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Hot Topic: Immigration Reform

Executive Actions on Immigration could affect not only an estimated 5.2 million unauthorized immigrants living in the United States, but small business owners and entrepreneurs as well.

Capitol Hill

Here’s a look at the actions listed to streamline legal immigration, according to the White House Fact Sheet on Immigration Accountability Executive Action:

  • Providing portable work authorization for high-skilled workers awaiting LPR status and their spouses.
  • Enhancing options for foreign entrepreneurs.
  • Strengthening and extending on-the-job training for STEM graduates of U.S universities.
  • Streamlining the process for foreign workers and their employers, while protecting American workers
  • Reducing family separation for those waiting to obtain LPR status.
  • Ensuring that individuals with lawful status can travel to their countries of origin.
  • Issuing a Presidential Memorandum on visa modernization.
  • Creating a White House Task Force on New Americans.
  • Promoting Citizenship Public Awareness
  • Ensuring U.S. Citizens Can Serve
  • Creating a mechanism that requires certain undocumented immigrants to pass a background check to make sure that they start paying their fair share in taxes.
  • Expanding DACA to cover additional DREAMers

With this immigration reform 3.7 to 4.1 million unauthorized immigrants who are parents of U.S. citizens and LPR’s (lawful permanent residents) will have the opportunity to request a temporary relief from deportation and work authorization for three years at a time; if they come forward and meet certain qualifications. To meet the qualifications they must register, have been continuously present in the U.S. for more than 5 years, submit to biometric data, pass background checks, show that their child was born before the date of this announcement, and pay taxes. Again, this is only a temporary relief of three years at a time.

The Executive Action also allows for the expansion of the Deferred Action for Childhood Arrivals; eliminating the age cap that had previously limited the law to childhood arrivals who turned 31 prior to 6/15/12. Just as with the parents mentioned above, continuous presence in the US must have begun prior to January 1, 2010; and will also only be granted in increments of 3 years.

So what does all of this mean for the common small business owner from an HR standpoint?

One thing of importance is that thus far the executive order does not allow this new class of worker to get subsidies under the Affordable Care Act. In fact, the president’s executive order at present does not extend to the ACA eligibility in anyway, there for these employees won’t count towards your 50 employee of more threshold quota.

Some theorize that many of these individuals will step forward to claim a legitimate work status; thereby using an Individual Taxpayer Identification Number to contribute to the social security system and pay taxes. However, employers may also see an increase in employment lawsuits or more union organizing, as this new population of workers who have been silent at the worksite begins to speak out in regards to their grievances; ranging from harassment, discrimination, and lack of overtime pay. Be sure that these employees who may not have been given vacation time, and other benefits in the past, will now have the same expectations as the other employees.

However, it is expected that many of the immigrants who could seek relief will not do so, as they realize that this is “temporary” and not legislation. Additionally, while receiving amnesty (even temporarily) may seem enticing, many will choose to forego applying, to avoid paying the application costs, and having to pay taxes.

There are sure to be several new guidance’s issued in the coming weeks from the Department of Labor in coordination with other agencies, such as the United States Immigration and Customs Enforcement, regarding the new executive actions; and as with anything new there are bound to be greater audits and regulatory checks. Businesses may want to entertain the idea of doing their own proactive audit and recheck their employee’s documents, legitimizing the work statuses of employees, even if you think they have passed previously. Remember that any employee who presents new forms of identification should also complete a new I-9 form. Most importantly of all, remember not to take any discriminatory or retaliatory actions against any workers as it relates to the new immigration orders.

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The 26th Amendment

The 26th Amendment was passed by Congress March 23, 1971, and ratified July 1, 1971.

Note: Amendment 14, section 2, of the Constitution was modified by section 1 of the 26th amendment.

  • AMENDMENT XXVI: Section 1. The right of citizens of the United States, who are eighteen years of age or older, to vote shall not be denied or abridged by the United States or by any State on account of age.

Section 2. The Congress shall have power to enforce this article by appropriate legislation.

“The 26th Amendment lowered the voting age from 21 to 18, allowing millions of young people to participate actively in the democratic process and to have a powerful voice in shaping their political future.

The first rumblings to lower the voting age emerged in the midst of the Vietnam War, with student demonstrations running strong. The slogan “Old enough to fight, old enough to vote,” gained popularity and some groups, including student members of the California Teachers Association (CTA), hoped to change the system from within.

