Changes in FLSA expected in November:
In response to President Obama’s executive order declaring that the FLSA protections should cover more employees, the Dept of Labor has declared that they expect to announce the FLSA OT wage cap in November of 2014. The current wage cap is $455 per week meaning that any employee who is paid more than this cap can be determined to be exempt from OT wages as long as they meet other FLSA requirements. Experts have predicted that the new wage cap may come close to doubling.
The same Order declared that the minimum wage for all federal contract workers will increase to $10.10/hr. All federally contracted tipped employees are to be paid $4.90/hr with a tip credit of $5.20.
IRS Efforts to Recover Trust Fund Penalties Too Slow:
In a report to Congress, the Treasury Inspector General for Tax Administration noted in May of 2014 that IRS efforts to recover trust fund penalties were inadequate.
Income, Social Security and Medicare taxes, amounts that employers are required by law to withhold from employee income, are considered “trust fund” taxes. Employers are required to withhold and submit these taxes to the Treasury. Failure to do so can result in penalties equal to the amount of taxes owed. Employers owe an estimated $14.1 billion in delinquent employment taxes as of June 30, 2012.
While the Inspector General report noted that the IRS has taken steps to improve the collection process, more needs to be done. IRS officials agreed and are working on corrective actions.
FLSA enforcement Increases:
For the 7th consecutive year, the number of lawsuits filed in relation to the enforcement of the Fair Labor Standards Act has increased by at least 5%. Since 2009, the Dept. of Labor has recovered more than $1 billion in back wages on behalf of more than 1.2 million workers. These numbers correspond with the Obama administration’s initial pledge to pay more attention to the enforcement of wage and hour regulations. Since 2000, the number of FLSA lawsuits has increased over 430%.
As the Advi$or has always noted, the cost of compliance is always less than the cost of being caught for non-compliance. Feel free to contact us at any time if we can help you understand your payroll and labor obligations.
About Time & Pay:
Time & Pay is a professional payroll service provider located in Johnson City, TN. We service businesses of all sizes and types throughout the United States. Founded in 1992, Time & Pay provides businesses with complete payroll services , guaranteed payroll tax compliance, automated time and attendance systems and services, pay-as-you-go worker’s comp, human resource management systems and services, and more. We provide our customers with the cost effective tools you need to better manage your payroll, your employees and your business. Time & Pay’s services guarantee you will save money, time and aggravation and we back them up with the customer service you expect and deserve. Contact us today to learn why business owners throughout the country are saying:
“Time & Pay! Why would you do payroll and timekeeping any other way?”