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  • New York has always been at the forefront of progressive legislation, and this time, it has set a benchmark poised to change the landscape of working families’ lives. April 19, 2024, marked a historic moment for pregnant employees in New York state. Governor Kathy Hochul signed into law an unprecedented amendment to the New York Labor Law  § 196-b, establishing a standalone entitlement to paid prenatal leave, the first of its kind in the United States.

    Understanding The Paid Prenatal Leave Amendment

    Under this new law, expectant mothers can now use up to 20 hours of paid leave within a 52-week period to attend prenatal medical appointments and procedures. This initiative is part of New York’s final budget for fiscal 2025 and is a significant stride in supporting prenatal health and well-being.

    Key Features Of The Law

    • Immediate availability: The 20 hours of paid prenatal leave is immediately available upon employment, ensuring that pregnant employees don’t have to accrue this benefit over time.
    • Hourly increments: Leave can be taken in hourly increments, offering flexibility to pregnant employees.
    • Compensation: Employees will be compensated at their regular pay rate or the applicable minimum wage, whichever is greater, for the duration of the leave.
    • Additional leave: This paid prenatal leave is in addition to existing paid sick and family leave entitlements.

    The Impact On Employers And Employees

    Employers must update their leave policies to reflect this change by January 1, 2025. This law not only benefits employees but also encourages employers to cultivate a supportive workplace culture that values family and health.

    Employers should revise their leave policies to incorporate the new paid prenatal leave. In addition, it’s crucial for HR and benefits teams to be well-informed about the law and its implications. Pregnant employees now have a more robust safety net for their prenatal care without worrying about financial repercussions. This law emphasizes the importance of health and family, enabling expectant mothers to prioritize prenatal care.

    The Sunset Of COVID-19 Paid Sick Leave Law

    Coinciding with this development, the final budget also sets July 31, 2025, as the end date for the COVID-19 Paid Sick Leave Law that has been in effect since March 2020. The COVID-19 Paid Sick Leave Law provides employees who are subject to a COVID-19 mandatory, precautionary quarantine, or isolation order, with immediate paid or unpaid time off specific to the current crisis. Initially, Governor Hochul proposed that it end a year earlier, but the extension provides a transition period for employers and employees to adjust to post-pandemic norms.

    Looking Ahead: A Progressive Future For Work And Family

    New York’s paid prenatal leave law is not just a legislative win; it’s a societal advancement. It reflects a growing understanding that the health of future generations starts with the care we provide today. Employers and employees are stepping into a future where work-life balance is not just an ideal but a practical reality that supports family planning and prenatal health.

    On top of all the other hats you wear as a small business owner, it’s important to stay on top of ever-changing laws and regulations. Fortunately, GMS, a certified professional employer organization (CPEO), is here to help. GMS’ HR experts ensure that small business owners not only comply with the new paid prenatal leave mandate but also thrive under it. By managing human resources, employee benefits, regulatory compliance, and payroll, GMS provides the expertise and peace of mind that allows business owners to focus on their core operations. We offer a buffer against potential administrative pitfalls and inform businesses of evolving legislation. In essence, a partnership with GMS equips small businesses with the tools and support necessary to foster a supportive work environment that values the health of employees and their families, all while maintaining the business’s bottom line. With the assistance of GMS, small businesses in New York can seamlessly integrate this new law into their policies. Interested in learning more? Contact us today to learn more.

  • The digital landscape has become an integral part of our everyday lives, providing access to essential services and information. In a significant move towards inclusivity, the U.S. Department of Justice (DOJ) issued a final rule requiring state and local governments to ensure the accessibility of their websites and mobile applications. This rule, with its far-reaching implications, is set to transform the digital experience for millions of Americans with disabilities across the country.

    Understanding The Rule’s Application

    The final rule ensures state and local governments make their digital content accessible to those with disabilities. Attorney General Merrick Garland highlighted that this rule is a testament to the Justice Department’s commitment to upholding the Americans with Disabilities Act (ADA) by ensuring equal participation in society for people with disabilities.

    The significance of this rule extends to a wide array of public services, including emergency information, health care, education, transportation updates, and more. Non-compliance with these accessibility standards could hinder individuals with disabilities from accessing these essential services, highlighting the critical importance of this regulatory development.

