March 2024 Compliance Update: Spring into Action

Lisa John Customer Marketing Program Manager

Dance to the rhythm of fresh compliance updates and explore the lush fields of the latest tax and compliance changes in March’s Compliance Update. March is the season to stop and smell the roses, start fresh with spring cleaning, and spring into action so let’s ensure you’re prepped for what’s ahead.  

Legislation: What’s New and What’s Next? 

 
California Fast Food Minimum Wage 

California AB 1228 will impose a new $20.00 hourly minimum wage update for the fast food industry, effective April 1, 2024. This also establishes a council that will have the authority to increase the minimum wage annually by up to 3.5%. This surpasses the statewide minimum wage of $16.00 per hour for 2024.  

California Local Minimum Wage Updates

The following California cities have announced the following minimum wage updates: 

  • East Palo Alto: The City of East Palo Alto corrected the minimum wage rate for 2024 of $17.00 per hour, rectifying a rounding error.
  • Los Angeles: Effective July 1, 2024, the hourly minimum wage will increase from $16.78 to $17.28.
  • Malibu: Effective July 1, 2024, the hourly minimum wage will increase from $16.90 to $17.27.
  • Santa Monica: Effective July 1, 2024, the hourly minimum wage will increase from $16.90 to $17.27.  
California Pay Data Reports  

The California Civil Rights Department released updated spreadsheets, FAQs, and a new user guide for 2023 pay data reports, which must be filed by May 8, 2024. The spreadsheets now include three data fields to identify remote worker status for every employee detail collected: number of employees that do not work remotely, number of remote employees located in California, and number of remote employees located outside of California assigned to a California establishment.  

In addition, reporting “unknown” race/ethnicity or sex of a labor contractor employee is no longer permitted. For updated template files and information, visit the California Civil Rights Department website.  

Pennsylvania Act 34 

Pennsylvania recently passed Act 34, which changes the taxability of Section 129 dependent care benefits for 2023.

Employers:

  1. If you’ve already filed your Form W-2 with the Department of Revenue, file a corrected W-2 with the dependent care benefits (up to $5,000) excluded. Provide an updated W-2 to the employee to alert them of the change.
  2. If your employees have not filed W-2s with the Department of Revenue, they can use their W-2 to file their Pennsylvania State Income Tax Return (Form PA-40), by decreasing the amount in State Wages in Box 16, by the dependent care benefits reported in Box 10. The adjusted amount can be reported on Form PA-40. If you make this adjustment, it should not exceed $5,000 for the tax year 2023. Visit the Pennsylvania Department of Revenue website for more information.   
  3. Important! Do not file amended W-3s and Annual Withholding Reconciliation Statements (REV-1667s) removing the withholding previously made on dependent care benefits. Only amend the W-2 compensation. Employees will report any over withholding on their PA-40 and can obtain a refund, if applicable.
  4. Future: UKG will be changing the taxability of dependent care by stopping withholding for tax year 2024 on dependent care benefits (up to $5,000). Customer action is not required at this time.   
UKG Pro

We’ll provide additional updates once these changes have been applied to your UKG Pro ® solution. For more information, review our PA Act 34: Dependent Care article.  

UKG Ready

We’ll provide additional updates once these changes have been applied to your UKG Ready ® solution. 

New York City Workers’ Bill of Rights Guide 

New York City’s Department of Consumer and Worker Protection released a new Workers’ Bill of Rights that is a multilingual guide to rights in the workplace in the city. Effective July 1, 2024, employers in New York City must post the multilingual poster in a visible area for employees to see and provide a copy to each employee. Employers will also be required to post it to their intranet or mobile app if provided for employee access.  

Utah H.B. 55 

Utah amended its Antidiscrimination Act, which states that nondisclosure clauses regarding sexual misconduct required as a condition of employment are against public policy. H.B. 55 prohibits employers from retaliating against an employee for refusing to enter into an agreement that contains a nondisclosure clause.  

U.S. Federal Fast Facts 

 
Form 941 

An updated Form 941 (Employer’s Quarterly Federal Tax Return) was released by the IRS. The IRS expects this version to be used for all of 2024. They’ve also released 941 instructions, Schedule R, and Schedule B.  

Secure Act 2.0 
 
UKG Pro

Several agency and product updates to support Secure Act 2.0: 

  • A new standard report for long-term, part-time employees (the Secure Act 2.0 LTPT Hours) will be released in the UKG Pro 2024.R1 release for employers to track employee hours.
  • A new standard report (Secure Act 2.0 Roth Catch-Up Contribution Eligibility) will be released in the UKG Pro 2024.R1 release. This report will allow employers to identify employees that exceed $145,000 in wages for the preceding year, as their catch-up contributions must be Roth contributions. This was originally effective January 1, 2024, but has now been moved to January 1, 2026.
  • To assist employers in navigating this legislation, the IRS and Department of Labor have released updated notices:
    • Notice 2024-2: Miscellaneous Changes Under the SECURE 2.0 Act of 2022
    • Notice 2024-3: 2023 Cumulative List of Changes in Plan Qualification Requirements for Defined Contribution Qualified Pre-approved Plans
    • Notice 2024-22: Guidance on Anti-Abuse Rules Under Section 127 of the SECURE 2.0 Act of 2022 and Certain Other Issues with Respect to Pension-Linked Emergency Savings Accounts
    • IRS FAQs: Pension-Linked Emergency Savings Accounts
    • DOL FAQs: FAQs about Retirement Plans and ERISA 

For more information, visit our Secure 2.0 Act Resources page in the UKG Community™ Library.  

UKG Ready

Updates to pay statement calculations, scheduled deductions, deduction codes, and retirement plans regarding the Roth catch-up provision within the Secure 2.0 Act are available to use within the UKG Ready solution. A Roth Catch Up for High Earners 50 or Over User Guide is available in your UKG Ready solution (under My Info > Help > Online Documentation).

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Customer Marketing Program Manager

Lisa is a member of the customer marketing team, specializing in various product domains within the UKG Pro solution. Leveraging her extensive expertise in UKG Pro, she skillfully crafts concise materials and communications for our valued customers.