2018 Effective Laws and Tax Updates

December 21, 2017

There are several new laws effective on January 1, 2018, here is a brief synopsis of the upcoming laws along with federal, state, and local tax updates.

With 2017 coming to a close, there are several new laws taking effective on January 1, 2018. See below for a brief synopsis of the upcoming laws along with federal, state, and local tax updates.

HCM Updates

State of Washington Paid Sick Leave

  • Most employees must accrue paid sick leave at a minimum rate of one hour of paid sick leave for every 40 hours worked. This includes part-time and seasonal workers
  •  Paid sick leave must be paid to employees at their normal hourly compensation
  •  Employees are entitled to use accrued paid sick leave beginning on the 90th calendar day after the start of their employment
  •  Unused paid sick leave of 40 hours or less must be carried over to the following year

New York Paid Family Leave

  • Both full-time and part-time employees are eligible if they work 26 or 52 consecutive weeks or days
  •  Employees are eligible for up to 8 weeks of leave with pay set at 50% of the employee’s average weekly wage
  •  Employers are permitted, but not required, to take deductions ($1.65) from employees pay
  •  Seasonal employees are eligible to complete a waiver relieving them from making contributions for paid family leave benefits
  •  Click here for more information.

New York City Predictive Scheduling

  •  Applies to both Fast Food and Retail employees
  •  Employers must provide a written good-faith estimate of schedule at time of hire
  •  Schedules must be posted 14 days in advance
  •  Penalties will be put into place for changing a schedule after it has been posted
  •  Click here for more information.

California Paid Family Leave

  •  Working parents will now be able to take twelve weeks of unpaid job-protected leave to bond with their newborns
  •  Eligibility: more than 12 months of service with the employer, worked at least 1,250 hours during the previous 12 month period, and works at a worksite where the employer has at least 20 employees within a 75 mile radius
  •  Click here for more information.

California Salary History

  •  Applies to all employers and prohibits inquiries into, and reliance on, an applicant’s salary history
  •  Click here for more information.

California Ban the Box

  •  Extends statewide ban-the-box law to employers with 5+ employees
  •  Permits criminal history inquiry only after conditional offer of employment
  •  Requires individualized assessment and written notice if applicant is disqualified
  •  Click here for more information.

California Anti-Harassment Training

  •  Requires employers with 5+ employees to post notice regarding transgender rights
  •  Also requires employers with 50+ employees to provide training addressing harassment based on gender identity, gender expression, and sexual orientation

Maryland Data Breach Notification Law

  •  Amends existing notification law to expand the definition of protected personal information and adds notice duties, including where email access is disclosed
  •  Click here for more information.

Chicago Hands Off, Pants On Ordinance

  • Requires hotel employers to provide a “panic button” to any hotel worker who works alone in rooms without other employees present (like guest rooms or restrooms).
  • A panic button is a portable emergency contact device that a hotel worker can quickly activate to summon prompt, on-scene assistance by a hotel security officer, manager or other appropriate hotel staff member designated by the hotel employer
  • Click here for more information.

Federal Tax Updates

SSA lowers the 2018 Social Security wage base from what was previously announced. 

On November 27, 2017, the Social Security Administration (SSA) announced that due to its receipt in late October 2017 of approximately 500,000 Form W-2 corrections for tax year 2016, it has now lowered the 2018 Social Security taxable wage base to $128,400, down from the $128,700 it originally announced on October 13, 2017. The employee and employer contribution rates remain the same from 2017 to 2018 at 6.2%.

The revised 2018 wage base of $128,400 is lower than the $130,500 projected in the July 2017 Annual Report of The Board of Trustees.

The Medicare tax rate for 2018 remains at 1.45% of all covered earnings for employers and employees. For wages in excess of $200,000, the Additional Medicare Tax of 0.9% applies to earned income of more than $200,000 ($250,000 for married couples filing joint). While employers are required to withhold the additional 0.9% on covered wages in excess of $200,000, there is no employer matching contribution.


State Wage Base Updates

State Minimum Wage Updates

Local Minimum Wage Updates

You can stay up to date on this information by looking at your Time & Labor Glossary. The Glossary can be accessed by doing the following:

  • Login to your HR & Payroll
  • Place your mouse over your ‘Home’ tab
  • Select ‘Glossary’ in the drop down menu

Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.

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.