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  • As a business owner, you want your employees to come into work with enthusiasm and motivation to take on the day. After all, employee engagement can be very beneficial to a business in a number of ways. Yet, it’s not often that companies prioritize it. According to Gallup’s State of the American Workforce Report, only one in three employees are engaged at work. Below, we shared some ideas to improve employee engagement within your small business as well as a few key benefits.

     A group of coworkers are enjoying a pizza together at the office during lunch.

    Why is Employee Engagement Important?

    Employee engagement equates to more than just workplace happiness. According to Willis Towers Watson, employee engagement is an “employee’s willingness and ability to contribute to company success.” By this definition, high employee engagement can mean significant growth for your business. Specifically, here are a few key benefits that high engagement can bring:

    • Increased productivity. Engaged employees have the ability and motivation to outperform those who are disengaged. According to Gallup, highly engaged workforces were 17 percent more productive than those with less engagement. 
    • Greater profitability. Inc magazine reports that increasing employee engagement investments by 10 percent can increase profits by $2,400 per employee per year.
    • Improved retention. Employees who are invested in their employers won’t want to look elsewhere for work. The same Gallup report found that companies reduced employee turnover by 90 percent when engagement increased.
    • Better customer service. A business’s employee experience can directly impact customer experience. According to research by Temkin Group, companies whose customer experience is significantly better than their competitors have more engaged employees.
    • Reduced absenteeism. Low job motivation can cause employees not to show up for work. Gallup also found that companies were indicated to experience 37 percent less absenteeism as a result of increased employee engagement.

    How to Improve Employee Engagement

    Considering the many benefits that high employee engagement can provide, there are many different approaches you can take to improve engagement within your organization. According to an article by The New York Times, employees are more engaged when four of their core needs are addressed:

    • Physical – when employees can renew and recharge at work.
    • Emotional – when employees feel valued and appreciated for their contributions.
    • Mental – when employees have the time to focus on their most important tasks and define when and where they accomplish their work.
    • Spiritual – when employees can do more of what they do best and enjoy most.

    With these core needs in mind, here are some cost-effective ideas to improve employee engagement within your small business.

    Lunch and Learn

    Consider this an upgrade from your typical meeting. As the name suggests, lunch and learn sessions are casual training or informational meetings hosted by a fellow employee during lunchtime. During a lunch and learn, an employee shares a short presentation on a business-related topic, such as how to use marketing automation software or a case study on an exceptional project they worked on. Participants bring their lunches, listen in, and ask questions while enjoying their lunch. Lunch and learn sessions are a great way for your employees to learn about different sides of your business and the types of projects their colleagues are working on.

    Innovation Days

    Innovation days can be a day, or a half day, where employees are allowed to use company hours to work on special projects that matter to them. It allows employees to be creative, learn new things, and try new ideas, and they will certainly appreciate you for that. As a result of setting aside time dedicated to innovation, your employees may uncover ways to reduce costs, streamline processes, and make your business even stronger.

    Team Outings

    Company culture is an important aspect of any employee’s life. According to Glassdoor, 58 percent of workers say that company culture is more important than salary when it comes to job satisfaction. Hosting work outings can make your employees want to stay for who you are and what you do, and not for just a paycheck. Consider creating a culture committee focused on planning regular team outings and office activities, such as team lunches, happy hours, picnics, sporting events, and volunteer opportunities.

    Work Clubs

    Shared hobbies can certainly bring people together. Consider creating work clubs, such as fantasy football leagues, running clubs, softball teams, and book clubs, for likeminded employees. Clubs can be a great way to change the conversation from work to personal life and can serve as a prime environment for co-workers to develop camaraderie. According to the Society for Human Resources Management (SHRM), the more friends an employee has at work, the more likely they are to reject another job offer.

    Wellness Programs

    For employees to be engaged on the job, mental and physical health can play a significant role. That’s where implementing a workplace wellness program can help. Consider wellness programs beyond smoking cessation and drug and alcohol abuse prevention. Additional workplace wellness activities could be stress management and workout sessions. Wellness challenges, such as a step count challenge or water drinking challenge, can also be a great way to add some friendly competition into the mix.

    Performance Reviews

    Providing regular feedback is crucial to keeping employees engaged. Research shows the value of feedback: four out of 10 workers become disengaged when they receive little to no feedback, 82 percent of employees appreciate feedback, and 43 percent of highly engaged employees receive feedback at least once a week. 

    Regular check-ins―whether weekly, monthly, or quarterly―allow management to acknowledge an employee’s efforts and discuss opportunities for development and growth. These discussions can help employees feel more connected to the business, as they will gain a better understanding of the individual role they play in meeting your business goals and develop a sense of purpose that will keep them engaged on the job. 

    Training and Mentorship Programs

    Employee training shouldn’t end after onboarding is complete. For your employees to stay engaged, it’s important not to let them fall into a rut. Without opportunities to develop and learn professionally, employees are more likely to lose motivation and start to look elsewhere for work. According to a Korn Ferry survey, the majority of those changing jobs said boredom and the need for new challenges were the top reasons they were leaving. 

    Employee training programs can be an effective way to not only teach new employees but also develop existing workers’ skillsets. Additionally, mentorship programs can serve as a great way to help young employees grow within your organization.

    Regular Breaks

    Regular breaks offer employees time to reset and refocus. The New York Times reports that employees who take a break every 90 minutes experience a 30 percent higher level of focus than those who don’t, as well as a 50 percent higher ability to think creatively. A survey by Staples echoes these findings, with 80 percent of respondents saying that breaks make them feel more productive. As these findings show, when breaks are encouraged, employees feel like they can have better work-life balance, which can lead to greater engagement.

    Employee Recognition Programs

    Research has found that employees not only want but expect to be recognized when they do good work. As a result, Glassdoor found that more than 80 percent of employees are motivated to work harder when shown appreciation. Employee recognition programs are a great way to accomplish that. Consider building recognition programs that are aligned with your purpose, values, and goals as a way to show appreciation, encourage positive behavior, and keep engagement levels high.

    Need more employee engagement ideas? Contact GMS today to learn how our employee performance management services can help.

  • As the Coronavirus impacts businesses everywhere, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide some financial support during difficult times. The $2 trillion Coronavirus stimulus package contains a $349 billion lending program for small businesses, along with other means of relief.

    For small business owners, this news provides a form of respite in a difficult time. Of course, now these employers may ask how these loans work and whether they can access them. Read on to find out if your business can apply for a loan and how they impact your operations.

    Money from a CARES Act small business loan granted to a business impacted by the Coronavirus. 

    Is My Business Eligible for CARES Act Loans?

    As long as your business has fewer than 500 employees, it’s eligible for a loan. The stimulus package applies to businesses from all states and territories and even extends to self-employed individuals, independent contractors, and sole proprietors. The CARES Act does prioritize certain types of businesses, such as those in under-served and rural markets or businesses that are less than two years old.

    What Financial Assistance is Available for the Coronavirus?

    The CARES Act lays out a couple of different forms of financial relief for small businesses. The most notable of these is the $349 billion Paycheck Protection Program, which will provide partially forgiven loans depending on how businesses use them.

