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Is unpaid overtime a taxable gift to the employer?
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Having read Required to work unpaid overtime to "make up" for a shorter commute after moving closer to the office, I recall hearing that in the US doing unpaid work for a company is actually considered a gift that the employer is required to report on their taxes. Is that actually the case? I've never heard of a company doing that.
overtime taxes
edited Apr 13 '17 at 12:48
Community♦
1
asked May 23 '16 at 17:48
Don Branson
1216
 |Â
show 4 more comments
up vote
3
down vote
favorite
Having read Required to work unpaid overtime to "make up" for a shorter commute after moving closer to the office, I recall hearing that in the US doing unpaid work for a company is actually considered a gift that the employer is required to report on their taxes. Is that actually the case? I've never heard of a company doing that.
overtime taxes
edited Apr 13 '17 at 12:48
Community♦
1
asked May 23 '16 at 17:48
Don Branson
1216
4
If the employer is getting extra work from the employees that it should pay but it does not is already illegal. Reporting it as a gift would be like a drug dealer reporting sales taxes to the state.
– SJuan76
May 23 '16 at 18:00
3
"I recall hearing that in the US doing unpaid work for a company is actually considered a gift" - where did you hear that? Links, please.
– WorkerDrone
May 23 '16 at 18:33
1
Who said there was a link? :)
– Don Branson
May 23 '16 at 18:38
That is to say, when I said "hearing," I was signifying an auditory event, so there are no links. That's why I'm asking, because it was mere hearsay, and I wanted to find out if there was any truth to it.
– Don Branson
May 23 '16 at 18:42
This sounds like a legal question. I believe legal questions are generally considered off-topic.
– Keith Thompson
May 23 '16 at 21:59
 |Â
show 4 more comments
up vote
3
down vote
favorite
up vote
3
down vote
favorite
Having read Required to work unpaid overtime to "make up" for a shorter commute after moving closer to the office, I recall hearing that in the US doing unpaid work for a company is actually considered a gift that the employer is required to report on their taxes. Is that actually the case? I've never heard of a company doing that.
overtime taxes
edited Apr 13 '17 at 12:48
Community♦
1
asked May 23 '16 at 17:48
Don Branson
1216
Having read Required to work unpaid overtime to "make up" for a shorter commute after moving closer to the office, I recall hearing that in the US doing unpaid work for a company is actually considered a gift that the employer is required to report on their taxes. Is that actually the case? I've never heard of a company doing that.
overtime taxes
edited Apr 13 '17 at 12:48
Community♦
1
asked May 23 '16 at 17:48
Don Branson
1216
edited Apr 13 '17 at 12:48
Community♦
1
edited Apr 13 '17 at 12:48
Community♦
1
edited Apr 13 '17 at 12:48
Community♦
1
1
asked May 23 '16 at 17:48
Don Branson
1216
asked May 23 '16 at 17:48
Don Branson
1216
asked May 23 '16 at 17:48
Don Branson
1216
1216
4
If the employer is getting extra work from the employees that it should pay but it does not is already illegal. Reporting it as a gift would be like a drug dealer reporting sales taxes to the state.
– SJuan76
May 23 '16 at 18:00
3
"I recall hearing that in the US doing unpaid work for a company is actually considered a gift" - where did you hear that? Links, please.
– WorkerDrone
May 23 '16 at 18:33
1
Who said there was a link? :)
– Don Branson
May 23 '16 at 18:38
That is to say, when I said "hearing," I was signifying an auditory event, so there are no links. That's why I'm asking, because it was mere hearsay, and I wanted to find out if there was any truth to it.
– Don Branson
May 23 '16 at 18:42
This sounds like a legal question. I believe legal questions are generally considered off-topic.
– Keith Thompson
May 23 '16 at 21:59
 |Â
show 4 more comments
4
If the employer is getting extra work from the employees that it should pay but it does not is already illegal. Reporting it as a gift would be like a drug dealer reporting sales taxes to the state.
– SJuan76
May 23 '16 at 18:00
3
"I recall hearing that in the US doing unpaid work for a company is actually considered a gift" - where did you hear that? Links, please.
