Employment Law Changes for 201004/08/2010 | Spring 2010 Newsletter
Employers should be aware of the following important changes in employment law for 2010.
New York employers must provide new employees with written notice of their rate of pay
Effective October 2009, New York employers must provide all newly hired employees with written notice (which must be acknowledged in writing by the employee) of the employee’s initial rate of pay. For employees eligible for overtime, the notice must specify the regular and overtime hourly rate. Employers should keep a copy of the signed written notice in their files.
This requirement supplements the existing requirement for commissioned salespersons that employers must have a written signed agreement which specifies how commissions are earned and how the salesperson will be paid.
Federal government steps up enforcement of wage laws, including misclassification of independent contractors
Employers should expect increased government and private enforcement of the wage and hour laws, as the Obama administration has recently sought increased funding for enforcement of the federal wage laws, including stepped up enforcement against the misclassification of employees as independent contractors. The Department of Labor has also launched an awareness campaign for employees, which is likely to increase the number of private wage and hour lawsuits.
Employers should review their employment practices carefully to determine: 1) whether independent contractors should be treated as employees; and 2) whether persons treated as exempt (executive or administrative level salaried employees) should be treated as non-exempt, and therefore eligible for overtime.
Federal tax breaks for companies that hire new employees and for small businesses that provide health insurance
In order to encourage new hiring, employers who hire a new employee after February 3, 2010 will receive a tax break which excuses the employer from paying the employer’s matching share of social security taxes (6.2%) for wages paid in 2010, resulting in a potential tax savings of up to $6,621.60. In addition, if the company keeps the employee for at least a year, the employer can claim a tax credit up to $1,000.
To encourage employers to continue providing health care coverage for their employees, businesses with fewer than 25 full-time workers and who pay average annual wages below $50,000 can claim a tax credit up to 35 percent of premium costs in 2010 if they pay at least 50 percent of the cost of their employee health care coverage.