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Payroll

Last Week in Payroll: Heat Index

Christopher Wood, CPP  

Christopher Wood, CPP  

A blog of some of the prior week’s more important federal, state and local payroll stories. This week’s focus is on a checklist for employers that have employees working in the heat and the top federal, state and local stories from last week.

Heat Index

According to the National Weather Service, the period from July 1, 2021 to July 13, 2021 has seen the hottest average temperatures (73.5 degrees F) on record.  Death Valley in California hit a high temperature of 130 degrees F on July 9, 2021.  That’s close to the record of 134 degrees F, which was set back in 1913.

Throughout much of the United States, summer is hot and humid, which can make outdoor activities challenging and dangerous.  For those of us lucky enough to work indoors (either in an office or remotely from home) with central air conditioning, the workday is tolerable and even pleasant. However, many workers must brave the high temperatures on a daily basis to perform tasks related to their jobs.

I live in Hoboken, New Jersey – a small city on the other side of the Hudson River from New York City.  On July 15, 2021 and July 16, 2021, there was road construction on the street outside of my apartment building.  It was a noisy day for me for writing.  That said, it was a labor intensive, hot and humid day for the workers out on the street.  These and other types of outdoor jobs can be dangerous to workers when there is excessive heat. It is important for employers to keep a close eye on employees to make sure there are no health issues arise.

The U.S. Department of Labor (DOL’s) Occupational Safety and Health Administration (OSHA) provides employers with a guide using the heat index to help make sure the workers performing services outside in hot weather are safe. The guide notes that heat related illness can be prevented. Although OSHA does not have a specific standard that covers working in hot environments, under the OSHA Act, employers have a duty to protect workers from recognized serious hazards in the workplace, including heat-related hazards. OSHA’s guide helps employers and worksite supervisors prepare and implement hot weather plans. Professions where a worker spends a significant amount of time outdoors includes: construction workers, agricultural workers, baggage handlers, electrical power and transmission control workers, and landscaping and yard workers.

At the state level, Washington State recently announced emergency rules that provide farm and other workers who work outdoors more protection from the heat. Just prior to Washington State, Oregon also approved more protective emergency heat rules for workers.

We’re about one-month into the Summer of 2021, right in the middle of the “Dog Days” of the season. There are bound to be more hot temperatures on the horizon before the Fall 2021 season. If you are an employee who works outside, please take care of yourself.  If you are an employer, be aware of the heat index guidelines that OSHA offers.

Now let’s go over some of the more important payroll stories from the past week.

Federal News

White House clears Labor Department rule to repeal prior Administration’s joint employer rule. The White House Office of Information and Regulatory Affairs (OIRA) has finished its review of a U.S. Department of Labor rule that would repeal a joint employer rule from the Trump Administration. The Trump Administration rule was finalized in January of 2020. It revised and clarified the responsibilities of joint employers. Joint employment exists when a person is employed by two or more employers. The Trump Administration rule took effect in March of 2020 but faced a lawsuit that invalidated part of the rule in September of 2020. In March of 2021, the Biden Administration’s DOL announced plans to rescind this rule.  The stage of this rule now says “final” on the OIRA website.

CPI has largest 12-month increase since 2008.  The U.S. Bureau of Labor and Statistics has announced that the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9% in June 2021 on a seasonally adjusted basis after rising 0.6% in May 2021. The all items index increased 5.4% over the last 12 months before seasonal adjustment, which was the largest 12-month increase since a 5.4% increase for the period ending August 2008. The Social Security taxable wage base is determined base on the CPI.  So are a number of state and local minimum wage rates.

IRS Chief Counsel Advice addresses concerns regarding FAQs. The acting IRS Chief Counsel, William M. Paul recently attended a conference sponsored by New York University where he addressed several concerns regarding the frequently asked questions (FAQs) issued by the IRS, which included the extent to which practitioners and taxpayers may rely on them. Mr. Paul said that the IRS initiated a greater reliance on issuing FAQs after the signing into law of the Tax Cuts and Jobs Act (TCJA) and again regarding the relief measures in response to the coronavirus (COVID-19) pandemic. These COVID-19 FAQs include an extensive list of questions and answers regarding the paid sick and family medical leave and the employee retention credit (ERC). The IRS hopes to soon unveil a system that will archive FAQ guidance. Users of the new system will be able to search for FAQs and see the ways in which they may have been edited by the IRS.

IRS resumes collection actions. On July 15, 2021, the IRS resumed collection actions that had been suspended due to the COVID-19 pandemic. This includes levying taxpayer assets for the Federal Payment Levy Program, whereby the IRS can collect a taxpayer’s overdue taxes through a continuous levy on certain federal payments disbursed by the Bureau of Fiscal Services.

State and Local News

Unemployment taxable wage base increase. Connecticut legislation will increase the state’s unemployment taxable wage base by $10,000 on January 1, 2024 (from $15,000 to $25,000). The bill makes other unemployment tax changes like expanding the unemployment tax rate range (0.1% to 10%), and adjusting the benefit ratio for computing unemployment tax rates.  It is a significant piece of legislation for unemployment tax information.

Revised withholding tax tables. Idaho has issued revised withholding tax tables for the wage bracket method to reflect new withholding amounts retroactively effective January 1, 2021. Employers are not required to adjust withholding back to the beginning of 2021 but should use these tables going forward.

Hazard pay deemed constitutional. The Maine Supreme Court has ruled that the City of Portland’s increased minimum wage and hazard pay provisions do not violate the state’s constitution. This hazard pay was passed through a ballot measure on November 3, 2020. But, the ruling does impose a start date of January 1, 2022.

Stop work penalties updated. New Jersey has updated its stop work penalties with legislation that allows stop work orders currently permitted for violations of state wage, benefit and tax laws to be applied to all worksites of a violator.  The bill provides penalties of $5,000 per day for a failure to comply with a stop work order and entitles employees to pay from their employers for the first 10 days of a stop work order.

Unemployment tax rate freeze through 2023. Wisconsin is freezing its unemployment tax rates for employers through 2023. Rate Schedule D (0% to 10.7%) is the lowest contribution rate schedule for the state.  The legislation requires Schedule D to be in effect regardless of the trust fund level as of June 30, 2021 and June 30, 2022. However, the bill provides that it applies only if the 2021-23 budget bill, as enacted, provides for transfers of $60,000,000 in each of fiscal years 2021-22 and 2022-23.

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