    Technical Standards And Exceptions

    The rule adopts the Web Content Accessibility Guidelines (WCAG) Version 2.1, Level AA, as the technical standard for state and local governments’ web content and mobile applications. However, certain exceptions exist for specific types of content, such as archived web content, pre-existing electronic documents, and content posted by third parties under certain circumstances, ensuring a balanced approach to compliance.

    Significance And Impact

    The impact of this rule extends beyond mere regulatory compliance. Tony Coelho, an original sponsor of the ADA, emphasized the evolving nature of accessibility, particularly in the digital realm. He highlighted the importance of extending the ADA’s reach to the online sphere, ensuring equal participation for all individuals in an increasingly digital society. The rule’s significance is underscored by its potential to level the playing field and foster inclusivity in the digital space, aligning with the evolving needs of a society that’s increasingly reliant on digital activities.

    Distinct Employment Obligations

    It’s crucial to note that while state and local employees must be well-versed in these regulations, compliance with the rule does not guarantee Title I requirements of the ADA for state and local entities in their capacity as employers. This distinction emphasizes the multifaceted nature of ADA compliance and the unique obligations it entails in different contexts.

    Timeline For Compliance

    The effective dates of the rule are staggered based on the size of the covered entity. Localities with a population of over 50,000 have a two-year window to ensure compliance, while areas with smaller populations are granted a three-year timeline. This phased approach aims to facilitate a smooth transition towards digital accessibility, allowing entities to align with the regulatory requirements effectively.

    Presidential Endorsement

    In a post on X, President Joe Biden emphasized the far-reaching impact of the proposed web accessibility rule, highlighting its potential to improve online accessibility to state and local services for nearly 50 million individuals with disabilities. His endorsement reflects the administration’s commitment to fostering a more inclusive and accessible country through regulatory measures that address the evolving needs of its citizens.

    Partnering With A PEO: Your Strategic Advantage In Digital Accessibility Compliance

    As business owners grapple with the complexities of adhering to the DOJ’s new digital accessibility regulations, partnering with a professional employer organization (PEO) can be a strategic move. A PEO, like GMS, does more than offer support with HR tasks or payroll processing; we stand as a pillar of expertise in regulatory compliance, including the nuanced terrain of ADA standards.

    When you partner with GMS, you’re ensuring compliance and fostering an inclusive environment, demonstrating a commitment to all clients and employees. Ready to elevate your business in a world of digital advancement? Together, we can build a future where every individual has the keys to unlock the full potential of the digital world. Contact our HR experts today to get started!

  • The U.S. Department of Labor’s (DOL’s) has implemented a new overtime rule that will significantly increase the salary threshold for white-collar exemptions to overtime requirements in two phases, including the following:

    • Effective July 1, 2024, the Fair Labor Standards Act’s (FLSA’s) annual salary-level threshold for white-collar exemptions to overtime requirements will increase from $35,568 to $43,888. 
    • Effective January 1, 2025, the annual salary threshold will rise to $58,656 – nearly a 65% increase from the current level. 

    The Fair Labor Standards Act (FLSA) mandates overtime pay for the majority of employees, but it also provides exceptions for certain job categories. Those employees who qualify for overtime pay are labeled as “nonexempt,” while those who do not qualify are termed “exempt.” The most frequently seen exemptions from overtime, commonly known as the “white-collar exemptions,” encompass roles such as executive, administrative, professional, outside sales, and specific computer-related jobs.

    Who Is Affected

    To qualify for white-collar exemptions, employees must be paid a salary of at least the threshold amount and meet certain duties tests. If they are paid less than the threshold or do not meet the tests, they must be paid 1.5 times their regular hourly rate for hours worked in excess of a 40-hour work week. FSLA’s white-collar executive, administrative, and professional exemptions are not eligible for overtime pay.

    The new rule is expected to expand overtime protections to lower-paid salaried workers, which could provide meaningful financial relief for some employees. However, the changes may also burden small businesses, potentially forcing them to cut jobs or raise prices.

