Employment Laws & Regulations in 2013

Employment Laws & Regulations in 2013

2013 CalendarAre you ready for 2013?

With the new year comes new employment laws and regulations. We’ve got a short guide to some important changes employers need to know about!

Washington’s minimum wage is rising:

Minimum wage in Washington rises every year in accordance with the Consumer Price Index.  On January 1st, our minimum wage rises from $9.04 to $9.19 an hour.

Before you get mad at our elected officials, remember that it was us, the voters, who in 1998 passed the initiative tying our state’s minimum wage to the CPI.  If it makes you feel any better, ours is not the highest in the nation — San Francisco’s minimum is rising to $10.55.

The IRS optional standard mileage rate rises on January 1st:

The IRS optional standard mileage rate rises January 1st to 56.5 cents per mile.

It’s up to you to decide at what rate you want to reimburse your employees for the miles they drive.  But if you reimburse at higher than the IRS rate, it could be taxable income.

Some Fair Credit Reporting Act forms are changing:

If you’re performing background checks on employees, it’s important you know that some of the forms associated with the Fair Credit Reporting Act change as of the first of the year.  Most important is the Summary of Rights Form given to the employee.  These changes are due to the Dodd-Frank Act and the new Consumer Financial Protection Bureau.

Patient Protection and Affordable Care Act changes:

While we may have tried to keep our heads in the sand as it relates to implementing the Patient Protection and Affordable Care Act, the new year requires us to poke our heads up and pay attention.

You may have your eye on the ball for 1/1/14 when the big changes take place, but 2013 brings some important deadlines and decisions for employers:

  • If you issue more than 250 W-2 forms, you will need to start reporting the total cost of employer-sponsored health coverage on the forms for the 2012 calendar year, which you issue in January 2013.
  • In 2013, a cap of $2,500 goes into effect on contributions made to a Flexible Spending Account (FSA).  And for your higher earners with wages in excess of $200,000, Medicare payroll taxes will increase to 2.35%.
  • Starting in July 2013, you will be paying a $1.00 fee per employee if you offer a health plan, HRA, or maybe even an FSA.  This fee will go up to $2.00 per employee in 2014, and will be in effect for at least the next seven years.

The other important factor to be aware of is that your company’s headcount during 2013 will become the basis for whether your business is large enough to fall under the employer mandate, which requires you to either provide health care coverage to employees or pay a fine. 

The bar is 50 full time employees, but keep in mind that hours for part-time employees are added together and divided by total headcount.  Plus, the PPACA defines a full time employee as working 30 hours or more per week. 

January 1st is not too soon to start thinking about how your company will handle the employer mandate, and what strategic workforce decisions you will make in 2013 to prepare for 2014.

Happy New Year!