    Paycheck Protection Program Loans

    According to the CARES Act, businesses can receive a loan of 2.5 times the businesses’ monthly payroll up to $10 million. The exact amount your company can receive is based on how much you paid your employees between Jan. 1 and Feb. 29, plus 25 percent of that total amount. These loans have a fixed interest rate of one percent regardless of business type (the final rates, underwriting standards and other terms and conditions are to be determined). The Small Business Administration also notes that it will “forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll and certain other expenses following loan origination” if you are able to maintain your workforce.

    In addition, the CARES Act incentivizes employers for using loans for what it considers allowable purposes. By doing so, your Paycheck Protection Program loan can be forgiven and you’ll only need to pay back accrued interest on your loan if you use the loan for the following:

    • Payroll costs
    • Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums
    • Employee salaries
    • Interest payments on any mortgage
    • Rent and utility payments
    • Interest payments on any other debt obligations that were incurred before Feb. 15, 2020

    Economic Injury Disaster Loans

    In addition to the $349 billion lending program, the CARES Act also allotted $10 Billion for the Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs). According to Forbes, the expanded provisions mean that:

    • EIDLS can be approved by the SBA based solely on your credit score (a prior bankruptcy won’t disqualify your business)
    • EIDLs smaller than $200,000 don’t need a personal guarantee for approval (real estate is also not required as collateral)
    • Borrowers can receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage/lease payments, or repaying obligations that cannot be met due to revenue loss
    • EIDLs are now accessible for sole proprietors, independent contractors, tribal businesses, cooperatives, ESOPs with fewer than 500 employees, and all non-profits

    How Do I Apply for CARES Act Loans?

    If you’re want to apply for a Paycheck Protection Program loan, you can do so at any lending institution approved to participate by the SBA. You can apply for EIDLs online at the SBA website. 

    Contact us if you have any HR related questions on how to keep things running smoothly through these difficult times. 

  • A workplace accident can be a life-changing event, both for the person injured and an employer. A serious injury can change someone’s life, which in turn can place your business under the spotlight for both the injured employee’s family and OSHA.

    While you can’t heal someone’s injury after the fact, there are ways that you can definitively respond to workplace injuries to help avoid future accidents and avoid OSHA intervention. Here’s an example of how GMS helped one company avoid OSHA scrutiny and put practices in place to prevent additional workplace injuries.

    Hard hats in place to improve workplace safety for employees. 

    A Swift Reaction to Workplace Safety After a Fall

    The incident in question starts with an employee on top of a loaded flatbed trailer. At some point, the employee fell off the trailer and broke his neck in two places. After falling, the injured employee couldn’t move and laid motionless for roughly 30 minutes before another worker found him. The injured employee was then rushed to the hospital and spent 12 days in the intensive care unit before being moved to the physical therapy unit.

    While the injured employee was being treated, there was more work to be done back at the site of the accident. Within 60 minutes of the accident, a GMS safety coordinator was on the scene to investigate the incident and interview everyone directly involved with the incident. 

    Meanwhile, a claims specialist was in constant communication with the company’s owner, the witness, the injured worker’s spouse, and the safety coordinator. During this time, the claims specialist was able to make sure that the safety coordinator had accurate information for him to proceed with the investigation and create a Standard Operating Procedure (SOP) to make sure that the company didn’t have another employee suffer the same fate.

    Five days after the accident, OSHA sent the company a letter requesting a copy of our investigation. The coordinator emailed the investigation to OSHA along with a list of preventative measures the company was implementing to prevent these types of accidents from happening again. The attached SOP detailed that employees were no longer allowed to climb on loaded trailers. It also included information on a tool employees would now use to tarp the load without having to climb on it. Dates for future trainings were also set to teach employees how to use this tool and prevent future injuries. 

    Within a week of OSHA’s initial request, the organization reviewed the materials and plans GMS put in place and decided not to take any further action. In addition, OSHA didn’t assess any penalties for the accident.

    Take the Right Workplace Safety Precautions to Protect You and Your Employees

    As tragic as the accident was for everyone involved, it could have been much worse for this company. By acting swiftly and decisively, the company now has practices in place to protect more employees from catastrophic injuries. The investigation and new workplace safety practices also helped prevent the company in question avoid additional issues from OSHA.

    With millions of nonfatal workplace injuries occurring every year, it’s crucial to have plans in place to not only keep your employees safe, but also protect your business from OSHA repercussions. 

    Want to make your workplace safer? Contact GMS today about protecting your business.

  • Addressing common questions and concerns from clients and employees impacted by the coronavirus.

    Group Management Services Inc., a Certified Professional Employer Organization based in Richfield, Ohio, assures clients access to the same level of support and resources throughout the Coronavirus pandemic.  

    “Our number one priority is getting employees paid and maintaining benefits for those employees,” GMS President Mike Kahoe said. “As such, we are offering our customers grace period on all benefits, state unemployment, and workers’ comp billings.”

    GMS wants to address all concerns, starting with the list of common questions we anticipate from our clients and employees.

    GMS Operations

    Q: How will GMS employees be able to continue to work to ensure that my employees get paid during this crisis? 

    A: GMS has taken the precaution of instituting a company-wide work-from-home policy. In fact, a large percentage of our company already works from remote locations several days per week. This gives us a great deal of confidence in our ability to support you without disruption. Additionally, all GMS employees have access to all GMS systems, including phones and video conferencing, from wherever they work, and these systems are built on highly redundant platforms. 

    Technology

    Q: How is GMS protecting my data during this crisis? Aren’t allowances being made that could reduce the cyber protections in place to allow your employees to work from home?

    A: GMS has invested in cyber security improvements over the last 18 months that are effective at protecting our Clients’ data regardless of where you, or our staff, interact with it. All these safeguards remain in place, and we will maintain a high level of vigilance to ensure that your data and your employees’ payroll is secure. 

    Health Insurance

    Q: Will my GMS plan pay for the COVID-19 testing (Codes U0001 and U0002)?

    A: Yes. GMS will waive member cost share for these tests when administered by in-network providers in accordance with the CDC guidelines.

    Q: Will my GMS plan cover the treatment for COVID-19?

    A: Yes. Treatment for COVID-19 is eligible under the normal provisions of the plan when following CDC guidelines.

    Q: If I lay off part of my workforce in response to the COVID-19 crisis, can the company continue to cover those employees?

    A: Yes. As long as you continue to pay premiums, you may continue to cover laid-off employees even though they are not actively at work. Please note that you must administer the plan on a uniform, non-discriminatory basis. In other words, you may not choose to pay premiums for only certain people.

    Q: If I have to lay off my entire workforce in response to the COVID-19 crisis, can the company continue to cover those employees?

    A: Yes, as long as one person remains actively employed by the group. If you continue to pay premiums, you may continue to cover laid-off employees even though they are not actively at work. Again, this must be administered on a uniform, non-discriminatory basis.

    Q: What about continuation of coverage?

    A: As long as one person remains actively employed, employees may be offered COBRA and may elect to continue coverage under COBRA under the normal notice and election procedure.

    * If the plan has no active employees, the plan is terminated and COBRA is not an option. In that case, employees would have a special enrollment period to enroll in individual coverage or could purchase a short-term plan that is subject to medical underwriting.