    Proceed With Caution

    Employers will need to carefully review their exempt employees’ salaries and decide whether to raise them to maintain the exemption or to reclassify them as non-exempt and pay overtime. This process should be approached cautiously, as the rule is likely to face legal challenges.

    Employers will need to:

    • Budget for increases in salary and overtime expenses. 
    • Plan for communication or reclassification decisions. This will include training reclassified employees on timekeeping requirements and rules against off-the-clock work. Employers must also manage concerns that employees might raise if they are upset about losing their salaried status. 
    • Considering the 2025 salary-level thresholds and the interim, employers must determine whether to accomplish this in two steps or jump straight to the 2025 threshold. 
    • Be mindful of state, local, and wage and hour laws that may impose additional requirements for exempt status beyond federal requirements under the FLSA. 

    How To Navigate This Rule

    GMS can help your company stay compliant with the DOL’s new overtime rule and manage the associated challenges. Our team of HR experts can assist with analyzing your workforce, determining the appropriate classification for each employee, and implementing any necessary salary adjustments or reclassifications.

    We can also provide guidance on navigating the legal uncertainties, training programs for managers and employees on the new requirements and ensuring your payroll and timekeeping systems are updated to comply. By partnering with GMS, you can confidently navigate these complex regulatory changes and avoid penalties or disruptions to your business. Contact us today!

  • On April 29, 2024, the U.S. Department of Labor (DOL) finalized a rule reversing a Trump-era regulation designed to expand the formation and use of Association Health Plans (AHPs), without having to comply with the requirements of the Affordable Care Act (ACA). AHPs are group health plans that cover small employers and self-employed individuals in the same or different industries. AHPs, which are governed by state and federal laws, have historically varied significantly in size and membership.

    The 2018 Trump Administration Rule

    The 2018 rule from the Trump administration that expanded AHPs was struck down by a federal judge in 2019 and was never fully implemented. The DOL stated the 2018 rule expanded the definition of AHPs in a way that would have allowed some individual and small group health insurance coverage to be treated as large group coverage. This change could potentially evade critical consumer protections under the ACA, which requires coverage of essential health benefits such as emergency and maternity newborn care.

    The New Final Rule

    The new final rule from the Biden administration, issued by the DOLs Employee Benefits Security Administration, will take effect 60 days after its April 30th publication. It is intended to ensure consumers have access to quality health coverage consistent with federal law, including the ACA’s requirements for essential health benefits.

    While some proponents of the AHP argue they can provide small businesses and self-employed individuals with better bargaining power and lower prices, critics contend the 2018 rule would have undermined important ACA consumer protections. The new rule has been supported by the Biden administration but criticized by some Republican lawmakers as limiting workers’ health care options.

    Managing These Changes

    GMS can help your company stay compliant with the DOL’s new rule on AHPs and managing the associated challenges. Our team of HR and benefits experts can assist with analyzing your current health care plan offerings, determining the appropriate compliance requirements, and implementing necessary changes to ensure you are providing employees with quality, ACA-compliant coverage.

    In addition, we provide guidance on navigating legal and regulatory uncertainties, training programs for managers and employees on the new rules, and ensuring your benefits administration processes are updated. By partnering with GMS, you can confidently navigate these complex regulatory changes and avoid potential penalties or disruptions in your employee health benefits. Contact us today to learn more.

  • The expiration of COVID-19-related provisions requiring states to keep residents enrolled in Medicaid has cast a dark shadow over Texas, leaving an estimated 2.1 million individuals without health insurance. Texas, already grappling with the highest number of uninsured individuals in the country, has seen a drastic surge in the number of people being removed from coverage compared to any other state.

    The Human Toll

    The fallout of this mass loss of health coverage is dire. The state’s most vulnerable residents are now facing barriers accessing essential health care services. Not only has this negatively impacted individuals and families but also the state’s economy and fiscal health.

    Impact On Health Care Access

    The primary reason to maintain and expand health insurance access is to ensure that the state’s most vulnerable residents can obtain the care they need, thereby improving the overall well-being of individuals and families. With millions now stripped of their health insurance, accessing necessary medical care has become an increasingly arduous task, leading to detrimental effects on morbidity and mortality outcomes. In addition, the decreased productivity associated with adverse health outcomes is expected to take a toll on the state’s economic activity.

