WorldWide Drilling Resource

17 WorldWide Drilling Resource ® JANUARY 2016 Drilling Into Money Not Boring by Mark E. Battersby Employees, Payroll, Overtime, and Taxes Every employer faces countless rules regulating the payments made by a drilling operation to its workers. There are rules dictating when - and which - workers must be paid overtime, as well as the amount of taxes which must be withheld and when they must be paid to the Internal Revenue Service. Unfortunately, the potential for even more payroll problems increased recently for many drilling profes- sionals when the U.S. Department of Labor (DOL) proposed new payroll-related rules. The DOL’s current rules do not limit either the number of hours in a day or the number of days in a week an employee may be required to work, as long as the employee is at least 16 years old. Similarly, the DOL places no limit on the number of hours of overtime which may be scheduled. However, the rules do require employers to pay covered employees not less than one and one half times their regular rate of pay for all hours worked in excess of 40 in a workweek, unless the employees are otherwise exempt. The rules recently proposed by the DOL would raise the threshold at which salaried workers making up to about $50,000 annually, even those classified as “managers” and currently exempt from the rules for hourly employees, would qualify for overtime pay under the FLSA (Fair Labor Standards Act). The current salary threshold, set in 2004, is $455 per week ($23,660 per year) with the finalized rule expected to take effect in 2016. Remember, however, drilling operations not covered by the federal laws are, in all-likelihood, subject to similar overtime laws in their state. Not too surprisingly, where an employee is subject to both the state and federal overtime laws, the employee is entitled to overtime according to the standard that will provide the higher rate of pay. Unfortunately for those in the drilling industry, there is no definitive answer to whether or not seasonal employees are ex- empt or entitled to overtime. Wage and employment law varies from state to state, so checking local regulations is vital. With Uncle Sam reportedly gunning for small businesses with delinquent payroll tax problems and the DOL increasing the pressure on employers with their proposed overtime rules, understanding the basic rules for overtime and payroll taxes - and the requirement to pay withheld amounts - is a necessity. Guidance and advice from a competent, qualified advisor is virtually a requirement. Mark Mark E. Battersby may be contacted via e-mail to michele@worldwidedrillingresource.com ! " # !