Tuesday, October 4, 2016

Changes to Overtime Pay Regulations

Elaina Smiley
On Wednesday, May 18, the U.S. Department of Labor (DOL) announced new changes to the Fair Labor Standards Act (FLSA) regulations that will likely make approximately 4.2 million workers eligible for overtime pay.

As a reminder to clients, the changes will go into effect on December 1st of this year.

Under the FLSA, employers must pay workers time-and-a-half for hours worked in excess of 40 hours in a work week. The FLSA includes some exemptions to the overtime rules, intended to exclude certain "white-collar" workers from the overtime requirements. Companies do not have to pay an employee overtime wages as long as the worker passes both the salary test and the duties test to meet the FLSA exemptions from overtime pay.

Here are the five most important things to know about the changes:

1. New salary threshold is $47,476
Under the current standard, which has been in place since 2004, workers are exempt from the overtime pay requirement if they are paid a minimum salary of $455 per week or $23,660 per year and their job duties fit the FLSA's definitions of executive, administrative and professional categories. The new regulations, effective December 1, more than double the salary threshold to $913 per week or $47,476 per year.

2. Up to 10 percent of the salary threshold may be bonuses or commissions
For some employees, their weekly pay may fall below the $913 threshold, but non-discretionary bonuses, incentive pay or commissions may put their total pay over the annual minimum. Under the new rules, such an employee qualifies as exempt from overtime pay as long as the employee makes at least 90 percent of the threshold amount in salary and the remaining 10 percent is paid in non-discretionary bonuses, incentive pay or commissions distributed at least on a quarterly basis.

3. No changes to the "duties test"
Even if a worker is paid more than the minimum salary, the worker is still entitled to overtime wages unless their work passes the "duties test." To meet the duties test, the worker's job responsibilities must meet all of the FLSA's criteria established under the various exemption categories. Initially, the DOL considered changing the duties test to further restrict the types of jobs that are exempt from overtime pay, but ultimately decided against making any changes.

4. New minimum salary to qualify as a "highly compensated employee" is $134,004
The FLSA exempts "highly-compensated" workers from overtime pay as long as they regularly perform at least one job duty from the executive, administrative or professional exemption category and are paid a high salary. Previously, the DOL defined the salary of a highly compensated employee as $100,000 per year, but the new regulations raise it to $134,004.

5. The DOL will update the rules every three years
The DOL will update the minimum salary levels every three years, with the next update scheduled to take effect January 1, 2020. The DOL will calculate the new minimum salary threshold based on the pay of full-time workers in the 40th percentile in the lowest-wage census region. For highly-compensated workers, the DOL will calculate the threshold based on the wages of workers in the 90th percentile of full-time salaried workers nationwide. By 2020, the DOL expects the minimum salary level to rise to $51,168, and the salary for highly compensated workers will be roughly $147,524. The DOL will announce the new salary levels on August 1, 2019.

Employers should carefully review their current exempt employees' compensation structure to determine which workers may be eligible for overtime wages under the new regulations.  Although the changes don't take effect until December 1, companies should monitor those employees' work hours now to determine the most cost-effective way to comply with the new rules. In some cases, it may be easier to simply raise the workers' salaries to the threshold, assuming their job functions meet the FLSA duties test.  In other cases, employers may want to convert the employee to an hourly rate and pay overtime for hours worked in excess of forty hours per week and implement rules to limit excessive overtime.

Wednesday, September 28, 2016

Ready, Start, Go Global!

MUS Attorney Jason Yarbrough will be presenting at Duquesne University’s Small Business Development Center’s Export Basics seminar scheduled for Wednesday, October 5th at 8:30 a.m.

Topics covered will include:

  • Recognizing and Identifying Export Opportunities
  • Shipping and Payment
  • Legal and Regulatory Aspects of Exporting
  • Sources of Information and Assistance
  • Cultural Issues

For more information, and to register online, please visit SBDC Events.

Friday, September 23, 2016

Department of Revenue 2017 Tax Amnesty Program Guidelines

Kevin F. Israel
The 2016-17 Pennsylvania budget legislation includes provisions for an amnesty program for certain delinquent Pennsylvania taxes.

The program allows a taxpayer with unpaid delinquent taxes to pay all of the back taxes plus one-half of the interest that would otherwise be due. The other half of the interest and all penalties are waived.

