HR Webinar: Ho, Ho, Ho My Goodness: Compliance Review for Year-End 2019

Organize. Humanize. Maximize.
“Ho Ho Ho My Goodness:”
Compliance Review for Year-End 2019
December 12, 2019
Bob Greene
IRS
DOL
W-4
Changes
States
FLSA
Rules
Changes
Min
Wage
Changes
CMS
Ben
Limit
Changes

2

Speaker
Housekeeping
3
Questions
Today’s
topic

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Today’s Speaker
Bob Greene currently serves as Channels Manager and Sales Trainer at
Ascentis. Bob’s 40 years in the human capital management industry have
been spent in practitioner, consultant and vendor/partner roles.
As practitioner, he managed payroll for a 5,000 person bank in New Jersey.
As consultant, he spent 8 years advising customers in HRMS, and payroll
and benefits system design as well as acquisition strategies. Bob also built a
strategic HCM advisory practice for Xcelicor (later acquired by Deloitte
Consulting.)
As vendor/partner, he has had prominent roles in sales support, marketing
and product management at several companies and currently Ascentis. Bob
has been a Contributing Editor for IHRIM's Workforce Solutions Review
journal, for the past eight years. His experience also includes two years as
Adjunct Lecturer in HRIS at Benedictine University in Lisle, Illinois. In
addition to his 40 years of experience, Bob also holds a BA in English from
Rutgers University.
Bob Greene

Agenda
• Part I: FLSA Update: This Time It Looks Real…
• History of the Latest Efforts to Update the Law
• The Proposed Final Rule: On Track for 1/1/2020
• Part II: States Have Been Busy, Too…
• Minimum Wage Changes by Jurisdiction
• State ACA Compliance Reporting Debuts Next Month
• The CCPA: California Blazes the Trail Again – This Time, on Data Privacy
• California Employment: The Dynamex Decision and the New “ABCs” of Employment Status
• Part III: Year-End Regulatory Roundup
• Annual Benefit Limit Changes
• A New W-4 Form for 2020
• EEO-1 Component 2 Reporting Update
• Last Call: These Provisions are Expiring….!
• How Ascentis Can Help
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Disclaimer
• Legal advice
• A political opinion
This presentation is not:
Before Taking Any Actions
Before taking any actions on the information contained in
this or any other Ascentis presentation, employers should
review this material with their professional advisors.

Part I
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FLSA Update:
This Time, For Real?

FLSA Updates - History
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Source: DOL Wage & Hour Division, Release #19-1715-NAT. https://www.dol.gov/newsroom/releases/whd/whd20190924
The FLSA Exempt Salary Basis Threshold
• The salary thresholds driving exempt status determination under the FLSA were last updated in
2004.
• In 2014, then-President Obama directed the Secretary of Labor to update the overtime regulations
to reflect the original intent of the Fair Labor Standards Act, and to simplify and modernize the rules
so they’re easier for workers and businesses to understand and apply.
• The department issued a final rule that would have put more money in the pockets of middle class
workers – or given them more free time.
• The Final rule would have:
• Raised the salary threshold indicating eligibility from $455/week ($23,660 per year) to $913 ($47,476 per year),
extending protections to 4.2 million additional workers.
• Automatically updated the salary threshold every 3 years, based on wage growth over time, increasing predictability.
• Strengthened overtime protections for salaried workers already entitled to overtime.
• Provided greater clarity for workers and employers.

FLSA Updates - History
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FLSA Updates – The “Final” (?) Rule
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The Obama-Era Rule Enjoined
• On November 22, 2016 U.S. District Judge Amos Mazzant of the Eastern District of Texas
enjoined enforcement of the new rule, primarily due to the DOL exceeding its authority in the
rulemaking.
• On August 31, 2017 Judge Mazzant officially concluded that the FLSA overtime rule is invalid.
This made permanent the injunction preventing implementation of the new rules.
• On October 30, 2017, the Department of Justice, on behalf of the Department of Labor (DOL),
appealed the U.S. District Court’s August decision that the FLSA overtime rule is invalid
• At the same time, the DOL said it intends to ask the Fifth Circuit Court of Appeals to "hold" that
appeal indefinitely while they continue their rulemaking to determine what the new salary level
threshold should be.
• On March 7, 2019, DOL announced a Notice of Proposed Rulemaking that more modestly
increased the same threshold, from $455/week ($23,660 per year) to $679/week ($35,308 per
year, trimming the number of additional workers protected from 4.2 million to 1.2 million.

