Regulatory Roundup July 2023

Regulatory Roundup July 2023

Heat waves weren’t the only thing to kick in over the month of July. Several state-based legislative updates from New York’s Metropolitan Commuter Transportation Mobility Tax (MCTMT) to Colorado’s Protecting Opportunities and Workers’ Rights (POWR) Act and parts of Minnesota’s Omnibus Jobs Act either took effect in July or soon will. At the federal level, the United States Citizenship, and Immigration Services (USCIS) announced a new, overhauled version of Form I-9 and an alternative document exam for qualified employers. Learn more about these updates and more below in this month's Regulatory Roundup.

Form I-9 Updates

Effective August 1, 2023, a brand-new version of Form I-9 is available and eligible employers are allowed to use an Alternative Document Examination Method.

New Form I-9

The new version of Form I-9 includes several changes, including shorter Sections 1 and 2, Preparer/Translator Certification and Reverification and Rehire portions being converted into standalone supplements (A & B respectively), removal of “alien authorized to work” from Section 1, and technical updates that ensure the form can be downloaded easily and completed on mobile or tablet devices.

Employers may continue using the old version of the form until October 31, 2023.

Alternative Document Exam Rules

Within three business days of a new hire’s first day, eligible employers may forgo normal review steps and instead examine copies of Form I-9 documents during a live video interaction with an employee to verify the employee’s identity and employment eligibility. To qualify, employers must be enrolled and in good standing with E-Verify via compliance with the service’s Memorandum of Understanding (MOU). Those interested in using this alternative procedure must register with E-Verify and complete assigned training.

Florida E-Verify Mandate

On May 10, 2023, Governor Ron DeSantis signed immigration bill SB 1718, which took effect on July 1, 2023. The new law requires “private employers” with at least 25 employees to use the USCIS’ E-Verify service to confirm the identity and eligibility of newly hired employees. Affected employers are also required to keep employment eligibility documents for a minimum of three years and certify their E-Verify compliance on their annual re-employment tax return.

Colorado Legislative Updates

Several state legislative changes signed by Governor Jared Polis will take effect on August 7, 2023, unless otherwise noted below:

• Colorado POWR Act: SB 23-172 significantly alters the state’s workplace harassment and discrimination law in the following ways:
  • The definition of “harassment” has been changed to conduct that’s “subjectively offensive to the individual alleging harassment and is objectively offensive to a reasonable individual who is a member of the same protected class.”
  • The standard for disability discrimination claims has been updated so that an employer’s actions aren’t discriminatory, “…if there is no reasonable accommodation that the employer can make with regard to the disability that would allow the individual to satisfy the essential functions of the job and the disability actually disqualifies the individual from the job.”
• Colorado Job Application Fairness Act: Starting July 1, 2024, employers will no longer be allowed to ask about an applicant’s age, date of birth, and dates of attendance at or graduation from an educational institution on an initial employment application. The only exceptions to this law are when a job has age requirements caused by:
  • A bona fide occupational qualification pertaining to the public
  • Occupational safety
  • A federal law or regulation
  • A state or local law or regulation based on a bona fide occupational qualification
• Ensure Equal Pay for Equal Work Act: An amendment to the original Equal Pay for Equal Work Act, this update requires employers to take reasonable measures to inform all employees about job opportunities on the same day and before making decisions about that opening.
• Colorado Home Purchase Assistance: Effective tax year 2024, HB 1189 allows employers to contribute to a savings account for qualifying expenses an employee has towards an eligible home purchase. Employers can then claim 5% of their contributions (up to $5,000 per employee or $500,000 per tax year) as a credit on the organization’s income taxes.
• Healthy Families & Workplaces Act (HFWA) Leave Changes: SB 23-017 allows employees to use HFWA leave for the following additional reasons:
  • Grieving, attending a funeral or memorial, or dealing with financial and legal matters relating to the death of a family member.
  • Caring for a family member whose school or place of care is closed due to inclement weather, loss of power, heating, or water, or other unexpected occurrences.
  • Evacuating the employee’s place of residence due to inclement weather, loss of power, heating, or water, or other unexpected occurrences.

Minnesota Omnibus Jobs Act

The following portions of Minnesota’s new Omnibus Jobs Act took effect on July 1, 2023:

• Non-compete agreements are now void and unenforceable, except when related to the sale or dissolution of a business.
• Prior limits to reasonable paid breaks during the first 12 months after childbirth have been removed along with the requirements that breaks for expressing milk must run concurrently with existing breaks provided to the employee.
• Payroll deductions to charitable, nonlabor organizations are now required when requested by five or more employees.

Other parts of the act, such as mandated paid sick leave and expanded workplace posters, will take effect on January 1, 2024.

New York MCTMT Changes

Senate Bill S4008B significantly changes the state’s existing MCTM tax by reshaping the Metropolitan Commuter Transportation District (MCTD) into two zones, each with tiered tax rates. Zone 1 will include Manhattan, the Bronx, Brooklyn, Queens, and Staten Island, while Zone 2 will include the Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester counties. Tax filing and payment deadlines, however, will remain unchanged.

Illinois’ Updated Withholding Allowance Formula

Per Public Act 103-0009, the state of Illinois lowered its withholding formula allowance from $2,625 to $2,425. Booklet IL-700-T has also been updated with the new formulas and an addendum for “catch-up” calculations that correct withholdings for existing employees for the remainder of 2023.

Additional Information

Get more details on the compliance updates from July here:

• 2023 Form I-9 Updates
• Form I-9 Alternative Document Examination Rules
• Florida Will Require Most Employers to Use E-Verify
• 2023 Colorado Legislative Updates
• 2023 Minnesota Legislative Updates
• New York State Modifies the Metropolitan Commuter Transportation Mobility Tax
• Illinois Updates 2023 Withholding Allowance Formula

Bookmark our resource library and come back monthly for Regulatory Roundups of tax and compliance alerts you need to know. For any other frequently asked questions or general assistance, refer to our Administrator Support page for support contact information, quick how-to guides or training courses, important PEAK articles, and more. Remember to follow us on Facebook, LinkedIn, and Twitter for urgent updates.

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.