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Monthly Archives: May, 2016

  • Updated Salary and Compensation Levels Required for FLSA ‘White Collar’ Exemption

    Changes Effective December 1, 2016

    The U.S. Department of Labor (DOL) has released a final rule, effective December 1, 2016, to update the regulations governing which executive, administrative, and professional employees (referred to as “EAP” or “white collar” workers) are entitled to the federal Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay protections.

    Current Rules
    The FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executiveadministrative, and professional employees (among others). The current regulations implementing the exemption have generally required each of three tests to be met for the exemption to apply:

    1. The employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test“);
    2. The amount of salary paid must meet a minimum specified amount, the current level for which is not less than $455 per week, or $23,660 per year (the “salary level test“); and
    3. The employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (the “duties test“).

    “Highly-compensated employees” (HCEs) who are paid total annual compensation of $100,000 or more and meet certain other conditions are also deemed exempt.

    Note: Job titles never determine exempt status. Receiving a particular salary, alone, does not indicate that an employee is exempt. Rather, in order for a white collar exemption to apply, an employee’s specific job duties and earnings must meet all of the applicable requirements provided in the regulations.

    Key Changes
    comparison table of the current regulations, proposed rule, and final rule has been provided by the DOL. Among other things, the final rule:

    • Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region (rather than on national data as originally proposed), resulting in a salary level of $913 per week or $47,476 annually for a full-year worker;
    • Sets the HCE total annual compensation level equal to the 90th percentile of earnings of full-time salaried workers nationally, consistent with the DOL’s original proposal ($134,004 annually);
    • Establishes a mechanism for automatically updating the salary and compensation levels every 3 years, beginning on January 1, 2020 (rather than annual updates as originally proposed); and
    • Amends the regulations to allow employers to use nondiscretionary bonuses, incentives, and commissions to satisfy up to 10% of the new standard salary level, so long as employers pay those amounts on a quarterly or more frequent basis.

    The DOL is not making any changes to the current duties tests. For more information, please refer to the DOL’s website on the final rule, which offers employers comprehensive resources including fact sheets, Q&As, guidance for businesses, and more.

    Our section on the Fair Labor Standards Act features additional information on exemptions from the law’s minimum wage and overtime requirements.

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2016 HR 360, Inc. – All rights reserved

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  • Two New Employer Resources Now Available

    The U.S. Equal Employment Opportunity Commission (EEOC) has issued two new resources that address employer-provided leave under the Americans with Disabilities Act (ADA), and enforcement protections for LGBT workers under Title VII of the Civil Rights Act (Title VII). These federal nondiscrimination laws generally apply to employers with 15 or more employees.

    Employer-Provided Leave and the ADA 
    The new resource is intended to help educate employers and employees about workplace leave under the ADA to prevent discriminatory denials of leave from occurring. It responds to common questions employers and employees have raised about leave requests that concern an employee’s disability. Among other things, the resource addresses:

    • The interactive process;
    • Maximum leave policies;
    • “100% healed” policies;
    • Reassignment; and
    • Undue hardship issues (including the amount and/or length of leave required).

    Protections for LGBT Workers
    The EEOC interprets and enforces Title VII’s prohibition of sex discrimination as forbidding any employment discrimination based on gender identity or sexual orientation. According to the new resource, these protections apply regardless of any contrary state or local laws. The new guidance also contains topics such as:

    • Examples of LGBT-related sex discrimination claims;
    • Training and outreach;
    • Charge data;
    • A description of the applicable federal law; and
    • Links to various technical assistance publications on LGBT issues.

    Employers may review the resources on employer-provided leave under the ADA and Title VII protections for LGBT workers for additional information.

    Our section on Discrimination has more information regarding employer obligations under federal nondiscrimination laws.

