This year has brought many legislative changes. Here is a look at items with effective dates on or after July 1. A review of items effective during the first half of the year follows. Lastly, the 2019 State Minimum Wage Chart and 2019 Local Minimum Wage Charts are provided for your convenience.
EFFECTIVE JULY 1 – DECEMBER 31
Federal Updates
• IRS Releases First Draft of 2020 Form W-4
◦ New form no longer uses withholding allowances
◦ Final version of the form will be released in November
◦ Click here for more agency information
◦ Click here to view the Tax Alert
State Updates
• CT Minimum Wage Update effective October 1, 2019
◦ the minimum wage rate will be $11.00
◦ the minimum cash wage will be $6.38 for wait staff; $8.23 for bartenders
◦ the maximum tip credit will be $4.62 for wait staff; $2.77 for bartenders
• DC Minimum Wage Update effective July 1, 2019
◦ the minimum wage rate will be $14.00
◦ the minimum cash wage will be $4.45
◦ the maximum tip credit will be $9.55
• DE Minimum Wage Update effective October 1, 2019
◦ the minimum wage rate will be $9.25
◦ the minimum cash wage will be $2.23
◦ the maximum tip credit will be $7.02
• NJ Minimum Wage Update effective July 1, 2019
◦ the minimum wage rate will be $10.00
◦ the minimum cash wage will be $2.63
◦ the maximum tip credit will be $7.37
• OR Minimum Wage Update effective July 1, 2019
◦ the minimum wage rate will be $11.25
• State Mandatory Retirement Plans
◦ There are 10 states and 1 city that have enacted new state-facilitated retirement savings programs for private sector workers. To date, these new programs have adopted one of these four models:
◦ State-sponsored retirement plans generally focus on people working for small companies, as well as younger workers, minorities, and low- to moderate-income earners
◦ The state programs:
• Are typically designed as Roth individual retirement accounts (IRAs)
• May be mandated for businesses of a certain size if they don’t offer a retirement plan for their employees
• Use investment firms and low-risk investments chosen by the state
• Will require participating employers to set aside a percentage of every worker’s salary each month for the retirement fund, usually 3%
• Allow workers to opt out of contributing via payroll deduction
• Minimize investment and management costs
• Improve retirement for people with limited savings options
Local Updates
• California Local Minimum Wage Updates effective July 1, 2019
◦ Alameda minimum wage rate $13.50
◦ Los Angeles (25 or Fewer Employees) minimum wage rate $13.25
◦ Los Angeles (26 or More Employees) minimum wage rate $14.25
◦ Los Angeles County (Unincorporated) (25 or Fewer Employees) minimum wage rate $13.25
◦ Los Angeles County (Unincorporated) (26 or More Employees) minimum wage rate $14.25
◦ Malibu (25 or Fewer Employees) minimum wage rate $13.25
◦ Malibu (26 or More Employees) minimum wage rate $14.25
◦ Milpitas minimum wage rate $15.00
◦ Oakland (Hotels – Health Benefits Provided) minimum wage rate $15.00
◦ Oakland (Hotels – No Health Benefits) minimum wage rate $20.00
◦ San Leandro minimum wage rate $14.00
◦ Santa Monica (25 or Fewer Employees) minimum wage rate $13.25
◦ Santa Monica (26 or More Employees) minimum wage rate $14.25
• Illinois Local Minimum Wage Updates effective July 1, 2019
◦ Chicago minimum wage rate $13.00
◦ Cook County minimum wage rate $12.00
• Maryland Local Minimum Wage Updates effective July 1, 2019
◦ Montgomery County (51 or more employees) minimum wage rate $13.00
◦ Montgomery County (11-50 employees / 11 or more employees & either a 501(c)(3) or certain home health or community based services providers / 10 or fewer employees) minimum wage rate $12.50
• Minnesota Local Minimum Wage Updates effective July 1, 2019
◦ Minneapolis (100 or Fewer Employees) $11.00
◦ Minneapolis (101 or More Employees) $12.25
• New York City Minimum Wage Update effective December 31, 2019
◦ New York City employers with at least 11 employees, remains $15;
◦ New York City employers with fewer than 11 employees, rises to $15;
◦ Nassau, Suffolk, Westchester counties, $13;
◦ The rest of the state, $11.80
• Oregon Local Minimum Wage Updates effective July 1, 2019
◦ Urban counties minimum wage rate $12.50
◦ Nonurban counties minimum wage rate $11.00
◦ The rest of the state, $11.25
EFFECTIVE JANUARY 1 – JUNE 30
Federal Updates
• The Social Security wage base increased from $128,400 to $132,900 in 2019
◦ The maximum tax for employees is $8,239.80
• The Medicare tax rate for 2019 remains at 1.45% of all covered earnings for employers and employees
• The business standard mileage rate for use of a car (including vans, pickup trucks, and panel trucks) increased from $0.545 to $0.580 and the rate for medical and relocation increased from $0.18 to $0.20
State Updates
• California EDD is enforcing penalties for missing account numbers
◦ Per agency legislation, state law mandates electronic submission of tax returns, wage reports, and payroll tax deposits for all employers
◦ In August 2015, California passed Assembly Bill (AB) 1245 requiring all employers to electronically submit employment tax returns, wage reports, and payroll tax deposits to the EDD. This law became effective for employers with 10 or more employees January 1, 2017 and for all employers January 1, 2018
◦ The agency has provided a grace period up to this point but is now beginning to enforce the requirement
◦ Click here for more agency information
◦ Click here to view Paylocity’s Tax Alert
• Florida gets strict on employers use of valid Social Security numbers
◦ Florida Department of Revenue began assessing penalties on employers for any Social Security number submitted on unemployment tax wage listing found to be invalid.
◦ A valid SSN never begins with the number nine “9”, cannot start with the first three digits of “000” or “666,” the middle two digits cannot be “00,” and the last four digits cannot be “0000.”
◦ The penalty for filing an erroneous, incomplete, or insufficient report (which includes an inaccurate SSN) with the Florida Department of Revenue is $50 or 10% of any tax due, whichever is greater, but no more than $300 per report.
◦ Click here for more agency information.
◦ Click here to view Paylocity’s Tax Alert
MINIMUM WAGE CHARTS
State Minimum Wage Rate Chart
Source: Bloomberg Law
Local Updates
- Please see the chart below for current local minimum wage updates.
Local Minimum Wage Rate Chart
Source: Bloomberg Law
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.