    Q: If I have to terminate coverage for my employees in the middle of a month, will I receive a refund of my premium for the rest of the month?

    A: While your contract states that GMS will not refund a partial month’s premium, we will refund the proportional amount of premium should you terminate your coverage before the end of the month given the gravity of the current situation.

    Q: In light of the COVID-19 crisis, can I get a grace period extension on paying my premium?

    A: Yes. GMS is offering to extend the grace period for your next monthly premium payment by up to 60 days.

    Q: Will employees who are laid off temporarily as a result of COVID-19 concerns be permitted to rejoin the plan without a waiting period when they return to work?

    A: Yes. There will be no waiting period for current employees who are rehired by May 31, 2020. New hires are subject to any waiting period the plan requires.

    Q: Will I lose my job-based group-health coverage? 

    A: You may qualify for tax credits that can lower your monthly premiums and for lower out-of-pocket costs. Please inquire with your Benefit Account Manager if you have any questions.

    Q: Is our GMS pharmacy plan through MedTrakRx going to allow early re-fills on prescriptions if necessary?

    A: MedTrak has relaxed its refill-too-soon edits for non-opioid and non-specialty medications. These are not changes that will happen automatically and will occur at the discretion of dispensing pharmacists.

    Q: What does the Families First Coronavirus Response Act mean to covering testing for Covid-19?

    A: On March 18, 2020, President Trump signed the second coronavirus relief measure into law – the Families First Coronavirus Response Act (Act). Effective immediately, the Act requires group health plans and health insurance issuers to cover COVID-19 testing without imposing any cost sharing (such as deductibles, copayments, or coinsurance) or prior authorization or other medical management requirements. During this public health emergency, health plans and issuers must cover FDA-approved diagnostic testing products for COVID-19, including any items or services provided during a visit to a provider (in-person or telehealth), urgent care center or emergency room that relate to COVID-19 testing. This coverage cannot be subject to any plan deductible, copayment, or coinsurance. This coverage mandate does NOT require health plans and issuers to cover COVID-19 treatment at no charge. Exact coverage details for COVID-19 treatment, including any cost-sharing amounts, will vary by plan.

    Q: Will private health plans cover the cost of COVID-19 diagnostic testing that occurs prior to April 2?

    A: Yes, this section of the legislation is effective from the date of enactment, March 18, 2020, through the end of the national emergency period. The Act states that “a group health plan and a health insurance issuer offering group or individual health insurance coverage  shall provide coverage, and shall not impose any cost sharing (including deductibles, copayments, and coinsurance) requirements or prior authorization or other medical management requirements” for specific items related to testing or related health care provider visits.

    HR

    Q: What should Employers do if an employee discloses they have been in close contact with a person who tested positive or who is awaiting test results for COVID-19?

    A: According to the CDC, individuals who have had close contact with a person diagnosed with COVID-19 should self-quarantine. Employers can require an employee who has been exposed to the virus to stay home. Your HR Account Manager would be happy to help you navigate through these types of situations.

    Q: If an Employer is considering a temporary or permanent lay off what steps should be considered?  

    A: Employers should work closely with their HR Account Manager who will help guide them through this process. Items to consider include how to appropriately select employees for lay off, necessary documentation to provide to the employee, COBRA and Health Care Benefits (if applicable), and assisting with unemployment benefits.

    Q: If my state has instituted a “Stay at Home” order allowing only Essential Businesses to continue operation, what qualifies as an “Essential Business?” 

    A: In Ohio, for example, essential businesses are allowed to continue to operate, but must comply with social distancing requirements. A few examples of these are: 

    • Healthcare and public health operations
    • Human services operations
    • Essential infrastructure
    • Essential government functions
    • Stores that sell groceries and medicine
    • Food and beverage production and agriculture
    • Charitable and social services
    • Gas stations and businesses needed for transportation
    • Critical trades
    • Restaurants for off-premise consumption
    • Transportation
    • Professional services
    • Hotels
    • Home-based care

    For the full order and list, please reference the following link – Order to Stay at Home. 

    The Governor of Ohio has issued a Stay at Home Order effective March 23 at 11:59 p.m. and lasting for the next two weeks. Group Management Services is considered an Essential Business. All our services will continue as normal. We will also continue to monitor developments and recommendations from the CDC, Federal, State, and Local government. We hope you are doing well. Please let us know if there is anything we can do to help.

    Q: What are my next steps?

    A: If you are considered an essential business, we are happy to help guide you through the social distancing requirements. If you are unable to continue business because of the Stay at Home Order, we are happy to help you navigate next steps. If you have positions that have the ability to work from home, we are happy to help create a work from home policy. In the unfortunate event your business requires layoff of some or all of your workforce at this time, we can assist in documentation, communication, and next steps.   

    Q: President Trump signed the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, so its provisions go into effect no later than April 2. Will the leave provisions, Emergency FMLA (EFMLA) and Emergency Paid Sick Leave (EPSL) be applied retroactively?

    A: When a law is to be applied retroactively it will typically state so in plain language, which this legislation does not. Therefore, the law will likely not be enacted retroactively. GMS will alert you of any change to this.

    Q: From now until April 2, how should we handle employees who need time away from work for COVID-19 related reasons? What documentation should we require?

    A: Until the legislation takes full effect, continue handling these situations as you have been on a case by case basis. Work with your HR Account Manager for assistance. Rely on current employment policies, including but not limited to paid time off, paid vacation, sick leave, or other leaves of absence policies. Certification for certain absences (advisement by health care provider to self-quarantine, experiencing symptoms, seeking diagnosis) may be hard to obtain due to doctors not seeing patients, providing notes, or conducting full testing. GMS has created the attached Documentation on a COVID-19 Absence that may be used to gather facts and communicate details of a potential leave of absence. This would be filed in the employee’s confidential personnel file. 

    Q: Do you have the forms necessary for employees to file for EFMLA and EPSL?

    A: No, official forms or documentation have not been released yet by the Federal government. We will provide if, and when, they become available.  

    Q: Do we have to offer EFMLA and EPSL to employees who are already or who will be laid off prior to April 2?   

    A: No, if employees are laid off, they become eligible for unemployment compensation under the Emergency Unemployment Insurance Stabilization and Access Act. This is handled separately from EFMLA and EPSL. 

    Q: If I cut an employee’s hours, can they apply for partial unemployment?

    A: Yes, an employee experiencing a reduction in hours may apply for and obtain unemployment benefits. In Ohio, if the reduction in hours is due to COVID-19, employee should provide Mass Layoff ID# 2000180. These layoffs will not affect your unemployment rate as all coronavirus layoffs will be charged to the Ohio Unemployment Mutual Fund and will not be charged to your account.

    Q: If an employee is CHOOSING to stay home out of fear of exposure, how do you recommend we handle this scenario?

    A: Evaluate the safety precautions you, as a business, have taken to protect employees and prevent the potential spread of COVID-19. If you feel that you have taken all preventative measures within reason, review your current time off policies and available time off balances with the employee, or explain the unpaid model you have been utilizing. 

    Q: How can an employer apply for and receive the small business exemption to the leave provisions of the FFCRA?

