Welcome to PayTech’s December Update
The passing of Proposition 206 will increase AZ state’s minimum wage to $10 an hour January 1, 2017. The minimum wage will continue to increase in steps to $12 an hour by 2020. If you are an employer in the state of AZ with fewer than 15 employees you are now required to provide employee paid sick leave for a minimum of 3 days per year. If you are an employer with more than 15 employees you are now required to provide 5 days of employee paid sick leave starting in 2017.
Minimum Wage Increase
Prop. 206 would increase the minimum wage in Arizona to:
- $10.00 per hour on January 1, 2017;
- $10.50 per hour on January 1, 2018;
- $11.00 per hour on January 1, 2019; and
- $12.00 per hour on January 1, 2020.
After 2020, Arizona’s minimum wage would increase according to increases in the cost of living, as is currently the law.
Prop. 206 preserves an employer’s right to pay $3.00 per hour less than the minimum wage to an employee who customarily and regularly receives tips or gratuities.
Paid Sick Time Requirement
The less-publicized, but certainly more groundbreaking portion of Prop. 206, is its paid sick time (PST) component. Arizona law does not currently require any private or municipal employers to provide PST for their employees. Under Prop 206, private employers and municipalities would be subject to the following requirements, starting on July 1, 2017:
- All private and municipal employers must accrue for each employee a minimum of one hour of paid sick leave per 30 hours worked according to the following terms and limits:
- Employers with 15 or more employees must permit employees to accrue up to 40 hours of PST per year and to allow use of up to 40 hours of accrued PST per year.
- Employers with fewer than 15 employees must permit employees to accrue up to 24 hours of PST per year and to allow use of up to 24 hours of accrued PST per year.
- Even part-time and temporary workers are considered “employees” under Prop. 206 and are entitled to PST.
- Like the federal Family and Medical Leave Act of 1993, employees are protected from retaliation and may not have PST absences count against them.
- “Foreseeable” leaves require an employee to “make a good faith effort to provide notice to the employer” in advance of the leave and make a “reasonable effort” to schedule the time off “in a manner that does not unduly disrupt the operations of the employer.”
- Leaves that are “not foreseeable” require no prior notice to the employer, unless the employer has a written policy containing procedures for providing notice.
- Employers may not require employees to find their replacements as a condition for receiving PST leave.
- Unused accrued sick leave carries over from one year to the next, but accrued paid sick leave does not need to be paid to employees whose employment is terminated for any reason.
- PST begins to accrue at the commencement of employment, or on July 1, 2017, whichever is later.
An employer may require an employee hired after July 1, 2017, to wait until the 90th calendar day after commencing employment before using accrued PST.
Prop. 206 also specifies a number of situations for which an employee may use paid sick time, including:
- when the employee has a mental or physical illness;
- when the employee needs to care for a family member who has a mental or physical illness;
- when a public health emergency arises; and
- when an employee must address issues related to domestic violence.
Employers Get 30 More Days to Give 2016 Forms 1095-C to Employees
The IRS has extended the deadline to March 2, 2017, for employers and insurers to give the 2016 ACA Forms 1095-C and 1095-B to employees and covered individuals. The IRS did not extend the deadline to file Forms 1094-B, 1094-C, 1095-B, and 1095-C with the IRS. These deadlines remain February 28, 2017 (paper) or March 31, 2017 (electronically). The IRS also has extended penalty relief for employers that can show they have made “good-faith” efforts to comply with ACA reporting requirements.
‘White Collar’ Salary Increase Delayed Indefinitely
A federal judge in Texas has issued a nationwide order preventing the U.S. Department of Labor from increasing the “white collar” exemption salary minimum to $913 per week December 1. The order will remain in effect until the court decides a case filed by 21 states challenging the increase, or an appeals court lifts the injunction. For now, the salary level remains $455 per week.
Small Business Tax Mistakes You Need To Stop Making In 2017
“Those who do not learn from history are doomed to repeat it.”
Every year, you pay your taxes. Every year, you wonder why you pay certain taxes. And every year, the process never becomes any more enjoyable. While you’re never going to welcome the action of giving the government your hard-earned money, here are several mistakes you can avoid to make the entire process less painful.
Waiting Until The Last Minute
Most tax deadlines are rigid, so don’t wait until the last minute to start. Just as you’d charge a customer extra for a quick turnaround on a project, so will your tax accountant.
Start the conversations with your accountant long before your returns are due (the first due date for corporate returns is March 15th, personal April 15th… extended deadlines Sept. 15th for corporate and Oct. 15th for personal). Know what inputs she or he will need, and when you’ll expect to have them. Get on their good side and your tax accountant will be more likely to try to dig up some possible deductions to save you money… (read more)