Department of Labor Rules Effective December 1 2016

Started by CarlT • 6 replies • 1355 views

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CarlT (Hawaii)
Posts: 3

Posted:

There are Department of Labor rules that impact my HOA and may also yours depending on how you pay your HOA manager and managers pay level. My HOA currently has manager as an exempt employee and salary is in mid $30K range.

He currently works as necessary and does not get overtime. New Department of Labor rules effective December 1 will require Manager to be considered an hourly employee since paid less than $47,476 and be paid time and a half if work more than 40 hours within a week. Thus, hours worked will have to be closely tracked.

Does your HOA have a salaried manager that is exempt but will have to become hourly under the new rules and how are you handling?

http://www.accountingweb.com/practice/clients/new-dol-overtime-rule-changes-8-key-questions

EdwardC1 (Florida)
Posts: 14

Posted:

Quote:

Posted By CarlT on 09/27/2016 2:45 AM
There are Department of Labor rules that impact my HOA and may also yours depending on how you pay your HOA manager and managers pay level. My HOA currently has manager as an exempt employee and salary is in mid $30K range.

He currently works as necessary and does not get overtime. New Department of Labor rules effective December 1 will require Manager to be considered an hourly employee since paid less than $47,476 and be paid time and a half if work more than 40 hours within a week. Thus, hours worked will have to be closely tracked.

Does your HOA have a salaried manager that is exempt but will have to become hourly under the new rules and how are you handling?

http://www.accountingweb.com/practice/clients/new-dol-overtime-rule-changes-8-key-questions

Your manager's pay type will not have to become "hourly" starting 1 DEC. "Salary" and "hourly" are merely types of pay schedule and do not determine whether or not an employee is exempt or non-exempt. Your manager can remain "salary" but for all hours over 40 worked in a defined work-week your manager will have to be paid 1.5x overtime (figured: salary/52/40=hourly rate x 1.5=OT rate).

CarlT (Hawaii)
Posts: 3

Posted:

A Federal judge has issued injunction November 22nd that currently puts on hold the December 1st law.

https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/judge-blocks-flsa-overtime-rule.aspx

TimB4 (Tennessee)
Posts: 21,059

Posted:

Carl,

It may be time to consider hiring the individual as an independent contractor vs. an employee.

MarkM31 (Washington)
Posts: 494

Posted:

Quote:

Posted By TimB4 on 11/23/2016 8:53 PM
Carl,

It may be time to consider hiring the individual as an independent contractor vs. an employee.

If they can stay within the behavior and control guidelines that the IRS has in place. A contractor will likely demand a higher price, as they will be responsible for their own WC and liability insurance and will have to also pickup both sides of the social security contribution.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Mark,

All of that is true. However, it can also be cheaper in the long run for the Association to consider independent contractors or a MC vs. employees.

MarkM31 (Washington)
Posts: 494

Posted:

Quote:

Posted By TimB4 on 11/27/2016 6:27 AM
Mark,

All of that is true. However, it can also be cheaper in the long run for the Association to consider independent contractors or a MC vs. employees.

I'm sure you're right. If done correctly there is less paperwork (only a 1099 is required) and less ancillary costs. It just must be done correctly to be legal and to indemnify the association. There also has to be a conscious effort to not treat the individual as an employee. Some states are even more rigid than the IRS
https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

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