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Benefit Limits for 2022

Each year, the IRS sets new limits for employee benefits plans and retirement plans. Please see below for Lake Effect’s ready reference chart setting forth the Benefits Limits for the 2022 tax year. A PDF of this information can be downloaded here.

	2021	2022
Flexible Spending Accounts (FSAs)
Healthcare FSA max election (per year) (incl. LTD FSA)	$2,750	$2,850
Healthcare FSA max rollover	$550	$570
Dependent Care FSA max election (per year) (Single or Married Filing Jointly)	$5,000	$5,000*
Dependent Care FSA max election (per year) (Married Filing Separately)	$2,500	$2,500*

Transportation Benefits
Parking Account	$270/mo	$280/mo
Transit Account	$270/mo	$280/mo

High Deductible Health Plan Requirements to Contribute to an HSA
HDHP min annual deductible - Self-only	$1,400	$1,400
HDHP min annual deductible - Family	$2,800	$2,800
HDHP out-of-pocket max - Self-only	$7,000	$7,050
HDHP out-of-pocket max - Family	$14,000	$14,100
HSA max contribution limit - Self-only	$3,600	$3,650
HSA max contribution limit - Family	$7,200	$7,300
HSA catch up contribution limit (age 55)	$1,000	$1,000

ACA Plan Limits
Maximum Out-of-Pocket (Self-only or Individual in a Family)	$8,550	$8,700
Maximum Out-of-Pocket (Family)	$17,100	$17,400

Salary Thresholds for Non-discrimination Testing
Highly compensated employees	$130,000	$135,000
Key employees	$185,000	$200,000

Retirement Plans (401(k), 403(b))
Max employee elective contributions for those 49 and younger	$19,500	$20,500
Max employer + employee contributions for those 49 and younger	$58,000	$61,000
Max employee catch-up contributions for those 50+	$6,500	$6,500
Max employee elective contribution plus catch-up for those 50+	$26,000	$27,000
Max employer + employee contributions for those 50+	$64,500	$67,500

*As of the time of drafting this blog, the dependent care limits for 2022 reverted to the pre-ARPA levels

Lake Effect is here to answer your questions about benefits administration and how best to structure your benefits plans to be a leading employer. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Human Resources - 11/16/2021

OSHA Issues COVID-19 Vaccination and Testing Emergency Temporary Standard

On November 4, 2021, OSHA issued its Emergency Temporary Standard (ETS) and a helpful FAQ detailing the federal mandatory vaccination and testing requirements for large employers across the country. The ETS is lengthy and detailed, but major highlights include the following:

Who: The mandatory vaccination and testing requirements apply to US employers with at least 100 employees firm or corporate-wide at any time the ETS is in effect (“covered employers”).
- The ETS does not apply to workplaces already covered by Federal Workforce Task Force Guidance or federal contractors and subcontractors already covered under Executive Order 14042.
- Even if their employer is covered, the ETS does not apply to employees who do not report to a workplace where other people are present, employees working from home, or employees who work exclusively outdoors.
When: The ETS is effective immediately upon its publication in the Federal Register on November 5, 2021. On or before December 5, 2021, employers must be in compliance with all ETS provisions (including requiring all unvaccinated employees to wear masks) other than weekly testing for employees who are not fully vaccinated. On or before January 4, 2022, employers must be in compliance with all ETS provisions, including requiring weekly testing for unvaccinated employees.
Key requirements: The ETS established minimum vaccination, vaccination verification, face covering, and testing requirements. Covered employers must do the following:
- Develop, implement, and enforce a mandatory COVID-19 vaccination policy (or a policy allowing alternative weekly COVID-19 testing and masking). Provide written information about the ETS and related policies to all employees.
- Determine the vaccination status of each employee, obtain acceptable proof of vaccination, maintain records of each employee’s vaccination status, and maintain a roster of each employee’s vaccination status.
- Provide employees reasonable time, including up to 4 hours of paid time, to receive vaccination doses, and reasonable time and paid sick leave to recover from possible side effects after each dose.
- Require employees to receive the necessary shots to be fully vaccinated -- either two doses of Pfizer or Moderna, or one dose of Johnson & Johnson – by January 4, 2022.
- In the alternative, ensure that each employee who is not fully vaccinated by January 4, 2022 is tested for COVID-19 at least weekly (if in the workplace at least once a week) or within 7 days before returning to work (if away from work for a week or more). Covered employers are not required to pay for such testing under the ETS, although they may be required to do so under other applicable laws or collective bargaining agreements. The ETS lists permissible tests upon which covered employers and employees may rely.
- Require employees to immediately provide notice if they receive a positive COVID-19 test or are diagnosed with COVID-19, and immediately remove such employees from the workplace, keeping them out until they meet criteria for returning to work.
- Require every employee who is not fully vaccinated to wear a face covering when indoors or in a vehicle with another person for work purposes.
- Report work-related COVID-19 fatalities to OSHA within 8 hours of learning about them and work-related in-patient hospitalizations within 24 hours of learning about them.

