Overtime and Joint Employment

 Overtime rules  Comments Off on Overtime and Joint Employment
Sep 292011

You have an employee who is shared by more than one company.  The employee works less than 40 hours in a given week at each company, but when you add the the time cards together, she worked more than 40 hours in that week.  Is the employee due overtime pay?

It depends on whether a “joint employment” relationship exists between the companies.

“Joint employment” describes the situation in which an employee works for more than one employer, but the employers have enough in common to be considered “one” under state and federal wage and hour laws. And if the employers meet this threshold and an employee works for both of them in a workweek, all of the hours must be counted to determine whether overtime is owed.

Whether a particular arrangement translates into “joint employment” is based upon all the circumstances in that individual case. The courts have used the following factors to make this determination:

  • whether the employers share an employee’s services;
  • whether the employer acts directly or indirectly in the interest of the other employer; and
  • whether the employers are not disassociated with respect to an employee and share control of the employee; for example, where one employer controls, is controlled by, or is under common control with the other employer.

For instance, common ownership would support the control necessary to establish joint employment.

This does not mean that the employee will get paid overtime twice, but simply there is a shared obligation to compensate the employee for overtime hours paid.

Source: BOLI

 Posted by at 11:30

Employer-Provided Cell Phones

 Benefits  Comments Off on Employer-Provided Cell Phones
Sep 212011

Wondering whether company-paid cell phone service should be considered a fringe benefit, and as such added to the employee’s wages as income?

The IRS provides the following guidance:

  • If the cell phone is provided by the employer for business reasons (other than compensation), then it’s not considered a taxable fringe benefit.  For example, if the employer needs to contact the employee at all times, or if the employer requires the employee to be able to talk to customers while away from the office.
  • If there is no substantial business reason for the employee to carry a company cell phone but yet the employer chooses to provide it, then it is considered a taxable fringe benefit and must be reported as income on the employee’s W-2.

Contact us if you need further assistance on this topic.

Source:  IRS

 Posted by at 07:14

Should business owners be included in the company workers compensation policy?

 Uncategorized  Comments Off on Should business owners be included in the company workers compensation policy?
Sep 112011

Many business owners wonder if they should include themselves in the workers compensation policy for the company.  Rarely does this make sense, for the following reasons:

Insurance companies regard workers compensation coverage for company owners as a moral hazard; that is, if the business experiences financial problems, the owner may be incented to stage a workplace accident or otherwise compromise the guidelines of the policy.  As a result of this inherent risk, workers compensation coverage for company owners is generally cost-prohibitive.

Moreover, workers compensation policies are not designed to provide adequate coverage or compensation in cases where the owner becomes incapacitated due to illness or accident that is unrelated to the workplace. Therefore, disability insurance and life insurance become logical choices for business owners concerned with protecting their ability to meet financial obligations, continue to earn income, and protect future income.  Life and disability policies provide sound alternatives to the limited benefits of workers compensation insurance.

If you are a business owner in need of a trustworthy professional with whom to discuss insurance and asset protection, we would be happy to provide you with a personal recommendation.

As always, we’re here to provide the resources you need.

~Time 4 Payroll