    A: Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave in cases where the viability of the business is threatened. That said, it remains to be seen how to request an exemption and for which provisions of the legislation the exemption will apply to. Please note the FFCRA allows tax credits up to 100 percent of the cost of paid leaves. Under guidance that will be released this week, eligible employers who pay qualifying sick, childcare, or other leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying leave paid, rather than deposit them with the IRS. Per the legislation and the IRS, the payroll taxes that are available for retention include withheld federal income taxes, and both the employee and employer share of Social Security and Medicare taxes. 

    We will be covering tax credits and small business relief on Friday, March 27, 2020 during the next webinar in our COVID-19 webinar series. Please join us. You may register here: https://attendee.gotowebinar.com/rt/6872645169703825931 

    Unemployment

    Q: Will Coronavirus related layoffs affect my unemployment rate?

    A: Every state is different. In Ohio (where we are headquartered), these layoffs will not affect your rate. All coronavirus layoffs will be charged to the Ohio Unemployment Mutual Fund and will not be charged to your account.

    Q: Will my employees have a waiting week before their unemployment starts?

    A: No, Governor DeWine (Ohio) has waived the waiting period for all lack of work claims so employees can start collecting as soon as the claim has been processed.

    To learn more about GMS, visit https://www.groupmgmt.com/about-us/.

  • Health Insurance renewals may be one of the most important decisions an employer makes each year. For most small businesses, group health insurance is one of the largest expenses they incur, meaning the process can be quite stressful. To help, we put together some guidance on the renewal period and what you can do to streamline the process for your business.

    Small business owners reviewing the different elements of the health insurance renewal process. 

    Why Do Renewals Happen on an Annual Basis?

    The renewal process is designed to give insurance carriers, employers, and employees the ability to make adjustments on an annual basis. However, those adjustments differ depending on the party involved. Insurance carriers use the yearly renewal process to keep plans compliant with any new regulations and calculate new health insurance plan premiums.

    As an employer, yearly renewals allow you to adjust your benefits plans as your business evolves. Over time, you may have grown or your employees’ benefits needs may change. Annual renewals allow you to add or adjust your plans, change contributions, and make any other changes to benefit both your business and your employees. 

    Likewise, your employees can use the renewal period to change their plan selection or renew the same plan as before. Potential changes include swapping plans if you offer more than one, adding a dependent, or even opting out to join a spouse’s plan.

    What are the Different Stages of the Health Insurance Renewal Process?

    The renewal process is made up of five main steps from start to completion. This process begins with health insurance carriers before turning to you and your employees.

    Stage 1: Reassessment 

    Before you see any new plan options, your insurance carrier needs reevaluate its new pricing for the upcoming year. This can  often involve the insurance carrier adjusting premiums because of new doctor’s fees, medical technology, general inflation, and other reasons. The insurance company will also assess your company for any change in risk levels and other factors that impact your potential premiums.

    Stage 2: Presentation 

    Once your insurance carrier reassesses its rates, it’s time to apply those rates to new plans. At this point, your insurance carrier will present you with different options for your company to use in the upcoming year.

    Stage 3: Selection 

    Now that you have a variety of plan options, you’ll want to figure out which is best for you and your employees. You’ll also need to determine how much your company will contribute to each employee’s plan after you decide on a plan.

    Stage 4: Employee enrollment 

    After you’re done making a plan selection and identifying contribution amounts, it’s time for open enrollment. At this point, you will present your employees with the plans you’ve chosen so they can weigh costs, compare coverage, and weigh any other factors that may impact their decision to enroll in one of your options or find coverage elsewhere.

    Stage 5: Completion 

    At some point, your employees will need to select a plan or opt out of your plans. Your insurance provider will then make sure that any eligible member of the company who selected a plan is effectively covered throughout the course of the new plan year.

    How Can I Prepare for a Smooth Health Insurance Renewal Process?

    While the renewal process may sound like a fairly simple five-step process, it can be anything but if you’re not careful. It’s important to prepare ahead of time to limit the stress renewals can place upon both you and your employees. Here are a few tips to help you get your company ready for renewal season.

    Communicate with your employees ahead of time

    It never hurts to give your employees advance notice about open enrollment. While some of your employees may be aware of your annual renewal season, others may not. As you or your health care provider go through the presentation and plan selection process, it’s good to send a message to your employees that open enrollment is approaching and share some basic info about what that means for them. This will help eliminate any confusion from employees who may not be as knowledgeable about insurance renewal season.

    Not only should you communicate with your employees ahead of the open enrollment period, you should also talk to them once they’re presented with new plan options. It’s good to educate eligible employees about any plan changes, whether it’s a new offering or something that’s no longer a part of the new coverage options. By explaining these changes, you can be upfront with employees, which can help mitigate any hard feelings from employees upset about surprise changes.

    Evaluate your company’s needs

    There’s a good chance that your company isn’t in the same position it was a year ago. Whether you’ve grown or not, you and your employees may have different health insurance needs than before. As such, it’s best to plan ahead to determine some specific goals for the plan selection process.

    As an employer, one of the first factors you need to identify is your budget. Has that number changed since this time last year? If so, that will likely impact the quality of the plan you select. You’ll also need to account for any potential rate increases given the aforementioned possibility of higher plan costs due to internal or external factors.

    You’ll also want to account for your employees as well. According to the Society for Human Resource Management, “56 percent of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job.” In addition, 46 percent of that same group said their health insurance was the deciding factor or a major reason why they chose their current job. Health insurance is a key retention and recruitment tool, so you’ll want to balance your employees’ preferences with your budget to have a plan in place during the renewal process.

    Find the right coverage options for your organization

    One of the most important parts of the renewal process comes long before you’ve ever presented plans. Finding the right group health insurance partner plays a massive role in not only the quality of your benefits package, but also the cost of your premiums. Small and mid-sized businesses may be subject to higher premiums since they have fewer employees than big companies that can spread risk out across larger group sizes. Fortunately, a Professional Employer Organization (PEO) can help your company enjoy some of the same advantages as a big business. 

    At GMS, we represent tens of thousands of employees, which allows you to leverage our greater group buying power to attain more cost-effective insurance rates. In addition to getting more bang for your buck, we also offer supplemental insurance coverage to tailor your plan around your employees. Our experts can also take the burden of employee benefits administration off your shoulders, making sure your company is covered and compliant while you use your new free time to focus on other business matters.

    Ready to revitalize your health insurance coverage? Contact us today to talk to one of our experts about what we can do to protect you and your business.

  • After years of proposed changes to overtime laws, the Department of Labor (DOL)’s new updates finally went into effect at the beginning of 2020. The new salary levels make roughly 1.3 million more workers eligible for overtime pay. This news means business owners across the country may have some work to do to keep up with these changes.

    While the new standard salary level is a notable difference, it’s not the only change the DOL made. The department also revised rules for highly-compensated employees, regulations on overtime pay calculations, and other crucial details. To help, we broke down exactly what the DOL changed to help you know where your business stands and what you should do next.

    A clock tracking time for employees now eligible for overtime and papers documenting business numbers like regular rate calculations.

    Which Employees are Now Eligible for Overtime?