FLSA Updates – The “Final” (?) Rule
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The New Rule, Which Takes Effect January 1, 2020, provides:
• …an increase to the minimum salary required for an employee to qualify for exemption from the current
level of $455 to $684 per week ($35,568 per year). [Adds 1.2 million workers to non-exempt ranks.]
• …an increase to the total annual compensation requirement for “highly compensated employees” (HCE)
from the current level of $100,000 to $107,432/year. [Adds 101,800 workers to non-exempt ranks.]
• …allowing employers to use nondiscretionary bonuses and incentive payments (including commissions)
that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level.
• …no changes in overtime protections for:
• Police Officers
• Fire Fighters
• Paramedics
• Nurses
• Laborers including non-management production-line employees
• Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians,
mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and other construction workers
• …no changes to the job duties test.
• …no automatic adjustments to the salary threshold.
Source: DOL. https://www.dol.gov/newsroom/releases/whd/whd20190924

Part II
Busy States, Counties and Localities
Source: Economic Policy Institute and Wolters Kluwer
Courtesy: Business Insider/Andy Kiersz

Minimum Wage Rate Increases, 2020
State Min Wage in 2019 Min Wage eff 2020 …On its Way To… Tipped Employees
Alaska $9.89 $10.19 No separate rate for tipped
Arizona $11.00 $12.00 $9 for tipped employees
Arkansas $9.25 $10.00 $2.63 for tipped employees
California (<26 e’es) $11.00 $12.00 $15.00 by 2023 No separate rate for tipped
California (26> e’es) $12.00 $13.00 $15.00 by 2022 No separate rate for tipped
Colorado $11.10 $12.00 $8.98 for tipped employees
Connecticut $11.00 $12.00 (eff 9/1/20) $15.00 by 6/1/2023 $6.38/$8.23 dep on job title
District Columbia $14.00 $15.00 (eff 7/1/20) $5.00 eff 7/1/20 tipped emps
Florida $8.46 $8.56 $5.54 for tipped employees
Illinois $8.25 $9.25 / $10.00 (7/1/20) $15.00 by 2025 $5.55 for tipped employees
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More than 20 states increase their minimum wage rates, effective in 2020

Maine $11.00 $12.00 $6 for tipped employees
Maryland $10.10 $11.00 $3.63 for tipped employees
Massachusetts $12.00 $12.75 $15.00 by 2023 $4.95 for tipped employees
Michigan $9.45 $9.65 $3.67 for tipped employees
Minnesota (<$.5m gr) $8.04 $8.15 No separate rate for tipped
Minnesota ($.5m> gr) $9.86 $10.00 No separate rate for tipped
Missouri $8.60 $9.45 $12.00 by 2023 $4.73 for tipped employees
Montana $8.50 $8.65 No separate rate for tipped
Nevada (health bens offered) $10.25 $11.00 (eff 7/1/20) No separate rate for tipped
Nevada (no health benefits) $11.25 $12.00 (eff 7/1/20) No separate rate for tipped
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New Jersey $10.00 $11.00 $15.00 by 2024 $3.13 for tipped employees
New Jersey (<6 emps) $8.85 $10.30 $15.00 by 2026 $3.13 for tipped employees
New Jersey (ag emps) $8.85 $10.30 $15.00 by 2027 $3.13 for tipped employees
New Mexico $7.50 $9.00 $12.00 by 2023 $2.35 for tipped employees
New York $11.80 $12.50 $15.00 by CPI det date …varies by job title/category
Ohio (>$319k gr) $8.55 $8.70 $4.35 for tipped employees
Ohio (<$319k gr) $7.25 (fed) $7.25 (fed) $4.35 for tipped employees
Oregon $11.25 $12.00 (eff 7/1/20) $13.50 by 2022 No separate rate for tipped
South Dakota $9.10 $9.30 $4.65 for tipped employees
Vermont $10.75 $10.96 $5.48 for tipped employees
Washington $12.00 $13.50 No separate rate for tipped
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State, Locality Min Wage in 2019 Min Wage eff 2020 Comment/Limit Expected Eff Date
Arizona, Flagstaff $12.00 $13.00 1/1/2020
California, Alameda $13.50 $15.00 7/1/2020
California, Belmont $13.50 $15.00 1/1/2020
California, Berkeley $15.59 TBD, based on CPI 7/1/2020
California, Cupertino $15.00 $15.35 1/1/2020
California, Daly City $12.00 $13.75 1/1/2020
California, El Cerrito $15.00 $15.37 1/1/2020
California, Emeryville $16.30 $16.42 (est.) 7/1/2020
California, Fremont $13.50 $15.00 26 or more e’es 7/1/2020
California, Fremont $11.00 $13.50 25 or fewer e’es 7/1/2020
California, Los Altos $15.00 $15.40 1/1/2020
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Many localities will also increase their minimum wage rates, effective in 2020

