workweek, at a rate not less than time and one-half their regular rates of pay. The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days. Different workweeks may be established for different employees or groups of employees. Typically, overtime pay earned in a particular workweek must be paid on the regular payday for the pay period in which the wages were earned. On May 20, 2020, the U.S. Department of Labor announced a final rule that allows employers to pay bonuses or other incentive-based pay to salaried, non- exempt employees whose hours vary from week to week. The Department of Labor provides detailed informa- tion regarding this area (
www.dol.gov/agencies/whd/ overtime).
Sick/vacation pay upon retirement/termination of employment. The FLSA does not require organi- zations to pay employees for time not worked, such as vacations, sick leave, or holidays. These benefits are mat- ters of agreement between an employer and an employee (or the employee’s representative).
Payroll is one of the many areas that fall under the umbrella of the school business office.
The FLSA does not require severance pay either. It,
too, is a matter of agreement between an employer and an employee (or the employee’s representative). Payout options may include a check or payment to a
tax-sheltered annuity. Such payments are made after the employee has “left the building.”
Withholdings and Deductions
The two main types of payroll deductions are taxes and payroll withholdings. All school employees are subject to federal and state taxes with amounts withheld on the basis of W-4 paperwork. State disability may or may not be deducted depending on the statute. FICA (Federal Insurance Contributions Act) and Medicare have employer share responsibilities. Other types of deductions include insurance policy deductions and retirement deductions. Payroll withholdings may include union dues.
Pension. Most school employees should be enrolled in a state pension system. Individual state pension websites
34 APRIL 2022 | SCHOOL BUSINESS AFFAIRS
are comprehensive with answers and guidance for employers.
Tax-sheltered annuities. Most districts allow partici- pation in tax-sheltered annuities— 403(b) and 457 pre- tax (federal only) deduction savings plans. Each plan has federal limits. Since they are regulated, use a third-party administrator (TPA) for these programs. In the past, the district administrator was the point person for signing off on transfers, loans, and withdraw- als, among others. The compliance regulations are get- ting tighter, so if the district does not have a TPA, now might be a good time to explore using one.
Dues. When an employee is eligible to join the union, the building representative handles the completion and remittance of the paperwork, a copy of which is sent to payroll. Dues withholding begins upon approval from the state union. Any changes to dues are reflected in a form the district sends to the state union association.
Credit union deduction. Employees who participate in a credit union can have a portion of their income deposited into their credit union account.
Garnishments. Occasionally, the payroll office may receive information regarding a wage garnishment for such items as alimony, child support, or student loan default. Usually, the garnishment is a set amount or per- centage per pay period. The payroll office must maintain the payment schedule until it receives notification that the garnishment has been satisfied.
Employee benefits. These deductions account for all benefits contributions from each employee. They include
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