DID YOU KNOW? MERGERS & ACQUISITIONS: INTRODUCING MULTI-STATE COMPLIANCE NAVIGATOR™
Mergers and Acquisitions can expand your business into new states and/or locations. At Thomas & Company, we have created a tool to help you remain compliant with the complex payroll tax laws across the country.
Introducing…the Multi-State Compliance Navigator™! With all the information you need right at your fingertips, Thomas & Company’s Multi-State Compliance Navigator™ will cut down on research time and enable you and your staff to focus on other critical tasks.
Visit our website to learn more and keep an eye out as we post weekly to help keep you informed!
US DEPARTMENT OF LABOR WAGE AND HOUR DIVISION – INDEPENDENT CONTRACTOR MISCLASSIFICATION ENFORCEMENT GUIDANCE UPDATE
The US Department of Labor Wage and Hour Division (WHD) has provided updated guidance associated with Independent Contractor Classification under the Fair Labor Standards Act (FLSA). In a recent correspondence, the WHD indicated that they would be reverting back to the previous guidelines while they continue to evaluate future changes.
According to the Field Assistance Bulletin 2025-1, the WHD will no longer apply the Employee or Independent Contractor Classification Under the Fair Labor Standards Act, 89 Fed. Reg. 1638 (“2024 Rule”) in FLSA investigations. Instead, the WHD will enforce the FLSA via the guidance provided in Fact Sheet #13, originally distributed in 2008 and affirmed on May 1, 2025.
Fact Sheet #13 provides general information about the meaning of an “employment relationship” and its impact on application of the FLSA. According to the document, factors that are considered significant based on US Supreme Court ruling are:
1) The extent to which the services rendered are an integral part of the principal’s business.
2) The permanency of the relationship.
3) The amount of the alleged contractor’s investment in facilities and equipment.
4) The nature and degree of control by the principal.
5) The alleged contractor’s opportunities for profit and loss.
6) The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
7) The degree of independent business organization and operation.
After an employer/employee relationship is confirmed, all standards under the FLSA must be met. If a relationship is not confirmed, these standards do not apply.
Additional information can be found below:
OKLAHOMA – STATE PASSES UNEMPLOYMENT REFORM BILLS FOCUSED ON OFFERING EMPLOYERS RELIEF AND TARGETING UNEMPLOYMENT FRAUD
Senate Bills 911 and 924 have passed in both the Oklahoma Senate and House, aiming to modernize Oklahoma’s unemployment system. Senate Bill 911 focuses on reducing costs for employers – it would reduce the top unemployment tax rate from 9.2% to 6.5%. Aiming for fairness and predictability, the Bill would also establish a new “conditional factor” rate table along with increasing the threshold which would trigger an unemployment surcharge from $25 to $50 million.
Senate Bill 924 takes aim at unemployment fraud, allowing the Oklahoma Employment Security Commission to require in-person interviews when fraudulent activity is suspected. The Bill also allows for the denial of a claim when the employer’s name is incorrect.
Both bills passed the Senate and House with overwhelming support and are now headed to Governor Kevin Stitt’s desk. If signed into law, they will take effect November 1, 2025.
PENNSYLVANIA – NEW LEGISLATION AIMED TO MAKE STATE TRUST FUND SOLVENT AND CUT TAXES ON WORKERS
A package of five bills has been introduced by lawmakers in an attempt to make Pennsylvania’s Unemployment Compensation Trust Fund solvent and cut taxes for workers and employers. The bills include:
- Legislation that would tie maximum benefit duration to the state’s unemployment rate, helping to prevent long-term claims and incentivize employment.
- Legislation that would make an adjustment to how benefits are calculated for seasonal workers to bring their payments in line with workers who work year-round. Currently, a seasonal worker and a year-round worker who both make $32,000 a year but in different timeframes (one quarter vs. all four quarters) earn $605/week and $315/week, respectively. This legislation would ensure that benefits for seasonal workers reflected the “full picture” of their earnings and employment.
- Legislation that would require claimants to report other types of income that indicate they are not able/available to work, such as Worker’s Compensation, public/private disability benefits, etc.
- Legislation that would require claimants who are at fault for their unemployment benefit disqualification to demonstrate “a stronger attachment to the workforce” before requalification is allowed.
- Legislation that clarifies the voluntary resignation verbiage. That, in order for an individual to be qualified for benefits after resigning, they must prove “necessitous and compelling” cause attributable to the employer.
Thomas & Company will continue to monitor all legislation as it makes its way through the legislative process.
