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Posts tagged as “department of labor”

Surprise FUTA Tax Bill is in Our Future

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Under the provisions of the American Federal Unemployment Tax Act (FUTA), a federal tax is levied on employers covered by the Unemployment Insurance program at a current rate of 6.0% on wages up to $7,000 a year, paid to a worker. The law, however, provides a credit (basically a discount) against federal tax liability of up to 5.4% to employers who pay state taxes timely under an approved state UI program. Therefore, the employer pays an effective federal tax of 0.6% or a maximum of $42 per covered worker, per year. During times of high unemployment claims, a state may…

Restaurants and Businesses with Tipped Employees – New Minimum Wage Rule Takes Effect

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On October 28, 2021, the U.S. Department of Labor (DOL) issued a Final Rule, which takes effect on December 28, 2021; it is extremely important for businesses that pay the lower “tipped minimum wage” to take notice. In this final rule, the DOL finalizes its proposal to withdraw one portion of the Tip Regulations Under the Fair Labor Standards Act (FLSA 2020 Tip Final Rule) and finalize its proposed revisions related to the determination of when a tipped employee is employed in dual jobs under the Fair Labor Standards Act of 1938. Specifically, the Department of Labor is amending its…

Tax Credit for Hiring for Long Term Unemployed

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Last December, President Trump signed the Consolidated Appropriations Act of 2021, which included $1.4 trillion to fund the government through fiscal year 2021, as well as a number of important tax provisions. One of the little-known and under-utilized benefits in that Act is the extension of the Work Opportunity Tax Credit (WOTC) through December 2025. The WOTC provides a general business tax credit of up to $9,600 to employers that hire and retain individuals from certain targeted groups, such as veterans, ex-felons, summer youth, SSI recipients, long term unemployed and more. This month, the Internal Revenue Service even reminded employers…

COBRA: Two Sizes That Cover Just About Every Employer

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The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 gives workers, and their families who lose their health benefits, the right to choose continued group health benefits provided by their group health plan for a limited period of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan. The law generally applies to all group health plans maintained by private-sector employers with 20 or…