HR Alerts & News

Here are some important HR alerts that we wanted to notify you about.

WOTC Tax Incentives – As a reminder, The Vow to Hire Heroes Act of 2011 increased some Work Opportunity Tax Credit (WOTC) tax incentives for the hiring of veterans. The target groups with hire dates of November 22, 2011, through December 31, 2012, may qualify for the WOTC tax incentive. To qualify a veteran, forms DD214, WOTC 8850 and 9061 must be filed to verify 180 days of service in the Armed Forces. To qualify a disabled veteran, a Disability Rating Letter must be completed showing entitlement to compensation.

Re-authorization of E-Verify – On September 13, 2012, The U.S. House of Representatives passed Bill S.3245 that would reauthorize E-Verify for three years and ascertain that immigrant visa programs set to expire would remain active. The web-based program helps to identify individuals working illegally in the U.S. and protects jobs for legal workers. However, the bill will become effective based upon further action conducted by the President. Stay tuned for additional information as it is released.

FCRA Notices – By January 1, 2013, employers should begin to use new Fair Credit Reporting Act (FCRA) notices for their background check programs, which reflect changes made to the FCRA Summary of Rights form.  The FCRA Summary of Rights form must include the following: as an enclosure with the first of the two “adverse action” notice and the disclosures for “investigative consumer reports” notice.

State versus Federal Wage Garnishments

If a state wage garnishment law differs from the federal Consumer Credit Protection Act (CCPA), then employers should only comply with the law resulting in the small garnishment against the employee.

New W-2 Reporting Requirements

Q: I have been hearing about the new W-2 reporting requirements under the Health Care Reform Act and have a few questions. (1) Are employers now required to report the value of employee benefits on each employee’s W-2 form?  (2) Does the value of benefits become taxable income to the employee? (3) What amount should the employer report on the Form W-2 for health coverage – the amount the employer paid, the amount the employee paid, or both?

A: (1) Yes, many employers are required to meet this reporting requirement for 2012 W-2s, which will generally be mailed in January of 2013. However, the IRS has provided transitional relief from the requirement for small employers for the 2012 tax year.  For 2012 W-2s, an employer is not subject to the reporting requirement if the employer was required to file fewer than 250 W-2s for the 2011 calendar tax year. (2) No, the reporting requirement in no way changes the tax treatment of employee benefits. The reporting requirements were simply put into place to provide each employee with an idea of the value of his/her benefits package, so the employee may take it into consideration when considering life changing decisions that affect benefits, such as changing jobs, transferring to part-time status, etc. The IRS has stated that “the purpose of the reporting is to provide useful and comparable consumer information to employees on the cost of their health care coverage.” (3) For most plans, the amount reported on the W-2 should include both the portion the employee contributed and the portion the employer contributed to the plan.  It is important to consult with your accounting professional regarding exceptions to this general rule.