    Currently, the Fair Labor Standards Act sets the salary threshold for overtime at $35,568, which equates to $684 per week. Previously, the threshold was $23,660, or $455 per week. Those employees who meet the requirements set by the DOL are entitled to earn overtime pay for any hours worked past 40 in a given week. The pay for those extra hours is set at one-and-a-half times that employee’s standard rate of pay, which is the same as before. 

    In addition, highly compensated employees must now earn at least $107,432 ($684 of which must be paid weekly as either a salary or fee) instead of the old rate of $100,000. The new rules also maintain that employers can count annual (or more frequent) nondiscretionary bonuses and incentive payments as up to 10 percent of the minimum salary threshold.

    This salary threshold does not apply to all employees, however. The new rules still provide overtime protections to blue-collar workers, which means they are eligible for overtime even if they make more than $684 per week. Similarly, white-collar employees still do not receive these same overtime protections as long as they meet certain criteria for exemption. 

    In addition to meeting the new salary threshold, white-collar employees are considered exempt based on the duties they perform and if they’re paid a predetermined, fixed salary that is not subject to reduction. There were no changes to the preexisting duties tests, so owners can use the same criteria for exemption as in the past. For a detailed breakdown of those exact duties, check out our post on navigating white-collar exemptions.

    What Applies to Regular Rate Calculations for Overtime?

    Once you identify which employees are eligible for overtime pay, there’s still the matter of having to pay them for their extra hours. However, it’s not always easy to identify what affects an employee’s regular rate of pay.

    The FLSA identifies an employee’s “regular rate” as the rate that the employee is paid per hour. This doesn’t mean that the employee needs to be compensated on an hourly basis. Instead, it’s simply a calculation of how much the worker makes over the course of an hour compared to his or her salary, commission, and other compensation for all non-overtime hours worked in a workweek. As such, it’s relatively simple to calculate an employee whose compensation consists of only hourly pay – multiply that employee’s total hourly rate by the number of overtime hours worked.

    However, these calculations are much more complicated once you factor in other forms of compensation. The FLSA identifies that the rate should cover compensation that “include(s) all remuneration for employment paid to, or on behalf of, the employee,” such as bonuses, commissions and other forms of compensation. The DOL’s final rule added a list of exclusions that do not apply to overtime pay to address the confusion over what is considered part of the regular rate of pay. Per the DOL, these exclusions include:

    • The cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access/fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student-loan program), and adoption assistance
    • Payments for unused paid leave, including paid sick leave or paid time off
    • Payments of certain penalties required under state and local scheduling laws
    • Reimbursed expenses including cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred “solely” for the employer’s benefit; and clarifies that reimbursements that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System or the optional IRS substantiation amounts for travel expenses are per se “reasonable payments”
    • Certain sign-on bonuses and longevity bonuses
    • The cost of office coffee and snacks to employees as gifts
    • Discretionary bonuses, by clarifying that the label given a bonus does not determine whether it is discretionary and providing additional examples 
    • Contributions to benefit plans for accidents, unemployment, legal services, or other events that could cause future financial hardship or expense

    What Should an Owner Do About the New Overtime Rules?

    While some of the exact details have changed since the initial plans to update the overtime rules were announced back in March of 2019, our advice remains largely the same as it was that spring. First, you’ll need to evaluate your employees and identify who is now eligible for overtime and how much overtime you expect them to work (if any). If you do have employees who will now earn overtime, you’ll need to decide how you want to handle these new costs:

    • Pay newly-eligible employees overtime pay for the extra hours they accrue
    • Limit employees to 40 hours per week to prevent them from earning overtime
    • Determine how much certain employees would make in expected overtime and bump their pay to above the salary threshold if that ends up being less costly
    • Adjust salaries for new employees to account for expected overtime costs

    Each of these options has its own benefits and drawbacks, so deciding which route is best for your company largely depends on you and your workforce. Regardless of your decision, you’ll need to make sure that whatever you do ensures that your business is compliant with the new overtime rules so that you don’t open yourself up to thousands of dollars in fines and other potential penalties.

    How Can I Stay Ahead of New Regulations?

    The new overtime rules are just another major change that forces business owners to change how they manage their business. Unfortunately, you don’t always have the time or knowhow to keep up with new regulations. Fortunately, GMS can help you claim your time back and protect your business.

    As a premier PEO, GMS has the HR experts necessary to help you plan for the future and stay compliant with current laws. Our integrated HR system helps us take care of the administrative burden of payroll management, benefits administration, and other crucial human resources tasks for you so you have the time you need to focus on growing your business.

    Ready to stay ahead of new regulations and ease your administrative burden? Contact us today to talk to one of our experts about how we can strengthen your business.

  • An underperforming employee in your organization is an unfortunate reality that every business owner may have to face at one point or another. When an employee is failing to meet expectations, not only do those directly associated with that employee suffer, but the entire company will eventually feel the ripple effect of these behaviors. These repercussions are typically felt more greatly and much more quickly within a smaller business, where every employee tends to play a larger role in the success and failure of your operation.

    Eventually, though, you’ll reach a point where it’s clear that the situation has to change. While terminating the employee may seem like the logical course of action when you reach this point, performance improvement plans may offer a better approach to employee performance management.

     Silhouette of a businessman pushing a boulder up a hill.

    What is a Performance Improvement Plan?

    A performance improvement plan (PIP), sometimes referred to as a performance action plan, is a tool used to give an underperforming employee the opportunity to succeed. Essentially, it can be viewed as a probationary period for employees. The plan itself should be a formal, written document that outlines any recurring behavioral and/or performance issues along with a specific timeline for the employee to achieve certain goals to regain good standing in the company.

    Steps to Implementing a Performance Improvement Plan

    The Society for Human Resource Management (SHRM) outlines the steps that organizations should take to implement a performance improvement plan:

    1. Identify the Underperforming Employee

    Underperforming employees can be challenging to identify within an organization. For example, an underperformer could be a new hire that has a larger learning curve than originally anticipated. Even a top performer can become disengaged if there’s a lack of growth opportunities or challenges. According to PeopleGoal, an employee experience platform, some signs that may suggest that an employee is struggling include:

    • Decreased productivity
    • Decreased engagement
    • Increased time off
    • Increased tardiness

    2. Determine the Right Course of Action

    Performance improvement plans can be beneficial in certain circumstances. However, they can also be a detriment if there isn’t a genuine commitment to improvement. SHRM says that performance improvement plans should be implemented when there is “a commitment to help the employee improve, not as a way for frustrated managers to start the termination process.” 

    To assess whether a performance improvement plan is the appropriate next step, ask yourself:

    • Is it likely that the issue can be resolved through a formal improvement plan? Problems that involve sales goals, quality ratings, and other quantitative objectives are typically issues that could be resolved with a performance improvement plan. Issues related to a poor attitude or bad behaviors, on the other hand, usually aren’t as well-suited to using the goal-oriented process of a performance improvement plan.
    • Has the employee received the proper training to perform the job well? Was the employee’s onboarding process sufficient? Additional training outlined in a performance improvement plan can help correct any gaps in training.
    • Is there a known personal issue affecting the employee’s performance? When an employee experiences troubles in their personal life, it can affect their work performance. A performance improvement plan can help the employee get refocused and back on track in a reasonable time frame.

