With the close of 2018 upon us, employers are anticipating the next round of labor and employment laws and regulations to take effect in and after 2019. Starting on January 1st, and continuing throughout the new year, employers need to address a multitude of new or amended federal, state, and local responsibilities. The new laws and regulations regarding employees will impact employers.
The most notable federal legislative bill that affected employment law was Congress’s budget bill, the Consolidated Appropriations Act. This Act amended the Fair Labor Standards Act by addressing rules affecting tipped employees and tip ownership. The Act expressly prohibits an employer from keeping tips received by its employees for any purpose (including allowing managers or supervisors to keep any portion of the employees’ tips) regardless of whether the employer takes a tip credit.
The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, affects specific deductions and reporting provisions for 2018 and 2019. The law eliminated, at least through 2025, the exclusion of a business expense deduction related to nondisclosure agreements (NDAs) in conjunction with the settlement of sexual harassment claims. Thus, no business expense deduction will be allowed for any settlement or payment related to sexual harassment or sexual abuse if such a settlement or payment is subject to a nondisclosure agreement or attorney’s fees related to such a settlement or payment. This new restriction will have employers contemplating on a per case basis whether any amount paid to settle a sexual harassment claim is significant enough to be worth the tax deduction at the expense of an NDA