Exempt vs. Non-Exempt Employee Classification

Exempt vs. Non-Exempt Employee Classification

Exempt vs. Non-Exempt Employee Classification

Most business owners find it difficult to distinguish between the exempt and non-exempt employees, and it also causes a great deal of confusion between employers and employees. Whether you are entitled to the overtime payment or not (usually means the extra time you work after the standard 40 hours for every week), depending on your exemption position according to the FLSA (Fair Labor Standards Act), remains the primary ambiguity in this regard. However, various other jobs don’t fall under these standards, like agricultural jobs, truck driving, and others, which are usually governed by other law organizations.

Majority of citizens in U.S come under the FLSA and you can either classify them as exempt or non-exempt, depending on the overtime pay regulations. As an amateur, you may not have a clear idea of what category of workers these are, but don’t ponder over it because that’s what we are here for today! We’ll give you a quick breakdown of what rules apply to which workers. So let’s dive right in.

Non-Exempt Employees

If you work as a non-exempt employee for more than the standard time per week, that’s 40 hours, then according to the FLSA policies, you are entitled to extra pay for the time and one-half of the standard hours of overtime work you spend. Concisely, if you are working on the hourly basis and get paid for the hours you work, apart from the standard hourly paid rate, then you are classified as a non-exempt employee. If you are a non-exempt employee, then you will not qualify for the numerous white collar job exemptions. Such employees usually include maintenance, technicians, construction, semi-skilled, blue collar, laborers, and clericals.

Exempt Employees

Such employees don’t get any protection and cover from the FLSA, and this means that they are not entitled to any overtime payments. According to the FLSA, airline and sales employees are exempt, and if you meet with three points, then you are in this category. These are the rules that apply:

  • If you are getting a payment of $23,600 for the year
  • If you get paid on the wage basis (doesn’t apply to people who work on “hourly basis,” like school teachers, and physicians)
  • If you perform duties on the job that are classified as exempt

To qualify for the exempt status, the nature of your job is also taken into account. Typically, the duties of exempt employees are high, and the FLSA splits them into three further categories:

Executive

Employees are exempt from the FLSA policies and rules if they perform duties such as:

  • Supervise more than one employee
  • Work as a manager
  • Having the power to hire, assign tasks, fire and so on.

In most cases, such people are usually considered in charge or the boss of the business or company.

Administrator

For people who have duties that support the business, like public relations, accounting, human resources and payroll staffs, then they fall under this category. Duties must also include:

  • Office work
  • Tasks related to the management or customers of the business
  • Independent discretion and judgment of significant business matters

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What Records to Keep in a Personnel File?

What Records to Keep in a Personnel File?

It can be difficult to know what employee records a small business should keep in a personnel file. Should it only hold onto the bare minimum and risk not having enough documentation to protect itself should it need to in the future, or should it keep everything and files become so thick that it is impossible to find anything efficiently? Ultimately, a practical compromise is necessary.

Below is a brief list of the essential documents a small business should keep in a personnel file. However, please remember that this list is a guideline, a template and that ultimately it is up to the specific needs of the small business to determine what stays and what goes.

 Employment Agreement Records

The most basic of personnel file documents that need retaining should center on the professional relationship between the employee and employer. These documents would include the employee’s application and resume, the description of the job as given to the employee, the offer of employment, and the signed receipt of the employee handbook.

 Legal Documents

The most important of the legal documents that need retaining should be the ones related to taxes. These would include W-4s and state withholding forms. Obviously, the tax forms required by your business may not be the same as other businesses, but the idea is to make sure that a copy of whatever tax forms is required always are kept in the employee’s file. Also, legal documents may include next of kin information, emergency contacts, and forms relating to employee benefits.

 Employee Performance Documents

An essential collection of documents is how the employee performs their job. Primarily, this documentation will provide the necessary empirical data to justify an employee’s review. A short list of such records would include awards, reprimands, notes on attendance, certificates of successful completion of training programs, and why and under what conditions the employee left. In essence, these documents should give a stranger an understanding of what this individual was like as an employee.