    3. Draft an Improvement Plan

    Once the need for a performance improvement plan has been established, it’s time to start drafting the plan. As you write the performance improvement plan, be sure to:

    • Define what is considered an acceptable level of performance. Consider the employee’s job description as well as the company guidelines outlined in your employee handbook.
    • Identify areas where the employee’s performance is lacking. Include specific details, such as dates, specific data, detailed explanations, and any previous guidance or reviews given to the employee.
    • Set specific, measurable, attainable, relevant, and time-bound (SMART) goals. Keep in mind, performance improvement plans usually last 30, 60, or 90 days. An example of a SMART goal could be, “John Smith must produce at least 100 units per month for the next three months.”
    • Provide guidance on what the company will do or provide to help the employee achieve these goals. For example, a manager might provide additional training, resources, or coaching to help an employee close a skills gap.
    • Include how often you will meet with the employee to review their progress. Weekly check-in meetings can be common, but the frequency can depend on the goals or circumstances.
    • Clearly state the consequences of not meeting the objectives of the plan. Consequences may include a demotion, transfer to a different position, or termination.

    4. Review the Plan

    It’s important to remove any bias against the employee from the performance improvement plan, especially if you work closely with the employee. Ensure that the performance issue is clearly stated, the goals are fair, and the deadlines are reasonable. It could be in your best interest to have someone in HR review the plan to ensure the plan is attainable and fair.

    5. Implement the Plan

    It’s now time to meet with the employee to discuss the plan and your expectations. A word of caution: performance improvement plans tend to get a bad rap with employees, as they can often be seen as the first step toward termination. As a result, some employees may decide to quit, rather than stick around for what they believe to be inevitable. It’s also important to note that not every employee will respond to criticism well.

    When you meet with the employee, it’s important to communicate the company’s commitment to the plan and to the employee’s success. Employee feedback should also be encouraged during this time to help clarify any areas of confusion and understand their perspective on the current situation. After reviewing the plan and making any modifications, you and the employee should both agree to and sign the written plan.

    6. Monitor Progress

    As stated in the performance improvement plan, you should regularly meet to review the employee’s progress toward meeting their performance goals. Ensure all meetings are scheduled and occur on time. Cancelling, rescheduling, or tardiness to meetings could convey a lack of importance or commitment from you to the employee.

    During these check-in meetings, evaluate the employee’s progress, identifying why progress has or has not been made. If needed, provide solutions or resources to help get the employee back on track.

    7. Plan Conclusion

    The outcome of a performance improvement plan is situational. In an ideal scenario, the employee would reach their goals by or before the plan’s deadline. If this is the case, formally close the performance improvement plan, recognize the employee’s success, and allow the employee to continue employment with the expectation of continued good performance.

    If an employee falls short of meeting their performance goals in the given timeline but is committed to improvement, it could be worthwhile to extend the deadline. In other situations where the employee is unable to improve or their performance worsens, you’ll need to consider whether a transfer, demotion, or termination would be in the best interest of the company.

    Benefits of a Performance Improvement Plan

    Regardless of the outcome, there are many benefits to implementing a performance improvement plan. The process of identifying the root causes of poor performance, outlining clear expectations for improvement, and giving the employee a chance to rectify shortcomings could save significant time and costs related to termination and re-hiring. Additionally, by having these types of plans in place, you’ll create a culture of performance accountability and continuous improvement along every rung on the corporate ladder. 

    Employee Performance Management Services

    As a business owner, performance management is critical to making decisions related to training, career development, compensation, transfers, promotions, and termination. Professional employer organizations (PEOs) like Group Management Services can help. Whether it’s reviewing a performance improvement plan, documenting performance reviews, or even initiating demotions, transfers, or terminations, we can take on the administrative challenges associated with managing employees. In addition to performance management, we can provide comprehensive HR services, including payroll, benefits, and risk management. Contact GMS today to learn more about our employee performance management services.

  • Like any other state, Tennessee has it’s own particular rules when it comes to workers’ compensation. The Volunteer State has specific compliance standards for acquiring coverage. Here’s what small business owners in Tennessee need to know about workers’ compensation.

    A woman filling out a work injury form for a Tennessee employer with workers’ compensation insurance.

    Does My Business Need Workers’ Compensation Insurance?

    The state of Tennessee is strict when it comes to required workers’ compensation coverage. To start, Tennessee law mandates that employers must secure workers’ compensation insurance if they have five or more employees.

    It’s important to note that there is a big distinction between who is considered an employee or an independent contractor. While you may not view certain part-time workers or family members as true employees, the state may count them toward your five-person threshold depending on certain criteria. The differences between employees and independent contractors typically come down to the level of control an employer has over a person. In Tennessee, the state adopted a new 20-factor test that went into effect Jan. 1, 2020 to determine who is legally considered an official employee.

    Exemptions to the five-person minimum

    While five employees is the main threshold for mandatory workers’ compensation insurance, there are exceptions to that rule. The exemptions work both ways, allowing some businesses to work around the five-person count in some instances while lowering the threshold for others.

    In Tennessee, there are a couple of instances where employers need to secure coverage even if they only have a single employee. This one-person threshold applies to all employers in the coal mining or construction service industries unless they are specifically exempt. For example, Tennessee’s Department of Labor & Workforce Development notes that sole proprietors, members of LLCs, and partners “are excluded from the count of employees that determines whether or not an employer is covered by the Tennessee Workers’ Compensation Act.”

    Minimum employee thresholds do not apply to any state and local government agencies, as well as businesses that employ farm laborers or domestic help. However, these entities, along with any other business not required to secure insurance, may purchase coverage at their own discretion. It’s also important to note that any companies that do not have to provide worker’s compensation insurance are not protected against legal action. Injured employees for these companies won’t receive workers’ compensation benefits, but may still file a lawsuit against the employer.

    How Do I Make Sure My Business is Covered?

    If you need to – or decide to – secure workers’ compensation coverage, you have three options in Tennessee:

    • Voluntary market plans
    • Tennessee assigned risk plans
    • Self-insurance plans

    Unlike monopolistic states where employers have a single route for acquiring workers’ compensation insurance, Tennessee allows business owners to compare quotes and purchase policies from private companies. If your business has older or higher-risk employees, you can also purchase coverage from Tennessee’s assigned risk plan. This plan is managed by the National Council on Compensation Insurance (NCCI) and gives employers in Tennessee an insurance option if the voluntary market won’t.

    The third option involves employers self-insuring workers’ compensation claims. This route means that an employer assumes the risks associated with providing workers’ compensation to employees. As such, a self-insured employer won’t submit claims to an insurance company or pay fixed premiums. Interested businesses can apply with the Tennessee Department of Labor & Workforce Development to qualify for self-insurance.

    However, this option means that your business is on the hook for the cost of each workers’ compensation claim out-of-pocket as they happen. This arrangement makes self-insurance a high-risk, high-reward approach for smaller businesses without assistance from a Professional Employer Organization or some other organization that can administer such a policy.

    What’s the Best Way to Protect My Business without Extensive Workers’ Comp Costs?