    Decrease In Health-Related Spending

    With 2.1 million fewer Texans covered by health insurance, health-related spending is expected to decrease, reducing business activity across communities and the broader economy. This decrease in spending not only affects the health care sector but also has far-reaching implications for various other industries and businesses.

    Rise In Uncompensated Care And Insurance Premiums

    Due to the surge in uninsured individuals, uncompensated care is no longer just a future possibility; it’s an imminent threat. This will place an unbearable strain on our health care providers, leading to a subsequent increase in insurance premiums. This exacerbates the financial burden on both individuals and the state’s health care system, creating a crisis that demands immediate attention.

    Economic Costs

    The Perryman Group’s estimates paint a picture of the economic costs of the mass loss of health insurance coverage. If this situation persists, the state will lose $58.9 billion in annual gross product and almost 509,200 jobs, factoring in multiplier effects. These economic harms are not confined to specific regions but are felt across the entire state, casting a wide net of distress.

    A Call To Action

    The repercussions of 2.1 million Texans losing their health insurance are far-reaching, encompassing human suffering and economic distress. Urgent and decisive action is needed to address this crisis and prevent it from spiraling further out of control.

    Policy Interventions

    Policy measures aimed at reinstating and expanding health insurance access for the affected individuals must be prioritized. These measures should focus on ensuring health care remains accessible and affordable for all Texans, regardless of their socioeconomic status.

    In addition, collaboration between government agencies, health care providers, and community organizations is essential to formulate comprehensive strategies that can effectively mitigate the impact of the mass loss of health insurance coverage.

    A Ray Of Hope For Small Business Owners In Texas

    In the midst of a health care and economic crisis that has left millions of Texans uninsured, there is light at the end of the tunnel – Group Management Services (GMS), a professional employer organization (PEO). As experts in providing comprehensive HR solutions, GMS can play a pivotal role in helping these businesses navigate through these challenging times.

    As a small business owner, you must step in now more than ever to support your employees. By offering tailored employee benefits management, including affordable health insurance options, GMS helps small businesses attract and retain talent. GMS is the only PEO that provides an in-house master health plan that helps you avoid large swings in usage, trends, and renewal rates. In addition, our benefits experts provide guidance on how to best utilize your plans, maintain compliance, and stay on top of ever-changing rules and regulations.

    At the end of the day, you want what’s best for your employees. Partnering with GMS is not just supportive; it’s transformative. Contact our experts today to learn more.

  • As more states across the U.S. legalize cannabis, its presence in the workplace has become a pressing issue for employers. States such as Colorado, Ohio, New York, New Jersey, and many others have legalized cannabis for recreational use, while even more have legalized it for medical purposes. As a business owner, this legalization presents a new set of challenges for maintaining workplace safety and compliance with employment laws.

    The primary concern centers on ensuring your workforce is unimpaired while on the job, especially in industries where safety is paramount, such as transportation, health care, and construction. As you can’t dictate what an employee does off the clock, adapting your business policies to prioritize sober working is crucial.

    Creating these policies is no small task; given the ever-changing legal landscape and the variations in laws across different states, any policy implemented today will likely require future updates and refinements to keep pace with ongoing changes. However, creating internal policies should still be a priority as it can safeguard your business against discrimination or wrongful termination suits if any incidents occur. To help you get started, we’ve compiled essential information to formulate a policy that suits your business needs and ensures compliance with local and federal regulations.

    Understanding Cannabis And Its Effects

    Cannabis or marijuana, primarily known for its psychoactive and medicinal properties, contains several compounds, with tetrahydrocannabinol (THC) and cannabidiol (CBD) being the most significant. Recreational cannabis has THC and CBD; the THC is the primary psychoactive component known for its ability to impair cognitive and motor functions, affecting decision-making, reaction times, and coordination. Separately, medical cannabis is stripped of the THC while keeping the CBD non-psychoactive and highlighted for its potential therapeutic benefits, such as reducing inflammation and anxiety without causing a “high.”

