IRS, FTC, CFPB Workplace Compliance News & Resources
All employers are responsible for reporting income and collecting and remitting withholding taxes, so it’s important to understand any changes that they will need to implement with their payroll system.
Here is the latest news from the Internal Revenue Service (IRS), Federal Trade Commission (FTC), and Consumer Financial Protection Bureau (CFPB). Be sure to seek legal counsel when you’re looking for how these changes will directly impact your business.
Past IRS Workplace Compliance News
When: Due by July 31, 2023
Internal Revenue Code Sections 4375 and 4376 impose fees on issuers or sponsors of self-insured health insurance plans. The fees fund the Patient-Centered Outcomes Research Institute (PCORI).
The fee for policy years and plan years ending on or after October 1, 2022, and before October 31, 2023, is $3.00 per covered life, up from $2.79 for the previous plan year. The agency calculates the fee based on the average number of lives covered under the policy or plan.
Employers must submit the fee to the IRS annually, along with IRS Form 720, the Quarterly Federal Excise Tax Return.
- Submit your PCORI fees and Form 720 to the IRS by July 31, 2023.
When: Reports due by March 2, 2023
On December 12, 2022, the Internal Revenue Service (IRS) permanently extended the deadline for Forms 1095-B and 1095-C that are required under the Affordable Care Act (ACA). Insurance companies, self-insured plans, and applicable large employers must file these forms, which attest that employees and covered individuals were offered “minimal essential coverage” as defined by the ACA.
Employers now have an additional 30 days to furnish these forms to covered individuals; the new deadline is March 2 every year. If the date falls on a weekend or holiday, the due date is the next business day.
The deadline extension does not apply to Forms 1094-B and 1094-C that employers must file with the IRS. Those deadlines are February 28 for paper filing and March 31 for electronic filing.
The IRS has also made permanent an alternative method of offering notice to non-full-time employees and non-employees when the shared responsibility penalty is $0. In those cases, the employer is deemed to be in compliance if they post a “clear and conspicuous” notice on their website through October 15 of the year following the calendar year to which the forms relate, stating that individuals may receive a copy of the form upon request. The notice must conform to other specific requirements as detailed in the final rule.
Lastly, the final rule eliminates the good faith relief from penalties for reporting incorrect or incomplete information on the forms and returns. The penalty is $290 per return.
- Furnish the 1095-B and 1095-C forms to individuals before the March 2, 2023, deadline.
- Carefully complete and review all forms before filing to avoid penalties.
- Be mindful of other states that have their own mandates and reporting requirements.
- Consult with legal counsel if questions arise before filing these forms.
When: Effective immediately
On December 29, 2022, the Internal Revenue Service (IRS) increased the standard mileage rate for business use of a vehicle from 62.5 cents to 65.5 cents, effective January 1, 2023. For qualified active-duty members of the Armed Forces, the rate is .22 cents per mile for medical or moving purposes. For miles driven in service of charitable organizations, the rate remains unchanged at .14 cents per mile.
How: Review your policies and procedures to ensure compliance with the new rates.
When: Effective January 29, 2023
On November 30, 2022, the IRS published guidance on how to satisfy the prevailing wage and apprenticeship requirements (PWA Notice) in the Federal Register. The guidance will become official 60 days after publication on January 29, 2023. It describes how to identify the applicable prevailing wage for a specific geographic area and job classification on the Department of Labor’s sam.gov website, participation requirements for apprentices, and recordkeeping requirements.
The prevailing requirements are applicable to builders, developers, and owners of clean energy facilities. Prevailing wage and apprenticeship requirements are applicable to construction projects started before January 29, 2023.
Meeting the requirements allows taxpayers to take advantage of certain enhanced tax benefits under the Inflation Reduction Act. The purpose is to drive investment in renewable energy and create good-paying jobs with strong labor protections.
- Update your internal policies and documentation as needed to comply with the new requirements.
When: Effective immediately
On October 18, 2022, the Internal Revenue Service (IRS) announced an inflation-indexed increase in the healthcare flexible spending accounts (FSA) employee contribution limit from $2,850 in 2022 to $3,050 in 2023. An FSA is an arrangement between an employee and an employer that lets the employee pay for many out-of-pocket medical expenses with tax-free payroll deductions. Some of the covered expenses include insurance copayments and deductibles, some prescription drugs, and medical devices.
For cafeteria plans that allow a carryover of unused funds from 2023 to 2024, the maximum carryover amount is $610.
- Update your employee handbook and HR manual with the new 2023 FSA limits.
- Include information on the 2023 FSA limit in your company health plan open enrollment communications
When: Effective immediately
On October 21, 2022, the Internal Revenue Service (IRS) announced an inflation-indexed increase in the cap on 401(k) contributions in 2023. The cap is $22,500 for 2023. Plan participants who are 50 years or older in 2023 may contribute an additional $7,500.
A 401(k) is an employer-provided retirement saving and investing plan that gives employees a tax break on their contributions to the plan. The employer automatically withdraws employee contributions from their paychecks and invests that money, plus any funds the employer is contributing, in the fund the employee chooses from a list of available options.
The IRA contribution limit increased to $6,500 for 2023.
- Update the contribution thresholds in your employee handbook and payroll system as needed.
