News and Updates
Category: 1099
How the Spending Bill & Other New Laws Could Impact Your Business
Secure Act 2.0 Narrowly missing our December newsletter, the SECURE Act 2.0 (SA2) was included in the $1.7 trillion omnibus spending package signed into law on 12/29/22. If the acronym for the long-winded “Setting Every Community Up for Retirement Enhancement” sounds familiar, that’s because it’s an expansion of 2019’s SECURE Act. The 2.0 version contains laws intended to provide incentives to both employers and employees to grow retirement plans, and hopefully shore up savings for late starters or those whose retirement funds may have suffered losses in the market over the last couple of years. Unless otherwise noted, these changes will be effective January 1, 2024. Here are some of the high points on requirements: SA2 broadens eligibility for some small businesses to qualify for a credit that would cover the administrative costs of setting up a workplace retirement plan. Beginning in 2025, employers with retirement plans will be required to auto-enroll employees once eligible, at a minimum of 3% of the employee’s wages (no more than 10%) and will be increased by 1% each year (also no more than 10%). Employees can opt out of this automated enrollment if they choose. Catch-up limits: We talked about the initial changes back in December, but the SA2 will allow a second increase to participants ages 60, 61, 62, and 63 – effective plan years 2024 and later. Most plans will have a limit of a $10,000 catch-up, whereas simple plans wil
Should We Cover Independent Contractors for Workers' Comp?
Don’t let the 1099 fool you. Just because your company doesn’t send these workers a W-2 doesn’t mean you shouldn’t cover them for workers’ compensation in Ohio. You may be thinking, “We’re not concerned – all of our 1099ers have a certificate of coverage from BWC.” Ok, so they knew that they had to manually elect coverage for themselves if they’re an LLC filing as a sole corp right? It can be more complicated than it appears on the surface, but we’re here to help you get a handle on it. Keep in mind this is not legal advice. If you have specific situations about classifying workers, you can always reach out to us, but sometimes it’s best to follow up with an employment attorney. Navigating the world of gig workers can be tricky, but just ask Ugicom – it’s best to classify workers correctly from the beginning. A lot of employers will casually mention that they don’t have to cover certain workers as employees for workers’ comp, because these people are independent contractors. Unless they come and go as they please with no schedule parameters, don’t utilize company vehicles or other property, and you have no say in the work they perform - they may in fact be independent contractors. If you can’t confidently tick all of those boxes, it may be time to reevaluate. When Ohio BWC performs a payroll audit, the