– WorkerDrone
May 23 '16 at 18:33
1
Who said there was a link? :)
– Don Branson
May 23 '16 at 18:38
That is to say, when I said "hearing," I was signifying an auditory event, so there are no links. That's why I'm asking, because it was mere hearsay, and I wanted to find out if there was any truth to it.
– Don Branson
May 23 '16 at 18:42
This sounds like a legal question. I believe legal questions are generally considered off-topic.
– Keith Thompson
May 23 '16 at 21:59
4
4
If the employer is getting extra work from the employees that it should pay but it does not is already illegal. Reporting it as a gift would be like a drug dealer reporting sales taxes to the state.
– SJuan76
May 23 '16 at 18:00
If the employer is getting extra work from the employees that it should pay but it does not is already illegal. Reporting it as a gift would be like a drug dealer reporting sales taxes to the state.
– SJuan76
May 23 '16 at 18:00
3
3
"I recall hearing that in the US doing unpaid work for a company is actually considered a gift" - where did you hear that? Links, please.
– WorkerDrone
May 23 '16 at 18:33
"I recall hearing that in the US doing unpaid work for a company is actually considered a gift" - where did you hear that? Links, please.
– WorkerDrone
May 23 '16 at 18:33
1
1
Who said there was a link? :)
– Don Branson
May 23 '16 at 18:38
Who said there was a link? :)
– Don Branson
May 23 '16 at 18:38
That is to say, when I said "hearing," I was signifying an auditory event, so there are no links. That's why I'm asking, because it was mere hearsay, and I wanted to find out if there was any truth to it.
– Don Branson
May 23 '16 at 18:42
That is to say, when I said "hearing," I was signifying an auditory event, so there are no links. That's why I'm asking, because it was mere hearsay, and I wanted to find out if there was any truth to it.
– Don Branson
May 23 '16 at 18:42
This sounds like a legal question. I believe legal questions are generally considered off-topic.
– Keith Thompson
May 23 '16 at 21:59
This sounds like a legal question. I believe legal questions are generally considered off-topic.
– Keith Thompson
May 23 '16 at 21:59
 |Â
show 4 more comments
2 Answers
2
active
oldest
votes
up vote
6
down vote
Is unpaid overtime a taxable gift to the employer?
No, this is simply not true. When an employee works overtime one of two things happen:
- the employee is either exempt from FLSA overtime rules and receives nothing for it,
- or the employee is owed overtime pay for all time worked over the applicable FLSA overtime threshold in the applicable FLSA work period (typically 40 hours per week)
An employee who is owed overtime is legally unable to give up his right to overtime pay. He must be paid for it as part of the regular pay cycle (i.e. within X weeks as defined by state/federal law). Employees who were not paid overtime and can prove that they worked overtime while non-exempt are eligible for backpay years down the line and the employer would be subject to heavy fines. This may be the source for the rumour you've heard.
For more details, check my answer here where I go into obsessive amounts of detail on exempt and non-exempt status.
I am not a legal professional and this answer does not constitute legal advice. It is only intended to be a summary of the applicable laws as they apply in general.
edited Apr 13 '17 at 12:48
Community♦
1
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
1
"Legally unable to give his right": There was a thread a while ago about an employer having problems to force an employee not to do unpaid overtime. Which seemed a ridiculous problem until it was pointed out that the employee refusing to leave could sue for payment years later.
– gnasher729
May 24 '16 at 7:48
1
@gnasher729 Yes it's brought up occasionally as one of the quirks that come with the employee protection laws and can prevent employees who want to go above and beyond from volunteering at crunch time. But the argument can be made that those who want to do it routinely should be rewarded with overtime pay or reclassified as exempt (if legally possible). You may also be thinking of a related answer here about mandatory lunch breaks.
– Lilienthal♦
May 24 '16 at 9:23
suggest improvements |Â
up vote
0
down vote
I have never heard this approach, but working for wages is usually governed by each state's department of labor and unless you are an Exempt Employee, you can not be forced or asked to be working overtime without pay. It is illegal. If you are non-exempt, you get paid for each hour or smallest fraction allowed in your employment contract, for time worked.