For additional information about complying with these new detailed ETS requirements, contact your partners at Lake Effect.

Lake Effect is here to answer your questions about federal, state, and local regulations that impact employers across all industries. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

COVID-19 Resources / Human Resources / Legal - 11/05/2021

US Department of Labor Issues Final Rule on Tipped Workers

On October 28, 2021, the US Department of Labor (DOL) issued its Final Rule on tipped workers, establishing when tipped employees can be paid less than the federal minimum wage, an issue that has been in a state of flux over the last several years. The Final Rule will take effect on December 28, 2021. Lake Effect’s prior blog on this issue provides additional information and history on this topic.

Background: Under the Fair Labor Standards Act (FLSA), employers must pay employees no less than the current minimum wage of $7.25/hour. However, the FLSA allows employers to take a “tip credit” for employees who normally earn at least $30/month in customer tips. This means that employers may pay tipped employees a reduced minimum wage of $2.13/hour, instead of $7.25/hour, if they make sure that the employees earn at least $5.12/hour in tips, thus reaching the statutory minimum of $7.25/hour.

The Issue: Although this seems a straight-forward rule, its application becomes challenging when a tipped employee like a waiter spends some work time completing non-tipped work, like wiping down tables or folding napkins. Because the employee does not earn customer tips while performing such duties, the DOL has historically scrutinized an employer’s ability to take the tip credit (i.e., pay the lower hourly rate of $2.13/hour) for all of the employee’s work hours. The question has lingered, “When does an employee’s non-tipped work becomes so time consuming that the employer should lose the tip credit and pay the full federal minimum wage to that employee?”

DOL’s Answer: The DOL’s Final Rule identifies three categories of work that may be performed by tipped employees and specifies the FLSA pay requirements for each:

tip producing work that provides service to customers and for which tips are normally received (i.e., a server provides table service, or a bartender makes and serves drinks): an employer may take the full tip credit and pay an employee $2.13/hour for this work, assuming the employee’s tips make up the remainder of the minimum wage requirement.
directly supporting work performed by a tipped employee in preparation for tip-producing work (i.e., a server refills condiments and rolls silverware, or a bartender slices fruit for drinks): the “80/20 principle” applies. If a tipped employee spends more than 20% of their work week performing directly supporting work, the employer must pay them the full minimum hourly wage of $7.25/hour for that work. In addition, if an employee spends more than 30 continuous minutes performing directly supporting work, the employer must pay full minimum wage for any time that exceeds 30 minutes. This rule applies regardless of whether the 80/20 rule applies to the employee’s overall work week.
- Directly supporting work” includes idle time spent waiting to serve customers.
- If an employee performs dual jobs for an employer, one that normally produces tips and one that does not, only time spent performing the tipped job is considered in applying the 80/20 work week principle.
work that is not part of or supportive of the employee’s tipped occupation (i.e., server prepares food and cleans bathrooms, or bartender cleans the dining room): an employer must pay the employee the full minimum wage of $7.25/hour for all time spent on this work.

Challenges Ahead: Although intended to provide clarity on the issue of tipped employees, DOL’s Final Rule will require many employers to revamp their employee scheduling, timekeeping, and task-tracking processes. It will be especially important for employers to closely monitor employee time spent on “directly supporting work” so that they can properly apply the 80/20 and 30-minute continuous duration rules. To avoid uncertainty and minimize administrative burdens, some employers might consider foregoing the tip credit altogether. Your partners at Lake Effect can help assess your pay practices and navigate the new FLSA rules for tipped employees.

Lake Effect is here to answer your questions about federal and state wage and hour laws that impact employers across all industries. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Human Resources / Legal - 11/03/2021

Provisions of Final Tip Pool Rule Effective November 23, 2021

The U.S. Department of Labor’s latest final tip pool rule provisions will take effect on November 23, 2021. For further discussion on other provisions of the final rule that were implemented in April 2021, please see Lake Effect’s prior blog on this topic.