    While there are a few situations where you won’t need to secure workers’ compensation insurance, odds are that you do. Even if you don’t, that insurance can be an important safeguard against legal action in case an accident does occur.

    Of course, this protection does come at a cost. Workers’ compensation rates can be a major drain on your overall bottom line. Fortunately, you have options in Tennessee that allow you to find the best means of workers’ compensation coverage for your business. Even better, you can work with a PEO to not only expand your coverage possibilities but also work to lower your rates through cost containment and loss prevention strategies.

    Certain costs or risk levels can limit options for small companies. As a PEO that represents tens of thousands of employees, GMS can help you tap into Fortune 500-level services, such as better workers’ compensation insurance options and more ways to save on rates. Between expert claims managers and economies of scale, we can help you protect your business at a more reasonable cost.

    Ready to keep your business compliant and take the burden of HR administration off your shoulders? Reach out to our Tennessee office or one of our other locations to talk to one of our experts about how we can help you through risk management and other critical administrative services.

  • Retirement plans can be a great benefit for small business owners looking to attract and retain employees. But between IRAs and 401(k)s, it can be challenging to decide which is the best plan suited for your organizational needs. For greater ease, some employers might prefer the SIMPLE IRA. For flexibility, though, the variety of choices available in a 401(k) can make this retirement plan a more attractive option. 

    Choosing a retirement plan is often one of the most important financial decisions a business owner can make. To help with your decision, we explained the differences between a SIMPLE IRA and a 401(k) as well as the pros and cons of each retirement savings plan.

     Retirement savings plan.

    What is a SIMPLE IRA?

    A Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA is a tax-deferred retirement savings account that can be established by employers, as well as self-employed individuals. As the name implies, many employers prefer this plan for its simplicity in that it’s quick to set up and ongoing maintenance is straightforward and inexpensive from an administrative standpoint.

    The Difference between a SIMPLE IRA and a Traditional IRA

    While SIMPLE IRAs and Traditional IRAs are similar, SIMPLE IRAs are aimed more toward small business owners and self-employed individuals. With a SIMPLE IRA, employers must match part of their employees’ contribution. Employers have two options for matching according to Motley Fool: They can either match contributions up to 3% of their employees’ compensation, or contribute a fixed rate of 2% of compensation regardless of employee participation in the plan. The contribution limits are also different. The amount an employee contributes from their salary to a SIMPLE IRA cannot exceed $13,500 in 2020 and 2021. Conversely, for a Traditional IRA, the total contribution limit can’t be more than $6,000 in 2020 and 2021 ($7,000 if you’re age 50 or older).

    The Difference between a SIMPLE IRA and a SIMPLE 401(k)

     

    A SIMPLE 401(k) plan is a cross between a SIMPLE IRA and a traditional 401(k) plan. The same eligibility rules that apply to a SIMPLE IRA apply to a SIMPLE 401(k). One key difference is the employer contribution limits. All employer contributions to a SIMPLE 401(k) are subject to a compensation cap ($290,000 for 2021); with a SIMPLE IRA, only non-elective employer contributions are subject to a compensation cap.

    Eligibility

    To qualify for a SIMPLE IRA, employers can have no more than 100 employees who have received at least $5,000 in compensation from the employer for the previous year. There is also no age limit with a SIMPLE IRA, making it available to all employees within the company. By choosing a SIMPLE IRA, employers are not allowed to maintain any other plan. 

    Contributions

    Employer contributions are mandatory with a SIMPLE IRA and are deductible on your business tax return. Regardless of whether an employee contributes, employers must either match up to 3 percent of an employee’s pay or match a contribution equal to 2 percent of an employee’s compensation. For two out of every five years, an employer who elects to make matching contributions has the option to reduce their contribution amount to one that is between 1 and 2.99 percent. With a SIMPLE IRA, all contributions vest immediately.

    As with any retirement savings plan, there are some limits to how much can be contributed to a SIMPLE IRA. For 2020, the annual contribution limit is set at $13,500 (up $500 from 2019) for employees. Workers that are 50 years in age or older can contribute $3,000 more, for an annual total of $16,500. Meanwhile, there is no limit on employer matching contributions, with one exception. Employers using the 2 percent contribution based compensation model can only match their contribution on up to $280,000 salary.

    Administrative responsibilities and fees

    As previously alluded to, there are minimal administrative requirements associated with SIMPLE IRAs. There are no annual tax filing requirements, either – business owners just need to be sure to send annual plan details to employees. Another advantage of SIMPLE IRAs is the low cost of setup and maintenance.

    What is a 401(k)?

    A 401(k) is a defined contribution retirement plan that comes with a lot of flexibility for employers who would like to offer it as a benefit to employees. While this type of retirement savings plan can be more complex to establish and maintain, being able to choose how you want to contribute to employee accounts as well as having the option of a Roth 401(k) can sway employers to select this plan.

    Eligibility

    Any company with one or more employees is eligible to offer a 401(k). However, 401(k)s are limited to employees at least 21 years old who worked at least 1,000 hours in the previous year. 

    Contributions

    Under a 401(k), employees have the option to set aside a portion of their income and invest it in a qualifying retirement account. This money is tax-deferred, meaning that the employee doesn’t pay federal income taxes on their contributions.

    Perhaps one of the biggest advantages of offering a 401(k) is that employer contributions aren’t mandatory. Rather, employers have the option to match none, some, or all of their employees’ 401(k) contributions. Usually, business owners will set limits on how much they’ll match. For example, you might match employee contributions up to 6 percent of an employee’s salary, and only have your contributions fully vest after two years. 

    Employer contributions are deductible up to IRS limits. As of 2020, combined contributions of employee and employer are limited to less than 100 percent of compensation, or $56,000. For workers aged 50 and older, that limit is raised to $62,000. Should an employer chose not to contribute, employee contributions are limited to $19,000, or $25,000 for those aged 50 and older.

    Additional provisions

    In addition to the traditional 401(k) as mentioned above, there are additional provisions that can be made, such as a Roth option or profit-sharing.

    Roth 401(k)

    The option of a Roth 401(k) can be a major deciding factor in selecting this retirement plan. A Roth option for your 401(k) plan allows you and your employees to contribute post-tax earnings toward retirement and face no additional taxes on those savings or investment earnings when the money is withdrawn at retirement. 

    Having the Roth option can be a cost-effective way to make your retirement savings plan more attractive because you and other highly-compensated employees won’t be subject to an income cap. Furthermore, contributions to the account are taxed up-front, rather than at the time of withdrawal. While certainly a plus, the additional tasks associated with the administration and taxation of a Roth 401(k) can be burdensome on a small business. 

    Profit Sharing

    Profit-sharing is another option that can be added to a 401(k) plan with a simple amendment. Profit-sharing allows business owners to contribute pre-tax dollars to employee retirement accounts based on how well their business did in the year. For profit-sharing 401(k) plans, the annual contribution limit is $56,000 per employee (or 100 percent of their salary, if it’s lower). 

    Profit-sharing plans can serve as a great motivation tactic for employees to work hard toward meeting your goals. As with all other types of 401(k)s, implementing a profit-sharing 401(k) plan can also allow small business owners to benefit from lower tax liability, controlled contributions, and improved talent acquisition and retention.

