New DOL rules for businesses with employees earning $47,476 or less

If you don’t currently track the number of hours your salaried employees work, you may want to begin doing so now. That’s because salaried employees earning $47,476 or less will no longer be exempt from overtime pay. Regulations passed last month by the Department of Labor increased the salary threshold for overtime exemption from $23,600 (set in 1975) to $47,476 (or $913 a week). To ensure it doesn’t become outdated (an annual salary of $23,600 is actually below the poverty line in today’s society) the salary threshold will increase automatically every three years. To comply with the new rules, employers must collect accurate hourly data and have a clear audit trail for the hours their employees have worked. Salaried employees who are below the new threshold must be paid for any overtime hours worked. If you don’t follow the new regulations, your employees could report you and the DOL will audit your business. Consider these three options: First, you may want to raise salaries to the exemption threshold. Of course, if you raise an employee’s annual salary to $47,476, you’ll be automatically increasing your operating costs for just that one employee. If increasing salaries isn’t an option, you may want

June 6, 2016 6 Comments

Three best practices for remitting 401(k) contributions

By Maha Ahmed Qualified Plan Financial Consultant Sponsoring a business retirement plan like a 401(k) can be a smart way to save big on taxes, maximize retirement savings, and attract and retain qualified employees. As sponsors, employers have certain responsibilities under the plan; the most important is properly managing plan contributions. Failure to comply with Department of Labor (DOL) rules may mean the employer will have to pay additional interest and earnings to plan participants. Take last year’s DOL case against a Pennsylvania-based dentist. The dentist was fined for the misuse of plan funds that were intended for the business’s 401(k) plan. According to the DOL, the employer failed to deposit employee and employer contributions into the plan in a timely manner from 2009 through 2012. A district judge ordered the defendant to repay nearly $45,000, including lost interest and earnings, to plan participants. Employers can avoid this type of litigation by following these 3 simple rules: Segregate your retirement plan assets from company assets. Never look at elective deferrals as if they are the company’s money. Elective deferrals come directly from an employee’s paycheck and are amounts they specified to go into their retirement plan. This money should never

January 11, 2016 No Comments