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Approve Proposal to
Create New Association
Members of the American
Institute of CPAs (AICPA)
and the Chartered In-
stitute of Management
Accountants (CIMA) have
overwhelmingly approved a proposal to
create a new, international accounting
association that will integrate operations
of both organizations while preserving
the existing membership bodies.
Voting concluded in separate AICPA and
CIMA membership ballots on June 16
and a supermajority of members who
voted from both organizations endorsed
the proposal. The AICPA ballot passed
86.5 percent to 13.5 percent, accord-
ing to independent tabulator Survey
and Ballot Systems. CIMA members en-
dorsed the proposal 89.7 percent to 10.3
percent, according to their independent
tabulator Electoral Reform Services.
The new association will represent
more than 600,000 current and future
accounting professionals and will raise
the profile of public and management
accounting in the United States and
abroad. It will enhance resources,
provide more market insights, and
have a stronger advocacy voice. AICPA
members will get these benefits and
automatic dual membership in the
AICPA and new association as part of
their regular AICPA dues, which will
continue to be set and adjusted in line
with historic norms.
The AICPA will continue its partnership
with state societies to promote, protect,
and grow the CPA.
Fifty-two CPA societies passed
resolutions in support of the member
ballot proposal, including Connecticut.
The new association is expected to
launch in 2017. Additional details will be
provided as they become available in
the coming months.
The U.S. Department of Labor (DOL)
on May 18 released a final rule amend-
ing the requirements for overtime pay
that dramatically increases the salary
thresholds for exemption for CPA firms
and other businesses in Connecticut
and throughout the nation.
Under the Fair Labor Standards Act
(FLSA), employees who work more
than 40 hours in a week are entitled
to overtime pay, unless they meet
the requirements of one of the wage
level and duties tests. The new rule
doubles the minimum salary threshold
from $23,660 to $47,476 annually and
raises the exemption level for what
are considered "highly compensated
employees" from $100,000 to $134,004
annual salary. DOL estimates that
this rule change will directly impact
some 4.2 million workers across the
United States not currently eligible
for overtime and may reclassify an
additional 8.9 million salaried workers
as nonexempt.
Businesses nationwide are assessing
the effects of the new overtime-pay
rule, with many companies saying
the regulation will lead them to
reduce workers' hours, cut benefits,
or limit flexible office arrangements.
Companies will have until December 1,
2016 to make determinations on which
employees to reclassify as nonexempt
and implement the changes.
In Connecticut, CPA firms and clients
alike are expressing concern about the
rule's impact.
"The rule may be well-intentioned,
but is likely to have unintended con-
sequences," said CTCPA Executive
Director Art Renner. "Expanding the
pool of overtime-eligible employees
will force firms and companies to re-
sort to cost-saving measures to main-
tain current payroll levels. The Labor
Department received 270,000 pub-
lic comments on its proposal, many
from employers who believe the rule
will force them to cap workers' hours,
slow the hiring of full-time employees,
and shift salaried workers to hourly
While most accounting firms will
work to absorb the additional payroll
expectations, the overtime rule will
have a significant negative impact
on smaller accounting firms. Of
particular concern are the impacts
the changes have on major decisions
such as hiring, expansion, benefits,
and the ability to offer flexible working
arrangements. Further, DOL does not
take into consideration the seasonal
nature of the accounting profession,
nor the numerous small firms that
are unable to increase the salaries
of their employees to comply with
the exemption threshold, while also
meeting the demands of tax season
each year.
The CTCPA will work with the AICPA
to urge Congress to intervene in the
process so that regulations governing
overtime pay reflect the evolving
workplace in a manner that is not
economically counterproductive.
CTCPA Assessing Impact of
New DOL Overtime Rule
Companies will have until
December 1 to make
determinations on which employees
to reclassify as nonexempt and
implement the changes.
Connecticut CPA
July/August 2016