Florida Minimum Wage Will Rise Gradually to $15 per hour

On Nov. 3, 2020, voters in Florida approved a constitutional amendment that will raise the state minimum wage rate each year until it reaches $15 per hour in 2026. Beginning in 2027, the state minimum wage rate will be adjusted annually by Florida’s Department of Economic Opportunity. The amendment did not change the tip credit Florida allows employers to deduct from their tipped employees. Since this credit will remain at $3.02, projected minimum wage rates for tipped employees are also included in the table below.

Next Steps for Employers

Employers in Florida will need to adjust their payroll procedures to accommodate two minimum wage increases in 2021, the first on January 1, the second on September 30. Employers can also use this information to plan for annual minimum wage increases through 2026.

IRS: Unused Transit Benefit May Be Used for Parking

In response to a question from a worker who, due to COVID-19, opted to drive to work instead of using public transportation, the IRS has issued a letter saying that employees may apply unused commuter transit benefit amounts to parking benefits in certain circumstances.

Rolling Over Unused Benefits

In the letter, the IRS states that an employee “is not precluded from rolling over unused transit benefit amounts through the use of another qualified transportation fringe,” such as qualified parking, if the other fringe:  Is offered by the employer’s plan; and  Does not exceed the maximum monthly amount for the respective qualified transportation fringe benefit.

Monthly Benefit Limits

The monthly maximum excludable amount for qualified parking is $270 in 2020 and 2021. The monthly limit for the other qualified fringe benefits of transportation in a commuter highway vehicle and transit passes, combined, is also $270 for 2020 and 2021.

Limitations on Use of Benefits

The letter points out the following limitations: 

• Amounts set aside under a compensation reduction agreement are not refundable other than by payment of another qualified transportation fringe under the employer’s plan; and 

• The employee must have made a valid compensation reduction election (and not have been terminated) to use compensation reduction amounts for commuting expenses in future months.

CDC Announces Shorter Quarantine Guidelines After a COVID-19 Exposure

During a recent media briefing, the Centers for Disease Control and Prevention (CDC) announced an update to quarantine guidelines, offering options for shorter quarantine periods. The CDC’s updated guidance allows for the following quarantine periods for those who may have been exposed to COVID-19 but are without symptoms: 

Ten-day quarantine period—An individual may end quarantine 10 days after exposure if the individual does not take a COVID-19 test. 

Seven-day quarantine period—An individual may end quarantine seven days after exposure if the individual tests negative for COVID-19.

While offering these shorter alternatives, the CDC still recommends a 14-day quarantine as the safest

IRS Offers Guidance on COVID-19 Employee Leave-sharing Plans

In recently issued frequently asked questions (FAQs), the IRS said employers may set up leave-sharing plans under IRS Notice 2006-59 to benefit employees adversely affected by COVID-19.

The IRS FAQs

The FAQs explain that leave-sharing plans permit employees to deposit leave in an employer-sponsored leave bank for use by other employees who have been adversely affected by a major disaster such as the COVID-19 pandemic. 

Employees depositing leave in a qualifying plan:

X  Do not include the deposited leave in income or wages.

X May not claim an expense, charitable contribution or loss deduction for the deposited leave.

The FAQs direct employers to Notice 2006-59 for information about the requirements of qualifying leave-sharing plans.

IRS Notice 2006-59 lets employees contribute leave to a bank for use by other employees affected by a major disaster.

IRS Notice 2006-59

Notice 2006-59 provides guidance on the federal tax consequences of leave-sharing plans during major disasters declared by the president. Currently, all 50 states are under a presidential major disaster declaration.

The notice lists eight features these plans must have for donor employees not to be taxed on donated leave. Among them are that use of donated leave be limited to employees for whom the major disaster has caused a severe hardship, requiring the employee’s absence from work; that the plan not allow a donor to deposit leave for transfer to a specific leave recipient; and that employers make a reasonable determination, based on need, as to how much leave each approved leave recipient may receive.