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OSHA, the DOL and hurricanes: What employers need to know this fall coast-to-coast

September 26, 2017

By Lori Stewart, SPHR®, SHRM-SCP, HCS, Partner, Human Resources Consulting

OSHA update

If you’re following US Department of Labor (DOL) trends, you will see the Occupational Safety and Health Administration (OSHA) has been very active in recent months. Employers in Missouri, Wisconsin, South Dakota and New York are just a few among the many who have received OSHA citations. Employers have no greater responsibility than worker/employee safety. Whether you’re a manufacturer or a provider of office services, it’s important to give your organization a yearly safety check-up and ensure you are complying with the continuously changing OSHA regulations.

DOL overtime rule

Texas federal judge, Amos Maazant, recently struck down the proposed rule from the DOL that would have extended overtime pay to more than four million workers. As the last update was in 2004, many agree that the $23,660 salaried worker’s threshold should be considered more frequently than history has demonstrated.

DOL guidance on donations and loans in wake of hurricanes

Hurricanes Harvey and Irma have certainly dealt our southern and southeast states a blow. If you are located or have businesses in the impacted areas, ensure you are continuously reviewing compliance guidance issued from the DOL and the Internal Revenue Service (IRS) for employee benefit plans and relief programs. Here are a few highlights:

Leave donation programs

The IRS has issued guidance allowing donations of vacation, sick or personal leave through a leave-based donation program to be made to charitable organizations for the relief of victims of Hurricanes Harvey and Irma.

Eligible donations

Cash payments an employer makes to a charitable organization, described in IRC §170(c), in exchange for vacation, sick or personal leave that its employees elect to forgo, will not be considered gross income or wages of the employees if the payments are:

(1) made to the IRC §170(c) organizations for the relief of victims of Hurricane Harvey, Tropical Storm Harvey, Hurricane Irma or Tropical Storm Irma; and

(2) paid to the IRC §170(c) organizations before Jan. 1, 2019.

Similarly, the IRS will not assert the opportunity to make such an election results in constructive receipt of gross income or wages by employees.

Electing employees may not claim a charitable contribution deduction under IRC §170 with respect to the value of the forgone leave excluded from compensation and wages.

Employers do not need to include the cash payment in boxes 1, 3 (if applicable) or 5 of Form W-2.

Loans from employer-sponsored retirement plans

The IRS has relaxed rules governing loans and hardship distributions from employer-sponsored retirement plans to victims of Hurricanes Harvey and Irma and members of their families. Participants in §401(k), §403(b) and §457(b) plans may be eligible to take advantage of the relief. Employer plans that do not already have provisions to allow for loans and/or hardship distributions have until the end of the first plan year beginning after Dec. 31, 2017, to amend their plans. Note: The tax treatment of these loans and distributions remains unchanged. Ordinarily, retirement plan loan proceeds are tax-free if they are repaid over a period of five years or less. Hardship distributions are generally taxable and subject to a 10% early-withdrawal tax.

If you need assistance with employment law compliance or other updates, contact 888.556.0123 or email hrconsulting@hkpayroll.com.

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