Heads up to all Maine nonprofit employers having 11 or more employees: Maine’s earned paid leave law takes effect on January 1. I wrote about the basics of the new law in the May 2019 E-Bulletin. Maine’s law is the first in the nation to provide paid leave for any reason—including vacation—and not just sick leave. Over the past year, the Maine Department of Labor has been working on administrative rules to flesh out the details, and the Final Rules and a detailed Frequently Asked Questions are hot off the press. Here are five key takeaways:
Most Maine nonprofit organizations have leave policies that are more generous than the provisions of the new law, both in terms of total earned leave time and carryover of unused time from prior years. But in any event, many policies will need at least some tweaking to conform to the details of the new law, and the time to ensure compliance is now, not in January. Penalties of up to $1,000 per violation apply, with each improper denial for each employee treated as a separate violation.
Meanwhile, when Covid showed up last March, one of the initial responses by Congress was the Families First Coronavirus Response Act, which established a temporary Covid-related paid leave law that applies to all employers, nonprofit and otherwise. The law requires up to 80 hours of fully paid leave for an employee who is quarantined or has Covid symptoms, or 80 hours at two-thirds rate for an employee who has to care for an individual subject to quarantine or for a child whose school is closed or switched to remote learning. In addition, employees employed for at least 30 days are eligible for up to 10 more weeks of paid family leave to care for a child under certain circumstances related to Covid, including schools that have transitioned to fully or partial remote learning. This federal paid leave law overrides any state employment laws, and is in effect until December 31, 2020, unless extended by Congress, which is certainly a possibility given the continued impact of Covid.
However, subsequent guidance (see Questions 58 and 59) issued by the federal Department of Labor established a limited exemption for employers having fewer than 50 employees. To claim this exemption, the employer must internally document that it meets at least one of the following three criteria:
Claiming the exemption should not be undertaken lightly, as an employee can challenge the employer’s claim of such an exemption with the Department of Labor, in which case certain penalties could apply. See here for a smart take on the nuances of claiming the exemption.
Most nonprofit administrators know that if they pay an independent contractor (including an attorney) more than $600 in a calendar year, they must report the income to the IRS and the contractor on the Form 1099-MISC. But starting for the 2020 tax year, the IRS is rolling out a new Form 1099-NEC (Non-Employee Compensation) for these payments. The rest of the 1099-MISC will stay the same. The filing deadline for the 1099-NEC will be February 1, 2021. So don’t be caught flat-footed come January, and order your 2020 1099-NEC’s now.
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