A comprehensive legal and HR compliance update is essential for keeping up with ever-changing laws and regulations. Your designated HR compliance specialist or team members should stay up to date on these changes, but if your company is small or has a complicated business structure, you may need additional support to remain compliant.
New HR Compliance Changes for 2020
Below, we’ll run down a short list of the most important changes with links to resources. We’ve focused on the areas of human resource compliance, federal form changes, and government agency changes that have the greatest impact to employees and HR.
1. New I-9 Form for 2020
An I-9 is the Department of Homeland Security’s (DHS) Employment Eligibility Verification form. Completed by each new employee at your business, it is used to determine and document each employee’s eligibility to work in the US. On January 31, 2020, the U.S. Citizens and Immigration Services (USCIS) published the Form I-9 Federal Register notice announcing a new version of Form I-9, Employment Eligibility Verification, that the Office of Management and Budget approved on October 21, 2019. This new version contains minor changes to the form and its instructions. Employers should begin using this updated form as of Jan. 31, 2020.
The USCIS made the following changes to the form and its instructions:
Revised the Country of Issuance field in Section 1 and the Issuing Authority field (when selecting a foreign passport) in Section 2 to add Eswatini and Macedonia, North per those countries’ recent name changes. (Note: This change is only visible when completing the fillable Form I-9 on a computer.)
- Clarified who can act as an authorized representative on behalf of an employer
- Updated USCIS website addresses
- Provided clarifications on acceptable documents for Form I-9
- Updated the process for requesting paper Forms I-9
- Updated the DHS Privacy Notice
Employers must begin using the new form with the October 21, 2019, revision date as of May 1, 2020, and ensure that HR teams and others responsible for completing Section 2 of Form I-9 are aware of these changes to ensure no inadvertent discrimination or noncompliance in completing I-9s for employees.
2. New 2020 Form W-4
On December 5, 2019, the IRS released the final version of the 2020 Form W-4, retitled Employee’s Withholding Certificate, with major revisions designed to make accurate income-tax withholding easier for employees starting in 2020. The IRS also posted FAQs about the changes incorporated in the revised form.
When the final version of the 2020 Form W-4 was released, the IRS identified the following key points for employers:
- All new employees hired as of Jan. 1, 2020, must complete the new form.
- Current employees are not required to complete a new form but can choose to adjust their withholding based on the new form.
- Adjustments made after Jan. 1, 2020, must be made using the new form.
The 2020 Form W-4 is a single page followed by instructions, worksheets and tables. In place of withholding allowances, the new W-4 includes five possible steps for declaring additional income so employees can adjust their withholding with accuracy, privacy and ease of use.
The IRS also released a new Publication 15-T, Federal Income Tax Withholding Methods, for use with the new 2020 Form W-4, which includes steps employers can take to determine federal withholding. Employers can still compute withholding based on information from employees’ most recently submitted Form W-4 if employees choose not to adjust their withholding using the revised form, but employers should advise them that withholding will be based on their previous W-4 and may not be as accurate as the new form.
Resource for employers: SHRM created a sample Notice to Employees—What You Need to Know About the New Form W-4, encouraging employees to consider completing the new form to more accurately account for their annual income when determining paycheck withholding.
3. IRS Lowers Mileage Standard
The IRS has lowered the rate used to calculate the deductible costs of operating an automobile for business purposes for the 2020 tax year. Standard mileage rates for the use of a car, van, pickup or panel truck will be 57.5 cents per mile driven, half a cent lower than in 2019. The deductible mileage rate is based on an annual study of the fixed and variable costs of operating an automobile. Many companies use the standard rate to calculate reimbursements for employees who use personal vehicles for business.
4. Changes to the FLSA
There are several changes to the Fair Labor Standards Act (FLSA) that employers should comply with in 2020. You and your team should incorporate the new rules relating to unpaid Family and Medical Leave Act (FMLA), paid leave and childbirth into one comprehensive policy. Ensure that your childbirth and bonding leave doesn’t leave the father out, as more men are suing for equal rights and winning.
A summary of the changes:
- The FLSA provides for unlimited breaks to express milk during the first 12 months of an infant’s life. Hourly employees are entitled to as many unpaid breaks as are necessary in a “mother’s room,” or a break room that is private (and must not be a bathroom). The rule applies to all employers with 50 or more employees. It also covers employers with at least one employee unless the employer can show evidence of undue hardship for compliance.
- More states and cities have added paid leave laws. Eleven states and the District of Columbia mandate paid leave, along with 30 cities and counties in states that don’t. It’s important to know the rules in every location where you employ workers, including remote employees.
- Childbirth, or maternity and paternity leave, is separate from paid leave, but can overlap. For example, the FMLA provides up to 12 weeks of unpaid childbirth and bonding leave. Paid leave laws cover childbirth recovery, but not necessarily bonding time. Currently, only the District of Columbia and California, New Jersey, Rhode Island, New York, and Washington have paid childbirth leave laws.