important issues for public sector payroll...may opt to pay overtime government employers may opt to...

09/11/17

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Important Issues for Public Sector

Payroll Presented by Ron Moser, CPP

Payroll/Employee Benefits Consultant – Taxing Matters

Member of the American Payroll Association Speakers Bureau

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COMPENSATORY TIME

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Basics

State and local government employers may provide nonexempt employees with compensatory time off as a substitute for paying overtime

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Compensatory time

09/11/17

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Basics

Granted to nonexempt employees working > 40 hours in a workweek

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Compensatory time

Basics

Granted in place of paying overtime

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Compensatory time

Basics

Conditions

• Provided at 1½ hours for each hour of overtime worked

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Compensatory time

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Basics

Conditions

• Employees represented under a collective bargaining agreement must have compensatory time as part of the agreement

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Compensatory time

Basics

Conditions

• Employees not represented under a collective bargaining agreement must have an understanding about compensatory time before the compensatory time is granted

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Compensatory time

Accural Limited

Public safety, emergency response, or seasonal activities

• May not accrue more than 480 hours

• 320 hours of overtime

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Compensatory time

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Accural Limited

All other employees

• May not accrue more than 240 hours

• 160 hours of overtime

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Compensatory time

Accural Limited

When performing public safety activities, emergency response activities, or seasonal activities must have more than occasional duties

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Compensatory time

Accural Limited

Office employees performing public safety activities or emergency response in emergencies will not be allowed the 480-hour limit

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Compensatory time

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Accural Limited

Seasonal activities

• Work periods of increased demand

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Compensatory time

Accural Limited

Seasonal activities

• That are regularly recurring

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Compensatory time

Accural Limited

Seasonal activities

• The projected overtime will cause the accumulated compensatory time

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Compensatory time

> 240 hours

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Accural Limited

Seasonal activities are not limited to those that are susceptible to weather

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Compensatory time

Accural Limited

• Seasonal activities = processing tax returns

• Short periods of intense activity are not seasonal

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Compensatory time

Using Comp Time

Request to use comp time must be granted within a “reasonable period of time” unless it is “unduly disruptive”

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Compensatory time

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Using Comp Time

When determining a reasonable period of time, consider the facts and circumstances of each case

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Compensatory time

Using Comp Time

Mere inconvenience is not basis for denying use

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Compensatory time

Using Comp Time

U.S. Supreme Court ruled

• Can compel use of comp time

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Compensatory time

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May Opt to Pay Overtime

Government employers may opt to pay overtime instead of granting comp time

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Compensatory time

Paid at Termination

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Compensatory time

Unused compensatory time must be paid at the employee’s termination

Paid at Termination

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Compensatory time

Rate at which unused compensatory time is paid must be not less than

• Average rate received during the last three years, or

• Final regular rate of pay received

09/11/17

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DOL Guidance

Use of compensatory time to pay nonexempt employees for hours worked between 37½ and 40 in a week

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Compensatory time

DOL Guidance

Non-overtime weeks

• If meeting minimum wage

• May provide 2½ hours comp time

• Is not required to provide comp time

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Compensatory time

DOL Guidance

Overtime weeks

• If meeting minimum wage

• Must be paid for all hours worked up to 40

• May be provided comp time for hours worked > 40

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Compensatory time

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Special Exemption

Exempt from 7 day work week

• If employed on work period basis

• Work periods are > 7 days but ≤ 28 days

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Fire Protection and Law Enforcement

Special Exemption

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Work periods are not required to coincide with duty cycles or pay period

Special Exemption

No requirements when the work period must start

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Special Exemption

A defined work period remains fixed

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Special Exemption

A work period may be changed

• Changing work periods must not be intended to evade overtime

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Special Exemption

Separate work periods may be defined for groups or specific employees

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Special Exemption

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Work Periods (days)

Fire Protection Maximum Hours

Law Enforcement

Maximum Hours

16 121 98

17 129 10418 136 110

Special Exemption

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Employees working > maximum hours for work period, FLSA overtime rules apply

OCCASIONAL -SPORADIC AND

SUBTITUTE EMPLOYMENT

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Occasional/Sporadic Employment

• Work for the same government organization in a different capacity

• Defined as occasional or sporadic

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Compensable Activities


• Hours from both positions are not combined

• When deciding if the hours worked exceed 40 in the workweek

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Work assignments must not be in the same general occupational category as the employee’s regular work

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Decision to partake in the assignments must be made freely and without coercion

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Substitution

• Two individuals employed in the same occupation by the same government

• May agree to substitute for one another

• With the approval of the organization

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Substitution

When substitution occurs, the hours worked substituting for another employee are excluded from the overtime

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Substitution

• Each employee must be free to decline to substitute

• Government organization is not required to keep records of the substitute hours

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VOLUNTEER EMPLOYMENT

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Volunteer Activities School District Employees

Wage and Hour Opinion Letter

• Individuals are volunteerswhen they

• Perform services for civic, charitable, or humanitarian reasons without promise, expectation, or receipt of compensation for the services rendered

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• Individuals are volunteers when they

• Can either receive no compensation or be paid expenses or a nominal fee

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• Individuals are volunteers when they

• Offer their services freely

• Are not employed by the same public agency to perform the same services for which they volunteer

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Whether the services are the same services they are employed to perform depends upon the facts and circumstances

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Use the Dictionary of Occupational Titles – online.onetcenter.org

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CLOTHING UNIFORMS DONNING/DOFFING

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Time Spent Changing Clothes

Changing clothes is worktime if changing clothes is integral and indispensable

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Time spent donning basic “nonunique” protective gear is not compensable

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Police officers changing in and out of uniforms

• Courts are split

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?

