Weekly Compliance Update: HSA’s, FLSA, and Discrimination
Health savings accounts. The limit on health savings account (HSA) contributions for 2018 is now $6,850 for family coverage, as updated by the IRS to reflect changes under the recent tax reform law.
Medical savings accounts. The 2018 deductibles and out-of-pocket expenses required for health plans to qualify as “high deductible” plans under the medical savings account (MSA) rules have been modified due to changes enacted under the Tax Cuts and Jobs Act of 2017.
FLSA compliance. The U.S. Department of Labor’s Wage and Hour Division (WHD) will be launching a pilot — the Payroll Audit Independent Determination (PAID) program — to facilitate the resolution of potential Fair Labor Standards Act (FLSA) overtime and minimum wage violations. The program will allow employers to self-report potential wage violations that they uncover during a compensation practices self-audit. Employers must pay all back wages due but will not have to pay liquidated damages or civil monetary penalties when they choose to participate in the program and proactively work with the WHD to fix any compensation practices at issue. The goal of the PAID program is to resolve overtime and minimum wage claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed more quickly, according to the WHD. The program will be implemented nationwide for approximately six months. At the end of the pilot period, the agency will evaluate the program’s effectiveness, potential modifications, and whether to make the program permanent.
Payroll tax withholding. The IRS’s online withholding calculator can help employees determine the appropriate amount of federal tax withholding for purposes of updating their W-4 forms. A “withholding checkup” using the calculator can prevent employees from having too little or too much tax withheld. The calculator, as well as planning steps for employees and a new set of frequently asked questions, can be found on the IRS website or via the link in the show notes on peopleprocesses.com (https://www.irs.gov/individuals/irs-withholding-calculator)
Gender identity discrimination. In a case brought by the Equal Employment Opportunity Commission (EEOC), the Sixth Circuit has held that discrimination against employees — either because of their failure to conform to sex stereotypes or because of their transgender and transitioning status — is illegal under Title VII of the Civil Rights Act of 1964. The case involved a funeral home that fired a transgender funeral director because she would not conform to its sex-specific dress code. The owner of the funeral home believed he would be violating God’s commands if he were to allow a biologically male-born employee to wear a skirt while at work because he would be directly involved in supporting the idea that sex is a changeable social construct rather than an immutable God-given gift. According to the appeals court, the unrefuted facts showed that the director was fired because she refused to abide by the employer’s stereotypical conception of her sex. The Religious Freedom Restoration Act (RFRA) did not provide the owner with any relief, as continuing to employ the funeral director would not, as a matter of law, substantially burden his religious exercise. Even if it did, enforcing Title VII was the least restrictive means of furthering the compelling government interest in combating and eradicating sex discrimination. The case, for further research, is EEOC v. R.G. & G.R. Harris Funeral Homes, Inc.