Should you pay your employee overtime? What is the difference between an exempt and nonexempt employee?

Figuring out whether or not it’s necessary to pay an employee overtime can be a confusing task. The main deciding factor of whether or not you should pay overtime is the status of the employee. The Fair Labor Standards Act (FLSA) requires that employers classify jobs as either exempt or nonexempt. Nonexempt employees are covered by FLSA rules and regulations, and exempt employees are not. Generally speaking, nonexempt employees receive more protection under federal law than exempt employees, but most employers treat their exempt and nonexempt employees in a similar manner. The primary pieces of federal legislation that apply to the workplace are the right to a safe and healthful work environment, the right to equal employment opportunities, and the rights provided under the Family and Medical Leave Act and federal child labor laws. These laws apply to exempt and nonexempt workers alike.

Exempt positions are excluded from minimum wage, overtime regulations and other rights and protections afforded nonexempt workers. Employers must pay a salary rather than an hourly wage for a position in order for it to be exempt. Generally, only executive, supervisory, professional or outside sales positions are exempt.

Nonexempt employees are not exempt from the FLSA requirements. Employees who fall within this category must be paid at least the federal minimum wage for each hour worked and given overtime pay of not less than one-and-a-half times their hourly rate for any hours worked beyond 40 hours each week. For further information about exempt and nonexempt employees, visit the Department of Labor’s website. If you have any questions about paying your employees overtime, please contact us and we will be happy to assist you.

Important Notice: Davidson County Sales Tax Increase

The sales and use tax rate in Davidson County, North Carolina, will be increasing from 6.75% to 7.00%. This change takes place on October 1, 2014. Any retailers or facilitators required to collect local and transit sales and use tax in more than one county must complete Form E-536 (Schedule of County Sales and Use Taxes) and submit it along with their sales and use tax return.

For more information on the administration of the sales and use tax rate increase for Davidson County relating to leases, rents, construction contracts, layaway sales, gross receipts, taxable service contracts, etc., visit the North Carolina Department of Revenue website.

If you have any questions about this sales tax rate increase, please contact us.

Is Your Business Moving?

Whether you’re moving your business down the block or to a new city, there are things that need to be considered before the move:

1.      Space: Make sure that the space you are moving into is large enough for growth for your company, but not so large that you are struggling to pay the rent and utilities. Consider the layout of the building, and confirm that all furniture and offices will be laid out according to your vision before you begin the moving process.

2.      HVAC Requirements: Consider the HVAC requirements for any equipment your company uses, and address this with your architect or space planner before the move to eliminate last minute scrambling or expensive fixes.

3.      Marketing: When your business moves to a new location, you will need to replace any and all marketing materials, such as business cards, flyers, letterhead, pens, etc. You will also need to change the business address on your company website, Google, Yelp, Yellow Pages, Facebook, and anywhere else you have a business listing. You might also want to consider budgeting expenses for advertising your move. If you have a business that clients visit often, you will want to ensure that they are aware of the move and have the new business address.

4.      Address Change: When your business changes its address, all of your marketing materials will need to be replaced. But you also will need to change your address with the post office, the Internal Revenue Service, your state’s Secretary of State, your state’s Department of Revenue, and your city and county for licenses and permits.

5.      Cost of Moving: Calculate the cost of the move beforehand to confirm that your business can afford it. Consider the cost and time spent renting a moving truck, packing, unloading, and setting up the new office. Also, you need to consider the costs of marketing updates and address changes, as mentioned above.

IRS Says that Idle ITINS Expire After 5 Years

The Internal Revenue Service has announced that Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years. The IRS noted that it will not begin deactivating ITINs until 2016. This new policy applies to any ITIN, regardless of when it was first issued. This will ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so, while at the same time resulting in the likely eventual expiration of millions of unused ITINs. Only about 25% of the 21 million ITINs issued since the program began in 1996 are being used on tax returns.

This new policy replaces the previous policy in which ITINs would have automatically expired after 5 years, even if used properly and regularly by taxpayers. Under the new policy:

·         An ITIN will expire for any taxpayer who fails to file a federal income tax return for 5 consecutive years.

·         Any ITIN will remain in effect as long as a taxpayer continues to file U.S. tax returns.

·         The IRS will not begin deactivation of unused ITINs until 2016.

·         A taxpayer whose ITIN has been deactivated and needs to file a U.S. tax return can reapply using Form W-7.

For more information, contact us or visit www.IRS.gov.