    The effects can vary depending on the individual, method of consumption, potency, and personal tolerance. However, typically, the impairment from smoking cannabis can last several hours, while edibles, which take longer to metabolize, can be delayed and last significantly longer. Understanding these variances is crucial for employers and employees to make informed decisions about consumption during personal time.

    Developing Workplace Policies

    As an employer, it’s essential to balance both the rights of employees who use marijuana legally outside of work and your ability to maintain a safe work environment. This can include implementing policies that prohibit working under the influence of marijuana, even if used off-duty. However, you must check your local and state laws to remain compliant when crafting your drug policies.

    In some states, such as Illinois, where cannabis has been reclassified as a “lawful product,” you’ll need to be mindful not to break the state’s Right to Privacy in the Workplace Act, which prohibits employers from discriminating against employees for off-duty “use of lawful products.”

    Despite the complexities of these differing state laws, you can still develop policies that safeguard your employees and minimize the risk of accidents. Your policies should clearly and fairly outline your stance on cannabis to prevent impairment in the workplace. In addition, it should clearly define the consequences of policy violations to ensure that all team members understand the seriousness of compliance. Having a detailed policy that includes possible repercussions can help safeguard your business in the event of a violation that leads to a termination of employment.

    In addition to developing comprehensive policies, it’s critical to train your team to ensure effective implementation. These policies should also be easily accessible to your staff for review whenever necessary. Including them in an employee handbook is an ideal start, as it’s often the most centralized resource for employees to find company information.

    Testing And Monitoring

    Unlike alcohol, cannabis can stay in an individual’s bloodstream for 30 days and hair for up to 90 days or longer for regular consumers. This means drug tests aren’t always reliable for determining active impairment. In addition, there is also no legally or medically accepted definition of what constitutes impairment for cannabis use, making it more difficult to accurately determine an employee’s non-compliance with your policies.

    However, there are a few signs you can look out for. If you carefully document instances over time, you should be protected from a wrongful termination suit if you end up needing to fire an employee due to non-compliance. These signs include:

    • Poor muscle or limb coordination 
    • Delayed reaction times and abilities 
    • Red eyes
    • Changes in speech or overall behavior
    • Negligent or carelessness while on the clock
    • Panic or anxiety

    While employees may have the right to use marijuana recreationally or medically in states where it is legal, employees are generally not permitted to be impaired at work, especially in safety-sensitive positions. This means business owners are well within their rights to enact policies and monitor employees to protect their teams and businesses.

    Prevention And Employee Assistance

    While implementing policies is a significant step in ensuring a safe work environment, establishing a healthy workplace culture that prioritizes safety is another way to help prevent injuries due to cannabis use. Positive cultures tend to have collaborative mindsets where teams and individuals work together towards common goals. This sense of shared responsibility not only boosts productivity and retention but also creates an environment where employees are motivated to perform at their best. This supportive atmosphere helps ensure that safety is a collective priority and can significantly reduce the risks of workers showing up with impaired functioning.

    In addition, offering employee assistance programs (EAPs) can help employees struggling with substance abuse issues. EAPs can help address employees’ personal issues by providing confidential and professional counseling; some even offer this service via phone, text, and email 24 hours a day, 365 days a year, to ensure your team can get the help they need.

    How GMS Can Help

    Professional employer organizations (PEOs), like GMS, can help with various tasks, including developing your HR policies and procedures and employee training. As a small business owner, you have a lot on your plate, and ensuring compliance with local and federal regulations can be complicated, stressful, and time-consuming.

    Additionally, GMS can help you offer employees the best health care benefits while reducing your overall costs. Traditional health care arrangements are no longer working. Whether your organization lacks an HR department or simply needs a resource to make more informed decisions about the management of benefits, GMS is here to help. GMS changes the approach to increase affordable options and give your employees access to small business health insurance.

    GMS takes the administrative burdens off your plate. Our team of experts ensures compliance, giving you peace of mind while saving you time and money. Contact us today to get started.

  • Earlier this week, the Federal Trade Commission (FTC) issued a final rule to ban noncompete clauses nationwide, and it is set to be a game changer for American workers and businesses. This bold move is aimed at promoting competition, protecting the freedom of workers to change jobs, fostering innovation, and encouraging new business formation.

    What Is A Noncompete?

