Federal Employment Law Update – October 2018

USCIS Notice to Appear Policy Memorandum Not Applicable to Employment-Based Petitions

On September 27, 2018, the United States Citizenship and Immigration Service (USCIS) clarified that its Notice to Appear (NTA) policy memorandum (PM), released June 28, 2018, providing guidance on when the USCIS may issue Form I-862, Notice to Appear, will not be implemented with respect to employment-based petitions and humanitarian applications and petitions. Existing guidance for these case types will remain in effect.

An NTA is a document that instructs an individual to appear before an immigration judge. This is the first step in starting removal proceedings. Beginning October 1, 2018, USCIS may issue NTAs on denied status-impacting applications, including but not limited to, Form I-485, Application to Register Permanent Residence or Adjust Status, and Form I-539, Application to Extend/Change Nonimmigrant Status.

The USCIS will send denial letters for status-impacting applications that ensures benefit seekers are provided adequate notice when an application for a benefit is denied. If applicants are no longer in a period of authorized stay, and do not depart the United States, the USCIS may issue an NTA. The USCIS will provide details on how applicants can review information regarding their period of authorized stay, check travel compliance, or validate departure from the United States.

According to the USCIS, it will continue to prioritize cases of individuals with criminal records, fraud, or national security concerns and will continue the current processes of using our discretion in issuing NTAs on these case types.

Background

The updated policy affects the following categories of cases where an individual is removable:

Cases where fraud or misrepresentation is substantiated, and/or cases where there is evidence the applicant abused any program related to receiving public benefits. The USCIS will issue an NTA in these cases, even if it denies the case for reasons other than fraud.
Criminal cases where an applicant is charged with (or convicted of) a criminal offense, or committed acts that are chargeable as a criminal offense, even if the criminal conduct was not the basis for the denial or the ground of removability. The USCIS will, where circumstances warrant, refer cases to ICE without issuing an NTA or adjudicating an immigration benefits.
Cases where the USCIS denied a Form N-400, Application for Naturalization, on good moral character grounds because of a criminal offense.
Cases where an applicant will be unlawfully present in the United States when the USCIS denies the petition or application.

The PM did not change USCIS policy for any of the following categories:

Cases involving national security concerns.
Cases where issuing an NTA is required by statute or regulation.
Temporary Protected Status (TPS) cases, except where, after applying TPS regulatory provisions, a TPS denial or withdrawal results in an individual having no other lawful immigration status.
Cases involving deferred action for childhood arrivals (DACA) recipients and requestors when processing an initial or renewal DACA request or DACA-related benefit request; or processing a DACA recipient for possible termination of DACA. Read the PM that applies to cases involving DACA recipients and requestors.

Read the press release

New Employer Tax Credit for Paid Family and Medical Leave Available for 2018 and 2019

On September 24, 2018, the IRS announced that eligible employers who provide paid family and medical leave to their employees may qualify for a new business credit for tax years 2018 and 2019. Additionally, eligible employers who set up qualifying paid family leave programs or amend existing programs by December 31, 2018, will be eligible to claim the employer credit for paid family and medical leave, retroactive to the beginning of the employer’s 2018 tax year, for qualifying leave already provided.

In Notice 2018-71, the IRS provided detailed guidance on the new credit in a question and answer format. The credit was enacted by the 2017 Tax Cuts and Jobs Act (TCJA). The notice also clarifies how to calculate the credit including the application of special rules and limitations.

Only paid family and medical leave provided to employees whose prior-year compensation was at or below a certain amount qualify for the credit. Generally, for tax year 2018, the employee’s 2017 compensation from the employer must have been $72,000 or less.

Read Notice 2018-71

IRS: 2018 Employer Reimbursements for Employees’ 2017 Moves are Generally Tax-Free

On September 21, 2018, the Internal Revenue Service announced (Notice 2018-75) that employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes.

The 2017 Tax Cuts and Jobs Act (TCJA) suspended the exclusion from income for moving expenses reimbursed or paid by an employer for most employees starting in 2018, making these amounts taxable, except for amounts for active-duty members of the U.S. Armed Forces whose moves relate to a military-ordered permanent change of station.

Under Notice 2018-75, reimbursements an employer pays to an employee in 2018 for qualified moving expenses incurred in a prior year are not subject to federal income or employment taxes. The same is true if the employer pays a moving company in 2018 for qualified moving services provided to an employee prior to 2018.

To qualify, reimbursements or payments must be for work-related moving expenses that would have been deductible by the employee if the employee had directly paid them prior to January 1, 2018. The employee must not have deducted them in 2017.

See Form 3903 or Publication 521 for more information on the 2017 rules.

Employers that have already treated reimbursements or payments as taxable can follow the normal employment tax adjustment and refund procedures. See Publication 15, section 13, or Form 941-X and its instructions for details.

Read Notice 2018-75

Treasury and IRS to Launch Redesigned W-4 Form in 2020

On September 20, 2018, the Treasury Department announced that the IRS will implement a redesigned W-4 form for tax year 2020, a timeline that will allow for continued work to refine the new approach for the form. As a result of the enactment of the 2017 Tax Cuts and Jobs Act, the Treasury Department and the IRS are revising the wage withholding system and Form W-4, Employee’s Withholding Allowance Certificate. In June 2018, the IRS released a draft redesigned form for public comment and received many suggestions for improvements, which they are working to integrate.

For tax year 2019, the IRS will release an update to the Form W-4 that is similar to the 2018 version currently in use. The 2019 form will be released in the coming weeks according to the usual practice for annual updates.

The Treasury Department and IRS will continue working closely with the payroll and the tax community as additional changes are made to the Form W-4 for use in 2020. The intent of these additional changes is to make the withholding system more accurate and more transparent to employees. The IRS will release the 2020 form and related guidance and information early enough in 2019 to allow employers and payroll processors ample time to update their systems.