Retirement Planning Resources for Your Business

Posted by admin on February 3, 2012  |   No Comments »

It’s a brand new year and it’s never too early to start taking advantage of the benefits of retirement planning. As a business owner, a retirement plan allows you to invest now for financial security when you and your employees retire. As a bonus, you and your employees can receive significant tax advantages and other incentives. Consider the following benefits of setting up a retirement plan:

Business Benefits

  • Employer contributions are tax-deductible.
  • Assets in the plan grow tax-free.
  • Flexible plan options are available.
  • Tax credits and other incentives for starting a plan may reduce costs.
  • A retirement plan can attract and retain better employees, reducing new employee training costs.

Employee Benefits

  • Employee contributions can reduce current taxable income.
  • Contributions and investment gains are not taxed until distributed.
  • Contributions are easy to make through payroll deductions.
  • Compounding interest over time allows small regular contributions to grow to significant retirement savings.
  • Retirement assets can be carried from one employer to another.
  • A special tax credit known as the “Saver’s Credit” may be available.
  • The employee has an opportunity to improve financial security in retirement.

Retirement Plan Resources from the IRS
The Small Business Retirement Plan Resources provided by the Internal Revenue Service include helpful information for choosing, operating and maintaining your retirement plan. Here is a list of resources to help you get started:

You can also check out the Retirement Plans Navigator, an online guide for choosing a retirement plan, maintaining it and correcting plan errors.

Allowing Employees to Work “Off the Clock:” How to Avoid a Costly Mistake

Posted by admin on January 31, 2012  |   No Comments »

Did you know if your employees are putting in extra time outside of normal working hours, even though you haven’t requested it, you may be responsible for paying them for that time “off the clock”? Consider the following examples:

  • An employee voluntarily continues to work at the end of regular working hours to finish an assigned task or finish waiting on a customer.
  • An employee takes work home to complete in the evening or on weekends to meet a deadline.

If your employees are covered under the federal Fair Labor Standards Act(FLSA), all of these are examples of hours worked that generally must be compensated.

What counts as “hours worked” under the FLSA?
In general, “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other designated place of work, from the beginning of the first principal activity of the work day to the end of the last principal work activity of the workday.

Also included is any additional time the employee is allowed to work. This means that time spent doing work not requested by the employer, but still allowed, is generally hours worked, since the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work being done.

Pay special attention to the following situations:

  • Rework. When an employee must correct mistakes in his or her work, the time must be treated as hours worked, even when the employee voluntarily does the rework.
  • Waiting for Work. Time, which an employee is required to be at work or allowed to work for his or her employer, is hours worked. A person hired to do nothing or to do nothing but wait for something to do or something to happen is still working.
  • Place of Work. Hours worked include all the time during which an employee is required or allowed to perform work for an employer, regardless of where the work is done, whether on the employer’s premises, at home or at some other location.

Employers should be especially careful when it comes to allowing non-exempt employees to read and respond to work-related emails after hours through the use of smart phones or similar devices. The time spent on these emails may be considered “hours worked,” entitling such employees to compensation.

Remember – it’s your responsibility to exercise control and see that work you do not want performed is not done. Merely making a rule against “off the clock” work is not enough. The employer has the power to enforce the rule and must make every effort to do so.

For more information, check out the U.S. Department of Labor’s Hours Worked Advisor. Our section on Employee Pay includes information on other issues related to employee compensation.