IRS Seeks Public Input on Obamacare

Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act  

The IRS along with the Treasury Department has requested public comment on a proposed affordability safe harbor for employers under the shared responsibility provisions included in the Affordable Care Act that will apply to certain employers starting in 2014.

Under the Affordable Care Act, employers with 50 or more full-time employees that do not offer affordable health coverage to their full-time employees may be required to make a shared responsibility payment. Notice 2011-73, posted today on, solicits public input and comment on a proposed safe harbor, designed to make it easier for employers to determine whether the health coverage they offer is affordable. To that end, Treasury and IRS expect to propose a safe harbor permitting employers that offer coverage to their employees to measure the affordability of that coverage by using wages that the employer paid to an employee, instead of the employee’s household income. This contemplated safe harbor would only apply for purposes of the employer shared responsibility provision, and would not affect employees’ eligibility for health insurance premium tax credits.

Today’s request for comment is designed to ensure that Treasury and IRS continue to receive broad input from stakeholders on how best to implement the shared responsibility provisions in a way that is administrable, allows flexibility, and minimizes burden.  By soliciting comments and feedback now, Treasury and IRS are giving all interested parties the opportunity for input before proposed regulations are issued.

Submit comments by:

  • E-mail to: Include “Notice 2011-73” in the subject line.
  • Mail to: Internal Revenue Service, CC:PA:LPD:PR (Notice 2011-73), Room 5203,P.O. Box7604, Ben Franklin Station, Washington, DC20044.

The deadline for comments is December 13, 2011.

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New TN SUI Rate for Construction Co’s

The Tennessee Dept of Labor has announced that the unemployment tax rate for new construction companies has gone up from 8.1% to 8.6%. The new rate is effective July 1, 2011. The new companies can plan to maintain that rate for at least 3 years until they establish some employment history so that their rate can be adjusted accordingly. As you know the construction industry has been hit particularly hard during this current economic downturn resulting in above average layoffs and thus above average demands on the unemployment trust fund.

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NLRB Announces New Employee Poster Requirement

HR and Payroll administrators should take note that as a result of the National Labor Relations Act (NLRA), governed by the National Labor Relation Board (NLRB: 5 members – 3 Democrats, 1 Republican, 1 vacancy), recently announced that private enterprises that fall under the NLRA’s jurisdiction will be required to post a new employee poster by Nov. 14, 2011. Right now, all employers are required to put up posters informing workers of the FLSA, minimum wage laws and other worker rights. This NLRA poster informs employees of their right to organize. Under NLRA guidelines, any business that exceeds $500,000 in gross sales, or for non-retail businesses, exceeds $50,000 in out-of-state sales or purchases falls under NLRA jurisdiction. The number of employees is of no relevance.

Here is a link to the poster for your review.

The poster will soon be available from the NLRB web site at no cost. It must be at least 11 x 7 and it must be posted with all other employee posters.  If 20 percent or more employees commonly speak a language other than English, an additional poster translated in that language must also go up. If employers use electronic methods to disseminate employee information, that electronic method must also be used to inform employees of this NLRB proclamation.

Enforcement of the ruling is in question as well as the consequences for non-compliance. The NLRB expects pro union individuals to visit places of employment to make sure they are in compliance. If a business is not, the NLRB will “slap their wrist” and ask them to put up the poster. Failure to comply will not result in any fines or penalties but the NLRB can accuse the employer of “unfair labor practices” which can result in consequences as they relate to employee organization efforts. There is also some question whether the NLRB even has the authority to mandate such a posting. The Advi$or notes that in one of the first executive orders of his administration, Mr. Obama, in January of 2009, ordered all Federal contractors to post a similar poster. 

The value of such a proclamation is debatable. The pro labor side of the argument notes that collective bargaining puts more money in workers’ pockets, increases purchasing power and creates a stronger economy. On the other hand, employers note that a competitive market place does a pretty good job of ensuring fair wages and benefits for employees and that collective bargaining inhibits the ability to reward better workers for productive work habits. There is also the burden of the cost of compliance as well as the cost of administration if employees choose to organize. The market seems to support the latter argument as private sector union membership has shrunk from 35% in the 1950′s to below 7% currently. Also notable is the increased migration of individuals to right-to-work states as indicated in the 2010 census.

