With 2018 just four months away, it’s not too early to start planning for some potential changes expected for next year.

The first one is the FICA tax with the social security wage limit expected to increase from $127,200 to $130,500.  While this does not seem like much, the impact is an additional $205 dollars in tax paid by companies for each of their employees that reach this limit.  This should be kept in mind as 2018 budgets are being prepared.

Next, the Department of Labor still plans to implement the updates to the Fair Labor Standards Act related to the classification of employees as hourly versus exempt.  The key aspect was that the minimum salary for classifying an exempt employee was to increase from $23,660 annually to $47,476 annually.  Thus, any salaried employee making less than $47,476 per year would have to be reclassified as an hourly worker and would be subject to being paid for overtime.  This regulation was supposed to have been in effect December 1, 2016, but at the last minute was postponed.  Recently, however, the Department of Labor has raised the issue again and is soliciting comments back from corporations on how best to implement this for payroll purposes.

Lastly, keep an eye on any tax reform legislation that may be coming.  While the press focuses on the expected decreases in the individual and business tax rates, companies need to focus on the behind the scenes changes to offset these tax reductions.  Flexible Saving Accounts and other Section 125 pre-tax payroll deductions could be phased out or dropped altogether.  401k plans could limit pre-tax payroll deductions, forcing employees to adopt post-tax Roth contributions.  As certain lawmakers have stated, everything is on the table except the mortgage deduction.

To stay abreast of these and other payroll, employee benefits and human resource related regulations, contact John Morlock of Total Team Solutions at 800-836-9678 or jmorlock@ttspro.com and see how our Human Resource Outsourcing solutions can help small businesses stay compliant and be more competitive.

ABOUT TOTAL TEAM SOLUTIONS:  Total Team Solutions is a full service Human Resources Outsourcing company helping small businesses manage their payroll, employee benefits and human resources needs to reduce expenses and save them time so they can focus on running and growing their businesses.  Based in Trumbull, CT, Total Team Solutions serves clients in Connecticut, Massachusetts, New York and New Jersey.