When: Due August 1, 2022
What: Internal Revenue Code Sections 4375 and 4376 impose fees on issuers or sponsors of self-insured health insurance plan. The fees fund the Patient-Centered Outcomes Research Institute (PCORI). The fee for policy years and plan years that end on or after October 1, 2021, and before October 1, 2022, is $2.79 per covered life, calculated based on the average number of lives covered under the policy or plan. For plan years ending on or after October 1, 2020, and before October 1, 2021, the fee is $2.66 per covered life.
Employers must submit the fee to the IRS annually, along with Form 720, the Quarterly Federal Excise Tax Return.
- Submit the fee and Form 720 to the IRS by August 1, 2022.
When: Effective immediately
What: On April 29th, 2022, the Internal Revenue Service (IRS) published Revenue Procedure 2022-24, which increases the maximum contributions for 2023 to health savings accounts (HSAs) to account for inflation. The maximum contribution amount for self-only coverage is increasing from $3,650 to $3,850 in 2023. The maximum contribution amount for family coverage is increasing from $7,300 to $7,750 in 2023.
The maximum out-of-pocket amounts for-qualified high-deductible health plans (HDHPs) increased to $7,500 for self-coverage and $15,000 for family coverage. The minimum annual deductible for HDHPs is $1,500 for individuals and $3,000 for families. The health savings account (HSA) catch-up contribution for 2023 for those 55 and older remains the same at $1,000.
- Inform employees about the new health plan savings account (HSA) and high-deductible health plan (HDHP) contribution limits amount for 2023
- Incorporate the new health plan savings account (HSA) and high-deductible health plans (HDHP) contribution limits into open enrollment materials, plan documents, and summary plan descriptions.
When: Forms due to employees by March 2, 2022
What: The Internal Revenue Service (IRS) has issued a proposed rule that permanently extends the deadline for employers to file Forms 1095-B and 1095-C. The forms provide information about whether employer-sponsored health insurance plans meet Affordable Care Act (ACA) requirements for minimum coverage.
Employers can rely on the 30-day extension before the proposed rule takes effect, meaning the deadline for providing the forms to employees is March 2, 2022. That deadline will be the same each year, unless the date falls on a weekend or holiday, in which case the due date will be the next business day.
The due dates for submitting the forms to the IRS have not changed. Paper forms are due by February 28, 2022, and electronic forms are due March 31, 2022.
In an effort to ease the administrative burden of the reporting requirement, the proposed regulations would allow employers to avoid sending the forms directly to certain individuals. Instead, they may prominently post a notice on their website that announces the availability of Forms 1095-B or 1095-C to:
- Health plan participants employed by health insurance issuers or governmental agencies,
- Part-time employees of self-insured employers, and
- Non-employees (e.g., former employees) of self-insured employers.
Those employees are exempted from the direct reporting requirements because their individual shared responsibility payment is currently $0, and they do not need the forms for tax reporting.
Employers should note that state reporting deadlines may differ from the IRS deadlines.
- Update your policies and procedures to account for the new reporting deadline and website notification, as applicable.
When: Effective January 1, 2022
What: The Internal Revenue Service announced new, inflation-adjusted limits for health savings accounts (HSAs), effective January 1, 2022. The annual contribution limit for an individual with self-only coverage under a high-deductible health plan is increasing by $50 to $3,650. For an individual with family coverage under a high-deductible health plan, the annual contribution limit is increasing by $100 to $7,300.
- Update your payroll and plan administration systems and your plan documents to reflect the new limits.
Past FTC Workplace Compliance News
When: Effective immediately
On April 25, 2023, the Federal Trade Commission (FTC), the Civil Rights Division of the U.S. Department of Justice (DOJ), the Consumer Financial Protection Bureau (CFPB), and the U.S. Equal Employment Opportunity Commission (EEOC) jointly released an official statement on their efforts to address discrimination and bias when using automated systems. They define automated systems as software and algorithmic processes, which includes artificial intelligence (AI).
The statement warns that automated systems can perpetuate unlawful bias and discrimination when applied to credit decisions, housing availability, and employment opportunities. The statement gives an overview of each agency’s position on the use of AI and links to key AI-related documents published by each agency. The statement summarizes sources of potential discrimination and bias, including:
- Insufficient or faulty data and datasets,
- Lack of transparency in how the system works, and
- Faulty design and use.
The agencies concluded by saying that they will use their collective authority to protect individuals’ rights.
- Evaluate automated decision-making outcomes for potential bias and discriminatory impact.
- Control for biases in training datasets.
- Enhance your risk-assessment and compliance-management systems as needed to detect, remediate, and prevent risks stemming from use of automated systems.
- Review how you will use automated systems going forward.
Past CFPB Workplace Compliance News
When: By March 20, 2024
The Consumer Financial Protection Bureau (CFPB) released an updated “A Summary of Your Rights Under the Fair Credit Reporting Act” notice on March 17, 2023. The notice explains how the Fair Credit Reporting Act (FCRA) protects consumers’ credit information. Changes include updated contact information for federal agencies, deletion of obsolete businesses, and formatting corrections.
In compliance with the federal FCRA, employers must provide notice to applicants before completing a background check and when taking an adverse employment action in response to a background check. Employers do not need to give the updated notice to employees that have already received the notice.
The CFPB’s final rule became effective on April 19, 2023, and the compliance deadline for starting to use the updated notice is March 20, 2024.
- Update your “A Summary of Your Rights Under the Fair Credit Reporting Act” notice.
- Monitor the CFPB website for an additional updated notice with corrected typos.