    A noncompete agreement is used by companies to prevent employees who have access to sensitive or proprietary information from taking that information to a competitor or using it to start their own competing business. Companies often invest significant resources into training and developing their employees, so they want to protect that investment by preventing those employees from immediately going to work for a rival firm.

    The Impact Of The Ban

    The FTC estimates the ban on noncompetes will lead to a significant increase in new business formation, with more than 8,500 additional new businesses created each year. This is projected to result in a 2.7% annual growth in new business formation. In addition, the rule is expected to drive innovation, potentially leading to an average increase of 17,000 to 29,000 more patents each year for the next decade.

    Higher earnings and lower health care costs

    The ban is also anticipated to positively impact workers’ earnings, with the average worker estimated to see an additional $524 per year. Additionally, the rule is expected to lower health care costs by up to $194 billion over the next 10 years.

    Worker freedom and opportunity

    The ban on noncompetes is a crucial step toward ensuring that American workers have the freedom to pursue new job opportunities, start their own businesses, and bring fresh ideas to the market. By eliminating the barriers imposed by noncompetes, workers will have greater flexibility and autonomy in their careers.

    Impact On Workers

    Noncompete clauses have been widely criticized for keeping wages low, stifling creativity, and restricting the dynamism of the American economy. An estimated 30 million workers (one in five Americans) are currently subject to noncompetes. These clauses often force workers to either remain in undesirable jobs or face significant hardships and costs if they seek to change employment.

    Prohibiting Noncompetes

    Under the new rule, existing noncompetes for the vast majority of workers will no longer be enforceable. While existing noncompetes for senior executives can remain intact, employers are banned from entering into or attempting to enforce any new noncompetes, even for senior executives. Employers will be required to notify workers bound by an existing noncompete that it will not be enforced against them.

    Public Feedback And Final Rulemaking

    The FTC’s decision to ban noncompetes was informed by a substantial public comment period, which over 25,000 comments expressed support for the ban. The Commission reviewed each comment and adjusted the proposed rule in response to public feedback.

    Alternatives To Noncompetes

    The Commission identified alternatives to noncompetes that enable firms to safeguard their investments without resorting to noncompete agreements. These alternatives include trade secret laws and non-disclosure agreements (NDAs), which provide employers with established means to protect proprietary information. In addition, employers can compete for workers’ services by improving wages and working conditions.

    Finalizing The Rule And Ensuring Compliance

    The final rule allows existing noncompetes for senior executives to remain in force but prohibits the enforcement of new noncompetes with senior executives. Furthermore, the requirement for employers to formally rescind existing noncompetes has been eliminated to streamline compliance.

    The rule will become effective 120 days after publication in the Federal Register. Employers will be required to provide notice to workers constrained by existing noncompetes that these agreements will not be enforced in the future. To facilitate compliance, the Commission has included model language in the final rule for employers to communicate with workers.

    Once the rule is effective, market participants can report suspected violations to the Bureau of Competition by emailing noncompete@ftc.gov.

    Partner With GMS To Stay Up To Date

    Navigating the complex and ever-changing employment laws and regulations can be a significant challenge for many businesses. That’s where a trusted professional employer organization (PEO) like GMS can make all the difference for your company. By outsourcing HR functions to GMS, companies can ensure they remain compliant with the new rules such as the FTC’s ban on noncompetes while also benefiting from our comprehensive suite of services and expert guidance. With GMS in your corner, you can focus on growing your business. Reach out to our experts today!

  • The U.S. Department of Labor (DOL) announced a final rule, defining and eliminating the exemptions for executive, administration, professional, outside sales, and computer employees. This will take effect on July 1, 2024. The final rule updates and revises the regulations issued under section 13(a)(1) of the Fair Labor Standards Act (FLSA) implementing the exemption from minimum wage and overtime pay requirements for these employees.

    The revisions to the overtime exemption regulations include:

    • Increases to the standard salary level
    • Increases to the highly compensated employee total annual compensation threshold
    • A mechanism that provides for the timely and efficient updating of these earnings thresholds to reflect current earnings data

    Which Employees Are Exempt?