    Administrative responsibilities and fees

    With more flexibility comes greater administrative duties and plan fees associated with 401(k)s. For one, employers that offer 401(k)s are subject to a compliance audit every year to ensure that plans don’t favor highly-compensated employees over those who are paid less. In addition, employers are subject to higher setup and maintenance costs. Generally, plan fees tend to expensive, even more so for small businesses.

    SIMPLE IRA vs 401(k): How to Decide

    As described above, there are many pros and cons to each retirement plan. To help decide which plan is best for your company, ask yourself the following questions:

    Why are you setting up a retirement plan?

    There are many benefits to setting up a retirement plan, which you’re likely considering. For instance, retirement benefits are listed among the most important employee benefits, according to Monster’s 2019 State of the Candidate survey. Beyond employee acquisition and retention, you may be trying to save for your own retirement as a small business owner. Contribution limits may be a factor here, especially for profitable owners who may prefer the 401(k) for the higher contribution limit.

    Will you need to adjust employer contributions?

    In an uncertain economy, mandatory employer contributions can be both a detriment and a benefit to small business owners. While mandatory contributions can certainly help attract employees, maintaining contributions could present some challenges, should your business fall on hard times. That’s where 401(k)s provide an advantage to employers who may need to make adjustments to their contributions in the future. With a 401(k), you would also have the option to set vesting terms, which allows you to require employees to remain employed by you for a set time before taking ownership of your contributions to their accounts.

    Retirement Planning for Small Business Owners

    Offering retirement plans is important to attracting and retaining quality employees, but is a benefit that can come with a lot of complexity and risk. That’s where a professional employer organization (PEO) like Group Management Services (GMS) can help. From cutting costs to reducing stress to saving valuable time, GMS can take on the administrative burdens associated with retirement plans, in addition to other employee benefits and HR responsibilities like payroll, human resources, and risk management, to allow you to focus on growing your business. 

    Contact GMS today to see how we can help make retirement plans simpler for your small business.

  • Over time, it’s becoming more apparent that people’s personal and professional lives will occasionally overlap. The Bureau of Labor Statistics found that 63 percent of families with children under the age of 18 had both parents employed. Add in millions of single parents trying to balance home and work responsibilities and you have a lot of employees who seriously value a family-friendly workplace. 

    Managing work and family obligations can take a serious toll on people, which can have a direct impact on your business. Not only can this balance impact the quality of their work, but it can also lead frustrated mothers and fathers to look for more family-friendly workplaces. Fortunately, family-friendly policies are beneficial to employers as well as employees. According to the University of Kansas, a family-friendly workplace can help you:

    • Make employees more productive
    • Create a less stressful work environment
    • Attract more top talent
    • Retain quality employees

    So what can you do to make your business more family-friendly? Here are four policies that can help your business appeal to existing and potential family-oriented employees.

    An employee working at home with her daughter thanks to a family-friendly workplace policy.

    Flexible Schedules

    A little flexibility can go a long way. Back in 2017, the Harvard Business Review asked 2,000 U.S. workers which benefits they’d consider when deciding between a higher-paying job and a lower-paying job with better perks. According to that survey, a whopping 88 percent of people said they’d consider a lower-paying job that offered more flexible hours, with roughly 40 percent of them giving the offer heavy consideration.

    While the Department of Labor defines a traditional schedule as a 9-to-5, 40-hour workweek, family responsibilities can wreak havoc on such a schedule. Whether employees need to drop off or pick up kids at school, stay home to watch over the little ones, or adjust their hours for any other reason, a flexible schedule can help them maintain a regular workload (and their sanity). 

    Another option is to offer employees the ability to opt for condensed workweeks. Instead of five eight-hour days, your workers can choose to work four 10-hour days and take off Friday, do four nine-hour days and work a half-day Friday, or some other weekly schedule. Regardless of which option(s) work best for your employees, having the flexibility to come in late or leave early can help relieve stress, reduce absenteeism, and increase productivity for workers who now have less to worry about while they’re at work. 

    Another big advantage is that flexible hours are a free benefit you can offer. It doesn’t cost extra money for you to provide employees some wiggle room and you can offer ground rules as to what is and isn’t allowed, such as maintaining core hours where employees must be present. In return, you’ll have a happier workforce that recognizes that you know that there’s life outside of work.

    Work From Home

    Similar to flex time, the ability to work from home gives employees a chance to be home when they need to for their families. In fact, that same HBR survey found that 80 percent of people would consider taking less money in exchange for work-from-home options.

    This interest in telecommuting is embraced by more than just employees. The number of people who telecommute has more than doubled over the past decade, with millions of people spending at least half their schedule working outside the office. Over time, business owners have recognized the value of allowing employees to work off site if possible. 

    Not only does telecommuting help out any employees who need to stay home with young or sick kids, it can even boost productivity. According to Global Workplace Analytics, two-thirds of businesses reported increased productivity among telecommuting employees. Whether it’s because those workers had more control over their personal and professional lives or some other reason, allowing employees to work from home can make your business a more family-friendly place for people who need to be home during business hours.

    Daycare Assistance

    Childcare is a major commitment, both in terms of time and money. Whether you opt to provide work flexibility or not, daycare assistance is another way to develop a family-friendly workplace.

    Between the daycare costs and conflicting schedules, childcare issues can have a direct impact on whether an employee decides to join or leave your company. According to Care.com’s Cost of Care report, 69 percent of parents have said that childcare has influenced their career decisions. That’s a lot of talent hanging in the balance depending on your benefits plan. To help out these employees, consider offering one or a combination of the following perks:

    • On-site daycare services
    • Child care subsidies
    • Flexible spending accounts for dependent care

    Parental Leave

    Welcoming a new child into the family is an exciting time for any parent, but it can also be incredibly stressful. A parental leave policy can help you take some of the stress out of the situation. As an employer, you have a few options if you decide to offer parental leave:

    • Unpaid parental leave
    • Paid parental leave
    • A combination of paid and unpaid parental leave

    As expected, paid leave is the most attractive option for employees, but it means you’re still on the hook for paying the new parent while he or she is out. On the flip side, not having a parental leave plan – or one that doesn’t offer any form of paid leave – makes it much more likely that prospective parents will look for better benefits elsewhere. Regardless of which route you chose, adding a parental leave policy to your company’s benefits plan will help show your workers that you care about them and their families outside of work, which can go a long way toward creating a family-friendly culture.

    Make Your Company a Destination for Good Employees

    The average employee spends more time at work than home, but that doesn’t mean your company can’t make it a bit easier to maintain a healthy work-life balance. Establishing family-friendly workplace policies can help you attract and retain top talent so that you have the right people in place at your business.

    Of course, your employees aren’t the only people who deserve a little help maintaining a good work-life balance. In addition to employee benefits administration, there are several key business functions that can eat up your schedule. Fortunately, a PEO can provide the comprehensive HR administrative service you need to manage your business’ HR needs so that you can focus on your business – and the occasional day off – instead of handling payroll or some other time-consuming task.

    Ready to focus on growing your work family? Contact us today to talk to one of our experts about how we can take on the burden of HR administration for you.