Not All IRS Guidance is as Good as Gold

Nina Olson is with the Taxpayer Advocate Service (TAS).  This is an independent organization within the IRS that assists taxpayers who are experiencing “troubles” with the IRS in getting issued resolve through the “normal channels”. During recent congressional hearing she was asked what seemed like simple questions concerning the types of IRS guidance taxpayers can rely on.  But the answer was not simple.  She has written a blog; IRS Frequently Asked Questions Can be a Trap for the Unwary on July 26, 2017, that contains excellent information for those of us who need to research tax questions and rely on tax guidance from the IRS.  I recommend reading it to ensure you know what you can and cannot rely on when researching the IRS website for tax guidance.

Using Fluctuating Workweek? Might Want to Think Again

If you are currently using the fluctuating workweek that is permitted under the Fair Labor Standard Acts (FLSA) you may want to review that decision.  The Fifth Circuit Court of Appeals has drawn some limits on that method.  Bill Pokorny has done a fantastic blog on discussing this recent court case. Check it out for the latest if you are currently using this type of workweek or just want to increase your current knowledge in this area.

Does Time and A Half Pay Count Towards Overtime?

When conducting my webinars on the FLSA requirements one area always seems confusing to attendees and that is the eight types of payments that can be excluded when calculating regular rate of pay.  The one found most often to be confusing to my attendees and maybe to you as well is the one that is for bona fide overtime premiums. Bill Pokorny has done an excellent blog post on this subject that I know you will find helpful on this topic. Please take the time to check it out if you offer this type of payment or to improve your general payroll knowledge.

Disaster Relief for Employees and Employers

With the major disasters befalling us many employers and employees are looking for ways to help or seeking help to recover.  The IRS, the states and others are providing relief for these disasters.  For example the IRS is permitting pension plan hardship loans and filing extensions. They are also permitting leave sharing programs and leave donations with favorable taxation.  Click here for outline of the IRS latest tax relief. 

The states are also giving disaster relief.  So far Alabama, Colorado, Georgia, Hawaii, Idaho, Illinois and Wisconsin have posted tax filing/payment relief for employers.  You need to check the individual website for each state to see who is offering this type of relief.

In addition, Ernest and Young’ Workforce Advisory Services are offering a complimentary webcast tomorrow morning on Disaster Relief: Workforce Considerations for Employers at 9 am pacific/12 noon eastern.

Employer Information Report (EEO-1) Pay Data Collection Blocked

The U.S. Equal Employment Opportunity Commission (EEOC) has been notified by the Office of Management and Budget (OMB) that it is initiating a review and immediate stay of the effectiveness of the pay data collection aspects of the EEO-1 Form that was revised on September 29, 2016, in accordance with with its authority under the Paperwork Reduction Act (PRA).

The previously approved EEO-1 form which collects data on race, ethnicity and gender by occupational category will remain in effect. Employers should plan to comply with the earlier approved EEO-1 (Component 1) by the previously set filing date of March 2018.

Acting Chair Lipnic said:

“The EEOC remains committed to strong enforcement of our federal equal pay laws, a position I have long advocated. Today’s decision will not alter EEOC’s enforcement efforts.

I had consistently urged OMB to make a decision on this matter so that stakeholders would be aware of their reporting obligations.

Going forward, we at the EEOC will review the order and our options. I do hope that this decision will prompt a discussion of other more effective solutions to encourage employers to review their compensation practices to ensure equal pay and close the wage gap. I stand ready to work with Congress, federal agencies, and all stakeholders to achieve that goal.”

My editorial:  Is this a good move?  I am not sure, but it seems like it will do more to discourage employers from closing the wage gap.  So far voluntary “encouragement” to bring compensation practices closer to ensure equal pay has not really worked very well, now has it? Having to actually set down on paper, in a report to the EEOC, exactly what the wage gap is in an employer’s compensation was a good way to shed light on the subject.