    Employees are exempt from the FLSA’s minimum wage and overtime protections if they are employed in a bona fide executive, administrative, or professional (EAP) capacity. To be within the EAP exemption, an employee must meet three tests:

    1. Be paid a salary, meaning they are being paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality of work performed.

    2. Be paid at least a specified week salary level.

    3. Primarily perform executive, administrative, or professional duties, as provided in the department’s regulations.

    The regulations also include an alternative test for certain highly compensated employees. These workers must be paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test to qualify for the highly compensate employee exemption. This alternative pathway provides a different set of criteria for classifying highly paid workers as exempt from overtime requirements.

    Key Dates To Note

    The final rule will raise the standard salary level and the highly compensated employee total annual compensation threshold on two key dates. The first increase will take effect on the rules effective date July 1, 2024. A second set of changes for these thresholds will then become applicable on January 1, 2025.

    The final rule includes a mechanism for regularly updating these earnings levels every three years. This will ensure that the exemption criteria keep pace with the current salary data over time.

    Navigating Compliance With Labor Laws

    Staying on top of ever-changing employment laws and regulations can be a challenge for small to mid-sized businesses. That’s why GMS’ team of HR experts are here to help! We closely monitor regulatory updates and provide guidance to ensure our clients remain compliant. By partnering with GMS, small business owners can focus on growth and success while we handle the complexities of workforce management. Contact our experts today!

  • Handling the complexities of HR administrative duties is daunting for businesses of any size. From managing payroll to ensuring compliance with labor laws, the demands of HR management can quickly consume valuable time and resources, particularly for small to mid-sized businesses. However, partnering with a professional employer organization (PEO) can alleviate these burdens.

    A professional employer organization (PEO) enables businesses to outsource various aspects of human resource management, including payroll processing, benefits administration, workers’ compensation, and more. Through this partnership, you retain control over important decisions for your business, while the PEO handles administrative tasks to streamline operations and improve efficiency.

    The transition process to a PEO can be a pivotal moment in your business’s journey. This transition is essential as it will significantly impact your success to leverage the benefits of outsourcing HR functions. Thus, understanding and effectively managing this transition is crucial for maximizing the potential benefits of a PEO partnership.

    Understanding The Need For A PEO

    Many small business owners turn to a PEO to alleviate the stress of juggling numerous HR responsibilities on top of managing everyday operations. If you’re like many other small business owners wearing multiple hats, outsourcing your HR functions to a PEO can lead to a plethora of benefits for your business, including:

    • Saving money: Leveraging economies of scale, PEOS can negotiate better rates for services like health insurance, retirement plans, and other employee benefits. This strategic advantage enables PEO to provide cost-effective solutions tailored to your exact needs.
    • Access to HR expertise: PEOs employ seasoned HR professionals with expertise in various areas of HR management. By tapping into this knowledge pool, you can access strategic guidance, best practices, and personalized support for your business.
    • Compliance assistance: Staying compliant with federal, state, and local employment laws is crucial for businesses of all sizes. PEOs specialize in navigating complex regulatory frameworks, providing ongoing guidance and support.
    • Risk mitigation: PEOs can help reduce compensation costs and address Occupational Safety and Health Administration (OSHA) concerns while establishing a culture of workplace safety. Risk management services offer solutions for current issues and work to prevent future incidents.

    Finding The Right PEO

    Once you decide that partnering with a PEO is best for you and your business, the next step is to find one that aligns with your goals and needs. Choosing the right PEO partner requires careful consideration and thorough evaluation. Learn how you can assess the fit and find the PEO that best aligns with your business needs:

    1. Conduct an audit of current HR processes: Before choosing a PEO, conduct a comprehensive audit of your current HR processes, policies, and documentation. Identify areas that may need improvement or updating to ensure that all necessary HR documents are organized and up-to-date. This audit will not only help you better understand your HR needs but will also clarify your requirements when searching for a suitable PEO.

    2. Research options: Start by conducting comprehensive research to identify potential PEO partners. Use online resources, industry publications, and professional networks to compile a list of reputable PEOs that serve businesses like yours. During your research phase, consider factors such as industry experience, geographic coverage, and service offerings.