When you are exempt, you are considered to be above average compensated and you are not subject to overtime pay. I am not sure what your situation is. In exempt employee contracts, there usually is a clause saying that some out of normal working hours and some weekend work is expected of you, which goes without saying, the compensation is already in your pay, so you shouldn't expect overtime or any other method of compensation.
answered May 23 '16 at 18:00
MelBurslan
7,00511123
suggest improvements |Â
2 Answers
2
active
oldest
votes
2 Answers
2
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
6
down vote
Is unpaid overtime a taxable gift to the employer?
No, this is simply not true. When an employee works overtime one of two things happen:
- the employee is either exempt from FLSA overtime rules and receives nothing for it,
- or the employee is owed overtime pay for all time worked over the applicable FLSA overtime threshold in the applicable FLSA work period (typically 40 hours per week)
An employee who is owed overtime is legally unable to give up his right to overtime pay. He must be paid for it as part of the regular pay cycle (i.e. within X weeks as defined by state/federal law). Employees who were not paid overtime and can prove that they worked overtime while non-exempt are eligible for backpay years down the line and the employer would be subject to heavy fines. This may be the source for the rumour you've heard.
For more details, check my answer here where I go into obsessive amounts of detail on exempt and non-exempt status.
I am not a legal professional and this answer does not constitute legal advice. It is only intended to be a summary of the applicable laws as they apply in general.
edited Apr 13 '17 at 12:48
Community♦
1
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
1
"Legally unable to give his right": There was a thread a while ago about an employer having problems to force an employee not to do unpaid overtime. Which seemed a ridiculous problem until it was pointed out that the employee refusing to leave could sue for payment years later.
– gnasher729
May 24 '16 at 7:48
1
@gnasher729 Yes it's brought up occasionally as one of the quirks that come with the employee protection laws and can prevent employees who want to go above and beyond from volunteering at crunch time. But the argument can be made that those who want to do it routinely should be rewarded with overtime pay or reclassified as exempt (if legally possible). You may also be thinking of a related answer here about mandatory lunch breaks.
– Lilienthal♦
May 24 '16 at 9:23
suggest improvements |Â
up vote
6
down vote
Is unpaid overtime a taxable gift to the employer?
No, this is simply not true. When an employee works overtime one of two things happen:
- the employee is either exempt from FLSA overtime rules and receives nothing for it,
- or the employee is owed overtime pay for all time worked over the applicable FLSA overtime threshold in the applicable FLSA work period (typically 40 hours per week)
An employee who is owed overtime is legally unable to give up his right to overtime pay. He must be paid for it as part of the regular pay cycle (i.e. within X weeks as defined by state/federal law). Employees who were not paid overtime and can prove that they worked overtime while non-exempt are eligible for backpay years down the line and the employer would be subject to heavy fines. This may be the source for the rumour you've heard.
For more details, check my answer here where I go into obsessive amounts of detail on exempt and non-exempt status.
I am not a legal professional and this answer does not constitute legal advice. It is only intended to be a summary of the applicable laws as they apply in general.
edited Apr 13 '17 at 12:48
Community♦
1
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
1
"Legally unable to give his right": There was a thread a while ago about an employer having problems to force an employee not to do unpaid overtime. Which seemed a ridiculous problem until it was pointed out that the employee refusing to leave could sue for payment years later.
– gnasher729
May 24 '16 at 7:48
1
@gnasher729 Yes it's brought up occasionally as one of the quirks that come with the employee protection laws and can prevent employees who want to go above and beyond from volunteering at crunch time. But the argument can be made that those who want to do it routinely should be rewarded with overtime pay or reclassified as exempt (if legally possible). You may also be thinking of a related answer here about mandatory lunch breaks.
– Lilienthal♦
May 24 '16 at 9:23
suggest improvements |Â
up vote
6
down vote
up vote
6
down vote
Is unpaid overtime a taxable gift to the employer?
No, this is simply not true. When an employee works overtime one of two things happen:
- the employee is either exempt from FLSA overtime rules and receives nothing for it,
- or the employee is owed overtime pay for all time worked over the applicable FLSA overtime threshold in the applicable FLSA work period (typically 40 hours per week)
An employee who is owed overtime is legally unable to give up his right to overtime pay. He must be paid for it as part of the regular pay cycle (i.e. within X weeks as defined by state/federal law). Employees who were not paid overtime and can prove that they worked overtime while non-exempt are eligible for backpay years down the line and the employer would be subject to heavy fines. This may be the source for the rumour you've heard.