California, Los Angeles $14.25 $15.00 26 or more e’es 7/1/2020
California, Los Angeles $13.25 $14.25 25 or fewer e’es 7/1/2020
California, LA County $14.25 $15.00 26 or more e’es 7/1/2020
California, LA County $13.25 $14.25 25 or fewer e’es 7/1/2020
California, Malibu $14.25 $15.00 26 or more e’es 7/1/2020
California, Malibu $13.25 $14.25 25 or fewer e’es 7/1/2020
California, Menlo Park $12.00/$11.00 $15.00 1/1/2020
California, Mountain View $15.65 $16.05 1/1/2020
California, Novato $12.00 $13.00 then $15.00 100 or more e’es 1/1/2020 then 7/1/2020
California, Novato $12.00 $13.00 then $14.00 26 to 99 e’es 1/1/2020 then 7/1/2020
California, Novato $11.00 $12.00 then $13.00 25 or fewer e’es 1/1/2020 then 7/1/2020
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California, Oakland $13.80 $14.14 1/1/2020
California, Palo Alto $15.00 $15.40 1/1/2020
California, Pasadena $14.25 $15.00 26 or more e’es 7/1/2020
California, Pasadena $13.25 $14.25 25 or fewer e’es 7/1/2020
California, Petaluma $12.00 $15.00 26 or more e’es 1/1/2020
California, Petaluma $11.00 $14.00 25 or fewer e’es 1/1/2020
California, Redwood City $13.50 $15.38 1/1/2020
California, San Diego $12.00 $13.00 1/1/2020
California, S San Francisco $12.00/$11.00 $15.00 1/1/2020
California, San Leandro $14.00 $15.00 7/1/2020
California, San Mateo $13.50 $15.00 non-profits only 1/1/2020
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California, Santa Clara $15.00 $15.40 1/1/2020
California, Santa Monica $14.25 $15.00 26 or more e’es 7/1/2020
California, Santa Monica $13.25 $14.25 25 or fewer e’es 7/1/2020
California, Santa Rosa $13.00 $15.00 26 or more e’es 7/1/2020
California, Santa Rosa $12.00 $14.00 25 or fewer e’es 7/1/2020
California, Sonoma $12.00 $13.50 26 or more e’es 1/1/2020
California, Sonoma $11.00 $12.50 25 or fewer e’es 1/1/2020
California, Sunnyvale $15.65 $16.05 1/1/2020
Colorado, Denver $11.10 $12.85 1/1/2020
Illinois, Chicago $13.00 $14.00 7/1/2020
Illinois, Cook County $12.00 $13.00 7/1/2020
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Maryland, Montgomery Co $13.00 $14.00 51 or more e’es 7/1/2020
Maryland, Montgomery Co $12.50 $13.25 11-50 e’es, nonprofits 7/1/2020
Maryland, Montgomery Co $12.50 $13.00 10 or fewer e’es 7/1/2020
Minnesota, Minneapolis $12.25 $13.25 101 or more e’es 7/1/2020
Minnesota, Minneapolis $11.00 $11.75 100 or fewer e’es 7/1/2020
New Mexico, Albuquerque $8.20 $8.35 (health bens offered) 1/1/2020
New Mexico, Albuquerque $8.95 $9.35 (no health benefits) 1/1/2020
New Mexico, Bernalillo Co $9.05 $9.20 1/1/2020
New Mexico, Las Cruces $10.10 $10.25 1/1/2020
New York, LI / Westchester $12.00 $13.00 12/31/2019
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New York, New York City $15.00 $15.00 (no chng) 11 or more e’es 12/31/2019
New York, New York City $13.50 $15.00 10 or fewer e’es 12/31/2019
Oregon, Portland Metro $12.50 $13.25 7/1/2020
Oregon, Nonurban Counties $11.00 $11.50 7/1/2020
Washington, Seattle $16.00 $16.39 501 or more e’es 1/1/2020
Washington, Seattle $15.00 $15.75 <500 e’es, no health bens 1/1/2020
Washington, Seattle $12.00 $13.50 <500 e’es, w/health bens 1/1/2020
Washington, City of SeaTac $16.09 $16.34 1/1/2020
Washington, Tacoma $12.35 $13.50 1/1/2020
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State-Mandated ACA Reporting
RY2019/
FY2020
RY2020/
FY2021

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States/Localities Seek to Re-Impose the Individual Mandate
• With the effective repeal of the individual mandate effective January 1, 2019, as part of the
Tax Cuts and Jobs Act, certain states are introducing (or in one case, “reviving”) state laws
imposing Individual Shared Responsibility Payments.
• So far, the states and jurisdictions establishing individual mandates include:
• Massachusetts
• New Jersey
• District of Columbia
• Vermont
• California
• Rhode Island
• With these new individual mandates come reporting requirements needed to ensure state
enforcement.
The Law of Unintended Consequences at Work?

