UNEMPLOYMENT TAXES, ACA REGULATIONS, TN LAWFUL EMPLOYMENT ACT and SALARIED VS HOURLY EMPLOYEES

By Ron Acree, Director of Tennessee Small Business Development Center

Before the end of the year, there are some things you should be aware of, if you haven't already been told by your Accountant or read it in the media!

1. Tennessee unemployment tax rates are lower as the taxable wage base has been reduced from $9K to $8K this year.
    
2. ACA insurance is going up an estimated 40 to 60 percent next year. Employers have no obligation to provide insurance if their FTE, (full-time equivalent), is under 50. You may not reimburse employees for providing their own insurance. Employer provided insurance must be billed to the employer and paid for by the employer. IRS is mailing letters to employers letting them know if some employees received insurance through the exchange and received a subsidy. It only affects employers with over 50 employees. A note here is that it may be the first step towards the possible IRS assessing the ACA penalty to the employer. If you are under 50 employees, it shouldn't be an issue. 
    
3. Effective this year, the new TN Lawful Employment Act requires that if you have six or more employees, you must utilize E-Verify or request and maintain the information for the Federal I-9 form. This also applies to Contractors who are not LLC's or Corporations. For federal programs, the I-9 is required. E-verify gives some credibility to the correctness of the I-9 information submitted. I-9's are required by TN for all employees, even if they are the owner or a member of the owner's family, (including children). The I-9 form is available online and contains instructions regarding where the form is placed.
    
4. The new amount minimum for a 'salaried' employee is $47,476.00 and an effective date of December 1, 2016. If you have someone that never works more than 40 hours in a week, this really won't affect them/you! Of concern are the one/ones who earn less than the above amount in a year and are either scheduled for more than 40 hours in a week or are scheduled for up to and occasionally work over that amount, (whether or not you requested it). That person must now be hourly and overtime must be paid at time and one-half. Teachers, lawyers and outside salespersons are exempt under those rules.

If you would like more information on this or other topics regarding your business, a FREE and CONFIDENTIAL visit with Ron Acree, Director of the TN Small Business Development Center, may be helpful. This counseling is offered as a service of your local Chamber of Commerce. Call the Chamber office to schedule an appointment.