Welcome to the February issue of the Mize payroll newsletter! This month we’re seeing more states mandating employee benefits for retirement savings and paid time off programs. We’ll get to the state-by-state rundown below, but first we wanted to give you a heads up about a common fraud regarding employee direct deposit.

Beware of Fraudulent Bank Account Change Requests

When an employee wants to change their bank account for payroll direct deposit, what’s your organization’s procedure? Can an employee just send an email to your office requesting the change? Or can they call with their new account information? 

Both of these options have the potential for fraud, and criminals are bold. Anytime you receive a request from an employee to change their bank account, proceed cautiously. If the employee makes the request in person and you know them, no problem! 

But if the request is made by email or phone call, you should verify the request by contacting the employee independently. That means picking up the phone to call the employee using the contact information in their payroll records, not replying to the email request or asking the caller for a good phone number. If you respond to the person asking for the change, you’re just talking to the potential fraudster.

And sometimes – if you take the time to look with a critical eye – these types of scams can be pretty obvious. Here are some red flags:

• Does the sender’s name and email address match? In most email programs, you can hover over the sender’s name to view the email address. And look closely – scammers often use email addresses that closely resemble legitimate ones except for slight differences.

• Is there a (false) sense of urgency to the request? If the sender uses terms like “immediately” or “right away,” slow down and review the request very closely.

• Are there misspellings or incorrect grammar? Obviously not everyone is a great communicator, but poor language can be a reason to suspect a fraudulent message.

Never click on links or open attachments in suspicious emails . . . and assume every email is suspicious until you’ve confirmed it’s legitimate.

If direct deposit fraud is successful, an employee’s pay gets diverted to the bad guys, and the likelihood of being able to pull back those funds is slim. Sure, it takes extra time to verify and confirm employee requests, but the investment of that extra effort can save you and your employees from an unpleasant situation.

Credit Reduction States for 2024

The US Department of Labor has indicated that California, Connecticut, and New York, along with the US Virgin Islands, will potentially be credit reduction states for 2024. This means that employers in these states may be subject to a higher contribution rate for federal unemployment insurance (FUTA). California and New York have an additional credit reduction rate of 0.6% for 2023 and may face a credit reduction of 0.9% for 2024. Connecticut was not subject to an additional rate for 2023 but could face an additional rate of 0.9%. The Virgin Islands could be subject to a FUTA credit reduction of 5% for 2024.

Credit reductions occur when a state has an outstanding Federal Unemployment Account loan on January 1 for at least two consecutive years and on November 10 of the second year. The credit reduction continues until the loan is paid off. Each year in which the loan balance exists on January 1, the credit reduction increases by 0.3%.

No Student Loan Garnishments Allowed through September 2024

Student loan payments were suspended as part of pandemic relief programs, but started back up again in October, 2023. When payments restarted, they did so under the “Fresh Start” program which allows a 12-month on-ramp through September 2024 to protect borrowers from being placed in default. For more information, refer employees to the Fresh Start program website.

An Upgrade Coming to E-Verify

A new version of E-Verify - called E-Verify+ - is coming soon. Enhancements include having new hires enter their own information and documentation online for verification. This information will be combined into a completed Form I-9 for the employer to download. If there’s any problem with verifying the employee’s status, USCIS will communicate directly with the individual, taking the employer out of the mix. Employees who have been verified in the past will be able to carry over that status to future employers.

Once the new application has been released, employers will be able to choose whether to stay with the current version of E-Verify or move to E-Verify+.

State By State News

California

SDI Elective Coverage Rate for 2024 – The 2024 disability insurance coverage rate for employers electing state disability insurance (SDI) increased to 9.785% of reportable income. Previously, it was 6.93% and capped at the annual SDI wage base. For 2024, there is no SDI wage base. The premium includes contributions for SDI and paid family leave benefits. For more information, see the SDI information notice.

Fast Food Worker Minimum Wage Increase – Effective April 1, 2024, the minimum wage for fast food workers will be $20 per hour. The Fast Food Council will set minimum wages for fast food workers beginning January 1, 2025.

Food Handler Training Paid Training Time – Beginning January 1, 2024, employees who handle food must be compensated for the time it takes to complete food handler training. Employers must also pay employees for any necessary expenses or losses associated with obtaining food handler training and a food handler card. Employees must be relieved of other duties while training or taking the examination.

