Two Upcoming Labor Rule Compliance Dates That CUs Should Keep in Mind
Also, the latest legal briefs from the federal level and your compliance question of the week, answered.
October 28, 2016
As the year flashes by, credit unions will want to keep in mind the upcoming compliance dates for two labor rule changes.
The first date is December 1, 2016, which is the date the Department of Labor’s updated Overtime rule goes into effect. The overtime rule updates the Fair Labor Standards with regards to exemptions from overtime pay for employees who meet the definition of “executives, administrative, and professionals.” To be exempt from the overtime requirements, these employees must meet certain requirements related to their primary job duty and be paid a salary at not less than the minimum amount specified in the regulation. The regulation will increase the salary basis test for overtime eligibility for these positions from the current $455/week ($23,660/year) to $913/week ($47,476/year).
The final rule will allow up to 10 percent of the salary threshold to be met by non-discretionary bonuses, incentive pay, or commissions, provided these payments are made on at least a quarterly basis.
The second date to keep in mind is March 31, 2018. The Equal Employment Opportunity Commission (EEOC) finalized their rule which will require additional pay data on the EEO-1 report. The first modified report will not be filed until the first quarter of 2018. This is a change from the normal filing of the EEO-1 report in the fall, and in following years the EEO-1 will have a March 31 deadline. This will allow employers to pull the W-2 data only once for a year to cover both tax and EEO-1 reporting requirements.
Private employers with more than 100 employees and federal contractors with more than 50 employees must provide a summary of employee pay data, based on W-2 earnings, as well as hours worked. The final rule requires covered employers to submit the summary pay data broken out by ten defined job categories.
Compliance Question of the Week
What is a Social Security Representative Payee Account, and how do I set one up?
The Social Security Administration (SSA) appoints a “representative payee” for a recipient of social security funds that is not qualified to handle the funds on their own. For example, a minor, the aged who are not mentally competent, or some institutionalized persons. More information about the rules that govern representative payees can be found on the Social Security Administration website, www.ssa.gov.
There are two different, but similar programs offered by the SSA. The first program is called the Social Security Representative Payee Program. The second program is called the Supplemental Security Income (SSI) Representative Payee Program. In either program, there are three common rules that apply when creating an account. First, the beneficiary must own the account. Second, the beneficiary cannot have access to the account. Third, the beneficiary’s TIN must be used on the account.
To set up one of these accounts, the account should be titled: “Beneficiary’sName by PayeeName, Representative Payee.” A credit union could either provide for this type of account in its account agreement, or use a trust account format or agency account format. The signature card should be signed: “PayeeName, Representative Payee for Beneficiary’sName.” Since it is the beneficiary’s account, the beneficiary could qualify for membership or if the payee was qualified for membership, the payee could open the account for the beneficiary.
National Credit Union Administration (NCUA)
The October issue of the NCUA Report is now available.
The NCUA announced that it approved a modernization to its field of membership regulations. The final rule allows greater flexibility to communicate charters, update the process for defining underserved areas, and allowing rural district credit unions to serve up to 1 million people.
The NCUA, jointly with the FDIC, OCC, FRB, and FCA, requested comments on a joint notice of proposed rulemaking to implement provisions of the Biggert-Waters Act.
Consumer Protection Financial Bureau (CFPB)
The CFPB announced that it has released its Project Catalyst Report which reviews various consumer-friendly market developments.
CFPB Director Cordray delivered prepared remarks at the Consumer Advisory Board Meeting. Cordray’s remarks focuses on the debt collection rule that the CFPB has been working on, as well as the student loan servicing market.
The CFPB issued a warning to 44 financial institutions about potential mortgage lending reporting failures under HMDA.
CFPB Cordray delivered prepared remarks at the Mortgage Bank Association’s recent meeting. Cordray discussed the mortgage regulations that have already taken effect and the upcoming HMDA amendments.
The CFPB issued its monthly compliant snapshot. The October report focuses on complaints about prepaid products, including unauthorized transactions, registering cards, and the most complained about companies.
Federal Reserve Board (FRB)
The FRB has released the 10th edition of its publication, The Federal Reserve System Purposes & Functions, which details the structure, responsibilities, and direction of the U.S. central banking system.
The FRB announced the approval of fee schedules for payment services to the Federal Reserve Banks to depository institutions. The fees will be effective on January 3, 2017.
The FRB announced that the Secure Payments Task Force is seeking comments from industry professionals that are knowledgeable about payment security.
Federal Housing Finance Agency (FHFA)
FHFA Director Watt delivered prepared remarks at the Mortgage Bankers Association Annual Convention. Watt’s remarks focused on how the housing finance systems supports the goals of decent and affordable housing.
The Department of Housing and Urban Development (HUD)
HUD issued a final rule that expands the housing protections from HUD regarding nondiscrimination and fair housing requirements. This final rule extends the requirements and protections to victims of domestic violence, dating violence, sexual assault, and stalking. The final rule will be effective thirty days after publication in the Federal Register.
Department of Labor (DOL)
The DOL issued FAQs regarding its recent final rule issued by the Department.
Financial Crimes Enforcement Network (FinCEN)
FinCEN issued an FAQ regarding reporting of cyber-events, cyber-enabled crime, and cyber-related information through SARs. FinCEN also issued an advisory on the important role that BSA reporting plays in helping U.S. authorities combat cybercrime.
Office of Foreign Assets Control (OFAC)
OFAC has updated the SDN list as of October 27, 2016. The last update prior to this was October 20, 2016.
Questions? Contact the Compliance Hotline: 1.800.546.4465, [email protected].