Find out what’s new in your community and industry.
Changes to Michigan minimum wage amounts effective January 1, 2017:
Workers 18 and older $8.90/hour
Workers 16 and 17 years old $7.57/hour
Tipped workers $3.38/hour
Retirement Plan Changes for 2017:
Maximum salary deferrals:
Simple maximum contribution $12,500
Catch-up contribution $ 3,000
401(k), 403(b), Profit Sharing plan
Annual compensation $270,000
Elective deferral $ 18,000
Catch-up contributions $ 6,000
Contributions limits $5,500
Catch up contributions $1,000
AGI Deduction phase-out $99,000 joint return
$62,000 single or head of household
Mileage rate changes effective January 1, 2017:
Medical or moving $.17
The Department of Labor (DOL) has finalized a rule that, effective Dec. 1, 2016, will make significant changes to the overtime regulations in the Fair Labor Standards Act (FLSA). As you know, employees covered by the FLSA must receive overtime pay for all hours worked over 40 in a workweek at a rate of not less than one and one-half times their regular rates of pay, unless otherwise exempt. The FLSA's "white collar" exemptions exclude certain executive, administrative, and professional ("EAP") employees, and outside salespersons, from the federal minimum wage and overtime rules. Currently, to qualify for exemption, white collar employees generally must: (1) be salaried, meaning that they must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the "salary basis test"); (2) be paid more than a specified standard salary amount, which is currently $455 per week (the equivalent of $23,660 annually for a full-year employee) in existing regulations (the "salary level test"); and (3) primarily perform executive, administrative, or professional duties, as provided in the DOL's regulations (the "duties test"). The current regulations also contain a relaxed duties test for certain employees (highly compensated employees) who receive total annual compensation of $100,000 or more and are paid at least $455 per week.
The new rule changes. Under the final rule, the standard salary level used to determine whether EAP employees and computer professionals are eligible to receive overtime will increase from $455 per week ($23,660 per year) to $913 per week ($47,476 per year) for a full-time worker beginning in December. Employers are not necessarily in compliance with the new standard salary level threshold if they just meet the $47,476 annual threshold. An employee's eligibility to receive overtime is determined on a weekly basis.
Nondiscretionary bonuses and incentive payments. The final rule allows employers for the first time to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level. These payments may include, for example, nondiscretionary incentive bonuses tied to productivity and profitability. For employers to credit nondiscretionary bonuses and incentive payments toward a portion of the standard salary level test, the final rule requires the payments to be paid on a quarterly or more frequent basis and allows the employer to make a "catch-up" payment.
An employee who earns $822 per week (90% of the standard salary level) must be paid a quarterly bonus of at least $1,183 ($913 − $822 = $91; $91 × 52 weeks = $4,732 per year; $4,732 ÷ 4 = $1,183 per quarter) to meet the standard salary level requirement for the quarter. If the bonus the employee receives during the quarter is less than $1,183, the employee will be eligible to receive overtime during that quarter unless the employer makes a catch-up payment in the first pay period after the quarter to meet the $1,183 threshold.
Highly compensated employees. The total annual compensation threshold for a highly compensated employee will increase from $100,000 to $134,004 in December ($913 per week rather than the current $455 per week). The final rule makes no changes to the requirement that highly compensated employees (HCEs) must receive at least the full standard salary amount each pay period on a salary or fee basis without regard to the payment of nondiscretionary bonuses and incentive payments. If employees earn at least $913 per week and pass the standard duties test for a white collar employee, they will not be affected by the increase in the HCE total annual compensation threshold. If they only pass the relaxed duties test for a HCE, the employer would need to raise their compensation to the new threshold ($134,004 per year) to retain their exempt status. While HCE employees must receive 100% of the $913 weekly threshold on a salary or fee basis, non-discretionary bonuses and incentive payments (including commissions) may be used to satisfy the remainder of the $134,004 total annual compensation requirement.
Duties test. The final rule makes no changes to any of the existing job duty requirements to qualify for exemption from overtime.
Outside sales employees. Outside sales employees are not subject to the salary basis or salary level requirements, and, therefore, are not affected by the rule changes.
