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Utah Compliance Connection - October 2022

October 1, 2022

Federal Department of Labor Proposes New Independent Contractor Test

On Oct. 11, 2022, the U.S. Department of Labor (DOL) announced its rule proposal for classifying independent contractors. The proposed rule would implement a test that the DOL will use to determine whether workers are employees or independent contractors under the Fair Labor Standards Act (FLSA). The proposed rule would formally rescind the current standard created by the Trump administration and would assist with employee classification. This is the Biden administration’s second attempt to reverse the current standard, which it believes leaves workers vulnerable to misclassification.

What Will the Proposed Rule Address?

The DOL’s current rule employs factors that must be considered when classifying workers. These factors are known as the economic realities test. Two of the factors—the nature and degree of control over the work and the worker’s opportunity for profit or loss—are considered “core factors,” having more probative value and carrying greater weight than the other factors. To answer the ultimate question of whether a worker is economically dependent on their employer, the proposed rule would return the test to a multifactor totality-of-the-circumstances analysis. This means no factor would have a predetermined weight.

According to the DOL, the proposed rule aligns the department’s analysis for determining worker classification with current judicial precedent and the FLSA’s text and purpose. When determining a worker’s status, the proposed rule would have the following factors weighed equally:

  • The amount of control a worker has over how they perform their job
  • The worker’s opportunity to increase their earnings by offering new services
  • The amount of skill required for the work
  • The degree of permanence of the working relationship
  • The worker’s investment in equipment or tools
  • The extent to which the work performed is integral to the employer’s business

Workers determined to be economically dependent on an employer would most likely be considered employees. Employees are entitled to certain benefits and protections that employers are not required to provide independent contractors, such as minimum wage, overtime, workers’ compensation, and unemployment benefits

The proposed rule applies only to laws the DOL enforces, such as the FLSA. Other federal agencies, like the IRS, and states can set their own criteria for determining worker classification. However, many employers, regulators and judges will likely consider the DOL’s rule when making decisions regarding worker classification. This proposed rule is generally considered worker-friendly and, as such, may greatly impact gig companies and related service providers, which classify the majority of their workers are independent contractors.

What’s Next?

The DOL will formally publish the proposed rule in the Federal Register on Oct. 13, 2022; 45 days are provided for public comment. Subsequently, the department will review comments and determine whether to move forward with a final rule.

Even after the DOL completes the notice and comment period, it will likely be some time before this proposed rule becomes final, as the department’s rule is likely to be legally challenged—similar to the administration’s prior efforts. Employers are not obligated to change how they classify employees until the DOL’s proposed rule becomes final. However, employers who may potentially be impacted will want to follow the DOL’s rule-making process closely.

Federal Voting Leave Compliance

As 2022’s Election Day approaches on Tuesday, Nov. 8, employers may be curious about how to best prepare. While federal law does not require employers to provide their employees time off to vote, many states have voting leave laws that allow employees to take time off to vote in certain circumstances. Further, employees may desire their employers to offer leave regardless of the applicable laws, so employers may choose to proactively plan for how to handle Election Day.

This article covers general information about state voting leave laws and employer considerations surrounding employee leave or time off for voting.

State Voting Leave Laws

Most states and localities have laws requiring employers to provide employees time off work to vote, even though no federal law requires this. Yet, if certain employees have enough time to vote during nonworking hours, they may not be eligible for leave.

  • The specifics vary by state, but many of these voting leave laws:
  • Require the leave to be paid
  • Impose a notice requirement on employees to provide their employers with notice of the leave
  • Allow employers to designate the hours during which employees may be absent to vote

In addition, some states even have notice requirements where employers must post a notice regarding voting leave laws. Employers should be aware of the voting leave laws that apply to them and be prepared to comply with any applicable requirements.

Employer Considerations

There are several ways employers can go about employee voting leave. One strategy is to provide time off to vote during Election Day. Even if this is not required in their state, employers may provide paid time off. Some employees may be seeking employers who offer time off or other flexibilities regardless of their state’s requirements and may seek employment somewhere that does.

Alternatively, employers can consider making Election Day a company holiday, if feasible, so everyone has the day off and can vote when they please. Employers may also consider providing their employees with information about early and absentee voting so that some employees may vote ahead of time and not need to take off work on Election Day. Employers should assess the various options and consider what works best for their organization and employees.

For More Information

Even though federal law does not require employers to provide leave to vote, many state laws do. As Election Day approaches, employers should review applicable laws and prepare to accommodate employees accordingly. If an organization has any specific compliance concerns surrounding employment law, it should seek local legal counsel. For additional information on voting, check out these federal resources: Voting and Elections in the United States and the U.S. Election Assistance  Commission.