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The Longest Standing State Law; the First New Deadline
• Back in 2006, Massachusetts passed a first-in-the-nation health care reform law:
Ch. 58, “An Act Providing Access to Affordable, Quality, Accountable Health Care”
(aka, “Romneycare”). Many considered it to be the model for the ACA.
• Many of the requirements of Ch. 58 were superseded by the ACA. For example,
the requirements for coverage under the federal Individual Mandate (including, for
example, minimum essential coverage and essential health benefits) met or
exceeded the equivalent requirements in the Massachusetts law.
• For this reason, the Massachusetts Individual Mandate fell silent from 2010 through
2018.
• When the federal Individual Mandate was effectively negated by the TCJA’17, the
Massachusetts Individual Mandate “kicked back in.”
• Massachusetts’ non-coverage penalty varies by age, income and family size.
• Massachusetts requires a special reporting form, the MA 1099-HC, to be filed
each year by January 31 for all workers (whether the employer is HQ’ed in
Massachusetts or not).
Massachusetts

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Well-Defined Requirements; Starts in early 2020
• New Jersey has communicated more about their state ACA reporting than most
other states.
• The State Individual Mandate penalty is 2.5% of the taxpayer’s household income
to a maximum of $695 per year per adult, or $347 per year per child.
• New Jersey will use the IRS 1094-c/1095-c for state reporting, so no separate form
to complete.
• Required to be filed by any New Jersey employer, or out-of-state employer with
New Jersey resident employees.
• Forms due March 31 of each year, beginning 2020 for 2019 – same deadline as
for federal electronic filing.
• Forms will be filed using the federal XML filing schemas, but through the NJ W-2
filing system.
New Jersey

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A Later Deadline, But More Complex Reporting
• Variable penalty will be determined by September 30 each year.
• Will use federal 1094-c/1095-c forms, but not the XML reporting schema.
• Reporting required for any employer with 50 or more full-time employees and at
least one employee who was a DC resident during the tax year.
• Due date:
• June 30, 2020 for 2019 forms.
• 30 days after the federal electronic filing deadline for later years.
• Forms required for any employee:
• Whose wages were withheld and paid to the District during the tax year, OR
• Who had a residence mailing address in the District at any time during the tax year.
• Filing method will be to upload form files to mytax.dc.gov using either .txt or .zip
format; XML format NOT supported.
District of Columbia

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Start Planning Now for 2021 Reporting
• The largest state so far to announce state level Individual Mandate reporting.
• Reporting effective for tax year 2020; filing year 2021.
• The State Individual Mandate penalty is 2.5% of the taxpayer’s household
income to a maximum of $695 per year per adult, or $347 per year per child.
• A cap will be placed on the penalty based on the average cost of a bronze level
plan in the California exchange.
• Due date: March 31 (same as federal electronic deadline)
• Filing format: leverage federal 1094-c/1095-c forms
• Filing method: TBD
California

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• Reporting effective for tax year 2020; filing year 2021.
• The State Individual Mandate penalty is 2.5% of the taxpayer’s household
income to a maximum of $695 per year per adult, or $347 per year per child.
• A cap will be placed on the penalty based on the average cost of a bronze level
plan in the Rhode Island exchange.
• Due date: TBD
• Filing format: leverage federal 1094-c/1095-c forms
Rhode Island

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• Individual mandate will be effective for tax year 2020; filing year 2021.
• Penalty: TBD
• Due date: TBD
• Filing format: TBD
Vermont

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California Blazes New Trails: The CCPA
…but some employer provisions have been postponed
• On January 1, 2020, the California Consumer Privacy Act (the “CCPA”) will officially
become California law. The law will impose a large number of new obligations upon
certain businesses regarding their collection, use, storage, and disclosure of consumers’
personal information.
• While many observers have been studying the effects the CCPA will have on a business’s
obligations regarding the collection, use, and retention of their California customers’
data, businesses have also recognized that it will impact how they should handle their
California employees’ data.
• Observers note that the CCPA defines consumer broadly as “a natural person who is a
California resident,” which means the CCPA applies not just to their California customers
but also to their California employees.
The California Consumer Privacy Act Takes Effect January 1, 2020

