Legislative Updates

Employee 401(k) contributions for 2022 will rise by $1,000 to $20,500 with an additional $6,500 "catch-up" contribution allowed for those age 50 or older. 

The Occupational Safety and Health Administration (OSHA) released its highly anticipated emergency temporary standard requiring businesses with at least 100 employees to mandate that their employees get vaccinated against the coronavirus or wear a mask and test for COVID-19 on at least a weekly basis.

Additionally, the White House announced the following details:

• All unvaccinated workers must begin wearing masks by Dec. 5 and provide a negative COVID-19 test on a weekly basis beginning Jan. 4.
• The deadline for federal contractors to comply has been pushed back to Jan. 4.
• Companies are not required to pay for or provide the tests unless they are otherwise required to by state or local laws or in labor union contracts.

Legal challenges to the mandate are expected. 

Here's a summary factsheet issued by OSHA.

The Bipartisan Budget of Act of 2018 and the final regulations enacted several changes to hardship withdrawal rules for qualified retirement plans, including:

• Repeal of the required 6-month suspension of elective deferrals after a hardship distribution.
  

• Permitting amounts contributed as qualified nonelective contributions (QNECs) or qualified matching contributions (QMACs) to be available for hardship distributions.
  

• Elimination of the need to exhaust plan loans prior to taking a hardship distribution.
  

• Allowing a general standard to be used to determine if a hardship distribution is necessary to satisfy the financial needs of a participant.
  

• Permitting hardship distributions to repair a primary residence, even if that repair would not otherwise qualify for a casualty loss deduction.

Plan sponsors also may need to adopt other retirement plan amendments by Dec. 31, 2021, if they made plan changes during 2021.

Effective December 28, 2021, the U.S. Department of Labor’s Tips Dual Jobs final rule clarifies when employers can take a tip credit for employees working in dual roles. For example, a hotel maintenance person also works in the hotel restaurant as a server. If this employee customarily and regularly receives at least $30 a month in tips for their work as a server, they are engaged in a tipped occupation—but only when they’re working as a server. The employee is employed in two occupations, and the employer can’t take a tip credit for the hours worked in the maintenance position.

The final rule clarifies that employers can only take a tip credit when:

• The worker is performing tip producing work; or
• As a tipped employee, they perform work that directly supports tip producing work for:
  • Less than 20 percent of their workweek hours worked, also referred to as a “20 percent tolerance” because employers can’t take a tip credit for any time that exceeds 20 percent of the workweek. The time that an employer doesn’t take a tip credit is excluded when calculating the 20 percent tolerance. 
  • Not more than 30 minutes. 

The final rule also amends Executive Order 13658—regulating the hourly minimum wage paid by contractors to workers who are performing work on or in connection with covered federal contracts— to be consistent with the dual jobs laws. 

Iowa Gov. Kim Reynolds signed a bill into law Friday, 10/29/2021 that aims to make it easier for workers to get medical and religious exemptions to workplace COVID-19 vaccine requirements.

The Iowa House and Senate passed the bill Thursday, 10/28/2021 with bipartisan support.

Reynolds said in a statement Friday the new law will protect Iowans' freedom to make their own health care decisions.

According to Republican lawmakers who proposed the bill, employees seeking a medical or religious exemption simply have to state they believe the COVID-19 vaccine would hurt their health or would conflict with their religion. It doesn’t require them to get proof from a doctor or religious leader.

If someone gets fired for not getting vaccinated, the new law will allow them to remain eligible to receive unemployment benefits.

The U.S. Equal Employment Opportunity Commission (EEOC) today posted updated and expanded technical assistance related to the COVID-19 pandemic, addressing questions about religious objections to employer COVID-19 vaccine requirements and how they interact with federal equal employment opportunity (EEO) laws.

The expanded technical assistance provides new information about how Title VII of the Civil Rights Act of 1964 applies when an applicant or employee requests an exception from an employer’s COVID-19 vaccination requirement that conflicts with their sincerely held religious beliefs, practices, or observances. Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin.

The key updates to the technical assistance are summarized below:

• Employees and applicants must inform their employers if they seek an exception to an employer’s COVID-19 vaccine requirement due to a sincerely held religious belief, practice, or observance.
• Title VII requires employers to consider requests for religious accommodations but does not protect social, political, or economic views, or personal preferences of employees who seek exceptions to a COVID-19 vaccination requirement.
• Employers that demonstrate “undue hardship” are not required to accommodate an employee’s request for a religious accommodation.

Governor Kristi Noem issued an executive order October 27, 2021 allowing federally-contracted state employees to make religious or medical exemptions from the federal vaccine mandate.

Gov. Noem says she is working with South Dakota lawmakers to make these exemptions permanent and to extend them to employees of private businesses.

Republican state lawmakers have already called for a special session to consider legislation that would make it illegal to deny a religious or medical exemption from the COVID-19 vaccine by any “entity” operating in the state, such as businesses or schools.

The executive order doesn’t apply to South Dakota National Guard service members who must meet federal readiness responsibilities for deployment.

Effective Jan. 1, 2022, the minimum wage for non-tipped employees in South Dakota will be $9.95/hour. The minimum wage for tipped employees will be no less than $4.975/hour. Read the State's FAQs.