Vision Payroll

This week’s question comes from Felix, a payroll manager: I have an employee who worked 34 hours last week. Since we pay eight hours for Independence Day even though we don’t work, do I need to pay two hours of overtime? Answer: Nothing in the Fair Labor Standards Act (FLSA) requires payment for time not worked. If an employer voluntarily pays for time not worked such as holidays, those hours need not be counted toward the FLSA overtime requirement for hours worked in excess of 40. Note that other federal or state laws or contractual agreements may require payment of holiday hours. Also, if an employee actually works on a holiday, those hours would be counted toward the overtime requirement. Consult your attorney if you have further questions.

Wal-Mart Inc. was ordered to pay more than $6.5 million in compensatory damages to current and former employees who worked in Minnesota. In Nancy Braun, et al. v. Wal-Mart, Inc., et al., No. 19-CO-01-9790, Minn. Dist., Dakota Co., Wal-Mart was found to have committed over two million violations of state laws including failure to provide rest and meal breaks as required by law or contract, requiring off-the-clock work during training, and improper record keeping. Wal-Mart also faces additional punitive damages and statutory penalties in excess of $2 billion.

Did you know that you can import your payroll data directly into QuickBooks®, Peachtree®, or other accounting software? Save time and avoid data entry errors through our streamlined payroll import. We work with your accountant or bookkeeper to setup the import and then you login to our website to retrieve your encrypted download. A few mouse clicks later and your payroll has been imported, allowing you to move on to more important things. Not all product versions are capable of importing files, so call us today to get more details.

The IRS recently released Notice 2008-62 which states that teachers who receive pay over a 12-month period will generally not be subject to §409A. Technically, teachers who only work for 9 or 10 months but are paid over a 12-month schedule have deferred compensation under §409A since some pay is deferred from one calendar year to the next. Under proposed regulations to be issued under §457(f), teachers paid under such plans will be exempt from the §409A rules.

The US District Court for the Southern District of New York has upheld payroll tax penalties on a company owned by actor Joe Pesci even though the taxes were timely paid. The IRS assessed the penalties because the company did not pay the taxes electronically as required by law. In Fallu Productions, Inc. v. United States et al., No. 1:06-cv-13248 (USDC SD NY), the court ruled that the “increased efficiency of the EFTPS [Electronic Federal Tax Payment System] provides reasonable justification for requiring…the system.” Furthermore, “the imposition of FTD [federal tax deposit] penalties when taxes are not deposited electronically as required does not violate taxpayers’ due process rights.”

The standard mileage rates for the use of automobiles beginning July 1, 2008 will be 58.5 cents per mile for business miles driven and 27 cents per mile driven for medical or moving purposes, the Internal Revenue Service announced June 23 (IR-2008-82; Announcement 2008-63; Revenue Procedure 2007-70 is modified). The new rates are changed from 50.5 cents per mile for business travel and 19 cents per mile for moving and medical travel for the first half of 2008. The rate for miles driven in service of charitable organizations has remained the same at 14 cents per mile.