Business Owners Becoming Increasingly Reliant on Mobile Technologies

Businesses of all sizes are becoming increasingly reliant on mobile technologies for many aspects of operations. Management, sales, client services and other departments all rely on mobile technology to operate smoothly and efficiently. Mobile technology has had many positive effects on businesses, such as the ability to perform business in the event of inclement weather, the increase in work and business to the company, and the ability to conduct meetings remotely. The 2014 Sage SMB Survey on Mobile Devices polled 1,090 small and midsized businesses (SMBs) in the United States regarding mobile technologies, and noted many positive effects that mobile technology brings to businesses. The biggest positive effect that respondents noted was the ability to provide superb customer service. Mobile technology empowers customer service by increasing productivity and by simply making business transactions easier. The survey also found that 51% of employees use a mobile device to access work-related information remotely and that two out of five respondents who used mobile applications used a work-related application on their mobile device (other than a laptop) that connects to the cloud. An article with more information about the Sage SMB Survey is linked here.

Could An Employee's Tweet Land Employers in Court?

“Employee Advocacy” is the practice of encouraging and enabling employees to serve as brand advocates for their organizations through posting and sharing social media on their company’s behalf. This practice is continually growing as companies strive to remain prevalent on social media websites. Practicing employee advocacy allows your company’s image to be personal and relevant, but it is important to be aware of what employees are posting, as the companies are ultimately responsible for the content. Recently, Duane Reed had been brought to court by charges stemming from content that an employee posted on the company’s Twitter account. Many other companies have also dealt with unapproved content being distributed by employees on the companies’ social media accounts. In order for employee advocacy to work for your company, and not land you in court or an embarrassing situation, provide clear training and guidelines for participation. Well-managed programs for social media amplification can increase your company’s reach, reputation, and even revenue when conducted properly.

Could You Inherit Deceased Parent’s Debts?

The death of a parent is a stressful experience made even worse by discovering that they passed away with large debts. Unless you cosigned one of your parent’s loans or accounts, it is usually the estate, not you that has to pay down the debts left behind. Usually, but not always, as the rules are complex and differ depending on the type of debt accumulated and where your parent lived. Creditors have a fixed period of time, commonly between two and six months, to make claims against your parent’s estate. If there are not enough funds in the estate to cover the debit, in many instances your parents debt will die as well. If there are funds or other assets available, they must be used to pay debts before anything is distributed to heirs. So although you may not be legally responsible to pay your parent’s debts, your inheritance could be reduced or wiped out to cover the payment of debts. CNN Money lists common debts that parents may leave behind and who is responsible for handling these.

·         Credit Card Debt: Unless you’re a cosigner on your parent’s credit card or the executor of the estate, you will not be held responsible to make credit card payments. Credit card companies are often low-priority creditors behind funeral homes, federal and state tax agencies and various lenders. If you are the executor of the account, credit card companies may be willing to negotiate lower payments.

·         Medical Debt: “If your parent received Medicaid, the insurance program for people who can't afford care, the state where your parent died can recover the payments it made from the time your parent was 55 until death. A house is the only substantial asset a person may keep and still qualify for Medicaid. So the state may place a lien on your parent's home to recover payments. Some states, however, may be willing to negotiate and let the executor pay less than the total due” (CNN Money).  States may not ask you to use your own funds to pay the bill, however, and they also are not allowed to pursue payments during the lifetime of the surviving spouse. If your parent was not on Medicaid but died with unpaid hospital or doctor bills, the estate is responsible for payment if funds are available. “But check state law. Close to 30 states have what's known as "filial responsibility" statutes. Those require adult children to pay for a deceased parent's unpaid medical debts, such as those to hospitals or nursing homes, when the estate cannot.”

·         Mortgage Debt: Generally, if you inherit your parent’s home and it still has a mortgage on it, the lender may not demand that you pay off the mortgage immediately, but you will be responsible for making payments on it going forward. If the mortgage is worth more than the property when you want to sell the home, ask the bank if it will agree to a short sale; if the bank will not agree, you can tell the bank to foreclose. Either way, you should not have to pay the bank the difference between the sales price and the money still owed on the loan. The foreclosure should not affect your credit score, so long as your name is not on the mortgage, but it all depends on how the mortgage company reports the transaction to the credit bureaus. You also have the option to disclaim your inheritance.

·         Taxes: The estate is responsible for paying any property and income taxes, delinquent or otherwise, and tax agencies are usually given top priority as creditors. If federal estate tax is due but property is distributed before it’s paid, the Internal Revenue Service may put a lien on the property and collect on it.

The article from CNN Money is linked here. If you have any questions about estate planning or managing, please contact us.