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Paychex lists top regulatory issues of summer 2015

August 27, 2015

Paychex Inc., a provider of payroll processing and professional employer organization services, listed of the top government regulations that impacted businesses across the US this summer and will continue to have an effect in the year ahead.

“A major ruling on the Affordable Care Act, coupled with news of the Department of Labor’s proposed overtime rule, has meant a busy and potentially uncertain time for business owners this summer,” said Paychex President and CEO Martin Mucci.

According to Paychex, the top regulatory issues of summer 2015 are:

  1. US Supreme Court ruling on the Affordable Care Act: In late June, the Supreme Court ruled, in a 6-3 decision, that premium tax credits are allowed for eligible individuals who sign up for health insurance coverage through federal and state health insurance marketplaces. With the ACA remaining unchanged, eligible individuals purchasing health insurance through the federal marketplace will continue to qualify for premium tax credits.
  2. US Supreme Court ruling on same-sex marriage: On June 26, the Supreme Court released its decision on the legality of same-sex marriage in the United States. By a 5-4 ruling, the Court held that the 14th Amendment requires a state to license a marriage between two people of the same sex and recognize a same-sex marriage lawfully performed outside the state. Same-sex couples who are legally married may now be eligible for the same benefits available to opposite-sex married couples
  3. Proposed expansion of overtime rules: In early July, the US Department of Labor released a proposed rule to update the regulations governing which executive, administrative, and professional employees (white collar workers) are entitled to the Fair Labor Standards Act’s minimum wage and overtime pay protections. The department last updated these regulations in 2004 with a minimum salary threshold of $455 per week ($23,660 per year) for the impacted white collar exemptions. Under the proposed rule, the department is suggesting the minimum salary level for these exemptions be set at the 40th percentile of earnings for full-time salaried workers, estimating a 2016 level to be about $970 a week, or $50,440 a year. The rule change is now going through a public comment period and is expected to be finalized sometime in 2016.
  4. Mandatory sick leave: Due to recently passed legislation, ballot initiatives and local ordinances across the country, certain private employers are or will be required to offer employees sick leave. Currently, there are no federal regulations or guidelines mandating private employers to provide paid sick time to employees, although certain employers must provide unpaid leave under the Family and Medical Leave Act for qualifying reasons. All of the activity to date regarding mandatory paid (and sometimes unpaid) sick leave has occurred at the state and local level. While only the District of Columbia and four states currently have sick leave laws on the books (California, Connecticut, Massachusetts and Oregon), more than 20 local jurisdictions have passed ordinances and the movement is expected to continue to grow.
  5. Minimum wage: The federal minimum wage rate remains $7.25 per hour, however, due to Congressional inaction on this issue, many states and local jurisdictions have set and/or recently increased their own minimum wage rates. So far in 2015, 22 states have had increases in their minimum wage rates.
  6. Increased enforcement of employee classification: The Department of Labor recently issued Administrator’s Interpretation 2015-1: The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors. In the document, the department generally concludes that most workers are employees under federal wage and hour law. The department is concerned with the intentional misclassification of employees as independent contractors on the part of employers as a means to reduce costs and avoid compliance with employment laws and regulations.