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semi-annual salary..is this possible? Alabama

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  • semi-annual salary..is this possible? Alabama

    Our company is going through a little financial hardship at the moment. The owner, who lives in Japan, presently is on a montly salary. In order to help with the financial bind we are in...he figures we can accrue his salary and just pay him twice a year.

    Is this possible? Will there be any problems with the IRS or state government agencies? Since he lives in Japan, we currently file 1042 withholding taxes.

    Hope to hear from yawl. Oh...and we are in Alabama.

  • #2
    I have never had to deal with this personally, but I know of several CEO's that take their salary as a $1... and I doubt they receive regular paychecks for it.

    I don't see why the IRS would care as long as the pay and deductions were correctly calculated.
    Not everything that makes you mad, sad or uncomfortable is legally actionable.

    I am not now nor ever was an attorney.

    Any statements I make are based purely upon my personal experiences and research which may or may not be accurate in a court of law.

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    • #3
      Wait. Does he reside in Japan and work here? Or does he work there also? (I'm not familiar with 1042S)
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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      • #4
        He lives in Japan but comes to "work" or check up on things 3, maybe 4 times a year.

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        • #5
          Then U.S. Law would not apply. If Japanese law allows this, there's no problem in the U.S. He comes in on a business visa, right? I think it's an L-1?
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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          • #6
            Sounds more like a B-1 to me. If I recall correctly, an L-1 is for a country-to-country transfer; i.e. an employee in Japan being permanently transfered to a US location.

            Elle?
            The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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            • #7
              He presently has an L-1A visa.

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              • #8
                Thanks - the exact visa can sometimes affect pay laws. That helps.
                The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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                • #9
                  My source says L1A (and B) visas are requested when a company wants to transfer an employee temporarily to a U.S. branch or affiliate. As I'm doing more reading, I'm surprised he doesn't have a B-1 visa (business visitors). Is he being paid on the U.S. payroll? In U.S. dollars?
                  I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                  • #10
                    thanks all for the replies so far.
                    Let me add a few more details of information...just to make things more interesting.

                    Our owner/President is also the owner/President of our Parent company in Japan. But both companies act as completely different entities. The company in Japan treats us as a Vendor in the USA, sales to us as a vendor, charges us like a vendor etc. And we pay to that company like our supplier.

                    So our president is also the President of that company. He has to be careful what things he decides as our president, cause he can't make it seem like he is manipulating tax laws, importing laws to the other companies benefit.

                    In the original post, I mentioned that we are having financial difficulties, and one of those difficulties is falling a little behind in payments we owe to the parent Japanese company. Which is why he, as our president figures, ok, well stop paying me for 6 months over in the USA(accrue for 6 months and pay him all at once during the summer), and catch up with your payments to my company over here.

                    I tell you...these are the "days of our lives"

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                    • #11
                      Originally posted by Pattymd View Post
                      My source says L1A (and B) visas are requested when a company wants to transfer an employee temporarily to a U.S. branch or affiliate. As I'm doing more reading, I'm surprised he doesn't have a B-1 visa (business visitors). Is he being paid on the U.S. payroll? In U.S. dollars?
                      Pattymd, yes we are paying him in US Dollars and it gets direct deposited into a US checking Account. At the end of the year he files a 1040NR federal tax return and he also has a S.S.#

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                      • #12
                        OK, now I'm getting the picture. I'm still not seeing a problem with it as far as wage-and-hour laws go. Since, when he is in the states, his work state would probably be deemed Alabama, and Alabama has no pay frequency requirements for general employment (it's industry-specific; transportation only), there is are no wage payment laws that I could see you running afoul of.
                        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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