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2016 HR 360, Inc. – All rights reserved

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  • 3 Things for Employers to Know About Vacation Leave

    With summer just around the corner, now is a great time to review existing vacation leave policies. Here are three things employers need to know about vacation leave:

    1. Vacation leave is not required under federal law. While vacation days are a common employer-provided benefit, federal law generally does not require either time off or pay for vacation. However, if an employer decides to offer vacation leave to its employees, the policy should be applied fairly and uniformly.
    2. State laws may apply to pay in lieu of earned vacation. In addition to allowing employees annual time off for vacation, employers also commonly provide pay in lieu of vacation time that employees have earned. A number of states require employers to pay employees for unused accrued vacation upon termination. Contact your state labor department for guidance on your state’s laws regarding vacation pay.
    3. Vacation policies should be in writing and communicated to employees. It is very important for employers to develop a clear, written policy regarding paid vacation leave and follow it exactly. Non-written leave policies can lead to inconsistency and complaints from confused employees, as well as claims of discrimination. At a minimum, the policy should include:
    • The categories of employees who are eligible to accrue and use paid vacation leave;
    • The amount of paid vacation leave provided each year and how leave is earned;
    • Whether paid vacation leave can be carried over from year to year; and
    • Whether employees will be paid for unused vacation leave upon termination of employment (in compliance with any state law requirements).

    Check out our section on Leave and Time Off to learn more about federal and state-mandated leave requirements, as well as common types of employer-provided voluntary time off.

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2016 HR 360, Inc. – All rights reserved

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  • Updated FMLA Poster Now Available

    The U.S. Department of Labor (DOL) has released an updated version of the “Employee Rights Under the Family and Medical Leave Act” poster (often referred to as the “General FMLA Notice”), along with a new guide to help employers comply with the law. Employers may use either the new April 2016 version of the poster or the prior February 2013 version of the poster to fulfill their FMLA posting requirements.

    Background
    The federal FMLA provies eligible employees of covered employers (including private sector employers who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year) with unpaid, job-protected leave for specified family and medical reasons. The law also includes certain family military leave entitlements. Employers are required to maintain group health insurance coverage for an employee on FMLA leave on the same terms as if the employee continued to work.poster1

    Updated FMLA Poster
    Every employer covered by the FMLA is required to display a poster prepared by the DOL which summarizes the major provisions of the law. The poster must be displayed in a conspicuous place where employees and applicants can see it, even if there are no employees eligible for FMLA leave. An April 2016 version of the required FMLA poster is now available for employers; however, the February 2013 version of the FMLA poster is still valid and can be used to fulfill the posting requirement.

    If a covered employer has any eligible employees, it must also provide the general notice to each employee by including it in employee handbooks or other written guidance concerning employee benefits or leave rights, if such written materials exist (otherwise, the employer may distribute a copy of the general notice to each new employee upon hire).

    New Employer’s Guide
    A new employer’s guide was also released, which is designed to provide information about employers’ obligations under the law and their options in administering FMLA leave. The guide contains resources such as charts, examples, and citations for further information.

    Our section on the Family and Medical Leave Act includes additional FMLA forms and notices for use by employers.

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2016 HR 360, Inc. – All rights reserved

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  • IRS Releases 2017 Health Savings Account Limits

    HSA Contribution Limits and Minimum Deductibles Announced for 2017 

    The Internal Revenue Service (IRS) has announced the 2017 inflation-adjusted amounts for Health Savings Accounts (HSAs) as determined under the Internal Revenue Code.

    Annual Contribution Limitation 
    For calendar year 2017, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,400 (up from $3,350 for 2016). The annual limitation on HSA deductions for an individual with family coverage under a high deductible health plan is $6,750 (unchanged from 2016).

    High Deductible Health Plan (Amounts Unchanged From 2016)
    For calendar year 2017, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.

    You may view the IRS Revenue Procedure announcing the 2017 amounts by clicking here.

    Be sure to check out our section on Health Savings Accounts for more on HSAs.

    HR News Alerts provided by:

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    2005 E 2700 St, Suite 140, Salt Lake City, UT, 84109
    385-234-6754

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2016 HR 360, Inc. – All rights reserved

    Read more