Pay Rate Notice Update – Beginning January 1, 2024, pay rate notices provided to employees at the time of hire must include additional information. If a federal or state emergency or disaster declaration is applicable to the location where the employee will be working within 30 days of the employee’s date of hire, it must be disclosed. A copy of the updated notice can be found here.

District of Columbia

Minimum Wage, Tip Credit Updates – Beginning July 1, 2024, minimum wage in DC will increase from $17 per hour to $17.50 per hour. Also effective that date, the minimum cash wage for tipped employees will increase from $8 per hour to $10 per hour. The tip credit will decrease to $7.50 per hour from $9 per hour.

Illinois

Revised withholding tables have been released effective January 1, 2024.

The city of Chicago is expanding its Paid Leave program effective July 1, 2024, guaranteeing up to 10 days of paid leave for all workers in the city.

The new Paid Leave and Paid Sick and Safe Leave ordinance replaces Chicago’s Paid Sick Leave Ordinance.

• The new ordinance allows employees to accrue one hour of paid sick leave plus one hour of paid leave for every 35 hours worked, up to a maximum of 40 hours of paid sick leave and 40 hours of paid leave.
• Employees can carryover 16 hours of accrued, unused paid leave and 80 hours of accrued, unused sick leave to the next year.
• Employers are permitted to front-load 40 hours of paid sick leave plus 40 hours of paid leave at the beginning of each year.
• The new provisions are effective beginning July 1, 2024 or on the first day of a covered employee’s employment.
• Covered employees include any employee who, in any two week period, performs at least two hours of work for an employer while physically present within the geographic boundaries of the City of Chicago.
• Excluded employees include camp counselors, any governmental entity other than the city and its sister agencies, and all Domestic workers.

Maryland

The Maryland Employer Withholding Guide has been updated for wages paid on or after January 1, 2024.

Michigan

Updated withholding tables and a withholding guide have been released for wages paid on or after January 1, 2024.

Montana

Forms W-2 for 2023 were due January 31, 2024. If a Montana employer missed that deadline, the state will apply an increased late filing penalty. The new late filing penalty increases to $50 from $5, with a minimum penalty increase to $250 from $50.

Nevada

The Nevada Unemployment Insurance Employer Self Service system is set to launch on February 20, 2024. Even though existing employer accounts will transfer to the new system, every account owner will need to establish a new user login, which will also be available February 20. The new system will provide a new Excel option for bulk filing.

New Jersey

The Retire Ready NJ Program is set for a soft launch in spring 2024 with the full program to open in summer 2024. Here’s an overview:

• Entry into the pilot program is voluntary and interested employers may sign up here:  https://www.nj.gov/treasury/securechoiceprogram/savers.shtml
• When the full program is open, every New Jersey employer with 25 or more employees and who don’t offer their own qualified retirement program, will be required to register with RetireReady NJ.
• Administration of the program is free of charge.
• No matching contributions are permitted.
• All employees are automatically enrolled if they are 18 years or older.
• Employees may opt out.
• Employees may also re-enroll if they previously opted out.
• Employees choose how much to have deducted from their pay checks.
• The initial contribution amount for employees is 3%, but employees may change that rate after enrollment.
• The IRA contribution is a Roth IRA contribution for tax purposes.
• Contributions are still subject to yearly contribution limits for Roth IRAs.

For details, visit the program website.

New Mexico

Santa Fe County has announced their minimum wage will increase to $14.60 effective March 1, 2024.

The city of Santa Fe has announced their minimum wage increase, effective March 1, 2024, is $14.60.

Oregon

Updated withholding tax tables have been released for wages paid on or after January 1, 2024.

Voters in Salem, Oregon voted down the Safe Salem Local Tax on November 7, 2023 and the tax has been repealed. The tax would have been effective July 1, 2024 at 0.814% of wages to employees who earn over minimum wage working within the city limits.

Vermont

A new Child Care Contribution Tax (CCC) for Vermont employees and employers takes effect with the first check date on or after July 1, 2024. The CCC is composed of a 0.44% payroll tax on employee wages and a 0.11% self-employment income tax.

Washington

2024 Workers Compensation Premium Rates have been announced and can be found by clicking here.

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