One of the more controversial and complex provisions of the Tax Cuts and Jobs Act has been the 21 percent excise tax on certain nonprofit executive compensation. On December 31, 2018, the IRS issued interim guidance that addresses how this tax will apply in various situations that commonly arise for tax-exempt employers. Establishing internal systems to comply with this guidance will be challenging.
Covered Employers means all private employers other than government agencies, federal work study programs and some scholarship programs, as explained in the Department of Consumer Affair’s (DCA) published FAQs with five or more Covered Employees.
Covered Employees means all employees who work in New York City more than 80 hours in a calendar year, except for certain licensed individuals listed in the FAQs.
Employers must provide the notice to employees in English and in the employee’s primary language if that language is listed on the DCA’s website, which currently includes Spanish, Arabic, Chinese, French-Creole (Haitian Creole), Italian, Korean or Russian. The Act requires that employers actually give the notice to employees (simply posting the notice is not sufficient) and requires employers to maintain records that demonstrate compliance with the law.
The Act, which went into effect on April 1, 2014, requires Covered Employers to provide Covered Employees with up to 40 hours of paid sick leave on a defined accrual schedule set forth in the Act. Earlier versions of the law set the threshold at 15 or more employees, but the final publication sets the threshold at five (to see the final published law, follow the link to the Act above, and open the “text” tab next to the “history” tab).
This paid sick leave requirement also applies to employers who have one or more domestic workers who have been employed at least one year and who work more than 80 hours in a calendar year. Employers with fewer than five employees must provide unpaid sick leave to employees.
To comply with the Act, Covered Employers should ensure they have provided the notices to Covered Employees by today, May 1, and updated sick leave policies to account for these new requirements.
For more information regarding the Earned Sick Time Act, please contact your regular McDermott lawyer or:
Heather Egan Sussman: + 1 617 535 4177 firstname.lastname@example.org
Maureen O’Brien: + 312 984 3242 email@example.com
Jonathan Boyles: + 1 212 547 5550 firstname.lastname@example.org
Ashley McCarthy: + 212 547 5794 email@example.com
Sabrina Dunlap: + 1 617 535 4014 firstname.lastname@example.org