Governor Charlie Baker of Massachusetts signed into law An Act Relative to Housing, Operations, Military Service, and Enrichment (also known as “The HOME Act”) on July 14, 2016. One of the provisions of the HOME Act requires employers with 50 or more employees to provide paid leave to qualified veterans on Veterans Day each year to participate in Veterans Day activities. Continue reading
With the new minimum salary threshold for exempt employees taking place later this year (Read more about that here), employers should concentrate on making sure they are in compliance with the new rules and also confirm that their exempt employees are correctly classified. In addition, employers should make sure they fully understand how exempt employees should be paid.
To help employers with understanding payment of exempt employees, we’re debunking three common myths associated with exempt and salary employees.
Can Employees Be Paid Salary to Avoid Paying Overtime?
This is a common question employers have – and not understanding the rules regarding exempt and non-exempt status, established by the federal Fair Labor Standards Act (FLSA), can land employers in hot water if employees are misclassified.
With the impending changes to the minimum salary threshold for exempt employees (Read more about that here!), this is a great opportunity for employers to review all current exempt and salary employees to make sure they are properly classified.
On October 18, 2016 the Social Security Administration (SSA) announced that the maximum amount of wages subject to the Social Security payroll tax will increase in 2017 by $8,700 to $127,200. This adjustment, which takes place on January 1, 2017, is calculated by the SSA based on average wage increases.
Social Security payroll tax is collected with Medicare payroll tax as the Federal Insurance Contributions Act (FICA) tax. In a traditional employment relationship, FICA taxes are paid by both employers and employees. Employers and employees both pay 6.2% of taxable wage for the Social Security portion up to the annual maximum level and pay 1.45% of taxable wage for the Medicare portion. There is no limit on the Medicare portion, however under a provision of the Affordable Care Act, highly compensated employees are required to pay an additional 0.9% in Medicare tax for all wages over $200,000 per year. Employers are not required to pay this additional Medicare tax.