In 1970, President Richard Nixon passed the Voting Rights Act, which called for the voting age to be 18. The Senate voted 94-0 to pass the resolution, and 13 days later, on March 23, 1971, the House voted in favor. Within four months, the amendment was ratified by the required three-fourths of state legislatures. It was the fastest time any proposed amendment has been pressed forward, and President Nixon signed it into law in July.

Millions of 18, 19 and 20 year olds could now vote in the 1972 presidential election. They, and the young activists who fought for the change, paved the way for future generations of young people to exercise their political voices.” (Excerpts from http://democracyday.com/the-26th-amendment.html

HR Strategies strongly advocates for all to vote in our upcoming elections this November.  Please remember that your vote counts in electing our public officials who determine our laws, including those regarding commerce, and human resource issues. If you haven’t registered to vote, you may do so at http://www.presidentialelection.com/register_to_vote/.

Additionally, as an employer are you making it possible for your employees to vote. Georgia code 21-2-404 reads as such:

Affording employees time off to vote

Each employee in this state shall, upon reasonable notice to his or her employer, be permitted by his or her employer to take any necessary time off from his or her employment to vote in any municipal, county, state, or federal political party primary or election for which such employee is qualified and registered to vote on the day on which such primary or election is held; provided, however, that such necessary time off shall not exceed two hours; and provided, further, that, if the hours of work of such employee commence at least two hours after the opening of the polls or end at least two hours prior to the closing of the polls, then the time off for voting as provided for in this Code section shall not be available. The employer may specify the hours during which the employee may absent himself or herself as provided in this Code section. (The law does not specify whether time off is to be paid)

HR Strategies advises employers to have set company policies, listed in their employee handbooks, which set forth how the employer deals with taking time off for voting.  If you need assistance with your employees’ right to vote, or construction of employee policies and handbooks, contact HR Strategies at 770-339-0000.

PPACA – PART II : Considering the Impact of Play or Pay

On July 16th, HR Strategies began a quick three part blog series to take a hard look at the health reform in order to provide  some clarity and guidance regarding PPACA’s impact on our clients and businesses everywhere.  This three part blog series offers analysis and interpretation on the important factors/elements of PPACA, including a timeline of applicable changes. 

Considering the impact of “Play or Pay”: By the time certain provisions of PPACA goes into effect, on 1/1/2014, the state sponsored exchanges (health insurance plans offered by the states and funded by Medicaid and employee taxes) may be a strong source of medical plan options for all employees.  In theory, the exchanges would provide the employees alternatives in selecting health care plans.  However, it is important that the employer calculates the cost to offer group health care or not.  If the company is clearly under the 50 employees threshold, as explained in the preceding scenario, the employer is not “obligated” to provide insurance within the “adequate and affordable” requirements of the “Play or Pay” mandate.  However, employers who are at or above the threshold must consider the following:

1. Adequate: In general, the actuarial value of coverage provided in the group health plan must pay for a minimum of 60% of the benefit cost.  Bear in mind that preventative services must now be covered at a 100% basis; there will be no pre-existing condition limitations and no annual or lifetime maximum benefits on essential benefits.  Plans will also have to maintain coverage available to dependents up to age 26, regardless of dependent status.  A company may choose to offer higher coverage and charge more for it, yet in order to do so, the minimum coverage option must be provided.

2. Affordable:  PPACA requires that the employee contributions towards coverage cost of employer sponsored health insurance cannot exceed 9.5% of the household income.  However, the concept of “household income” has yet to be clarified by the IRS and other departments.  For example:  an employee makes $10.00/hr. for annual gross earnings of $20,800.00/yr.  If we take the gross earnings (some experts are inclined to use net earnings, not gross) as listed on box 1 from the W-2, 9.5% of the household income would be $1,976.00. If the cost of employee only coverage is $400.00 per month and the employer pays 80% of the premium, or $320.00, the employee pays the remaining $80.00 per month premium, or 20%; then using the employee contribution/cost per month and gross wages annual calculation, the employee contribution would fall below the 9.5% of household income calculation ($960.00/yr.), satisfying the “affordable” requirement.  Again, if we were to assume a net income of approximately 30% less than gross earnings, or $14,560, then the 9.5% of the w2 wages would equal $1,383.20.  If the company contributed 50% of the premium, rather than 80%, the employee portion of the premiums would far exceed the 9.5% household income threshold.  That means, the plan would not satisfy the “affordability” requirement.