If you have questions regarding this requirement and your business, customers of Time & Pay can call our professional partner, SESCO, for free consultations.

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GSA Announces New Per Diem Expense Rates

Payroll administrators will be glad to see that the 2012 federal per diem rates used to substantiate business travel expenses within the continental United States were released by the General Services Administration. The federal per diem is equal to the sum of the federal lodging expense rate and the federal meal and incidental expense rate for designated areas of travel. The federal government publishes per diem rates for federal employees traveling on government business that may be used by other employers to establish allowances that will satisfy the substantiation requirements, according to the Internal Revenue Service.

Recall that the IRS recently announced that they were discontinuing the use of the High-Low method of substantiating expenses.  (Advi$or article 8/11/11)

For fiscal year 2012, the standard per diem rate is $77 to reflect the average daily rate for lodging across the country. Reimbursement for meals and incidental expenses remains unchanged from fiscal 2011, ranging from $46 to $71 for meals per day, depending on location, and $5 for incidental expenses. About 2,600 counties are covered by the standard CONUS (Continental US)per diem rate of $123 ($77 lodging, $46 meals and incidental expenses). For 2012, about 400 locations were assigned rates higher than the standard CONUS rate.

If an employer’s per diem rate is less than or equal to the federal per diem rate, the expenses are deemed substantiated and do not qualify as taxable income to employees. If the employer’s per diem rate exceeds the federal rate, amounts paid in excess of the federal per diem must be substantiated by employees or treated as taxable income.

IRS allows employers to apply federal per diem rates to substantiate business-related travel expenses for the government’s fiscal year, effective Oct. 1, or calendar year, if the employer elects to apply the rates on a calendar basis.

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COBRA Subsidies for Laid-Off Workers Ends Aug. 31

Payroll departments should note that the subsidy for continuing health insurance coverage for laid-off employees, and the associated payroll tax credit,  implemented under the federal economic stimulus law will end Aug. 31, 2011. Under the American Recovery and Reinvestment Act (ARRA) of 2009, eligible individuals, defined generally as people involuntarily terminated from their jobs due to the slow-down of the economy, have been able to extend their health insurance coverage by paying their former employers 35% of the cost of coverage for up to 15 months.  Prior to the passage of this legislation, under the Consolidated Omnibus Budget Reconciliation Act (COBRA), these former employees could extend their health coverage by paying 102 percent of the premium cost for up to 18 months.

Under this ARRA act, employers paid the resulting 65% difference in the cost of the former employees health insurance coverage. However, they were able to completely offset that cost with payroll tax credits. These credits resulted in a direct reduction in payroll taxes paid in and were defined on a quarterly basis on the employer’s 941.

The federal stimulus law originally applied the subsidy to individuals laid off between Sept. 1, 2008, and Dec. 31, 2009, but several extensions pushed the end date to May 31, 2010. The 15 month coverage period is now set to expire. The IRS did recently clarify that for those employees who delayed the start of COBRA, such as delays related to their severance package, use of banked hours, or other similar provisions of their lay-off, the expiration of their COBRA subsidy may go beyond the Aug. 31 expiration date.

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-M W – Royal Brass, Knoxville, TN

“From the start, Time & Pay has worked with us in many aspects of payroll and HR as we have grown from a single facility to a multi-state operation. They have allowed us to concentrate on that expansion while they have focused on keeping us compliant with payroll and timekeeping regulations. There customer service is exemplary! They are great to work with.”
-J G – Prime Choice Foods, Denver, CO

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-C – Comprehensive Community Services, Johnson City, TN

“Having Time & Pay as a payroll service has been a wonderful partnership. Their customer service, punctuality and attention to detail have surpassed our expectations and we are glad to have them as a partner in conducting all of our payroll functions. I would highly recommend their services to companies, large and small.”  
-T W – Little Things, LLC, Chattanooga, TN

A while back, the state came to our office to audit our payroll records. When the auditor found out Time & Pay did our payroll, she stopped, packed her briefcase and informed us there was no need for the audit. She was very confident we were compliant.
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