• Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);
• Be paid at least a specified weekly salary level; and
• Primarily perform executive, administrative or professional duties, as provided in the DOL’s regulations (the “duties test”).

Highly compensated employees (HCEs) performing office or non-manual work and paid total annual compensation of a specified amount are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.

How does this impact you? Employers must review all employees paid on a salary basis to ensure they meet the salary requirements if they use the EAP salary exemption. If an employee does not meet the salary requirements, the employer can change the employee’s compensation to hourly or increase the salary to meet the salary requirements. Review the job duties tests referenced in the DOL Fact Sheet to determine whether or not an employee can be compensated hourly. (ADP, 6/14/2024)

ADP FLSA & Overtime Rule Guide. Updated 6/14/2024. https://sbshrs.adpinfo.com/flsa

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The Employee Retention Credit offered is a tax credit provided to employers who had employees and were impacted by COVID-19.  Many employers are eligible for credit in one or several quarters.  This program hugely benefits several employers, especially small ones who suffered losses from the COVID-19 pandemic.

However, the IRS was behind in processing before firms began aggressively marketing offerings that they could help employers get this credit.  Let’s face facts – although COVID-19 shutdowns affected many businesses, they didn’t reduce revenue for every business.  Point in case – many companies that supported the need for people to shelter in place grew in 2020 and 2021.

As a result of the increased marketing to apply for the credits, many companies are receiving funds for while they did not qualify – and being required to return those funds.  For example, if an employer received a PPP loan during a specific quarter, they would not be eligible to use those wages for the ERTC for the same quarter.  The IRS offers detailed information on its website about this credit.

To complicate matters, when the employer is part of a PEO, it must submit the ERTC through the PEO’s consolidated tax filing.  As a result of some mechanical issues at the IRS, PEOs are required to submit amended 941s (941x) on paper by mail.  Yes, in 2023, the paper forms are being mailed to a post office box in Kansas City, MO, to be reviewed and processed accordingly.  Additionally, the IRS has had to staff up to address the growing demand for administrative processing.  As a result, many employees at the IRS are new hires.  Once the amended return is processed, the employer’s credit is given to the primary tax account of the PEO.

According to COO and CFO Jorge Solis of Idilus, “We have to track the process of all the 941x amendments manually, the date they were sent, received by the IRS, and when they have been forwarded for processing.”  Solis estimates it will take 2-3 weeks to receive notice that the IRS has received an amended return.  It has been, on average, taking 8 to 9 months to receive the credits from the IRS.

Effective Sept. 14, 2023, the IRS placed a hold on issuing ERT credits until 2024 due to credit abuse fraud from the pandemic relief program. For the IRS to strengthen claims processing, additional documentation may be required.

The IRS noted that hundreds of criminal fraud cases are being investigated, and thousands of claims are being audited.

On a more positive note, the IRS appears committed to correcting the situations of fraud and abuse that have plagued both this program and the PPP loan program to make sure the businesses legitimately in need of these funds receive them.

The post Where’s my ERC? appeared first on Idilus.

What does that mean for you?

At Idilus, we can help you handle all of your payroll and payroll compliance needs. We can ensure that your people are paid the correct amount, on time, and that all your taxes and legal fees have been accurately filed and accounted for.

We can help you stay up to date with changing labor laws.

In the last five years, three out of five small businesses have been faced with lawsuits regarding the treatment of their employees. Furthermore since 2000, the number of labor laws and regulations have grown by 67%. Your company is responsible for keeping up with every single one of these changes. Don’t put your company at risk. Let us worry about changing laws and regulations so that you don’t have to.

We can make sure you keep track of overtime, holiday pay, sick days, and away leave.

Your employees have a certain number of days allotted to them for things like major illness and vacation. If you deal with hourly employees, you have to consider their overtime pay, holiday pay, and everything in between. When you sit down to process payroll, all of these considerations can be a real headache to take care of, especially if you have close to 100 employees. This is where we come in. We can help ensure that every hour, sick day, and comp day is accounted for so that you don’t lose money on labor.

We can offer direct deposit and employee paychecks.

No matter how many employees you have, handwriting their paychecks isn’t a quick and easy task. We can simplify your payroll processes by offering direct deposit and paycheck processing. This ensures that your employees get paid on time with little to no hassle for you.

We can integrated benefits easily.

Since we offer customizable benefits packages for your employees,, we can handle all of your employees compensation methods at once. We provide your employees with a simple statement each month outlining what they’re paying for healthcare, their remaining time off, and more. Don’t attempt to handle details like HSAs and 401Ks on your own. Let us take care of every aspect of your employee’s compensation.

We give you unlimited access to HR professionals.

At Idilus, we pride ourselves on having an experienced staff of human resources professionals at your disposal. No matter what your staffing issue, we can ensure that you are handling your people with sensitivity, timeliness, and legality. This can greatly help mitigate current and future risk for your company.

No matter what your human resource needs, Idilus has been setting industry standards as a PEO for over twenty years. Not only do we know that your business is unique, we understand that top of the line service is important to you. Let our people take care of your people.

The post How Payroll Compliance Can Effect Your Business appeared first on Idilus.

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