The following provisions of the final tip pool rule will take effect on November 23, 2021:

Managers and supervisors may keep tips they receive for services provided “solely” by the manager or supervisor and “directly” to customers. This clarification to the traditional prohibition on managers and supervisors receiving tips in a tip pool or tip sharing arrangement recognizes the reality that managers and supervisors are often called upon to perform tipped duties in the course of their workday. This means, for example, when a bar manager is working as a bartender to fill in for an absent bartender or during a slow shift, the bar manager may keep tips received directly from patrons at the bar. Similarly, when a salon manager receives tips from a client for a haircut done by the salon manager, the salon manager may keep the tips.
Managers and supervisors may contribute some of their tips received from their “sole” and “direct” work into mandatory tip pools or sharing, but they may not receive any tips from a tip pooling or tip sharing arrangement. Further, an employer may require (or may allow) managers and supervisors to contribute part of their “sole” and “direct” tips into tip pooling or sharing arrangements, but, again, managers and supervisors may not keep or receive employees’ tips, or other managers’ and supervisors’ tips, in any arrangement.
Employers may face fines up to $1,100 for each instance that the Department of Labor finds an employer took an employee’s tips, regardless of whether the violation was repeated or willful. This now encompasses employer behavior that is in “reckless disregard” of the FLSA regulations and situations when an employer should have explored if its behavior was compliant but failed to do so.

Human Resources / Legal - 10/13/2021

IL Passes Law Restricting Non-Competes and Non-Solicitation Agreements

On August 13, 2021 Illinois Governor Pritzker signed into law broad restrictions on employee non-competes and non-solicitation agreements. The non-solicit restrictions apply to employer’s customers, as well as other employees.

The new law applies to agreements executed with an employee on or after January 1, 2022. As of that date, the law bans:

Non-competes with employees earning $75,000 or less
- The income threshold increases by $5000 every five years until it reaches $90,000
Non-solicitation agreements with employees earning $45,000 or less
- The income threshold increases by $2500 every five years until it reaches $52,500
Non-competes and non-solicitation agreements with an employee who is terminated, laid off, or furloughed due to COVID-19 or “circumstances that are similar to the COVID-19 pandemic”
- However, a non-compete will be enforceable if the employer includes in the agreement payment to the employee covering the employee’s salary from the date of termination through the period of enforcement minus compensation earned from subsequent employment during that period

In addition, an enforceable non-compete or non-solicitation agreement must:

Include a provision advising the employee to consult with an attorney before signing
Provide the employee at least 14 days to review the agreement before signing it
Offer “professional or financial benefits” or two years of employment as consideration for signing the agreement
- “Professional or financial benefits” are not defined in the statute but generally include benefits such as a bonus or promotion

Illinois’ new law is part of a national trend to more tightly regulate the circumstances under which employers can restrict an employee’s post-termination activities. California bans all non-competes, with limited exceptions, and tightly restricts non-solicitation agreements. Nevada recently enacted legislation banning non-competes with hourly workers. Under Washington law, non-competes are enforceable only if, among other things, the employee earns more than $100,000 per year (adjusted annually). Washington D.C.’s law banning non-competes for virtually all employees will likely become effective some time in 2022. President Biden’s recent Executive Order charging the Federal Trade Commission to explore options to limit the “unfair use” of non-competes also reflects this growing opposition towards these types of agreements.

Employers should work closely with employment law counsel to review applicable state laws on non-competes and non-solicitation agreements, especially for remote employees working outside of Wisconsin. An advance review may enhance the effectiveness and enforceability of your agreements. See our previous blog on other state law considerations with remote workers.

Lake Effect is here to answer your state and federal employment law and HR questions related to these and other employment agreements. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Legal - 08/26/2021

Dane County Face Covering Emergency Order

Public Health Madison & Dane County (PHMDC) has issued a new Public Health Order, effective August 19, 2021 through September 16, 2021. The new order requires individuals to wear face masks indoors, employers to develop a policy providing and requiring face masks, and organizations to post a sign mandating face masks indoors.

To address the rise in positive COVID cases, individuals age two years and older must wear face masks when in an enclosed space in Dane County with people outside their household, including while using public transportation. PHMDC defines a face covering as:

a piece of cloth or other material that is worn to cover the nose and mouth completely. A face covering must be secured to the head with ties, ear loops, or elastic bands that go behind the head and must fit snuggly but comfortably against the side of the face. Cloth face coverings must be made with two or more layers of breathable fabric that is tightly woven (i.e., fabrics that do not let light pass through when held up to a light source). A face covering does not include bandanas, single layer neck gaiters, face shields, goggles, scarves, ski masks, balaclavas, shirt or sweater collars pulled up over the mouth and nose, or masks with slits, exhalation valves, or punctures.