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A.B. 25 postpones most employer-directed CCPA provisions
• On October 11, 2019, California Governor Gavin Newsom signed into law A.B. 25, which
exempts employers from all provisions of CCPA, with the exception of two distinct
provisions, until January 1, 2021. These two provisions are:
• CCPA §1798.100(b), which requires the employer to inform employees and job applicants either at or before
the time it collects their data, about the categories of personal information the employer is collecting and the
purposes for which the categories of personal information will be used. Note that not every piece of data
being collected is subject to disclosure – only categories of data.
• CCPA §1798.150, which allows an employee whose personal information is accessed, stolen, or disclosed
without the employee’s authorization, specifically because the company failed to implement and maintain
reasonable security procedures and practices to bring a civil action against the company.
• Note that CCPA §1798.150 poses considerable liability risks to employers, particularly in the
class action context, because employers can face damages ranging from $100 to $750 per
employee per incident or actual damages incurred, whichever is greater.

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Guidelines Were Recently Issued Clarifying Business Obligations
• On October 10, 2019, California Attorney General Xavier Becerra issued a set of proposed
regulations, designed to offer employers specific guidance on complying with the CCPA from
an employment perspective. These guidelines specify that employers must:
• Use plain, straightforward language and avoid technical or legal jargon.
• Use a format that draws the employee’s attention to the notice and makes the notice readable, including on
smaller screens, if applicable. [Think impacts on mobile app self-service.]
• Make information available in the languages in which the business in its ordinary course provides contracts,
disclaimers, and other information to consumers and employees. [This may have impact on multi-lingual.]
• Make information accessible to employees and applicants with disabilities. At a minimum, provide information
on how a person with a disability may access the notice in an alternative format. [Guidance is available
under §508 of the federal Rehabilitation Act of 1973.]
• Make information visible or accessible where employees and applicants will see it before any personal
information is collected. For example, when a business collects applicants’ personal information online, it may
conspicuously post a link to the notice on the business’s website homepage or the mobile application’s
download page or on all webpages where personal information is collected. [Think in terms of up-front
notices to applicants, and click-through acknowledgements.]

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Practical Considerations in Implementing CCPA Guidelines
• With regard to §1798.100(b) (data collection disclosures):
• Establish written policy(ies) disclosing categories of information retained on employees, and the purpose
length of time, and eventual method of disposal for such data retention.
• Decide whether to have one comprehensive policy with California version “call-outs” or separate policies for
different employee group – bearing in mind the administrative burden when employees transfer locations.
• Collect electronic acknowledgements for these policies. Consider establishing a short training program within
the LMS to reflect the fact that the employee understood the policy they were signing.
• With regards to §1798.150 (expanded consumer right to sue):
• Implement data encryption, if available
• Implement multi-factor authentication, if available
• Restrict users from downloading data to unprotected devices
• Implement specific (algorhythmic) protections for collected biometric data (fingerprint, facial, etc.)
• Re-visit cyber-insurance: what does it cover? What are the limits of liability and deductibles? Are its current
terms sufficient?

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California Employee/Contractor Status: Dynamex
• In 1989, the California Supreme Court issued a decision in Borello & Sons, Inc. v.
Department of Industrial Relations. Until 2018, this became the touchstone set of standards
for determining employee vs. independent contractor status. It articulated a multi-variable
approach to this determination. Recognized factors included:
• The degree of control exercised by the hiring entity over the manner and means of the workers’
performance
• Whether workers purchase their own equipment,
• Whether they set their own hours,
• Whether they contract for discrete units of work rather than an indefinite time,
• Whether they hire their own helpers/ employees,
• Whether they perform services for companies other than the hiring entity, and
• Whether they assume the risk for profit and loss
The Previous Precedent: The Borello Decision

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• In 2018, the California Supreme Court issued its decision in Dynamex Operations West, Inc.
v. Superior Court of Los Angeles. Sometimes referred to as the “ABC” decision, and limited
to claims brought under the Industrial Welfare Commissions Wage Orders The ABC test
presumes considers all workers to be employees (and not independent contractors), unless
ALL THREE of the following conditions are met:
A. The worker must be free of all control and direction of the hiring entity in connection of the
performance of the work, both as described in the contract for the work, and in fact,
B. The worker must perform work outside the usual course of the hiring entity’s business; and
C. The worker must be customarily engaged in an independently established trade,
occupation, or business of the same nature as the work being performed.
New Rules: The Dynamex Decision