For more details, check my answer here where I go into obsessive amounts of detail on exempt and non-exempt status.
I am not a legal professional and this answer does not constitute legal advice. It is only intended to be a summary of the applicable laws as they apply in general.
edited Apr 13 '17 at 12:48
Community♦
1
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
Is unpaid overtime a taxable gift to the employer?
No, this is simply not true. When an employee works overtime one of two things happen:
- the employee is either exempt from FLSA overtime rules and receives nothing for it,
- or the employee is owed overtime pay for all time worked over the applicable FLSA overtime threshold in the applicable FLSA work period (typically 40 hours per week)
An employee who is owed overtime is legally unable to give up his right to overtime pay. He must be paid for it as part of the regular pay cycle (i.e. within X weeks as defined by state/federal law). Employees who were not paid overtime and can prove that they worked overtime while non-exempt are eligible for backpay years down the line and the employer would be subject to heavy fines. This may be the source for the rumour you've heard.
For more details, check my answer here where I go into obsessive amounts of detail on exempt and non-exempt status.
I am not a legal professional and this answer does not constitute legal advice. It is only intended to be a summary of the applicable laws as they apply in general.
edited Apr 13 '17 at 12:48
Community♦
1
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
edited Apr 13 '17 at 12:48
Community♦
1
edited Apr 13 '17 at 12:48
Community♦
1
edited Apr 13 '17 at 12:48
Community♦
1
1
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
answered May 23 '16 at 19:26
Lilienthal♦
53.9k36183218
53.9k36183218
1
"Legally unable to give his right": There was a thread a while ago about an employer having problems to force an employee not to do unpaid overtime. Which seemed a ridiculous problem until it was pointed out that the employee refusing to leave could sue for payment years later.
– gnasher729
May 24 '16 at 7:48
1
@gnasher729 Yes it's brought up occasionally as one of the quirks that come with the employee protection laws and can prevent employees who want to go above and beyond from volunteering at crunch time. But the argument can be made that those who want to do it routinely should be rewarded with overtime pay or reclassified as exempt (if legally possible). You may also be thinking of a related answer here about mandatory lunch breaks.
– Lilienthal♦
May 24 '16 at 9:23
suggest improvements |Â
1
"Legally unable to give his right": There was a thread a while ago about an employer having problems to force an employee not to do unpaid overtime. Which seemed a ridiculous problem until it was pointed out that the employee refusing to leave could sue for payment years later.
– gnasher729
May 24 '16 at 7:48
1
@gnasher729 Yes it's brought up occasionally as one of the quirks that come with the employee protection laws and can prevent employees who want to go above and beyond from volunteering at crunch time. But the argument can be made that those who want to do it routinely should be rewarded with overtime pay or reclassified as exempt (if legally possible). You may also be thinking of a related answer here about mandatory lunch breaks.
– Lilienthal♦
May 24 '16 at 9:23
1
1
"Legally unable to give his right": There was a thread a while ago about an employer having problems to force an employee not to do unpaid overtime. Which seemed a ridiculous problem until it was pointed out that the employee refusing to leave could sue for payment years later.
– gnasher729
May 24 '16 at 7:48
"Legally unable to give his right": There was a thread a while ago about an employer having problems to force an employee not to do unpaid overtime. Which seemed a ridiculous problem until it was pointed out that the employee refusing to leave could sue for payment years later.
– gnasher729
May 24 '16 at 7:48
1
1
@gnasher729 Yes it's brought up occasionally as one of the quirks that come with the employee protection laws and can prevent employees who want to go above and beyond from volunteering at crunch time. But the argument can be made that those who want to do it routinely should be rewarded with overtime pay or reclassified as exempt (if legally possible). You may also be thinking of a related answer here about mandatory lunch breaks.
