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The US Department of Labor’s (DOL’s) Wage and Hour Division (WHD) has proposed delaying the effective date for the Independent Contractor final rule from March 8, 2021, until May 7, 2021. The final rule that was issued on January 6, 2021, clarified how employers can determine whether a worker is an employee or an independent contractor. The final rule reaffirms that employers must consider whether there is a financial dependency in the employment relationship with their workers based on the Economic Realities Test. * HRK will continue to monitor the DOL website for updates on whether the Biden administration chooses to accept, amend, or reject the final rule before the rule’s effective date.

On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act (ARPA), a $1.9 trillion relief bill containing financial benefits for individuals, businesses, state and local governments, and more. Tax credits for employers who choose to provide employees paid leave under the Families First Coronavirus Response Act (FFCRA) are extended through September 30, 2021. Qualifying reasons for this voluntary FFCRA leave have been expanded, and the new law adds 10 days of voluntary FFCRA paid sick leave for employees, beginning April 1. The employee retention credit established under the Coronavirus Aid, Relief, & Economic Security (CARES) Act is extended through the end of 2021, and eligibility is expanded to cover some small startups and severely financially distressed employers.

The Massachusetts Department of Unemployment Assistance (DUA) has issued a notice regarding employers budgeting properly for their quarterly Unemployment Insurance (UI) contributions. Due to the high volume of claims caused by the COVID-19 pandemic, the Unemployment Trust Fund currently has a discrepancy balance, therefore triggering a high rate — schedule With no guidance from the legislation, UI employer contributions in 2021 will be increased to the highest allowable amount, causing the average employer contribution to grow by 60%, from $539 to $866. House bill 55, An Act financing a program for improvements to the Unemployment Insurance Trust Fund and relief to employers in the Commonwealth, will freeze the rate schedule for 2021 and 2022 at the current schedule “E,” slowing the contribution growth rate.