Unnecessary Documents

However, there are records that you should avoid including in an employee’s personnel file. These would include an I-9 as a government official who may need access to this record does not need to leaf through all the other personal information to find it, and medical records as a small business are legally required to keep this information confidential and available to only a select few.

How Do You File an Amended Tax Return?

How Do You File an Amended Tax Return?

It’s easy to make mistakes when you’re doing your own tax preparation. The IRS has a special procedure for fixing them.

That sense of accomplishment you feel after you’ve filed your income taxes can turn quickly to dread if you realize later that you made a mistake. What do you do now?

The IRS knows that this will happen to some taxpayers every year. The tax code is so complex, and if you prepare your taxes manually, you’ve probably been shuffling a lot of papers around.

So, first: Don’t panic. You can fix this. The IRS offers what’s called an amended return, the Form 1040X, for just this type of situation.

If you’ve made a mistake on your income tax return, you’ll be able to file a Form 1040X.

What IRS forms does the 1040X cover?

If your original tax return was filed using a Form 1040, 1040A 1040EZ, 1040NR, or 1040NR-EZ, you should file a Form 1040X to amend that return.

What if I realize I made a math error?

The IRS will make the necessary corrections, so you usually don’t need to file an amended return. However, you should submit one if there was an error related to your filing status, income, deductions, or credits.

I forgot to file my Schedule B. Should I file an amended return?

Usually, no. The IRS will request missing forms and schedules from you.

Can I file a Form 1040X electronically?

No. You must submit a paper return.

How much time do I have to file a Form 1040X?

You can usually file an amended return up to three years after the date of your original income tax return or within two years of actually paying the taxes – whichever date is later. Look at the above image of Form 1040X. You must indicate the year of the return you’re amending by checking a box or entering a year after This return is for the calendar year…

What if my amended return entitles me to an additional refund?

Don’t file a Form 1040X until you’ve received the first refund. Once that’s in hand, you can file the amended return and cash the check. Keep in mind that it can take up to 16 weeks for the IRS to process an amended return. It may not even appear in the system for three weeks after you’ve mailed it.

The IRS Form 1040X uses a three-column approach to help you illustrate where errors have occurred.

I realized that I owed more income tax than I sent, but it’s only March. Can I file a 1040X and include the additional funds?

Yes, as long as it’s received by the April due date for that specific year. You’ll avoid taxes and penalties.

Can I check on the progress of my amended return?

Yes. Go to this IRS page. You’ll need to supply your birthdate, Social Security number, and Zip code. You’ll be able to view the status of your return: received, adjusted (refund, balance due, or no changes), or completed.

Accuracy and Thoroughness Critical

The Form 1040X is not the most complicated of the standard IRS forms, but neither is it the simplest. It’s critical that you complete it absolutely correctly, so you don’t start having to amend your amended returns.

The completion of your Form 1040X can be delayed for a variety of reasons, including the presence of errors. It may take more than 16 weeks to process because it’s:

  • Incomplete.
  • Unsigned.
  • A victim of fraud or identity theft.
  • In need of additional information.

Avoiding Amended Returns

We can help you determine whether you need to file an amended return at all, and if so, how you should fill out the form.

If you don’t want to risk going through this whole thing again, talk to us about getting you started with year-round tax planning. It makes the whole tax preparation process (which we can handle for you, too) much easier and less stressful. We’ve worked hard with other individuals and small business to minimize their tax obligations, and we can do the same for you.

 

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Taking Your Company Paperless

Going paperless has been the way of the future in business over the past decade. People might have scoffed at the idea a few generations ago, but millennials and those who conduct business with them demand innovative solutions not only for the environment but also to cut down on the mundane drudgery of work place repetition.

And with the way things have been moving, people no longer feel like cogs in a wheel but rather integral team players with technological know how. So if your business has not moved completely digital yet, the following are just a few of the many reasons why you should be going paperless.

Boost in Efficiency

People don’t want to be doing the same task at work all day. With paper processes, the middle man is always the employee, who faithfully sits by the phone filling out papers for a client. Or the employee is busy digging in the company store room for files.