Donning/Doffing ≠ Compensable

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• Police officers in uniform at start of shift

• Home or Police Station?

• City sued

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Court ruled

• Donning/doffing time not compensable!

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Excluded from income

Are they taxable?Uniforms

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Excluded from income Must be worn as a condition of your

employment

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Uniforms

Are they taxable?

Excluded from income They are not suitable for

everyday wear

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Uniforms

Are they taxable?

It is not enough that the clothing be distinctive

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Uniforms

Are they taxable?

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The clothing must not be suitable for regular clothing

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Uniforms

Are they taxable?

Workers that may have the cost and upkeep of work clothes excluded from income

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Uniforms

Are they taxable?


Delivery workers

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Uniforms

Are they taxable?

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Firefighters

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Uniforms

Are they taxable?


Health care workers

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Uniforms

Are they taxable?


Law enforcement officers

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Uniforms

Are they taxable?

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Letter carriers

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Uniforms

Are they taxable?

Painter’s clothing that is not distinctive

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Uniforms

Are they taxable?

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Uniforms


White capPainter’s clothing that is not distinctive

Are they taxable?

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Blue shirt

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Uniforms

Are they taxable?


White jacket

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Uniforms

Are they taxable?


White bib overalls

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Uniforms

Are they taxable?

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Standard work shoes

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Uniforms

Are they taxable?

Protective clothing can be excluded from income

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Uniforms

Are they taxable?

Protective clothing

Safety shoes or boots

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Uniforms

Are they taxable?

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Protective clothing

Safety glasses

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Uniforms

Are they taxable?

Protective clothing

Hard hats

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Uniforms

Are they taxable?

Protective clothing

Work gloves

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Uniforms

Are they taxable?

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Workers who may be required to wear safety items

Carpenters

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Uniforms

Are they taxable?


Electricians

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Uniforms

Are they taxable?


Machinists

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Uniforms

Are they taxable?

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Truck drivers

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Uniforms

Are they taxable?

Working condition fringe benefits

Issued to police officers & firefighters

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Uniforms

IRS Rules!


Suitable for ordinary wear

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Uniforms

IRS Rules!

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Employer restrictions on off-duty wear

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Uniforms

IRS Rules!


With department insignia

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Uniforms

IRS Rules!


Restricting off-duty wear

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Uniforms

IRS Rules!

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Not suitable for ordinary wear

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Uniforms

IRS Rules!

Procedural change

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Uniforms

IRS Rules!

Uniform Allowances

Advance

90

Uniforms

Are they taxable?

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Uniform Allowances

Reimbursement

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Uniforms

Are they taxable?

Uniform Allowances

Amount paid is not wages

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Uniforms

Are they taxable?

Uniform Allowances

Amount paid is not wages • Condition of employment

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Uniforms

Are they taxable?

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Uniform Allowances

Amount paid is not wages o Cannot be worn as street clothes

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Uniforms

Are they taxable?

Uniform Allowances

Amount paid is not wages o Employee must return any excess amounts

advanced

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Uniforms

Are they taxable?

VEHICLE USE?

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Business-related purposes = No income

Income?Vehicles

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All other use = Income

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Vehicles

Income?

Exceptions

De minimis fringe benefit

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Vehicles

Income?

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Exceptions

Qualified nonpersonal use vehicle

100

Vehicles

Income?

Clearly marked police vehicles

What are qualified nonpersonal use vehicles?

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Vehicles

Clearly marked fire vehicles

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Vehicles


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Ambulances

103

Vehicles


Vehicle designed to carry cargo with a loaded gross vehicle weight over 14,000 pounds

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Vehicles


Bucket trucks (“cherry pickers”)

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Vehicles


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Delivery trucks with seating only for the driver

106

Vehicles


Dump trucks

107

Vehicles


Passenger buses

108

Vehicles


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Qualified specialized utility repair trucks

109

Vehicles


School buses

110

Vehicles


Unmarked vehicles used by law enforcement officers

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Vehicles


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Unmarked vehicles used by law enforcement officers Substantiation requirements do not apply to officially authorized

uses

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Vehicles


Unmarked vehicles used by law enforcement officers Law enforcement officer’s definition

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Vehicles


Employee must account to the employer for the business use

Accounting for vehicle use

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Vehicles

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Substantiating the usage

115

Vehicles


Substantiating the usage Mileage

116

Vehicles


Substantiating the usage Time and place of the travel

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Vehicles


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Substantiating the usage Business purpose of the travel

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Vehicles


Option Treat all employee use as personal use

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Vehicles


Maintain adequate records

Recordkeeping

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Vehicles

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Employee should log the business use of the vehicle for each trip

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Vehicles

Recordkeeping

If the employee’s business or personal mileage is the same for each period during a year

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Vehicles

Recordkeeping

If the employee’s business or personal mileage is the same for each period during a year Adequate records kept during one period can be

used to project totals

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Vehicles

Recordkeeping

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Avoid substantiation requirements

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Vehicles

Recordkeeping

Avoid substantiation requirements Enforcing a written policy against

personal use of vehicles

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Vehicles

Recordkeeping

Avoid substantiation requirements Considering all employee use of the vehicles as personal use

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Vehicles

Recordkeeping

09/11/17

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•THANK YOU FOR

ATTENDING!!!!!

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important issues for public sector payroll...may opt to pay overtime government employers may opt to...

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