HCM Insights June 2022

Upcoming Holidays

Juneteenth

The upcoming Juneteenth Holiday will be observed on Monday, June 20, 2022.  While CBIZ HCM offices will be open this day, this is a Federal Reserve Bank Holiday, and payroll draft dates may need to be adjusted.

Important Payroll Deadlines

Independence Day

In observance of Independence Day, CBIZ HCM offices will be closed on Monday, July 4, 2022. Independence Day is a Federal Reserve Bank Holiday, which means payroll draft dates may need to be adjusted.

Important Payroll Deadlines

As always, your CBIZ HCM team is here to help should you have questions. We appreciate your continued partnership, and we wish you and your business the best of health. Please contact your payroll services team if you have any questions.

State Mandated Retirement Plan Update

State-mandated retirement plans are continuing to gain traction throughout the United States. As of June 2022, several states enacted legislation requiring certain employers to enroll their employees automatically into the state-sponsored retirement plan. At the same time, other states created an optional retirement plan exchange system. The rules of these programs vary from state to state but were crafted to decrease the retirement gap for the millions of U.S. workers who currently don’t have access to an employer-sponsored plan.

States with Mandated Plans as of June 2022

California: Employers who do not sponsor a retirement plan and have more than five employees must participate in CalSavers.

Connecticut: All for-profit and not-for-profit employers who do not currently provide a retirement savings plan; employed five or more employees in Connecticut on October 1 of the previous year; and paid at least five employees $5,000 or more must facilitate the State’s MTCTSSavings program.

Illinois: Employers who do not offer an employer-sponsored retirement plan, have more than five employees, and have been in business for more than two years must participate in the Illinois Secure Choice Retirement Savings Program.

Oregon: All Oregon employers who do not offer a retirement plan for their employees and employ more than five employees must register to participate in OregonSaves..

States Offering Retirement Plan Options (non-mandated)

Massachusetts: Massachusetts nonprofit organizations with twenty employees or fewer may be eligible to adopt the Massachusetts Defined Contribution CORE Plan.

Washington: Participation in the Retirement Marketplace is voluntary for employers and employees.

More to Come

An additional seven states (Colorado, Maine, Maryland, New Jersey, New Mexico, Virginia, and Vermont) have passed legislation that will be implemented in the coming months.

2023 Health Savings Account Limits 

With inflation hitting a forty-one-year high of 8.5% in March 2022, the Internal Revenue Service (IRS) announced a 5.5% increase in the max amount that participants can contribute to a Health Savings Account (HSA) in 2023. Individuals can contribute $3,850 which is up from $3,650 in 2022 and families can contribute up to $7,750 up from $7,300 in 2022. Those over the age of 55 still have the option to contribute an additional $1,000 per year, as the catch-up amount is not subject to the adjustment for inflation. 

FMLA & Mental Health Conditions

Last month, in recognition of Mental Health Awareness Month, the Department of Labor (DOL) provided new resources about workers’ rights to take leave for mental health conditions under the federal Family and Medical Leave Act (FMLA).

Mental Health as a Serious Health Condition

In offering new resources, the DOL made it clear that mental health conditions are considered serious health conditions under the FMLA if they require inpatient care or continuing treatment by a health care provider, such as an overnight stay in a treatment center for addiction or continuing treatment by a clinical psychologist. Chronic conditions such as anxiety, depression, or dissociative disorders that cause occasional incapacitated periods and require treatment at least twice a year fall under the “continuing treatment” definition.

Frequently asked questions from the DOL provide additional examples of situations that qualify for FMLA leave, including treatment sessions for anorexia nervosa and caring for an adult child with a mental health condition that meets the definition of disability under the Americans with Disabilities Act. It is imperative to keep in mind that an eligible employee may take FMLA for their own serious health condition or to care for a spouse, child, or parent because of their serious health condition.

Another Strong Hurricane Season Ahead

The National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center has released hurricane season predictions. According to forecasters, there is a 65% chance of an above-average hurricane season, marking the seventh consecutive year for above-average hurricane activity in the Atlantic.

While an average season typically spawns seven hurricanes, forecasters predict that as many as ten hurricanes with sustained winds of 74 mph or more could form in 2022. Of the predicted hurricanes, between three and six storms may reach Category 3, 4, or 5 with sustained winds of 111 mph or more. In addition, the NOAA is estimating that 14 to 21 named storms might develop, including tropical storms containing wind speeds of 39 mph or more. The Atlantic hurricane season runs from June 1 to November 30.

Now is as good a time as any to dust off your disaster plan and make preparations. Statistics show that fifty-two percent of businesses have experienced at least one disruptive event in the last five years, and sixty-two percent do not have an emergency plan in place. To help you get started, check out a quick list of things you can do to prepare your business for hurricane season.

When Weather Events Strike, We are Here to Help

If your business is impacted by weather, contact us to discuss how we can help. There is always a chance that a storm could cause shipping delays. We are ready to assist you if you decide to process a payroll a few days early. If a storm impacts your area and you have questions about the status of a recent payroll, please do not hesitate to reach out. We are ready and available to help you prepare for changing weather conditions. Your CBIZ HCM Team is always here if you have any questions.

CBIZ also offers paperless payroll, which allows employees to receive their earnings via direct deposit or pay cards. Employees can then access their pay stubs and W2 forms online, and employers have online access to payroll reports. Going paperless can reduce the impact a storm has on your payroll delivery and keep you from paying shipping charges for delivering payroll packets. For more information, contact your CBIZ Service Team.

Minimum Wage Updates

Several states are scheduled to increase their minimum wage in the coming months. Connecticut, the District of Columbia, Nevada, Oregon, and Pennsylvania will increase the minimum wage in July. Then in September, an increase in the minimum wage is expected in Florida.

Changes Effective July 1, 2022

Connecticut

• Hourly minimum wage: $14.00 (up from $13.00)
• Tip credit for wait staff: $7.62 (up from $6.62)
• Tip credit for bartenders: $5.77 (up from $4.77)

District of Columbia

• Hourly minimum wage: $16.10 (up from $15.20) 
• Tipped employee hourly minimum: $5.35 (up from $5.05) 

Nevada

• $10.50 if qualifying health benefits are not offered (up from $9.75)  
• $9.50 if qualifying health benefits are offered (up from $8.75)

Oregon

• Standard hourly minimum wage: $13.50 (up from $12.75)
• Portland metro hourly minimum wage: $14.75 (up from $14.00)
• Nonurban counties hourly minimum wage: $12.50 (up from $12.00)

Pennsylvania

• State contractor wage: $14.00 (up from $13.50)

(State contractor wage is the hourly minimum wage rate to be paid to workers performing work on or in connection with covered state contracts.)

Changes Effective September 30, 2022

Florida

• Hourly minimum wage: $11.00 (up from $10.00) 
• Tipped employee hourly minimum: $7.98 (up from $6.98) based on a maximum tip credit of $3.02.

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The information contained in this HCM Insights is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.