility and precision, it eases their daily strife, Let’s sing about this feature, it’s the pulse of our work life.
CHORUS
Configurable Payroll Grids, a helping hand in sight, In the realm of admin life, where details are rife. With custom views and filters, they navigate through the night, Let’s celebrate this feature, it’s the heart of our work life.
VERSE 2
Admins wear many hats, in their daily grind, Sometimes they need to adjust, leave no errors behind. Adding extra hours, bonuses, or fixing pay, They need a simple method, to make it all okay.
CHORUS
Configurable Payroll Grids, a helping hand in sight, In the realm of admin life, where details are rife. With custom views and filters, they navigate through the night, Let’s celebrate this feature, it’s the heart of our work life.
BRIDGE
Custom views and filters, tailor it to your need, Focus on the important, no need for needless speed. A hundred-dollar bonus, a few clicks and it’s in flight, Admins get it done, making sure it’s right.
VERSE 3
In the admin’s world, where numbers have their say, This tool steps in gracefully, making tasks less gray. An interface so intuitive, like an Excel sheet, Changing data effortlessly, making work complete.
CHORUS
Configurable Payroll Grids, a helping hand in sight, In the realm of admin life, where details are rife. With custom views and filters, they navigate through the night, Let’s celebrate this feature, it’s the heart of our work life.
OUTRO
So here’s to Payroll Grids, in our song of praise they gleam, For admins working diligently, they fulfill a dream. In the world of office hustle, they bring much-needed light, Let’s tip our hats to this tool, and its invaluable might.
Rule-Based Automation, it’s the name of the game, Less manual toil, less stress and shame, With policies and standards, we’ll pave the way, To automate your chores and brighten your day.
VERSE 1
In the world of payroll, a daily task we face, Admins work hard, in this complex space, They handle policies, with attention and care, But there’s a solution that’s beyond compare.
PRE-CHORUS
Oh, payroll admins, your role’s crucial and true, But there’s a tool we’ve got, just for you, Let’s explore rule-based automation, my friend, With Viventium, your tasks will gently mend.
CHORUS
Rule-Based Automation, it’s the name of the game, Less manual toil, less stress and shame, With policies and standards, we’ll pave the way, To automate your chores and brighten your day.
VERSE 2
Standardize policies, that’s the key, For tenure, role, union status, you’ll see, PTO, bonuses, pay rates defined, Automation makes your workload more aligned.
PRE-CHORUS
Oh, payroll admins, the burden’s a load, But rule-based automation lightens the road, No more tiresome chores, no more dread, With Viventium, it’s smoother ahead.
CHORUS
Rule-Based Automation, it’s the name of the game, Less manual toil, less stress and shame, With policies and standards, we’ll pave the way, To automate your chores and brighten your day.
BRIDGE
In the world of payroll, where tasks repeat, We’ve got the solution, it’s oh so neat, “If this, then that,” it’s simple and sly, With Viventium by your side, you’ll reach for the sky.
VERSE 3
Tenure-based PTO, a common request, With Viventium, it’s passed the ultimate test, Set it up once, and then you’ll see, Automation handles the chore, oh so free.
PRE-CHORUS
Oh, payroll admins, take a breath, take a pause, With Rule-Based Automation, you’ll find no flaws, It’s easy, it’s simple, no programming in sight, Viventium’s got you covered, day and night.
CHORUS
Rule-Based Automation, it’s the name of the game, Less manual toil, less stress and shame, With policies and standards, we’ll pave the way, To automate your chores and brighten your day.
OUTRO
So if you’re a payroll admin, feeling the weight, Let Viventium’s Rule-Based Automation be your fate, No more worries, no more strife, With Viventium, you’ll transform your work life.
Oh, the Report Library, it’s the heart of the show, Where numbers come alive and insights start to flow. With Viventium’s aid, it’s a breeze, can’t you see? Reporting made easy, for your company to be free.
VERSE 1
In the world of business, it’s a complex game, With factors and figures, it’s never the same. Decisions are key, they’ll determine your fate, So listen up closely, don’t be a bit late.
PRE-CHORUS
Gather your data, don’t let it fade, In the depths of spreadsheets, don’t let it cascade. Your HCM software, is it up to the task? To capture and store, to help you unmask.
CHORUS
Oh, the Report Library, it’s the heart of the show, Where numbers come alive and insights start to flow. With Viventium’s aid, it’s a breeze, can’t you see? Reporting made easy, for your company to be free.
VERSE 2
Once the data’s collected, it’s time to report, But it can be daunting, that’s the common retort. Pre-built solutions, they’re your guiding light, Turning raw data into visions so bright.
PRE-CHORUS
No more manual hours, no errors in sight, With report library’s might, everything’s right. Payroll summaries, tax liabilities, and more, All in a flash, you’ll have what you adore.
CHORUS
Oh, the Report Library, it’s the heart of the show, Where numbers come alive and insights start to flow. With Viventium’s aid, it’s a breeze, can’t you see? Reporting made easy, for your company to be free.
BRIDGE
Viventium’s here, with a passion so true, Constantly improving, for folks just like you. A Report Library, a gift from the stars, For data-driven dreams, it’ll take you far.
CHORUS
Oh, the Report Library, it’s the heart of the show, Where numbers come alive and insights start to flow. With Viventium’s aid, it’s a breeze, can’t you see? Reporting made easy, for your company to be free.
OUTRO
So remember this lesson, in the business terrain, It’s all ’bout decisions, don’t let ’em wane. With data as your guide, and Viventium’s grace, You’ll conquer the challenges you’ll face.
