On March 23, President Trump signed H.R. 1625, the Consolidated Appropriations Act, 2018, which will fund the federal government for the remainder of the fiscal year, which ends on September 30. The new law affects payroll professionals, including funding the IRS and E-Verify, and changing some tip regulations [Pub. L. 115-141].
IRS Funding
The IRS received $320 million in additional funding to be used solely for carrying out Public Law 115-97, known as the Tax Cuts and Jobs Act.
E-Verify Funding
The law reauthorizes the E-Verify program and provides more than $108 million for the operation and support of the program for the 2018 fiscal year. The law also provides more than $22 million for procurement, construction, and improvements of the E-Verify Program. These funds are to remain available until September 30, 2020.
Tip Regulations
The law includes a provision prohibiting employers from keeping employees’ tips. Employers will be subject to liquidated damages for keeping tips (in addition to liability for the tips that they improperly kept), along with a $1,000 civil penalty per violation.
The law repeals portions of a regulation, issued by the U.S. Department of Labor (DOL) in 2011, that prohibited employers from requiring tipped employees to participate in a tip pool with non-tipped employees, if the employer did not take a tip credit and employees were paid the applicable minimum wage.
The law also affects a controversial rule proposed by the DOL in 2017. The proposed rule, which also would have repealed the 2011 regulation, did not clarify which non-tipped employees could participate in a tip pool. The law provides clarity by prohibiting managers and supervisors from retaining employee tips thereby excluding them from a tip pool.
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