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 1 COMPENSATORY TIME 2 Basics State and local government employers may provide nonexempt employees with compensatory time off as a substitute for paying overtime 3 1
Basics Granted to nonexempt employees working > 40 hours in a workweek 4 Basics Granted in place of paying overtime 5 Basics Conditions Provided at 1½ hours for each hour of overtime worked 6 2
Basics Conditions Employees represented under a collective bargaining agreement must have compensatory time as part of the agreement 7 Basics Conditions Employees not represented under a collective bargaining agreement must have an understanding about compensatory time before the compensatory time is granted 8 Accural Limited Public safety, emergency response, or seasonal activities May not accrue more than 480 hours 320 hours of overtime 9 3
Accural Limited All other employees May not accrue more than 240 hours 160 hours of overtime 10 Accural Limited When performing public safety activities, emergency response activities, or seasonal activities must have more than occasional duties 11 Accural Limited Office employees performing public safety activities or emergency response in emergencies will not be allowed the 480-hour limit 12 4
Accural Limited Seasonal activities Work periods of increased demand 13 Accural Limited Seasonal activities That are regularly recurring 14 Accural Limited Seasonal activities The projected overtime will cause the accumulated compensatory time > 240 hours 15 5
Accural Limited Seasonal activities are not limited to those that are susceptible to weather 16 Accural Limited Seasonal activities = processing tax returns Short periods of intense activity are not seasonal 17 Using Comp Time Request to use comp time must be granted within a reasonable period of time unless it is unduly disruptive 18 6
Using Comp Time When determining a reasonable period of time, consider the facts and circumstances of each case 19 Using Comp Time Mere inconvenience is not basis for denying use 20 Using Comp Time U.S. Supreme Court ruled Can compel use of comp time 21 7
May Opt to Pay Overtime Government employers may opt to pay overtime instead of granting comp time 22 Paid at Termination Unused compensatory time must be paid at the employee s termination 23 Paid at Termination 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 24 8
DOL Guidance Use of compensatory time to pay nonexempt employees for hours worked between 37½ and 40 in a week 25 DOL Guidance Non-overtime weeks If meeting minimum wage May provide 2½ hours comp time Is not required to provide comp time 26 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 27 9
Fire Protection and Law Enforcement Special Exemption Exempt from 7 day work week If employed on work period basis Work periods are > 7 days but 28 days 28 Fire Protection and Law Enforcement Special Exemption Work periods are not required to coincide with duty cycles or pay period 29 Fire Protection and Law Enforcement Special Exemption No requirements when the work period must start 30 10
Fire Protection and Law Enforcement Special Exemption A defined work period remains fixed 31 Fire Protection and Law Enforcement Special Exemption A work period may be changed Changing work periods must not be intended to evade overtime 32 Fire Protection and Law Enforcement Special Exemption Separate work periods may be defined for groups or specific employees 33 11
Fire Protection and Law Enforcement Special Exemption Work Periods (days) Fire Protection Maximum Hours Law Enforcement Maximum Hours 16 121 98 17 129 104 18 136 110 34 Fire Protection and Law Enforcement Special Exemption Employees working > maximum hours for work period, FLSA overtime rules apply 35 OCCASIONAL - SPORADIC AND SUBTITUTE EMPLOYMENT 36 12
Compensable Activities Occasional/Sporadic Employment Work for the same government organization in a different capacity Defined as occasional or sporadic 37 Compensable Activities Occasional/Sporadic Employment Hours from both positions are not combined When deciding if the hours worked exceed 40 in the workweek 38 Compensable Activities Occasional/Sporadic Employment Work assignments must not be in the same general occupational category as the employee s regular work 39 13
Compensable Activities Occasional/Sporadic Employment Decision to partake in the assignments must be made freely and without coercion 40 Compensable Activities 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 41 Compensable Activities Substitution When substitution occurs, the hours worked substituting for another employee are excluded from the overtime 42 14
Compensable Activities Substitution Each employee must be free to decline to substitute Government organization is not required to keep records of the substitute hours 43 VOLUNTEER EMPLOYMENT 44 Compensable Activities Volunteer Activities School District Employees Wage and Hour Opinion Letter Individuals are volunteers when they Perform services for civic, charitable, or humanitarian reasons without promise, expectation, or receipt of compensation for the services rendered 45 15
Compensable Activities Volunteer Activities School District Employees Wage and Hour Opinion Letter Individuals are volunteers when they Can either receive no compensation or be paid expenses or a nominal fee 46 Compensable Activities Volunteer Activities School District Employees Wage and Hour Opinion Letter 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 47 Compensable Activities Volunteer Activities School District Employees Whether the services are the same services they are employed to perform depends upon the facts and circumstances 48 16
