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The Department of Labor (DOL) issued a memorandum that clarifies the effect of The Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) on transportation industry personnel. SAFETEA-LU limits the Motor Carrier Act exemption for the transportation industry. Previously under the Fair Labor Standards Act (FLSA), an overtime pay exemption was allowed for people involved with “motor vehicles” when both the employer and the employee met FLSA requirements. This broad description allowed the exemption to be taken for numerous employees in the transportation field.
With the passage of SAFETEA-LU and clarification from the DOL, the exemption is now limited to personnel involved with commercial motor vehicles, which significantly decreases the number of employees who qualify for the exemption. The DOL explains that to be considered a commercial motor vehicle, the vehicle must:
With this change, many employees who were once exempt under the FLSA are not eligible for the overtime exemption. Ensure that your transportation industry clients have changed their employees’ status to reflect the new exemption rules.
For further information, please contact John Popies.
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Schneider Downs provides accounting, tax, wealth management, technology and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA and Columbus, OH.
This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.
The general rule under Internal Revenue Code §451 is that an item of income shall be included in gross income for the taxable year or receipt unless ...