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• On September 18, 2019, California Governor Gavin Newsom signed A.B. 5, a new law
which, effective January 1, 2020, codifies most of the Dynamex decision into law.
• The new law is not restricted to claims under the Wage Order department, but expands it to
all employment under the California Labor Code and Unemployment Insurance Code. It
expands to claims under the Workers Compensation Code as of July 1, 2020.
• Companies must reclassify their previously-designated independent contractors to employees on
the effective date of the law.
• A.B. 5 established exemptions for some 50 industry-specific professions, including:
• insurance agents,
• dentists, physicians,
• architects,
• securities broker-dealers, among others
• NOTE that many of these professions have very specific requirements written into the law
to impact their classification, so be sure to check these details. NOTE also that so-called
“gig-” workers are specifically NOT exempted from the new law!
A.B. 5: The Dynamex Decision, Codified

Part III
Year-End Regulatory Round-Up
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Annual Benefit Limit Changes
Retirement Plans
Defined Contribution Plans 2020 2019
Maximum employee elective deferral $19,500 $19,000
Employee catch-up contribution
(for employees age 50 or older by year-end)
$6,500 $6,000
Maximum limit, all sources
(employee + employer)
$57,000 $56,000
Maximum limit, all sources, employees age 50
or older by year-end (employee + employer)
$63,500 $62,000
Employee compensation limit for calculating
contributions
$285,000 $280,000
Key employee compensation threshold for
nondiscrimination testing
$185,000 $180,000
Highly compensated compensation threshold
for nondiscrimination testing
$130,000 $125,000

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Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs)
Health Care Flexible Spending Accounts (FSAs)
Earnings Subject to Social Security Payroll Tax
HSAs and HDHPs 2020 2019
HSA contribution limit (employer + employee)
Self-only: $3,550
Family: $7,100
Self-only: $3,500
Family: $7,000
HSA catch-up contributions (age 55 or older) $1,000 $1,000
HDHP minimum deductibles
Self-only: $1,400
Family: $2,800
Self-only: $1,350
Family: $2,700
HDHP maximum out of pocket amounts
(all amounts except premiums)
Self-only: $6,900
Family: $13,800
Self-only: $6,750
Family: $13,500
Health Care FSAs and Limited Scope FSAs 2020 2019
Maximum salary deferral contribution $2,750 $2,700
Social Security (FICA) Tax 2020 2019
Maximum earnings subject to Social Security FICA Tax $137,700 $132,900

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ACA-Related Indexed Dollar Amounts
ACA Affordability and ESRP Amounts 2020 2019
Out of pocket maximums
Self-only: $8,150
Any other: $16,300
Self-only: $7,900
Any other: $15,800
PCORI fee Phased Out
Phased Out
(WAS $2.45/pp for plan years
ending 9/30/19, due 7/31/20)
Transitional Reinsurance Fee Phased Out Phased Out
“Prior Year” FPL (for Affordability Safe Harbor) $12,490 $12,140
Affordability percentage 9.78% (went DOWN) 9.86%
Maximum self-only health plan contribution (FPL safe harbor) $101.79 $99.75
§4980H(a) – ESRP for failure to offer coverage ESRP (applied
on a monthly basis)
$2,570 ($214.17/month) $2,500 ($208.33/month)
§4980H(b) – ESRP for failure to offer affordable, minimum
value coverage (applied on a monthly basis)
$3,860 ($321.67/month) $3,750 ($312.50/month)

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PPACA §4980H(a)
Coverage Not Offered to at Least
95% of Full-Time Employees
PPACA §4980H(b)
Coverage Offered Doesn’t Meet
Specified MEC/Affordability Levels
• 2015: $173.33/month
• 2016: $180.00/month
• 2017: $188.33/month
• 2018: $193.33/month
• 2019: $208.33/month
• 2020: $214.17/month times the
total number of full-time
employees (30 or more hours in
a week) less the first 30
• 2015: $260.00/month
• 2016: $270.00/month
• 2017: $282.50/month
• 2018: $290.00/month
• 2019: $312.50/month
• 2020: $321.67/month times the
number of F/T employees who
receive Premium Tax Credits
through an Exchange
Note: for RY2015/FY2016 ONLY, one-time transition relief applied: §4980H(a) penalties applied only if coverage
was not offered to at least 70% of full-time employees, and the penalty “carve-out” was increased from 30 to 80.
Overall penalty safe harbor:
Penalties as calculated under
§4980(H)(b) cannot exceed
total penalty as it would
have been calculated under
§4980(H)(a).

