January 2018 Newsletter
New Year, New Laws
2018 brings with it some significant changes for New York employers and employees,
including the below increase in the minimum wage, NYS Paid Family Leave and a change in Commercial Rent Tax.
See attached for additional information regarding the tax reform.
Minimum Wage Changes
On December 31, 2017, the following minimum wage rates went into effect:
• New York City Employers (11 employees or more) – $13.00 per hour
• New York City Employers (10 employees or less) – $12.00 per hour
• New York City Fast Food Employers – $13.50 per hour
• New York State Fast Food Employers – $11.75 per hour
• Nassau, Suffolk and Westchester Employers – $11.00 per hour
• Employers in the Other Regions of New York – $10.40 per hour
• Employers are required to conspicuously post a Minimum Wage Information poster in their establishments, so they should make sure to update their posters.
In addition, employers are required to provide employees with a Notice and Acknowledgment of Pay Rate upon hiring and any time there is a change in pay. Therefore, if employees’ wages are changing due to the new minimum wage, employers should provide new Notices, or they may face penalties of up to $5,000 per employee.
Paid Family Leave Act
New York is breaking new ground on benefits with paid family leave, which is different from paid sick leave. Under the former, qualifying employees are entitled to up to eight weeks of paid leave time this year and 12 weeks in 2021 to bond with a newborn or newly adopted child. They can also use the time to care for a seriously ill family member or help relatives adjust to a family member being deployed overseas on active military duty.
Part-time employees are eligible for paid family leave after working 175 days in total for a company. Full-timers are eligible after working at least 20 hours per week for 26 consecutive weeks.
The pay is funded by a tax on employees’ compensation. But employers must guarantee the job is held for the employee on leave, and the company is required to continue making its regular contributions for the staffer’s healthcare coverage.
Currently, only California and Rhode Island have a similar law in effect. Meanwhile, Washington restaurants will be required to provide paid sick leave, at the rate of one hour per 40 hours worked.
Source: Restaurant Business
Commercial Rent Tax
The New York City council recently enacted Int. No. 799-B, which significantly increased the Commercial Rent Tax exemption. The Commercial Rent Tax applies to rent paid by commercial tenants located south of the center line of 96th Street in the borough of Manhattan. The new law will provide for a Small Business Tax Credit against the Commercial Rent Tax. Taxpayers will not owe any CRT if their annual rent is under $500,000 and have total income of $5 million or less. A partial reduction from the Commercial Rent Tax will be available when the annual rent is between $500,000 and $550,000 and have income between $5 million and $10 million. The credit will be available beginning July 1, 2018.
Health Insurance Mandate
Health insurance mandate for individuals will be removed, however, businesses that meet the full-time employee equivalence are still required to offer health insurance or will be subject to a penalty.
For 2018, non-resident owners of New York entities must re-certify that they will file a non-resident tax return by signing Form IT-2658-E (revised 12/2017). Alternatively, without signature, the entity will be required to remit payment on the non-resident owners’ behalf.
Effective September 27, 2017, 100% bonus depreciation is allowed on new and used assets placed into service. Section 179 threshold increased to $1,000,000 qualified improvements such as roof, HVAC, alarm, and security systems.