3. “Pay” factor: If we use the latter example, then the group health coverage does not satisfy the “play” requirement, and thus the employer will have to “pay”.  Employers will need to evaluate the impact of these penalties, and whether it makes more financial business sense to try to meet the “adequate and affordable” requirements, or simply pay the penalties.  An employer will pay an excise tax  in each one of the following scenarios:

i.      An employer chooses not to offer a group health plan, and at least one full-time employee enrolls in an exchange and receives the premium tax subsidy:  The excise tax is applied by full-time employee, not by full-time equivalent.  Therefore, the employer will be required to pay $2,000 per full-time employee, excluding the first 30 employees.  In the example used to explain eligibility, we identified 35 eligible full time employees.  Thus, the employer would have to pay $10,000 in excise tax for the 5 employees after the first 30 are excluded. Keep in mind; however, that the proposed regulations on how to count employees may change.

ii.      An employer’s plan is deemed “not affordable”  (as shown in (2) above) and one or more employees qualify for Federal subsidy to purchase exchanges:  The employer will be required to pay $3,000 per employee who qualifies for a Federal tax subsidy.  An employee qualifies for this subsidy if the employee’s annual household income is at or below 400% of the Federal poverty level.  To put it in perspective, a family of four whose household income is at or below $88,000/yr. would qualify for Federal subsidy.

Part III of our examination: “Other PPACA Changes and Timeline” will be highlighted this Friday 7/20, be sure to check back for important guidance on what this mandate can mean for your company.

PPACA – PART I: Eligibility Factor

As noted on July 2nd, HR Strategies is continuing to take a hard look at the health reform in order to provide some clarity and guidance regarding PPACA’s impact on our clients and businesses everywhere.  This three part blog series will offer analysis and interpretation on the important factors/elements of PPACA, including a timeline of applicable changes.

Eligibility factor:  Some of the provisions of the health reform are based on the number of employees.  Companies with fewer than 50 employees will not be subject to the “Play or Pay” Mandate.  The IRS has issued proposed regulations that provide for calculating the numbers of employees as follows:

Employees who work 30 hours per week are considered full-time employees.  Part-time employees are “converted” to full time equivalent, based on a 30 hrs work-week. For example, a company that has 35 full-time employees and 50 part-time employees who work 15 hrs per week, would produce the following equation:  total full-time employees (35 regular FT) + 25 full time equivalents (50 part-time@15 hrs. week) = total of 60 employees.  Therefore, the “Play or Pay” mandate would apply to the company.

Bear in mind, there are lookback and stability periods, which means that the determination is based on a lookback period of time (typically the prior 12 months before plan year effective date) and a stability period, which is based on volume or spikes in hiring within a set time.  Temporary and seasonal employees will typically count against the total number of full-time equivalents, especially if those positions are on-going.  There are exceptions to this rule:  if the spike in hires is truly due to seasonal increases in volume, i.e., agriculture (harvest season), tourism (high-season), and after season is over the number again falls below the 50 employee threshold, then the “Play or Pay” mandate may not apply.  All of these variables are still under consideration and await clarification from the appropriate agencies. Also, the IRS may revise its guidance in final regulations.

Part II of our examination: “Considering the Impact of Play or Pay”, will be highlighted this Wednesday 7/18, be sure to check back for important guidance on what this mandate can mean for your company.

Bill of Rights

During the Federal Convention and the constructing of the U.S. Constitution, there was some dissent over the need to have a Bill of Rights to protect the individual civil rights of Americans. This was quickly ratified on December 15, 1791, by the first ten amendments to the Constitution, which are known as the “Bill of Rights”.

“On September 25, 1789, the First Congress of the United States therefore proposed to the state legislatures 12 amendments to the Constitution that met arguments most frequently advanced against it. The first two proposed amendments, which concerned the number of constituents for each Representative and the compensation of Congressmen, were not ratified. Articles 3 to 12, however, ratified by three-fourths of the state legislatures, constitute the first 10 amendments of the Constitution, known as the Bill of Rights.” http://www.archives.gov/exhibits/charters/bill_of_rights.html

  1. Amendment I: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
  2. Amendment II: A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.
  3. Amendment III: No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law.
  4. Amendment IV: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
  5. Amendment V: No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
  6. Amendment VI: In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense.
  7. Amendment VII: In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.
  8. Amendment VIII: Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.
  9. Amendment IX: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
  10. Amendment X: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

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