43
A New Form W-4 for 2020
The Long-Delayed Revised W-4 Is Released
• The Tax Cuts and Jobs Act of 2017 (TCJA §11041) suspended personal allowances for tax
years from 2018 through and including 2025.
• While TCJA required the IRS to revisit the Form W-4 and the way federal income tax was
withheld by tax year 2019, they delayed doing this until tax year 2020.
• The IRS has acknowledged that a number of taxpayers were underwithheld in 2018,
because they did not update their W-4 forms where extra allowances were claimed. The
same may be true for tax year 2019.
• The IRS released the final version of the new form W-4 just last week, on December 5,
2019. They also released a draft Publication 15-T (replacing the prior Pub. 15), with the
intention to finalize Pub. 15-T by mid-December.
• Significantly, the IRS has not released a revised version of the lock-in letter based on the
new form W-4 and withholding method. Therefore, for now, the lock-in letter is still based
on the prior version of the W-4 form.

44
New Form W-4: Final Release December 5, 2019

45
Mapping the W-4: Old to New
2019 W-4
• Single
• Married
• Married but
withhold at higher
single rate
2020 W-4
• Step 1:
• Single or married
filing separately
• Married filing
jointly
• Head of household
Accurate as of 12/8/2019 publicly released IRS information. Special Thanks to EY Thought Center, “Preparing for Payroll Year-End and 2020.”
Form W-4, Marital Status

46
2019 W-4
• Additional amount, if any,
you want withheld from
each paycheck
2020 W-4
• Step 4:
• Enter any additional tax
you want withheld each
pay period, including any
amount from Step 2.
• ***Additional fields:
• Other income
• Deductions
Form W-4, Other Adjustments
***If an employee fails to submit a new form W-4 for 2020, these fields are to be treated as if they have no data.

47
2019 W-4
• (Step 7) Claim exempt from
federal income tax
withholding
2020 W-4
• There is no special field or
check box on the new W-4
where “Exempt” is to be
noted.
• Employees are instructed
to write “Exempt” below
Step 4(c) to have no
federal income tax
withheld.
• And no, the IRS is not
considering adding back a
check box for this purpose.
Form W-4, Other Adjustments

48
New Form W-4: Final Release December 5, 2019
EXEMPT
Employee inserts
this word here
prior to signing
form W-4

49
New Rules for a New Form W-4
• There is no requirement that employees must re-file a new form W-4 for 2020.
Lacking a new filing from an employee, the prior W-4 form on file is considered valid
and in force (except in the case of 2019 W-4 forms reflecting “exempt from
withholding”).
• Where no new form W-4 is filed, the employee is to be withheld based on the previously
submitted form.
• Employers are not permitted to treat employees who fail to file a new form W-4 for 2020 as
failing to file a W-4 form at all, i.e., “withhold at single-zero rate” (some exceptions apply to
employees filing “exempt.”)
• The same withholding tables are used for ALL filed W-4 forms (“old” and “new”).
• To do this, payroll providers may employ a “translation program” to bring “old” forms W-4
into the new calculation routines. Employers are advised to check with their payroll
providers on the specifics of their calculation routines and how old form W-4s are treated.

50
New Rules for a New Form W-4: Downline Impacts (State)
• Be aware that there may be downline impacts from these changes on state income
tax withholding.
• In particular, while the states follow different patterns of rules, two specific categories of
rules may present special challenges:
• States where federal form W-4 is no longer permitted to be used for new hires or withholding changes after
12/31/2019: Wisconsin and Nebraska.
• States in which personal allowances are used in the state withholding calculation, but which allow the use of
the federal W-4 form – this implicates specific challenges for new hires after 12/31/2019: California,
Colorado, Delaware, Georgia, Idaho, Massachusetts, New Jersey, New Mexico, New York, North Dakota,
Rhode Island, South Carolina, Vermont, West Virginia
• The availability of a state-specific form W-4 takes on new importance for onboarding and
employee self-service for most states with a state income tax, effective 1/1/2020.

