When it comes to payroll, there are many complex rules that need to be followed. You must comply with the requirements of the Fair Labor Standards Act (FLSA). Techeon specializes in understanding the ins and outs of FLSA so you, as a small business owner, don’t have to. Incorrectly classifying an employee’s exemption status can trigger an IRS audit. So accurately ensuring each employee’s exemption status when processing payroll is vital.
Understanding Exemption Status
Employees whose jobs are ruled by the FLSA are considered to either be exempt or non-exempt. Non-exempt employees are entitled to overtime pay, while exempt employees are not. But there is more to it than that. Generally speaking, non-exempt employees earn less than $455 per week, or $23,660 per year. Administrative, executive, professional, and certain computer employees – among others – who earn at least $455 per week, may be classified as exempt if they are paid on a salaried basis. Truck drivers and a few other professions are governed by laws other than the FLSA. The majority of U.S. workers, though, are covered by the FLSA. As such, their employers must adhere to the regulations regarding overtime pay.
Processing payroll
When processing payroll, there are specific guidelines to follow. For example, employers must pay non-exempt employees one-and-a-half times their regular rate of pay when they work more than 40 hours per week. Exempt employees’ hours, however, are not usually tracked by employers because of their salaried status. A business is also not required to pay exempt employees overtime, no matter how many hours they work.
Techeon follows FLSA guidelines and ensures businesses are in compliance. When it comes to processing payroll, employees want to be paid what they are owed. As well, employers have a vested interest in not only paying all their employees what they are due, but in observing FLSA requirements so that audits are easily passed.
If you are interested in learning more about our payroll services at Techeon, contact us today.
Recent Comments