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2 weeks ago · by · 0 comments

DOL Increases Civil Penalty Amounts for 2018

On Jan. 2, 2018, the Department of Labor (DOL) issued a final rule that increases the civil penalty amounts that may be imposed on employers under various federal laws. The final rule increases the civil penalty amounts associated with:

  • Failing to file an annual Form 5500 under the Employee Retirement Income Security Act (ERISA);
  • Repeated or willful violations of minimum wage or overtime requirements under the Fair Labor Standards Act (FLSA);
  • Willful violations of the poster requirement under the Family and Medical Leave Act (FMLA); and
  • Violations of the poster requirement under the Occupational Safety and Health Act (OSH Act).

The increased amounts apply to civil penalties that are assessed after Jan. 2, 2018. 

Employers should become familiar with the new penalty amounts and review their pay practices, benefit plan administration and safety protocols to ensure compliance with federal requirements.   

The 2015 Inflation Adjustment Act (Act) includes provisions to strengthen civil monetary penalties under various federal laws in order to maintain their deterrent effect. The Act required federal agencies, including the DOL, to adjust the civil monetary penalties with an initial “catch-up” adjustment. The DOL made this initial adjustment in July 2016. Federal agencies are also required to make subsequent annual adjustments for inflation, no later than Jan. 15 of each year.

The DOL’s final rule implements the 2018 annual adjustments for civil penalties assessed or enforced by the DOL, including penalties under the FLSA, FMLA, OSH Act and ERISA. The increased penalty amounts became effective on Jan. 2, 2018, and may apply for any violations occurring after Nov. 2, 2015.

The updated maximum penalty amounts are shown in the table below.

REQUIREMENT PENALTY AMOUNT
2017 2018
Wage and Hour
Repeated or willful violations of minimum wage or overtime requirements (FLSA) Up to $1,925 for each violation Up to $1,964 for each violation
Violations of child labor laws Up to $12,278 for each employee subject to the violation Up to $12,529 for each employee subject to the violation
Violations of child labor laws that cause death or serious injury to an employee under age 18 Up to $55,808 for each violation (doubled to $111,616 if the violation is repeated or willful) Up to $56,947 for each violation (doubled to $113,894 if the violation is repeated or willful)
Willful failure to post FMLA general notice Up to $166 for each separate offense Up to $169 for each separate offense
Violations of the Employee Polygraph Protection Act (EPPA) Up to $20,111 for each violation Up to $20,521 for each violation
Employee Benefits
Failure to file an annual report (Form 5500) with the DOL (unless a filing exemption applies) Up to $2,097 per day Up to $2,140 per day
Failure of a multiple employer welfare arrangement (MEWA) to file an annual report (Form M-1) with the DOL Up to $1,527 per day Up to $1,558 per day
Failure to furnish plan-related information requested by the DOL
*Under ERISA, administrators of employee benefit plans must furnish to the DOL, upon request, any documents relating to the employee benefit plan.  
Up to $149 per day, but not to exceed $1,496 per request Up to $152 per day, but not to exceed $1,527 per request
Failing to provide the annual notice regarding CHIP coverage opportunities
*This notice applies to employers with group health plans that cover residents of states that provide a premium assistance subsidy under a Medicaid or CHIP program.
Up to $112 per day for each failure (each employee is a separate violation) Up to $114 per day for each failure (each employee is a separate violation)
For 401(k) plans, failure to provide blackout notice or notice of right to divest employer securities Up to $133 per day Up to $136 per day
Failure to provide Summary of Benefits and Coverage (SBC) Up to $1,105 per failure Up to $1,128 per failure
Employee Safety – OSH Act
Violation of posting requirement Up to $12,675 for each violation Up to $12,934 for each violation
Other-than-serious violation Up to $12,675 per violation Up to $12,934 for each violation
Serious violation Up to $12,675 for each violation Up to $12,934 for each violation
Willful violation Between $9,054 and $126,749 per violation Between $9,239 and $129,336 per violation
Uncorrected violation Up to $12,675 per day until the violation is corrected Up to $12,934 per day until the violation is corrected

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3 weeks ago · by · 0 comments

Password Security Tips

Technology can be a risk, especially when it involves your password. You hear about all of the hack attempts on the large corporations, but you don’t hear about the every day person that get’s targeted by a cyber attack. Simply visiting a website could enable your attacker access to your computer. This should push you to protect your most valuable asset, your password! Don’t give the hackers an easy target by not following the simple tips on improving your password.