51
EEO-1 Component 2 Reporting Update
EEO-1 Component 2 Reporting Portal Remains Open!
• The original deadline for applicable employers (EEO-1 filers) to complete their
Component 2 wage band and hours worked reporting for filing years 2017 and 2018
was September 30, 2019.
• The EEOC reported that only an estimated 39.7% of covered employers completed their filings by
September 27.
• Federal District Court Judge Tanya Chutkan imposed a minimum 72.7% target response rate for her
to consider the filings for these years “complete.”
• The EEOC asked for, and was preliminarily granted, an extension to November 11 for the filings.
• As of October 8, the EEOC reported a filing rate for covered employers of 75.9%, exceeding the
Judge’s previously determined target response rate.
• Plaintiffs National Women’s Law Center (“NWLC”) then petitioned the court to raise the target
response rate to 98.25%, with which the Court agreed.
• In response to this development, the EEOC has announced that the Component 2 reporting
portal will remain open for required 2017/2018 filings through January 31, 2020.

52
“Last Call! These Provisions are Expiring…”
It’s Apparently “Good-Bye” to the Work Opportunity Tax Credit (WOTC)
• The Work Opportunity Tax Credit (“WOTC”) was originally established as a
temporary credit, as part of the Small Business Jobs Act of 1996, but has been
extended many times since then.
• It replaced the Targeted Jobs Tax Credit (“TJTC”) program, when the program expired in 1994.
• The program offers tax credits for specific candidate hiring, when those candidates are sourced from
ten specific targeted groups, including certain ex-felons, summer youth employees, SSI recipients,
SNAP (food stamp) recipients, vocational rehabilitation referrals, and several others.
• The most recent renewal of the program was part of the Protecting Americans from Tax Hikes Act
(“PATH”) of 2015, which renewed WOTC for hires from 1/1/2015 through 12/31/2019.
• Although a bill to make WOTC permanent (The Work Opportunity Tax Credit and Jobs Act) was
introduced earlier this year, that bill was referred to the Senate Finance Committee in April and hasn’t
seen action since. With a 50-year low unemployment rate of 3.5%, unprecedented partisanship in
Congress, and only a handful of legislative days left in the calendar year, prospects for renewal of this
tax credit are highly doubtful.
• The tax credit will be claimable for hires completed on or before December 31, 2019.

53
“Last Call! These Provisions are Expiring…”
The TCJA Paid Family & Medical Leave Tax Credit is expiring on schedule
• The Tax Cuts and Jobs Act of 2017 (P.L. 115-97) included a provision (§13403,
modifying §45S of the Internal Revenue Code) to provide certain employers with a
partial tax credit for paid family and medical leave time offered to their employees on
an uninsured basis.
• Written to apply to benefits paid to employees during tax years 2018 and 2019 ONLY, the provision
offered employers a tax credit of up to 25% of paid family/medical leave.
• For the employer to have qualified for this tax credit, they must have established a written policy
providing a minimum of two weeks paid family and medical leave to full-time employees.
• Payments for this benefit must have been at least 50% of the wage normally paid, and it was NOT
necessary that the employer be a covered employer under the FMLA.
• Importantly, this policy must NOT be in replacement of, or paid in lieu of, another policy under which
the employee would have been paid, such as PTO, paid disability, etc.
• Annual compensation limits for affected employees applied.
• This provision will expire, on schedule, on December 31, 2019.

54
Questions?

55
Learn More
Request a health-check of your organization’s benefits/HRIS systems today!

56
How to earn credit
Stay on the webinar,
online for the full 60
minutes
Be watching using your
unique URL
Program codes
delivered by email, to
registered email,
approximately 30 days
following today’s
session

57
Share with your colleagues

58
How Ascentis Can Help
The Ascentis HCM Suite Has Many Capabilities to Address These Challenges
• Human Resource Information System (Basic HR Recordkeeping)
• Employee and Manager Self-Service for Accessing Forms of all Kinds, including Forms 1095-c
• Full dependent tracking
• Employment status conversion table to ensure proper IRS definition of ACA Full-Time
• Payroll
• Lookback period monitoring and eligibility reporting for part-time and variable hour employees
• Administration of W-2 Box 1 Affordability Safe Harbor
• Human Resource Information System (Benefits Administration)
• Complete benefits rules table for plan administration
• On-line open enrollment, new hire enrollment, and life event enrollment with extensive plan documentation
• “Carrier Connection” Electronic Data Interchange for communication of plan changes to carriers
• ACA Compliance Module
• Affordability widget supporting user choice of three recognized safe harbors
• 1094-c/1095-c production, including full support for self-insured plans for ALEs
• IRS filing capability via AIR system, with full record-keeping of XML submissions, dates, confirmation numbers, etc.

59
Learn More
Request a health-check of your organization’s benefits/HRIS systems today!

60
Contact the Presenter
bob.greene@ascentis.com
info@ascentis.com
www.ascentis.com
800.229.2713

HR Webinar: Ho, Ho, Ho My Goodness: Compliance Review for Year-End 2019

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