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UHY LLP Michigan Practice
DECEMBER 2016
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ARCHIVE
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FAIR LABOR STANDARDS ACT OVERTIME RULE ON HOLD
In a ruling that has significant implications for many industries, on Nov. 22, a Texas federal judge dealt the US Department of Labor a major setback by preliminarily enjoining DOL's overtime rule which was set to go into effect on Dec. 1, 2016. The nationwide injunction means that employers do not have to comply with the rule on Dec. 1. Most employers have been actively planning or implementing changes with respect to how they compensate employees and classify them for purposes of overtime eligibility.
The new FLSA rule would raise the minimum salary requirement for employees to be exempt from overtime under the FLSA from $455 per week ($23,660 per year) to $913 ($47,476). However, a last minute Court injunction has now resulted in employers not needing to comply with the new regulations in the immediate term and presents uncertainty over whether this new FLSA rule will ever actually be implemented.
Employers should realize that, although they are not required to comply with the new rule on Dec.1, reversing course on any previously announced changes could present a variety of repercussions, including potential claims against the employer for misclassification of overtime exempt status or even breach of contract claims. As such, employers should consult with counsel if they are contemplating modifying their employee compensation plans based on this injunction, especially if the modifications alter plans that had already been announced to employees. Be diligent and continue to evaluate the FLSA status of your employees by reviewing job duties and descriptions.
For more information, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us on the web at www.uhy-us.com.
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AICPA MAKES TAX REFORM RECOMMENDATIONS TO LAWMAKERS By Andy Moceri, CPA
Recently, The American Institute of CPAs (AICPA) outlined its priorities for tax reform legislation, as a major change is expected to take place. The release of these priorities comes as Republicans are pushing to pass legislation that overhauls the tax code next year. Republicans believe that 2017 is the perfect time to pass a tax reform bill as they will control both houses of Congress, as well as the White House, with the new administration.
"The CPA profession prides itself on providing objective analysis of potential changes to our tax code and we again welcome the opportunity to lend expert input as the House and Senate consider tax reform" said Annette Nellen, chair of the AICPA Tax Executive Committee, in a news release.
The AICPA has stated that tax reform should "follow principles of good tax policy including equity, simplicity, minimum tax gap, transparency and economic growth and efficiency."
The AICPA believes that lawmakers should target specific issues in their legislation, such as lowering tax rates for businesses of all kinds, whether it be corporate or other types of businesses, repealing the alternative minimum tax (AMT), condensing and/or simplifying retirement savings provisions and making the communication process with the IRS more efficient for not just tax preparers, but taxpayers as well.
The Republican's "Better Way" tax blueprint is in line with the AICPA's recommendations. Part of the blueprint's agenda includes lowering the corporate tax rate from 35 percent to 20 percent and the rate for all pass-through entities, partnerships and S corporations, to 25 percent. It does also ask for the repeal of the alternative minimum tax and to simplify the sometimes complex higher education tax benefits. It also suggests that the House Ways and Means Committee work to consolidate the retirement savings provisions.
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CLIENTS SHARE VALUE-ADDED EXPERIENCES IN NEW UHY CAPABILITY STATEMENT
Released annually, the UHY Capability Statement illustrates how member firms have continued to strengthen close working relationships with our clients locally, internationally or cross-border throughout sectors, specializations and geographical regions - and, more importantly, it includes what our clients say about our services.
The latest 2017 edition includes seven great case studies with a range of international clients across a variety of market sectors: agriculture, automotive, construction engineering, marine electronics, mining, professional services and retail manufacturing. Two of which are right in our backyard: Bartech Group, a client based in Southfield, and AGM Automotive, another UHY Michigan client in Troy.
This past year, UHY member firms across the world celebrated 30 years as an international network. From a small group of senior forward-thinking executives three decades ago, to a leading mid-tier global network today.
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FASB ISSUES ASU 2016-09: STOCK COMPENSATION: IMPROVEMENTS TO EMPLOYEE SHARE-BASED PAYMENT ACCOUNTING By Lawrence Yee, CPA With the release of Accounting Standards Update (ASU) 2016-09 by FASB, accounting for employee share-based payments will take a more simplified approach to both accounting and financial reporting. One change noted in the ASU is that any excess tax benefit that used to be recognized as additional paid-in capital is now to be recorded as income tax expense. Any tax deficiencies are now to be reported on the income statement and cannot be used to offset accumulated excess tax benefits. An election can be made to account for forfeitures as they occur or to follow previous GAAP standards. ASU 2016-19 also allows for nonpublic entities to use a practical expedient to estimate the expected term of certain share-based awards. Any nonpublic entity can now choose to value awards at their intrinsic value instead of their fair value and no longer have to demonstrate the reasoning for choosing intrinsic value or fair value. Cash flow presentation has also changed in regards to any excess tax benefits. Previously, GAAP required any excess tax benefits to be shown as cash inflows from financing and cash outflows from operating activities. With the implementation of ASU 2016-09, tax benefits are classified as an operating activity. Cash payments from an employer to a taxing authority on an employee's behalf will now be classified as a financing activity if the employer withholds shares from an award for the purpose of making the payment. Other items addressed in the ASU relate to minimum statutory tax withholding requirements, the ability to use a practical expedient related to estimated terms of certain share-based awards and the elimination of the indefinite deferral in Topic 718. The ASU states that share-based payment transactions will no longer have to be accounted as a liability if the amount withheld does not exceed the amount calculated on the basis of the employee's maximum individual statutory rate and that nonpublic entities are allowed to use a practical expedient for term estimation. The amendments stated in ASU 2016-09 will be effective for annual periods beginning after Dec. 15, 2016 for public entities and are effective for other entities with an annual reporting period that begins after Dec. 15, 2017, and interim periods within annual periods that begin after Dec. 15, 2018. Early adoption is also allowed. For more information, contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us on the web at www.uhy-us.com.
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Published by UHY LLP News.
Copyright � 2016 UHY LLP. All rights reserved.
Our firm provides the information in this newsletter as tax information and general business or economic information or analysis for educational purposes, and none of the information contained herein is intended to serve as a solicitation of any service or product. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. "UHY" is the brand name for the UHY international network. Any services described herein are provided by UHY Advisors and/or UHY LLP (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.
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