Improve Your Password

  1. Change your password every 30-45 days.
  2. Choose a password between 8-16 characters.
  3. Use at least two special characters (!@#$%^&*) randomly within your password
  4. Avoid using family or pet names, dates or common phrases within your password.
  5. Never reuse or repeat a password across accounts.

Stay Away from COMMON Passwords

Protect yourself (and your company) by making sure you’re not using one of the top 25 most commonly stolen passwords of 2017, as determined by IT security firm SplashData.

  1. 123456
  2. password
  3. 12345678
  4. qwerty
  5. 12345
  6. 123456789
  7. letmein
  8. 1234567
  9. football
  10. iloveyou
  11. admin
  12. welcome
  13. monkey
  14. login
  15. abc123
  16. starwars
  17. 123123
  18. dragon
  19. passw0rd
  20. master
  21. hello
  22. freedom
  23. whatever
  24. qazwsk
  25. trustno1

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1 month ago · by · 0 comments

New Tax Law Includes Changes for Employee Benefits

On Dec. 22, 2017, President Donald Trump signed into law the Tax Cuts and Jobs Act (Act). The Act makes significant changes to the federal Internal Revenue Code (Code), including changes that impact employee benefits. Effective for 2018:

  • Employers cannot deduct expenses associated with qualified transportation fringe benefit programs;
  • Employees cannot exclude bicycle commuting reimbursements from their gross income; and
  • Moving expense reimbursements are not deductible for employers and cannot be excluded from employees’ gross income.

In addition, effective for 2018 and 2019, the Act creates a federal tax credit for employers that provide paid family and medical leave.

Because most of the Act’s provisions became effective on Jan. 1, 2018, employers should start working with their tax advisors to determine how the tax changes will impact their businesses.

Qualified Transportation Fringe Benefits

Code Section 132 allows employers to provide certain transportation benefits to employees on a tax-free basis. These benefits include qualified parking, transit passes, and transportation to and from work in a commuter highway vehicle (“vanpooling”). Prior to 2018, bicycle commuting reimbursements also qualified for this tax exclusion.

Qualified transportation expenses paid by either the employer or employee can be excluded from an employee’s gross income, up to certain limits. For 2018, the tax exclusion limits are $260 per month for qualified parking expenses and $260 per month for transit passes and vanpooling expenses, combined.

Beginning in 2018, the Act eliminates the employer deduction for expenses associated with a qualified transportation fringe benefit program. The Act also eliminates the deduction for any expenses incurred in connection with providing transportation to an employee in connection with travel between the employee’s residence and place of employment, except as necessary for ensuring the employee’s safety.

However, with the exception of bicycling commuting expenses, the tax exclusion for employees has not changed—qualified transportation benefits are still excludable from employees’ gross income. The tax exclusion for bicycling commuting benefits is suspended for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026.

Qualified Moving Expense Reimbursements

Before 2018, employers could pay or reimburse an employee’s eligible moving expenses related to starting employment at a new principal place of work on a tax-free basis. The Act suspends this income exclusion from 2018 through 2025 tax years.

It also suspends the employer deduction for qualified moving expense reimbursements for the same period of time. However, the income exclusion and deduction still apply in the case of a member of the U.S. armed forces on active duty who moves pursuant to a military order and incident to a permanent change of station.

Employer Credit for Paid Family and Medical Leave

The Act creates a new temporary tax credit for employers that provide paid family and medical leave to their employees. The tax credit, which applies to wages paid in 2018 and 2019, is equal to a percentage of wages paid to employees who are on family and medical leave. Paid leave that is provided as vacation leave, personal leave, sick leave, or required by state or local law is not taken into consideration.

To qualify for the tax credit, an employer must have a written policy in place that provides at least two weeks of paid family and medical leave for full-time employees (proportionally adjusted for part-time employees) and a rate of payment that is at least 50 percent of an employee’s normal pay rate.

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Scurich Insurance Services
Phone: (831) 661-5697
Fax: (831) 661-5741

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Aptos, Ca 95003-4700

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Watsonville, CA 95077-1170

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