The last 5 years have been riddled with State and Federal compliance legislation; legislation that affects both the independent operator as well as the corporate folks, and legislation that will only continue to grow with time. New laws create confusion and uncertainty on many levels and ensuring you remain in compliance is the only way to ensure that you’re not hit with heavy fines that may cost you more than you’re prepared to take on.
Recently, the state of Illinois enacted the Illinois Secure Choice Savings Program Act, which in layman’s terms states that every restaurant employing 25 or more people must offer a retirement plan for their team members and automatically enroll and allow all members to opt-out of said plan (signed documentation is always recommended).
If an employer does not already have a retirement plan in place for their employees, Illinois Secure Choice has made a simple and convenient savings *Roth IRA program under the following link https://employer.ilsecurechoice.com/ in which restaurants can register their employees and indicate their exemptions. The good news? It costs you NOTHING – The IL Secure Chioce webiste is an outstanding resource for restaurants to become more educated on the complexities of the law.
What is the rollout timing of the law?
The program began in July of 2018. Registrations and exemptions must be completed before the following dates, based on the restaurant’s number of employees:
What are the penalties if the law is not followed?
If a restaurant fails to remit their deductions in a timely manner, they violate Illinois law, including wage and hour requirements. As such, the State may impose penalties for the violation.
Timely is qualified as:
- Made on or before the last day of the month following the month in which the employee compensation was due (and payroll deductions were made)
- Before such later deadline prescribed by the Illinois Secure Choice Savings Board
A penalty of $250 will be assessed if an employer does not enroll an employee in the Illinois Secure Choice Savings Program, who has not opted out, within the time prescribed under the law.
A penalty of $500 for each employee that has not opted out and continues to be unenrolled, after a $250 penalty was assessed, in the Illinois Secure Choice Savings Program.
In the example above, based on an employer with 25 employees not enrolled and not opted-out, the employer is assesed a fee of $250 per employee for the 1st year. In the 2nd year, after a $250 fine has been administered, the fine increases to $500 per employee.
How can RSI assist restaurants to remain in compliance with the law?
All RSI clients are able to utilize their industry expert accountants in order to provide them with a report of employees’ Roth IRA deduction totals for each month in order to remain compliant with Illinois State Law.
Beyond the commitment to the relationships that RSI strives to retain with our clients, we’re aware that there are additional relationships that can ultimately afford our clients with an even higher level of comprehension from their RSI services. Our partnership with Efficient Hire enables our clients access to a comprehensive Automated E-Verify & Digital Storage solution with a dedicated support team to efficiently and seamlessly automate the entire compliance process.
*A Roth IRA is an individual retirement account. Unlike a traditional IRA, contributions to a Roth IRA are made with after-tax deductions. However, if necessary requirements are satisfied qualified distributions made from a Roth IRA account are tax-free. Contributions can be made to a Roth IRA after an employee reaches the age of 70 and 1/2 and can be kept in a Roth IRA as long as the employee lives.
Forms/Materials for Employers/Materials for Employees can be found @ https://employer.ilsecurechoice.com/home/employers/resources.html
Information and resources, including tutorials, are available online at www.saver.ilsecurechoice.com. Trained, knowledgeable account service professionals can also be reached by phone at (855) 650-6913 Monday through Friday, 8 a.m. – 8 p.m. CST.