Paying a salary to non-exempt employees. "Salaried status" and "exempt status" are separate concepts, so employees entitled to overtime pay may still be paid on a salary basis as long as they receive overtime pay for working over 40 hours in a workweek.
Seasonal employers. A seasonal employer must comply with these rules during the period the employer is open for business. For example, if a seasonal employer is open during 8 months of the year the employer will need to guarantee during the eight-month period that at least $913 per week is paid to an employee exempt from receiving overtime.
Job classification. Employees with one particular job classification do not all have to be classified as either eligible or exempt from overtime. The determination is made on an employee by employee basis.
Compliance options. The DOL notes that employers have multiple options for complying with the new overtime rule. Options include:
(1) Raise salary and keep the employee exempt from overtime. Employers may choose to raise the salaries of employees to at or above the salary level to maintain their exempt status, if the employees meet the duties test. The DOL says that this option works best for employees who have salaries close to the new salary level and regularly work overtime.
(2) Pay overtime in addition to the employee's current salary when necessary. Employers can also continue to pay their newly overtime-eligible employees the same salary, and pay them overtime whenever they work more than 40 hours in a week. The DOL says that this approach works best for employees who work 40 hours or fewer in a typical workweek, but have occasional spikes that require overtime for which employers can plan and budget the extra pay. The DOL also notes that there is no requirement in the rule to convert employees from salaried to hourly in order to calculate their overtime pay.
(3) Limit workers' hours to 40 hours per week. Under this option, employers must ensure that workload distribution, time, and staffing levels are all managed appropriately for their white-collar workers who earn below the salary threshold. Employers could hire additional workers to achieve this goal.
The deadlines for filing the Form W-2 with the Social Security Administration and the Form 1099-MISC with the Internal Revenue Service are changing next year.
Starting in 2017, for the 2016 reporting year, both the W-2 and 1099-MISC recipient copies need to be submitted by January 31, whether by paper or electronic filing. That is months earlier than previous year and promises to increase both workloads and stress levels for companies and their accountants alike.
Making matters even more complicated, the new filing deadline, as it relates to Form 1099-MISC, only affects filers that report nonemployee compensation payments in box 7. The overwhelming majority of 1099-MISC filers will report information in box 7, so there’s sure to be plenty of confusion.
Historically, filers have been required to provide both W-2 and 1099-MISC forms to their recipients by January 31. However, in the past they were not required to submit the forms to the Social Security Administration or the IRS until February 28 for paper forms or March 31 for e-filing.
With three months of work being condensed into 30 days, the change is likely to add plenty of work for filers next January. On top of that, the filing deadlines for Forms 1095-B and 1095-C also come on January 31 for recipient delivery, Greatland pointed out. This compressed schedule means businesses will face a time crunch when they need to do wage, income, and Affordable Care Act-related reporting for 2016.
Before the deadline change, businesses would be able to file W-2 and 1099-MISC recipient copies first and then wait to learn if any changes are needed before filing with the Social Security Administration or the IRS, which reduced the risk for possible corrections. Unfortunately, thanks to the advanced deadline next year, businesses might need to abandon that strategy and consider filing with the recipients and the SSA and IRS at the same time.
But that’s not all. To further complicate the multiple filing deadlines in January, the IRS recently eliminated the automatic 30-day extension of time to file W-2 forms. Before that, filers could automatically get a 30-day extension by submitting Form 8809 to the IRS on or before January 31. Filers were also able to request an additional 30-day extension, so they could push their e-file deadline out to the end of May. Now those automatic extensions won’t be available for business that need to file their W-2 forms for tax year 2016
I am an avid runner. And not just your “go-out-for-a-few-miles” kind of runner, but a distance runner. In fact, I recently participated in The Hallucination 100 at the Hell Creek Ranch in Pinckney, Michigan, with the goal of completing the entire 100 miles (it’s a 16-mile loop). I worked for it. I trained for it. I was determined to finish the race. But I didn’t. I ran out of gas somewhere along the 68-mile mark. I did get a 100k finisher medal, so my achievement was recognized, but it felt like a consolation prize. I felt like I had failed to achieve my goal.
We spend a lot of time talking about goals. We debate how to set goals, manage goals, and celebrate the success of achieving our goals. But what should you do when you don’t reach your goals?
