Daniel Cullinane CPA

2500 Plaza 5 25th fl  Jersey City NJ 07311                                                          phone 732-516-1648  fax 732-516-9778

                 MBA TAXATION                                                                                                         

Copyright ©​ Daniel Cullinane CPA.

Organizations across the country are responding to the Department of Labor's new overtime salary threshold by reclassifing Depart of Labor's new overtime salary threshold by reclassifying salary threshold of their white collar exempt employees into overtime eligible nonexempts.  Starting Dec 1, the new DOL rules are in effect that nearly double the salary threshold at which most salaried workers become exempt form having to be paid overtime. The overtime ceiling rose from $23,660 per year to $47,476. The DOL says that means more than 4 million additional white collar workers will qualify for overtime pay for the first time. So now is a great time to review your policies on when and how to pay hourly workers. It is not enough to set policies that ban employees from working unpaid overtime, you must ensure that managers enforce those polices. Here are seven FLSA mistakes to avoid


MISTAKE #1 NOT PAYING FOR ALL WORK TIME


When they were exempt, these employees probably worked all hours to get the job done. You appreciated that but now managers need to track and control employees' excess work hours  This may entail redistributing work or increasing staffing levels. It also means requiring employees to get manager approval to work overtime, then handing out discipline if they do not. Ask employees not to work off the clock. Recognize that employees prework or post work activities are compensable if those activities are principal activities that benefit the employer and not them.


MISTAKE #2 NOT PAYING EMPLOYEES WHO WORK THROUGH MEAL BREAKS


Employees do not need to be paid for meal breaks if they are at least 30 minutes long and people are completely relieved of work. Watch out : Some time keeping systems  automatically deduct time for meal breaks, whether or not employees are relieved during the time.


MISTAKE #3 NOT PAYING EMPLOYEES FOR WAITING TIME


Employees who wait around for work must be paid. 


MISTAKE #4 NOT PAYING EMPLOYEES FOR TRAVEL TIME


Employees commuting time is not compensable . This is true even if the employees go from home to the first job of the day and return home after the last job. Hourly employees travel to different job sites during the day is compensabe.


MISTAKE #5 MISCALCULATING OVERTIME PAY


EmployeEs earn overtime at 1.5 times their regular rates of pay. As a general rule, any payment that is measured by or based on employees' hours worked, production, or efficiency must be included in wages for purposes of determining the regular rate. 


MISTAKE#6 NOT PAYING TELECOMMUTERS FOR ALL HOURS WORKED.


Employees who work from home must be paid for every hour worked. Problem getting them to keep track of their hours. You may come to a reasonable  agreement with telecommuters regarding their work hours. 


MISTAKE #7 AVERAGING HOURS DURING DIFFERENT WEEKS IN A PAY PERIOD


Employees are paid based on a workweek, a continuous 168 hour period. Employees who work 60 hours during one week and 24 hours the second week of a two week pay period must be paid overtime for the 20 overtime hours worked during the first week. You can not average hours over those two weeks. 

















​NONEXEMPT PAY MISTAKES

Daniel Cullinane CPA

25 Plaza 5 25th fl Jersey City NJ                                          phone 732-516-1648 fax 732-516-9778

MBA Taxation