IRS Announces 401(k) Contribution Increases and More for 2023

The Internal Revenue Service (IRS) has released Notice 2022-55, containing cost-of-living adjustments for 2023 that affect amounts employees can contribute to 401(k) plans and individual retirement accounts (IRAs).

2023 Increases

The employee contribution limit for 401(k) plans in 2023 has increased to $22,500, up from $20,500 for 2022. Other key limit increases include the following:

  • The employee contribution limit for IRAs is increased to $6,500, up from $6,000.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased to $7,500, up from $6,500.
  • The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans is increased to

$15,500, up from $14,000.

  • The limits used to define a “highly compensated employee” and a “key employee” are increased to $150,000 (up from $135,000) and $215,000 (up from $200,000), respectively.
  • The annual limit for defined contribution plans (for example, 401(k) plans, profit-sharing plans and money purchase plans) is increased to $66,000, up from $61,000.
  • The annual compensation limit (applicable to many retirement plans) is increased to

$330,000, up from $305,000.

The income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs and claim the Saver’s Credit (also known as the Retirement Savings Contributions Credit) also increased for 2023. The IRS’ news release contains more details.

Additional details on these and other retirement-related cost-of-living adjustments for 2023 are in IRS Notice 2022-55.

IRS Updates Annual Benefit Maximums for Flexible Spending Accounts and More Each year in the fall, the IRS announces new limits for several types of benefits that have maximums subject to annual indexing. You can find the full list of the recently released amounts for 2023 in IRS Revenue Procedure 2022-38, but we’ve outlined the most common items employers ask us about.

Health Flexible Spending Account (FSA)

For plan years beginning in 2023, the salary reduction contribution limit is $3,050. For health FSAs that include a carryover feature, the maximum carryover is $610.

Qualified Commuter Plans—Mass Transit and Parking

For 2023, the monthly limits are increased to $300 for both qualified parking and mass Transit.

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

For 2023, QSEHRAs may not reimburse more than $5,850 per year for single coverage and

$11,800 for family coverage.

Adoption Assistance Programs

For 2023, the maximum tax credit and employer-provided adoption assistance that can be excluded from wages is increased to $15,960. Individuals with a modified adjusted gross income above $239,230 may not take the full exclusion amount.

Federal Form I-9 Updates

Form I-9 is Expiring, but Keep Using it Anyway

The current Form I-9, Employment Eligibility Verification, will technically expire on October 31, 2022, as noted on the form itself. However, the U.S. Citizenship and Immigration Services (USCIS) says employers should continue using the current Form I-9 after its expiration date (because a new form hasn’t been released yet). We’ll provide an update when the new version is available.

Remote Form I-9 Document Inspection Flexibility Extended Until July 31, 2023

The Department of Homeland Security (DHS) has once again extended the policy that provides employers with flexibility related to in-person Form I-9 document inspection. This latest extension is in effect until July 31, 2023.

You can read the extension announcement here.

State Compliance Update

Nothing so far…

Compliance Calendar


Nothing to report…


Nothing to report…


1/31 – Form 940 Filing Deadline (2022)

1/31 – Form 941 Filing Deadline (Q4)

1/31 – Forms W2 and 1099-Misc Distribution Deadline

1/31 – Forms W2 and W3 Filing Deadline


Lighthouse HR Support (LHRS) provides practical human resource information and guidance based upon our knowledge and experience in the industry and with our clients. LHRS services are not intended to be a substitute for legal advice. LHRS services are designed to provide general information to human resources and/or business professionals regarding human resource concerns commonly encountered. Given the changing nature of federal, state and local legislation and the changing nature of court decisions, LHRS cannot and will not guarantee that the information is completely current or accurate. LHRS services do not include or constitute legal, business, international, regulatory, insurance, tax or financial advice. Use of our services, whether by phone, email or in person shall indicate your acceptance of this knowledge.

Written By:

Kelly Murphy

Kelly Murphy

Senior HR Business Partner

Kelly brings a wealth of knowledge with nearly 30 years of human resource experience. She provides expertise in various human resource categories, including employee relations, performance management, HR Form creation/review (employee handbooks, job descriptions, etc.), employee/management training, workplace investigations, etc. Her human resource certifications include PHR (Professional Human Resources) and SHRM-PC (Society for Human Resource Management Certified Professional). 

Kelly attended Colorado Mesa University and Waldorf University, where she earned a degree in Human Resource Management and Business Administration with Summa Cum Laude honors. She was named Western Colorado Human Resource Association Professional of the Year, 2013, and currently serves on the Board of Directors. She also is a member of the WCHRA Skills Development Committee, the WCCA Education Committee, and the Members/Events Committee. She serves as an Ambassador for both the Fruita and Palisade Chamber of Commerce.