If you haven’t noticed, today’s society has embraced the failure concept. Basketball star Michael Jordan has a very famous quote about failure: “I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And this is why I succeed.”
Don’t get me wrong: Not achieving a goal is not always acceptable and embraced. But on some level, it’s okay, as long as you learn from it.
In his book, Learned Optimism, psychologist Martin Seligman, known as the father of the new science of positive psychology believes there is no such thing as not achieving your goal. You just need to rewire your brain to be able to see that. Here are some of his tips.
1: When you fail to achieve a goal, stop and make a note of everything you did achieve.
OK, so I didn’t complete the 100-mile race. But I DID run 68 miles! Focus on what you have achieved and not on what you haven’t.
2: There are goals, and then there are goals.
For example, let’s say someone in sales has a goal of reaching 25 new customers by the end of the quarter, but he only reached 20. On the surface, it would seem that he failed but dig a little deeper. His 20 new customers are bringing in more revenue than he had anticipated. And that revenue was his actual goal. Did he fail in reaching his goal? Not by a long shot.
3: Look at what you learned.
Most goals have a deadline or timeframe. Often that serves to motivate us, but what if that deadline comes and goes, and our goal is not achieved? Did we fail? Just because you don’t achieve the goal in the time frame you set does not mean you won’t achieve the goal eventually. And take a look at what you have achieved or learned while you were trying to reach your goal. This information will give you a more realistic deadline as you get back to work.
4: Review your reasons for going after the goal in the first place.
Once you’ve figured out the reason(s) why your goal wasn’t accomplished, you have to decide if this is still a goal you need to and want to accomplish. Perhaps the goal needs to be redefined in some way. Or perhaps, the goal doesn’t matter anymore, which is perfectly acceptable. One of the biggest drawbacks of failed goals is that they linger and stifle future productivity. So maybe I don’t have the physical stamina to run 100 miles. So I’ll put that goal aside and shoot for 75 miles.
5: Be grateful you failed.
Remember the words of inventor Thomas Edison. Edison is well known for his many inventions, but he is also well known for his hard work ethic and perseverance. Even after many failed attempts with his light bulb design, Edison continued knowing each failure brought him closer to success.“I have not failed 10,000 times. I have not failed once. I have succeeded in proving that those 10,000 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work.”
If You’re a Member of a Professional Organization—Beware! You Could Be Held for Ransom.
Ransomware—malware that can block access to a computer system until a ransom is paid to the perpetrator—is targeting professionals in ways that are likely to cause the unsuspecting to open an infected file. And the perps are getting savvier in their methods.
One way is an e-mail communication from their professional association. In fact, a wave of ransomware is hitting lawyers on the West Coast, causing state bar associations to issue warnings. The thieves send emails to attorneys, which appear to be from state bar associations and reference a complaint, the details of which claim to be in an attached document that contains the ransomware.
Although recent attacks on the West Coast have fed on a lawyer’s publicly accessible email address, these same attacks also go after other professionals. Healthcare is a prime target. Medical and dental practices cannot afford to have critical patient information held hostage. Targets have also included organizations that hold critical data of clients that is often deadline-focused. The threats will become more pronounced as criminals realize the benefit of redirecting resources to ransomware aimed at professionals such as lawyers and accountants.”
How can you avoid being the victim of ransomware?
Double-check the content of the message â¨There are obvious factual errors or discrepancies that you can spot. Example, if your bank or a friend claims that they have received something from you, try to go to your recently sent items to double-check their claim. Such spammed messages can also use other social engineering lures to persuade users to open the message.
Always check who the email sender is â¨If the email is supposedly coming from a bank, verify with your bank if the message is legitimate. If the email came from a personal contact, confirm if your contact sent the message. Do not rely solely on trust or relationship, as your friend or family member may be a victim of spammers as well.
Refrain from clicking links in email â¨In general, clicking on links in email should be avoided. It is safer to visit any site mentioned in the email directly. If you have to click on a link in email, make sure your browser uses web reputation to check the link, or use free services such as Trend Micro Site Safety Center
Cole Gavlas has a very competent, well-informed staff that takes a proactive approach in dealing with their clients. We have been pleasantly surprised with some of the money saving … ideas they have provided for us over time.