HR Alert- 2017 Contribution Limits

 

Inflation in 2016 remained low. Many of the federal contribution levels are unchanged from 2016.  Biggest change is the Social Security Wage Base.

 

  • The Social Security Wage Base for 2017 increases significantly from $118,500 in 2016 to $127,200 for 2017, an increase of over 7%. The maximum yearly Social Security tax withholding amount increases $539 from $7,347 to $7,886 (6.2% of $127,200).  The 6.2% Social Security tax contributed by the employee is matched by the employer.

 

  • Medicare tax remains at 1.45% for most employees (matched at 1.45% by employers) with no limit on income.

 

  • The maximum annual amount an employee can contribute to a 401(k) Plan during 2017 remains unchanged at $18,000. Employees age 50 and above can contribute an additional “catch-up” contribution of $6,000, for a total maximum contribution of $24,000.

 

  • The maximum annual amount an employee can contribute to a traditional IRA or a Roth IRA in 2017 remains unchanged at $5,500; the additional catch-up contribution for employees age 50 and above remains $1,000, for a total contribution of up to $6,500.

 

  • Simple IRA’s have a maximum annual contribution of $12,500 for employees in 2017. Employees age 50 and above have a catch-up contribution limit of $3,000, and a total contribution limit of $15,500 in 2017.

 

  • The Dependent Care annual limit under Section 125 remains at $5,000 for married and filing joint returns and $2,500 for married filing separate returns.

 

  • The limit on contributions to Flexible Spending Accounts increases from $2,550 in 2016 to $2,600 in 2017.

 

  • Amendment 70 passed in November, mandating increasing the Colorado minimum wage to $12.00 per hour by January 1, 2020.  Colorado’s Minimum Wage increases from $8.31 per hour to $9.30 per hour, effective January 1, 2017.  The Tipped Employee’s Minimum Wage increases January 1, 2017 to $6.28 per hour.

 

  • The 2017 IRS standard mileage rates are: $0.53.5 cents per mile for business miles driven (down from $0.54 in 2016); $0.17 cents per mile for medical or moving purposes (down from $0.19 in 2016; and $0.14 cents per miles driven in service of charitable organizations (unchanged).

 

  • Employers are required to comply with the following federal legislation (number of employees listed in parenthesis):

> Immigration Reform and Control Act (Form I-9) (1 or more employees) Note: revised Form I-9 must be used by no later than January 22, 2017

> Colorado Affirmation Form has been repealed and is no longer used by Colorado employers

> USERRA (1 or more employees)

> Fair Labor Standards Act (1 or more employees) Note: Proposed overtime rules not in effect- stay tuned

> Americans with Disabilities Act (15 or more employees)

> Age Discrimination in Employment Act (20 or more employees)

> Family and Medical Leave Act (50 or more employees)

> EEO-1 Reports (100 or more employees; 50 or more for federal contracts)

 

Frazier International sends the HR Alert to our business clients and colleagues to keep you informed of the latest developments in the HR world.  Please feel free to contact us at 303.875.5078 if you have any questions about this latest HR Alert, or if we can assist you in any way with your Human Resource needs.

 

Merry Christmas, Happy Hanukkah, and Happy New Year to all!  2017 promises to be a year of significant changes in HR and we will keep you updated as events unfold.

Posted in HR Alert by nfrazier. Comments Off on HR Alert- 2017 Contribution Limits

Revised Form I-9 Must Be Used No Later Than January 22, 2017

 Finally, after many months of delay, the revised Form I-9 was published by the U.S. Citizenship and Immigration Services (USCIS) yesterday.  The new form is dated November 14, 2016 and can be used immediately. It MUST be used no later than January 22, 2017  or employers will face a civil penalty of up to $2,156 for each use of the expired form that has an expiration date of March 31, 2016.

Go to www.uscis.gov and locate the revised Form I-9 under “forms”.  Here are the key changes:

  • Section 1 asks for “other last names used” instead of “other names used.”
  • Section 1 added a box to check if the employee did or did not use a preparer or translator.
  • Section 2 added additional instructions to tell the employer to document information from the approved list of documents provided by the new hire.
  • Section 2 is more specific on the name of employer or authorized representative.
  • Other changes include:
    • Addition of prompts to ensure information is entered correctly.
    • The ability to enter multiple preparers and translators.
    • A dedicated area for including additional information rather than having to add additional information to the margins of the Form I-9.
    • A supplemental page for the preparer/translator if needed.
    • The revised Form I-9 should be easier to complete on a computer, including drop-down lists and calendars for filling in dates, on-screen instructions for each field, easy access to full instructions, and an option to clear the form and start over.

My recommendation is to print the new Form I-9, compare it to the one that expired in March, then destroy all copies of the Form I-9 with the March 31, 2016 expiration date and immediately start using the new Form I-9 with the August 31, 2019 expiration date.  This will ensure that you don’t lose track of the mandatory date of January 21, 2017 and put yourself at risk for penalties for using an expired Form I-9.

Leading HR sources indicate the new administration will most likely introduce legislation to make the E-Verify system mandatory for all employers, with a phase-in schedule based on the number of employees.   E-Verify (in my humble opinion) is the best tool out there for employers to show good faith compliance with the Immigration Reform and Control Act.  Complete, timely and accurate Form I-9’s, combined wiht the use of E-Verify, are both strong tools to help you stay in compliance.  As always, feel free to call us with any questions.  We are pleased to be able to refer you to a leading immigration attorney if you have legal questions about  compliance.

 

 

Posted in HR Alert by nfrazier. Comments Off on Revised Form I-9 Must Be Used No Later Than January 22, 2017

Federal Court Injunction on Proposed Overtime Rules

HR Bulletin   Updated December 1, 2016

 

A federal judge in Texas  issued an injunction late this afternoon that blocks the implementation of the Department of Labor’s new federal overtime rules.  “A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity.” said Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas.  Judge Mazzant was appointed to the bench by President Obama.

The emergency motion for a preliminary injunction was filed in October by 21 states, and consolidated with another lawsuit filed by the U.S. Chamber of Commerce.  The suits claimed that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years.

What does this mean to each of you as business owners?  I think we just have to take a deep breath and see what evolves from this ruling. Obviously it puts the December 1 implementation on hold.   The Department of Labor announced today (12/1/16) that they are appealing this motion, so expect a long, drawn out process.  In the meantime, continue to comply with the Fair Labor Standards Act and the current rules for overtime. The December 1 proposed changes are now on hold until the court’s rule otherwise.   More information will be forthcoming in the near term and we will keep you informed as we learn more.

Update: It is likely that no court action will take place before the new administration is sworn in on Friday, January 20.  Our best guess is the current proposed revisions will be discarded and a phased in approach to the salary test for Exempt and Nonexempt employees will evolve over the first six months of the new administration.  1/15/17

 

 

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