The Pennsylvania Department of Revenue recently announced details on the amnesty. The Pennsylvania Tax Amnesty Program (the "Amnesty Program") begins April 21, 2017, and ends on June 19, 2017 (the "Amnesty Period").  The most recent prior amnesty program was in 2010. Generally, all taxes administered by the Department of Revenue are eligible for the Amnesty Program. Below is a brief overview of the Amnesty Program:

  • Eligible for Amnesty - Individuals, businesses, and other entities with Pennsylvania tax delinquencies as of December 31, 2015, are generally eligible to participate in the Amnesty Program.
  • Notification of the Amnesty Program - A written notice will be sent for each tax delinquent, where there is a valid address on the Department's records. This notice will contain information to participate in the Amnesty Program. Taxpayers with delinquencies for multiple tax types may receive more than one notification.
  • Participation Requirements - Participants in the program must complete the following:  File an online Amnesty Return; Make payment of all taxes and one-half interest due to the Commonwealth; File completed tax returns for all required periods for which the taxpayer previously has not filed a tax return; File completed amended returns for all required periods for which the taxpayer underreported tax liability; and File all returns for tax periods not eligible for the Amnesty Program.
  • Amnesty Return - The taxpayer must register and complete an online Amnesty Return. Along with the payment for all taxes reported on the Amnesty Return and one-half of the interest on those taxes, all missing and unfiled tax returns or reports must be filed no later than June 19, 2017.
  • Extension of Time for Filing Requirements - There is NO extension available for filing missing tax returns or reports eligible for the Amnesty Program.
  • Continued Compliance - The Department may re-impose all waived penalties and interest if the taxpayer does not remain in compliance with tax obligations following the conclusion of the Amnesty Program. In addition, all taxes and returns for periods after December 31, 2015 must be paid and filed prior to the Amnesty Period.
  • Future Amnesty Programs - Participants in the 2017 Amnesty Program will be prohibited from participating in any future amnesty program offered by the Commonwealth.
  • Non-participation Penalty - Once the Amnesty Period ends on June 19, 2017, a 5% non-participation penalty will be assessed on all eligible taxes, penalties and interest that remain unpaid after the Amnesty Period ends.

Key Takeaways: 

  • Taxpayers with known delinquencies should begin the process of preparing for the Amnesty Program by engaging tax counsel or tax return preparers. It may take significant time to prepare all of the unfiled tax returns that are due with the Amnesty Return and payment. Tax return preparers should be given adequate time to prepare past due returns because the Amnesty Period begins immediately after the end of the 2016 tax return preparation season.
  • Election to not participate in the Amnesty Program will expose those taxpayers with delinquencies to an additional 5% non-participation penalty, in addition to other penalties and interest.
  • The Amnesty Program is also available to taxpayers who are under existing Deferred Payment Plans with the Department of Revenue.
  • Taxpayers who are denied interest and penalty abatement under the Amnesty Program have certain appeal rights to the Pennsylvania Department of Revenue Board of Appeals.
Kevin F. Israel is a Partner in Meyer, Unkovic & Scott's Corporate Law, Tax, and Private Clients Groups. He can be reached at 412.456.2841 or kfi@muslaw.com.

Wednesday, September 21, 2016

Monday, September 12, 2016

ABA Intellectual Property Roundtable

Please join us for the next ABA Intellectual Property Roundtable scheduled for Thursday, September 29 from 12:00 – 1:00 p.m.  The program will be held in the offices of Meyer, Unkovic & Scott LLP. Lunch will be provided. The topic is Taming the Wild West of the Social Media Frontier with the Right of Publicity and Copyright Law.

Feel free to share this invite with others in your organization who may have an interest in this topic.

Please RSVP to:  rsvp@muslaw.com.

Thursday, September 1, 2016

Legal Basics Bootcamp

Date: September 22, 2016
Time: 5:00 - 8:00 p.m.
Location: Meyer, Unkovic & Scott
RSVP: Register online by September 15

Sponsored by The Center for Women’s Entrepreneurship at Chatham University

All the work that goes in to creating and building your company could be wasted if your business and assets are not properly protected. Understanding and implementing basic legal concepts is critical to protect the value of your investment.

Join attorneys, Beth Slagle, Michael Monyok and Josh Hoffman for a discussion of practical and effective steps to shield and strengthen your business.

Topics include:

  • Business formation and legal structure
  • Intellectual property, including trademark, copyright and patents
  • Contracts – from employment and independent contractors, indemnification, and insurance, to services and goods 

Thursday, August 25, 2016

Pennsylvania Building Code Update Webinar

Chad Michaelson is presenting a Pennsylvania Building Code Update Webinar on September 23 at 1:00 p.m. The event will help owners, designers, contractors and building code officials understand their obligations and navigate the confusing process of Pennsylvania building codes

Use this link to read more about the upcoming webinar and register with a 50% savings.