What do you think?

Last Round for Now: Obama Era New OT Rules Knocked Out

On August 31st, the Judge in charge of the court case for the new OT rules initiated by President Obama issued its final ruling.  Basically he sided with the plaintiffs. For an excellent recap of the ruling I am referring you to Bill Pokorny’s blog.

I Need Your Input: Regular Rate of Pay…Your Payroll System

I recently had a discussion with an associate (also an payroll consultant) about the regular rate of pay and payroll systems in general.  Unfortunately the question we both had, we could not fully answer. So I am turning to my blog followers to help me out.  When I started in payroll we did payroll by hand, including the regular rate of pay calculations.  Of course, systems have improved since 1977.  But my question is…which current systems (whether in-house or service bureau) do regular rate of pay calculations?  For example, I give a bonus to an employee for finishing a project on time (nondiscretionary bonus) and he earned it in the same week it was paid.  For this scenario would your payroll system do the regular rate of pay calculation? Or would you have to do it by hand and add it in?  Second example, an employee receives a monthly commission on sales (hourly employee).  He is paid his commission on July 15th for the month of June.  Would your system be able to recalculate the additional overtime due? Or would you have to do it by hand (Excel spreadsheet)?

If your system does not do the regular rate of pay calculation, did you know this when you bought the system or signed up for the service bureau?

I appreciate any input you might have on the subject.  Please include the name of the system if you can do so. Also please note if you had to have a special  program written to handle the calculations.

Latest Round on Battle for Exempt Employees

The latest on the salary increase was released today.  The U.S. Department of Labor has today announced that it will publish a Request for Information (RFI), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. The RFI offers the public the opportunity to provide information that will aid the Department in formulating a proposal to revise these regulations.  The RFI solicits feedback on questions related to the salary level test, the duties test, inclusion of non-discretionary bonuses and incentive payments to satisfy a portion of the salary level, the salary test for highly compensated employees, and automatic updating of the salary level tests. The 60-day comment period for all issues raised in the RFI ends on September 25, 2017.  The public may submit comments according to the instructions listed in the RFI as published in the Federal Register.

But the court case is still raging on.  The DOL has decided to fight the ruling, not to defend the limits set by the Obama administration, but to defend the concept that the DOL has the right to change the salary limit.  Lots of legal blogging on the topic so I wanted to include some of those blogs for you today:

Smith Gambrell & Russell LLP

Ogletree Deakins

Wage & Hour Insights

 

Opinion Letters Are Back at DOL!

The Department of Labor (DOL) has just announced that they will reinstate the issuance of opinion letters. The action allows the department’s Wage and Hour Division to use opinion letters as one of its methods for providing guidance to covered employers and employees. An opinion letter is an official, written opinion by the Wage and Hour Division of how a particular law applies in specific circumstances presented by an employer, employee or other entity requesting the opinion. The letters were a division practice for more than 70 years until being stopped and replaced by general guidance in 2010.

“Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” said Secretary Acosta. “The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”

The division has established a web page where the public can see if existing agency guidance already addresses their questions or submit a request for an opinion letter. The web page explains what to include in the request, where to submit the request, and where to review existing guidance. The division will exercise discretion in determining which requests for opinion letters will be responded to, and the appropriate form of guidance to be issued.

Court Case on CA’s Day of Rest…Finally Rested

California has long had a day of rest requirement.  In fact it has existed long before overtime and minimum wage. It guarantees an employee “one day’s rest therefrom in seven”.  But  which employees and what exactly is one day in seven?  This was really never litigated before the current case of Mendoza v. Nordstrom in which the ruling was just handed down on May 8th.  Rather than my trying to explain the entire court case in a blog, I will, instead, urge you to read the recap of the case as presented by Sheppart Mullin Richter & Hampton’s Brian S. Fong for the Mondaq News Update Service. It is an in-depth look at the ruling and the impact on employers.

 

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