Pub. 6 2016 Issue 4

16 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com Legal Landscape T he only constant with the legal landscape, as with any- thing, is change. Below are updates on legal changes affecting dealerships; one upcoming, one recent, and one from three years ago that continues to impact dealerships. If you have any questions about these updates or other issues impacting your dealership, please feel free to contact the Illinois Automobile Dealers Association at 217-753-0220. OVERTIME EXEMPTION LIMITED FOR “WHITE COLLAR” EMPLOYEES The U.SDepartment of Labor has released revised regulations scaling back the number of employees who will be able to qualify for the “white collar” overtime exemption. The new rules are scheduled to take effect December 1, 2016. Currently, certain executive, administrative, professional, and computer “white collar” employees (EAP employees), including managers and assistant managers, office managers, human resources professionals, controllers, accountants, attorneys, and computer specialists, who earn more than $455 per week ($23,660 per year) are not entitled to overtime compensation for work in excess of 40 hours per week. Under the proposed rule, EAP employees would not be exempt from overtime compensation unless they earned at least $913 per week ($47,476 per year). The proposed rule makes similar changes to the overtime exemption for “highly compensated employees” by raising the salary threshold from $100,000 per year to $134,004 per year. These salary figures will be adjusted every 3 years, beginning January 1, 2020. The new rule will allow up to 10% of the salary threshold for EAP employees to be met via nondiscretionary bonuses and incentives if paid at least quarterly. Before the new rules take effect, you may want to review your pay plans to see if your overtime exempt employees will continue to qualify for the white collar exemptions. If not, you may investigate whether those employees qualify for some other exemption, such as the exemption for commission employees, or whether you are able to adjust work schedules to minimize to overtime hours worked by affected employees. CHILD BEREAVEMENT LEAVE ACT On July 29, Governor Rauner signed the Child Bereavement Leave Act into law. The Act requires employers with at least 50 employees within a 75-mile radius, the same definition of employer as under the federal Family and Medical Leave Act of 1993, to provide up to 2 weeks (10 work days) of unpaid bereavement leave for all employees to attend the funeral or similar service of the employee’s child, to make arrangements necessitated by the death of the employee’s child, or to grieve the death of the employee’s child. in the event of the death of more than one child within a 12-month period, the employer shall be entitled to up to 6 weeks of unpaid leave within a 12-month period. Leave taken under the Act is not in addition to leave permitted by the federal Family and Medical Leave Act of 1993. An employee who is entitled to paid leave may substitute that leave for the leave provided under the Act. An employer may not take any adverse action against an employee who takes leave under the Act. An employer who violates the Act is subject to a civil penalty of up to $500 for a first offense and up to $1,000 for a second or subsequent offense. The Child Bereavement Leave Act took effect immediately upon the Governor’s July 29th signature. Employers subject to the Act should review their employment manuals to determine whether they need to be amended to reflect the changes made by the Child Bereavement Leave Act. FILE SALES TAX RETURNS FOR EXEMPT TRANSACTIONS Did you know that a dealership’s failure to file a timely sales tax return when you sell a vehicle at an auction or as a dealer trade can lead to a $100 penalty from the Illinois Department of Revenue, even though the transaction was tax-exempt? Motor Vehicle dealers must file a sales tax return (Form ST-556 or Form ST-556-LSE) for each vehicle they sell or lease, including transactions that are not subject to tax. Pursuant to legislation signed into law in 2013, the Department of Revenue began imposing a penalty of $100 per tax exempt transaction if the return is not filed by the statutory 20-day deadline. If you make a dealer trade, sell a vehicle to an exempt purchaser, or conduct any other type of tax exempt transaction, make sure to file form ST-556 or ST-556-LSE within 20 days so you can avoid this penalty. If you sell a vehicle at an auction that is open only to licensed dealers and the buyer is unknown, you may select “Other” on the menu of exemptions and enter the word “Auction” on the corresponding line. IADA has heard from dealers who have been assessed with substantial penalties for failure to file tax returns for tax-exempt transactions. Please make sure to timely file Form ST-556 or ST-556-LSE whenever you sell or lease a vehicle to a tax exempt customer. You may file forms ST-556 and ST-556-LSE on CVR’s website at http://www.cvrweb.com/ or on the Department of Revenue’s website at www.tax.illinois.gov . 