Limited exceptions to the mask requirement are allowed when an individual is eating and drinking, undergoing a service requires temporary removal of the mask (e.g. dental services), communicating with someone who is deaf or hard of hearing and who cannot communicate with a mask, swimming, following safety or security guidelines that require removal of the mask, and other similar circumstances. In addition, individuals with medical or mental health conditions that prevent them from wearing face masks are exempt from the requirement. When addressing such exemptions, employers should put in place other safety precautions to protect the health and safety of employees, customers, and other members of the public .

Employers must develop a written protective measure policy and procedure that provides employees with face masks and requires face masks indoors to comply with the order.

Employers must also post in visible locations signs requiring masks indoors. Employers may use PHMDC’s sign or develop their own.

Lake Effect is here to answer your questions about how local and state public health orders apply to employers. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

COVID-19 Resources / Legal - 08/17/2021

Maintaining a Respectful Workplace Post-COVID

While some organizations have been on site through the pandemic, others have returned in recent months. Many others are planning a more robust employee return to office in the coming weeks. As more employees return to work in the office, employers may need to reestablish and remind employees about expectations of workplace conduct to foster and maintain a respectful workplace.

While employees have been working virtually, it is likely that their work clothes have become more casual, morning routines have become less regimented, and communications with coworkers have become more informal as they connected from their homes. Employers may want to review, revise, and remind employees about dress code and attendance policies. Further, employers should grant grace during the return, as employees navigate at-home responsibilities, commute times, new health and safety changes to their work environment, and their own well-being.

While the return may be welcome for some, others may struggle. Employees may experience micro-rejections and awkward moments deciding whether to hug, shake hands, or maintain social distancing with coworkers and others. Office banter may become more casual now that video calls introduced us to our coworkers’ personal lives outside the workplace. At the same time, in-person interactions may be stilted after months of virtual exchanges. This is the time for managers – and coworkers – to refine their empathic leadership and listening skills to understand the needs of others, and be sensitive to their feelings and thoughts.

There may also be times employees become upset with one another, feel hurt, over-share, delve into personal information (including vaccination status and health conditions), or even pass judgment on mask wearing or vaccination status. At its worst, there is a risk that these interactions may be perceived as harassment or discrimination. Consider scheduling your annual respectful workplace training to remind employees of appropriate workplace conduct to prevent harassment and discrimination. Keep in mind that the EEOC recommends employers provide such training on an annual basis, in person, and provided by an experienced trainer.

Lake Effect is here to answer your questions about empathic leadership and respectful workplace training. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

COVID-19 Resources / Human Resources - 07/27/2021

Increased Fines for Not Posting Employment Posters

The federal government recently increased the fines employers may face for violating federal employment law posting requirements. Going forward, the potential posting fines are:

Family and Medical Leave Act – $178
Job Safety and Health: It’s the Law – $13,653
Employee Polygraph Protection Act – $21,663
EEO is the Law – $576

Employers should also be aware that each state has its own poster requirements, most of which impose fees for failing to comply. It is important for employers to maintain an effective strategy for staying informed about the applicable local, state, and federal posting requirements. Contact your partners at Lake Effect with questions about obtaining and updating required employment posters.

Lake Effect is here to answer your questions about your posting requirements and other employment law and HR compliance matters. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Legal - 07/16/2021

HR Reporting Updates

There have been two important employer reporting updates for Human Resource practitioners.

First, the Equal Employment Opportunity Commission (EEOC) announced an extension of the deadline for submission of 2019 and 2020 EEO-1 Component 1 Data Collection to Monday, August 23, 2021. Please see Lake Effect’s prior blog on EEO-1 reporting requirements for more information.

Second, the Social Security Administration announced that it is discontinuing Employer Correction Request Notices (EDCOR), also known as “Social Security No Match Letters.” Their stated rationale for this change is “to focus on making it a better, easier, more convenient experience for employers to report wages electronically.” Please see Lake Effect’s prior blog on Social Security No Match Letters for more information.

Lake Effect is here to answer your questions about employer reporting requirements. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Human Resources - 07/12/2021

President Biden Signs Law Making Juneteenth a Federal Holiday

On June 17, 2021, President Biden signed into law Juneteenth National Independence Day, making June 19 the 12th federal holiday. Juneteenth commemorates the end of slavery in the United States in 1865, almost three years after the Emancipation Proclamation was signed in 1862.

Most federal employees will observe the holiday on Friday, June 18 this year, and many local and state governments have followed suit. While private employers are not required to recognize federal holidays, the passage of the Juneteenth law is an opportunity to review your employee handbook leave policies generally and your holiday schedule specifically. Employers have several options for designing a holiday schedule that aligns with their strategic goals, workplace culture, DEI initiatives, and customer or client needs.

Lake Effect is here to answer your questions about your workplace culture, leave policies, and employee handbooks. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Human Resources / News - 06/18/2021

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