Archive for Benefit Plans

What have you done for your employee handbook lately?

In November 2014, Massachusetts citizens voted to entitle Massachusetts workers to earn and use paid sick time. In April 2015, the Attorney General released proposed regulations in order to help businesses comply with the new law. All employers are impacted by the law; however, only employers with 11 or more employees (not full-time equivalents (FTE’s)) during the calendar year are required to provide paid sick time to any employee whose primary workplace is located in Massachusetts, including part-time, full-time, seasonal or temporary employees. The new law takes effect on July 1, 2015.

According to a summary and the draft regulations published by the Attorney General’s office, some of the highlights of the new law are as follows:

• Massachusetts workers whose employers have 11 or more employees for at least 20 weeks during either the current or preceding calendar year (whether consecutive or not) can earn and use up to 40 hours of paid sick time per calendar year

• For employers with less than 11 employees for at least 16 weeks during either the current or preceding calendar year, workers can earn and use unpaid sick time

• The use of earned sick time can be used for:

o Caring for a physical or mental illness, injury or medical condition affecting the employee, spouse, child, parent or parent of a spouse

o Attending routine medical appointments for the employee, spouse, child, parent or parent of spouse

o Addressing the effects of domestic violence on the employee or employee’s dependent child

• Employees will earn at least one hour of sick time for every 30 hours worked

• Hours will begin to accrue on the date of hire, or July 1, 2015 (whichever is later) and employees can begin to use the sick time 90 days after that date (July 1, 2015 or date of hire, whichever is later).

• Up to 40 hours of earned sick time can be carried over to the next calendar year, but the employer is not required to provide more than 40 hours of paid sick time in one calendar year

• Earned sick time is not required to be paid out upon termination from employment

• Employers cannot require workers to make up the used sick time

• Other provisions exist within the law regarding requirements to provide notice, certification, documentation, retaliation, confidentiality, breaks in service, exempt employees and other responsibilities on the part of the employer and employee.

The above highlights are just a sample of what is in the draft regulations. All employers should be reviewing their employee handbooks containing human resource and PTO policies to ensure that their policies are up-to-date and compliant with the new law. An experienced employment attorney is recommended to ensure that circumstances specific to each organization are considered when reviewing for compliance.

Jeanne Pagnozzi Boston AccountantJeanne Pagnozzi is a manager in BlumShapiro’s Accounting and Auditing Department, based in Quincy, Massachusetts, Jeanne oversees attest and tax engagements and is responsible for engagement planning, staff supervision and coordination with client personnel to ensure successful completion of projects.

Reminders on 403(b) and 401(k) Remittances

As we start the new year, one reminder for non-profit organizations is to make sure you are remitting your employees’ contributions  and loan repayments to your organization’s
403(b) or 401(k) plan on a timely basis. The Department of Labor (DOL) requires that employee contributions and loan repayments to pension plans be deposited as soon as they can be segregated but, in no case, later than the 15th business day of the month immediately following the month in which the contribution or loan repayment is either withheld or received by the employer. The DOL created a safe harbor rule under which participant contributions to small plans (those with fewer than 100 participants) will be deemed to be made in compliance with the law if those amounts are deposited within seven business days of withholding or receipt.

Employee Benefit Plan Audits ConnecticutWhile the requirements for large plans mention the 15th business day of the month immediately following the month in which the contribution is withheld or received, the rule is as soon as the amounts can be segregated. Most organizations are able to segregate these amounts much earlier than the 15th business day of the following month. This typically happens when payroll is made, so amounts should be remitted the same day as payroll occurs or within one or two days after that payroll date.

If your organization is currently not remitting your contributions as timely as required, you might want to look at your process and work with your third-party administrator to change the process in order to meet these requirements in 2015.

Michelle Hatch is a partner in our Non-Profit Services Group. She oversees audit and accounting engagements for non-profit organizations, including independent schools, trade associations, health and human service organizations and art, cultural and membership organizations. Michelle is also a member of the Employee Benefit Assurance Group and oversees audits for 401(k), 403(b) and defined benefit retirement plans.