Note from Chris Whalen, CPA:  The New Overtime Rules Impact EVERYONE, employers and employees alike. So please take a moment and see how this may impact you, your family and your business.

Many people, especially employers, are not aware of these changes, so please forward this to your networks, contacts and Human Resources Departments.

This memo is extremely comprehensive, but always call me immediately with any tax, accounting or business question. 732-673-0510.

Simply click on the question you are interested in, and then click the link that appears just below.

General Questions and Answers

  1. What is the purpose of the “Overtime” Final Rule?
  2. What is “overtime”?
  3. What determines if an employee falls within one of the white collar exemptions?
  4. Why is the Department revising its overtime regulations for white collar workers now?
  5. When did the Department last revise its overtime regulations for white collar workers?
  6. What are the significant changes to the overtime regulations for white collar salaried workers?
  7. How does the final rule differ from the NPRM?
  8. How do the current regulations, proposed rule and final rule compare?
  9. How will employers implement the updated salary level requirement established in this Final Rule?
  10. When will these changes take effect?
  11. Is the Department making any adjustments to the standard duties tests?

GENERAL

  1. Who is covered by the FLSA? Are employees of small businesses covered?
  2. Is there an exemption for non-profit organizations from either the FLSA or the Department’s overtime regulations governing white collar workers?
  3. Is there an exemption for schools and institutions of higher education from either the FLSA or the Department’s overtime regulations governing white collar workers?
  4. Who is entitled to the minimum wage and overtime pay under the FLSA?
  5. How is overtime pay determined?
  6. What is the interaction between overtime and compensatory time?
  7. What are the white collar exemptions to the FLSA?
  8. I’m paid a salary. Am I exempt from overtime pay?
  9. My job title is manager. Am I exempt from overtime pay?
  10. Must employees earning below the new level be converted to hourly pay?
  11. Will newly overtime-eligible employees have to record their hours on a daily basis or “punch a time clock”?
  12. Does the FLSA allow for a flexible schedule for overtime eligible employees? Can employers still allow employees to work from home or have flexible schedules?
  13. Doesn’t having to punch a clock restrict the ability of an employee to work flexibly?
  14. Won’t this rule be difficult for employers because they will have to track workers’ hours?
  15. What if a State has its own overtime laws?
  16. How many white collar workers will become overtime-eligible as a result of this Final Rule?
  17. How does the Final Rule help workers who already are entitled to overtime – and their employers?
  18. Where can I review comments submitted in response to the Department’s Notice of Proposed Rulemaking (NPRM)?

SALARY LEVEL

  1. What are the new salary and compensation levels under this Final Rule?
  2. Why does the 2004 standard salary level need to be increased?
  3. How did the Department determine the new standard salary level?
  4. Why is the Department setting the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers in the lowest wage Census Region and not on national data as proposed?
  5. Why didn’t the Department set the salary threshold at a lower amount?
  6. How did the Department determine which Census Region is the lowest wage Census Region?
  7. How did the Department determine the new total annual compensation requirement for highly compensated employees (HCEs)?

NONDISCRETIONARY BONUSES AND INCENTIVE PAYMENTS

  1. May employers use bonuses to satisfy part of the new standard salary level test?
  2. What’s the difference between a discretionary bonus and a nondiscretionary bonus?
  3. May employers make a catch-up payment in the event that an employee doesn’t receive enough in nondiscretionary bonuses and incentive payments (including commissions) in a given quarter to remain exempt?
  4. Does the Final Rule change how employers may use bonuses to satisfy the salary level for highly compensated employees (HCEs)?

AUTOMATIC UPDATING

  1. Why is the Department changing the regulations to automatically update the salary level and HCE total annual compensation level?
  2. How often will the Department update the standard salary level and HCE total annual compensation requirements?
  3. How will the Department automatically update the standard salary level and HCE total annual compensation requirement?

ECONOMICS

  1. What are the costs and benefits of the Final Rule?
  2. How many employees does the Department estimate will be impacted by the salary level increases?
  3. How can I find information on the economic impacts of the Final Rule on a specific industry?
  4. Where can I find the earnings information the Department used in setting the salary and total annual compensation levels?

Do you have questions about Overtime? For you? For your employees?

Please reach out to me without hesitation with any tax,

business or accounting question,

and to schedule a consultation.

Tax Laws are complex.

It is very easy to make mistakes that can incur penalties.

Do you have a Tax, Accounting or Business Question?

Is your CPA or Attorney ignoring you?

Call Me Immediately.

(732) 673-0510.

Remember,

“If We Aren’t Working For You, Then You Aren’t Working At Your Best”

Chris Whalen, CPA
(732) 673-0510
79 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com

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