Compensable Activities Volunteer Activities School District Employees Use the Dictionary of Occupational Titles online.onetcenter.org 49 CLOTHING UNIFORMS DONNING/DOFFING 50 Compensable Activities Time Spent Changing Clothes Changing clothes is worktime if changing clothes is integral and indispensable 51 17
Compensable Activities Time Spent Changing Clothes Time spent donning basic nonunique protective gear is not compensable 52 Compensable Activities Time Spent Changing Clothes Police officers changing in and out of uniforms Courts are split? 53 Compensable Activities Donning/Doffing Compensable 54 18
Compensable Activities Donning/Doffing Compensable Police officers in uniform at start of shift Home or Police Station? City sued 55 Compensable Activities Donning/Doffing Compensable Court ruled Donning/doffing time not compensable! 56 Excluded from income 57 19
Excluded from income Must be worn as a condition of your employment 58 Excluded from income They are not suitable for everyday wear 59 It is not enough that the clothing be distinctive 60 20
The clothing must not be suitable for regular clothing 61 Workers that may have the cost and upkeep of work clothes excluded from income 62 Workers that may have the cost and upkeep of work clothes excluded from income Delivery workers 63 21
Workers that may have the cost and upkeep of work clothes excluded from income Firefighters 64 Workers that may have the cost and upkeep of work clothes excluded from income Health care workers 65 Workers that may have the cost and upkeep of work clothes excluded from income Law enforcement officers 66 22
Workers that may have the cost and upkeep of work clothes excluded from income Letter carriers 67 Painter s clothing that is not distinctive 68 Painter s clothing that is not distinctive White cap 69 23
Painter s clothing that is not distinctive Blue shirt 70 Painter s clothing that is not distinctive White jacket 71 Painter s clothing that is not distinctive White bib overalls 72 24
Painter s clothing that is not distinctive Standard work shoes 73 Protective clothing can be excluded from income 74 Protective clothing Safety shoes or boots 75 25
Protective clothing Safety glasses 76 Protective clothing Hard hats 77 Protective clothing Work gloves 78 26
Workers who may be required to wear safety items Carpenters 79 Workers who may be required to wear safety items Electricians 80 Workers who may be required to wear safety items Machinists 81 27
Workers who may be required to wear safety items Truck drivers 82 IRS Rules! Working condition fringe benefits Issued to police officers & firefighters 83 IRS Rules! Working condition fringe benefits Suitable for ordinary wear 84 28
IRS Rules! Working condition fringe benefits Employer restrictions on offduty wear 85 IRS Rules! Working condition fringe benefits With department insignia 86 IRS Rules! Working condition fringe benefits Restricting off-duty wear 87 29
IRS Rules! Working condition fringe benefits Not suitable for ordinary wear 88 IRS Rules! Procedural change 89 Uniform Allowances Advance 90 30
Uniform Allowances Reimbursement 91 Uniform Allowances Amount paid is not wages 92 Uniform Allowances Amount paid is not wages Condition of employment 93 31
Uniform Allowances Amount paid is not wages o Cannot be worn as street clothes 94 Uniform Allowances Amount paid is not wages o Employee must return any excess amounts advanced 95 VEHICLE USE? 96 32
Income? Business-related purposes = No income 97 Income? All other use = Income 98 Income? Exceptions De minimis fringe benefit 99 33
Income? Exceptions Qualified nonpersonal use vehicle 100 What are qualified nonpersonal use vehicles? Clearly marked police vehicles 101 What are qualified nonpersonal use vehicles? Clearly marked fire vehicles 102 34
What are qualified nonpersonal use vehicles? Ambulances 103 What are qualified nonpersonal use vehicles? Vehicle designed to carry cargo with a loaded gross vehicle weight over 14,000 pounds 104 What are qualified nonpersonal use vehicles? Bucket trucks ( cherry pickers ) 105 35
What are qualified nonpersonal use vehicles? Delivery trucks with seating only for the driver 106 What are qualified nonpersonal use vehicles? Dump trucks 107 What are qualified nonpersonal use vehicles? Passenger buses 108 36
What are qualified nonpersonal use vehicles? Qualified specialized utility repair trucks 109 What are qualified nonpersonal use vehicles? School buses 110 What are qualified nonpersonal use vehicles? Unmarked vehicles used by law enforcement officers 111 37
What are qualified nonpersonal use vehicles? Unmarked vehicles used by law enforcement officers Substantiation requirements do not apply to officially authorized uses 112 What are qualified nonpersonal use vehicles? Unmarked vehicles used by law enforcement officers Law enforcement officer s definition 113 Accounting for vehicle use Employee must account to the employer for the business use 114 38
Accounting for vehicle use Substantiating the usage 115 Accounting for vehicle use Substantiating the usage Mileage 116 Accounting for vehicle use Substantiating the usage Time and place of the travel 117 39
Accounting for vehicle use Substantiating the usage Business purpose of the travel 118 Accounting for vehicle use Option Treat all employee use as personal use 119 Recordkeeping Maintain adequate records 120 40
Recordkeeping Employee should log the business use of the vehicle for each trip 121 Recordkeeping If the employee s business or personal mileage is the same for each period during a year 122 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 123 41
Recordkeeping Avoid substantiation requirements 124 Recordkeeping Avoid substantiation requirements Enforcing a written policy against personal use of vehicles 125 Recordkeeping Avoid substantiation requirements Considering all employee use of the vehicles as personal use 126 42
THANK YOU FOR ATTENDING!!!!! 127 43