Logging onto the computer, whether for cloud accounting or client information, is leaps and bounds easier than putting people on hold or telling them that you will phone them back. You can be on the same page as the client in minutes rather than days by having their digital information at one’s fingertips on CRM. The same goes for talking between departments. It is much more efficient to send emails back and forth delineating the various degrees of urgency than to try to play telephone tag with employees in varied departments. Time is at a premium, so when a person can log on or fire off an email, time is saved from chasing down files and individuals that may not be easy to find.

Disaster Recovery

There’s no telling when a disaster might strike; maybe a flood, theft or a fire breakout could easily cripple your company. What will happen to the documents that are paper-based? Most probably, you will lose them because you don’t have a backup, or if you do have copies, wouldn’t they be likely stored in the same premises too? Going paperless can help avoid this problem. Once you store everything on the cloud, you will not have to worry about the data that you lost in the paper forms because they will all be available on the cloud and you can access them at any time.

Creative Solutions

Digital apps and programs like QuickBooks are often designed to integrate together. This is a virtual dream, literally, when it comes to helping the departments to coordinate. Without such products, people are stuck doing the same processes with paper over and over. The rewriting and photocopying of such pages can really only go so far.

To go digital, one needs to be savvy with employing people in the know-how. These teams can help to train others on processes as well as put them in place. But once paperless systems have been implemented, very few employers will regret the transition. It shows up on the bottom line quite apparently over the years as well.

Need help getting your company to paperless?  Contact STAC Bizness because we can help with establishing your company’s accounting, payroll, and human resource operations in a paperless world.  Join our newsletter for more free tips for running your business.

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2017 SEVA BEAUTY CONFERENCE

2017 SEVA BEAUTY CONFERENCE

As a small business consultant, I consider it part of my responsibility to stay abreast with the industries that I advise. This means learning the latest technology that our clients might need as well as the most recent issues that they are facing.

This year has been no different than other years. I attended the same training sessions and conferences necessary to keep me up-to-date with the constant changes in business laws and regulations; bookkeeping and payroll processes; new apps; QuickBooks updates; and accounting operations. As one can imagine, it is a constant curve of upward learning, but this knowledge is absolutely integral for all of our clients. It is important that we are on the same page when it comes to industry standards. They might not have time to keep up-to-date with the latest in their field, so this is where a small business consultant comes in.

My goal is to provide insightful advice which enables my clients to make informed financial decisions. That is why in addition to attending conferences for my profession, I also like to attend industry specific conferences. These conferences help me gain more particular insight into new products, skills, and potential issues our clients may be dealing with in their industry. There is nothing like understanding the industries in detail. A generalized approach would not give me the industry-specific know how to have personalized plans to help each of our clients with their business solutions.

This month I attended the 2017 Seva Beauty Conference. Talking with our clients face-to-face was amazing. I was able to speak with several salon owners and learn about what is working for them and what they are struggling with concerning growth. I enjoyed this rich qualitative data that I can now use as valuable lessons and share with my clients.

It was also nice to learn about the new products, services, and techniques. When our clients have questions for me regarding their operations, I will not have to waste time asking them to explain the basics of what certain processes are. Of course, each business is a unique entity, so I welcome dialogue with them that is not only clarifying, but also necessary to ensure that I understand exactly what a particular term means to their business.

I was glad to network with not only the franchise owners but also with the other franchise suppliers. Connecting with suppliers allows my firm to discuss potential partnerships to streamline processes for our clients further. This part of networking is essential as there is no use having another framework in place when customers cannot get their hands on products that are in demand in the salons.

The training sessions for this conference were particularly insightful and informative. Some of the sessions helped us gain further insight into the human resource issues with running a salon. We can then come up with some ideas for solutions that STAC Bizness Solutions can assist with going forward.

All in all, I had a particularly productive year of conferences and training. I look forward to passing this knowledge directly onto my clients through innovative solutions and technological advances.

Here are some of our pictures of the SEVA Beauty Conference.  A special “Thank You” to our current clients.

Want to hear more about what I learned?  Contact me today to discuss your personal salon or spa needs.

 

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