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United States Overtime Rule Update

Lots of US Landscapers used salary pay to help “optimize” overtime for rules. For instance, a common practice is to put foremen on salary and pay the guys hourly. As a salaried foreman, as long as you made over $26K a year, you didn’t get OT pay for OT hours. Because the foreman was not eligible for overtime pay, they would manage the work as quickly as possible, which would ensure the laborers are not getting OT hours either.

The US just passed a bill that upped the minimum salary to $47K per year. So the new rule states, if you don’t make $47K per year salary ($913 per week), you now get paid OT for hours worked > 40. This is a big deal, because now most foreman in the US are affected by the law. Most of them make less than $47K, so they’d now be eligible for OT.

You now have an interesting/very important decision:

A. Give foremen a raise to $47.1K per year so they are back to OT exempt

B. Convert foreman from salary back to hourly and pay them OT

C. Keep the employees on salary but pay them OT for hours > 40 

How these choices above affect LMN Time:

A. No impact on LMN Time. Salary must be adjusted in Quickbooks.

B. Go to the affected staff in LMN Time and turn the Salaried? checkbox to False.   Go to QB and add Hourly and Hourly OT payroll codes to all affected employees   that are set to that employee’s current rate of pay (x1.5 for OT).

C. Go to LMN Time Payroll Settings. Turn Are salaried workers paid OT? to YES. 

 

 

LMN can only advise on how to setup LMN Time. We don’t support Quickbooks Payroll and we’re not qualified to give HR/Payroll advice – particularly given the fact laws vary from state to state.  Users should absolutely consult with a payroll professional regarding these changes, or someone from Intuit Payroll, to ensure their payroll rules are setup correctly in their accounting software.

 

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