– Lilienthal♦
May 24 '16 at 9:23
@gnasher729 Yes it's brought up occasionally as one of the quirks that come with the employee protection laws and can prevent employees who want to go above and beyond from volunteering at crunch time. But the argument can be made that those who want to do it routinely should be rewarded with overtime pay or reclassified as exempt (if legally possible). You may also be thinking of a related answer here about mandatory lunch breaks.
– Lilienthal♦
May 24 '16 at 9:23
suggest improvements |Â
up vote
0
down vote
I have never heard this approach, but working for wages is usually governed by each state's department of labor and unless you are an Exempt Employee, you can not be forced or asked to be working overtime without pay. It is illegal. If you are non-exempt, you get paid for each hour or smallest fraction allowed in your employment contract, for time worked.
When you are exempt, you are considered to be above average compensated and you are not subject to overtime pay. I am not sure what your situation is. In exempt employee contracts, there usually is a clause saying that some out of normal working hours and some weekend work is expected of you, which goes without saying, the compensation is already in your pay, so you shouldn't expect overtime or any other method of compensation.
answered May 23 '16 at 18:00
MelBurslan
7,00511123
suggest improvements |Â
up vote
0
down vote
I have never heard this approach, but working for wages is usually governed by each state's department of labor and unless you are an Exempt Employee, you can not be forced or asked to be working overtime without pay. It is illegal. If you are non-exempt, you get paid for each hour or smallest fraction allowed in your employment contract, for time worked.
When you are exempt, you are considered to be above average compensated and you are not subject to overtime pay. I am not sure what your situation is. In exempt employee contracts, there usually is a clause saying that some out of normal working hours and some weekend work is expected of you, which goes without saying, the compensation is already in your pay, so you shouldn't expect overtime or any other method of compensation.
answered May 23 '16 at 18:00
MelBurslan
7,00511123
suggest improvements |Â
up vote
0
down vote
up vote
0
down vote
I have never heard this approach, but working for wages is usually governed by each state's department of labor and unless you are an Exempt Employee, you can not be forced or asked to be working overtime without pay. It is illegal. If you are non-exempt, you get paid for each hour or smallest fraction allowed in your employment contract, for time worked.
When you are exempt, you are considered to be above average compensated and you are not subject to overtime pay. I am not sure what your situation is. In exempt employee contracts, there usually is a clause saying that some out of normal working hours and some weekend work is expected of you, which goes without saying, the compensation is already in your pay, so you shouldn't expect overtime or any other method of compensation.
answered May 23 '16 at 18:00
MelBurslan
7,00511123
I have never heard this approach, but working for wages is usually governed by each state's department of labor and unless you are an Exempt Employee, you can not be forced or asked to be working overtime without pay. It is illegal. If you are non-exempt, you get paid for each hour or smallest fraction allowed in your employment contract, for time worked.
When you are exempt, you are considered to be above average compensated and you are not subject to overtime pay. I am not sure what your situation is. In exempt employee contracts, there usually is a clause saying that some out of normal working hours and some weekend work is expected of you, which goes without saying, the compensation is already in your pay, so you shouldn't expect overtime or any other method of compensation.
answered May 23 '16 at 18:00
MelBurslan
7,00511123
answered May 23 '16 at 18:00
MelBurslan
7,00511123
answered May 23 '16 at 18:00
MelBurslan
7,00511123
answered May 23 '16 at 18:00
MelBurslan
7,00511123
7,00511123
suggest improvements |Â
suggest improvements |Â
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4
If the employer is getting extra work from the employees that it should pay but it does not is already illegal. Reporting it as a gift would be like a drug dealer reporting sales taxes to the state.
– SJuan76
May 23 '16 at 18:00
3
"I recall hearing that in the US doing unpaid work for a company is actually considered a gift" - where did you hear that? Links, please.
– WorkerDrone
May 23 '16 at 18:33
1
Who said there was a link? :)
– Don Branson
May 23 '16 at 18:38
That is to say, when I said "hearing," I was signifying an auditory event, so there are no links. That's why I'm asking, because it was mere hearsay, and I wanted to find out if there was any truth to it.
– Don Branson
May 23 '16 at 18:42
This sounds like a legal question. I believe legal questions are generally considered off-topic.
– Keith Thompson
May 23 '16 at 21:59