    3. Evaluate services: Once you’ve identified a list of potential PEO candidates, it’s essential to evaluate the range and quality of their services. Look beyond basic HR administrative functions and consider additional services such as employee benefits administration, risk management, payroll processing, and HR technology solutions. Assess whether the PEO’s service offerings align with your current and future HR needs.

    4. Engage in consultations and ask questions: Before making a final decision, schedule meetings with your shortlisted PEO candidates to discuss your specific needs and objectives. Prepare a list of questions to ask during these meetings, covering topics such as:

    • Their experience working with businesses of similar size and industry
    • Service agreements, pricing structures, and contract terms
    • HR technology platforms and the tools they utilize
    • Employee benefits offerings and customization options
    • Compliance support and risk management strategies
    • Communication channels and ongoing support availability

    Use these consultations to assess the PEO’s responsiveness, communication style, and willingness to customize solutions to meet your needs. Pay attention to how well the PEO understands your business and whether they demonstrate a genuine interest in helping you achieve your HR goals.

    Steps For A Smooth Transition

    Once you’ve selected the right PEO for your business, it’s time to focus on the transition. Careful planning and preparation are essential to ensure a seamless and secure transition from internal HR management to your new PEO partner. Follow these vital steps when going through the switch:

    1. Communicating with your employees: Open and transparent communication is key to effectively managing the transition. Inform your employees about the decision to partner and the reasons behind it. Be prepared to address any questions or concerns that may come up and reassure them of the benefits it will bring to them. You should keep your team updated on the progress of the transition and involve them in the process where appropriate to foster buy-in.

    2. Identifying key stakeholders and assigning roles: Specify individuals or teams within your organization who will oversee different aspects of the transition, such as data migration, employee training, and communication with the PEO. Establish clear lines of communication and accountability to ensure that each stakeholder understands their role and appropriately contributes to the transition process.

    3. Migrating the data: Support a smooth and secure transition of HR data to the PEO’s systems by developing a data migration plan. Collaborate closely with the PEO to determine the data formats, timelines, and processes for transferring employee information, payroll records, benefits data, and other relevant HR data.

    4. Onboarding employees: Coordinate with your PEO to develop a comprehensive employee onboarding process that introduces them to the new HR systems, policies, and benefits in a straightforward manner. Train and support employees as they navigate the transition to promote a positive onboarding experience.

    5. Monitoring compliance and performance: Establish protocols for ongoing compliance monitoring and performance review in collaboration with the PEO. Define key metrics and benchmarks for evaluating HR performance and compliance with legal requirements. Regularly review performance metrics and compliance reports to identify areas for improvement and ensure continued alignment with organizational goals.

    Tips For Organized Transition Management

    The transition process can seem overwhelming, but with careful planning, you can minimize disruptions and maximize success. The following can help keep you organized:

    Develop a detailed implementation plan

    Create a comprehensive transition timeline and checklist to guide the implementation process. Define key milestones, deadlines, and tasks to ensure a structured and organized transition.

    Appoint a transition leader

    Assign a dedicated transition team or point person to oversee the implementation process. Establish clear roles and responsibilities so team members feel empowered to effectively collaborate with the PEO and other stakeholders.

    Prepare for challenges with a contingency plan

    Anticipate potential challenges and develop contingency plans to address them proactively. Identify potential risks, such as data migration issues or employee resistance, and establish mitigation strategies to minimize their impact. Stay agile and responsive to emerging challenges to foster a smooth transition process.

    Document transition processes and decisions for future reference

    Document all processes, decisions, and agreements related to the transition for future reference. Maintain detailed records of meetings, discussions, and action items to facilitate continuity and accountability. Create a centralized repository for documentation to ensure easy access and retrieval by relevant stakeholders.

    Best Practices For Maximizing PEO Partnership

    Now that you have successfully transitioned your business to partner with a PEO, what’s next? You have a wealth of resources and expertise at your disposal, but consider the following to make the most of your new collaboration:

    Establishing clear lines of communication with the PEO

    Effective communication is the cornerstone of a successful PEO partnership. Establish clear channels for communication with your PEO, including designated points of contact and regular check-in meetings. Foster open dialogue to address any concerns, share updates, and collaborate on strategic initiatives.

    Leveraging resources and expertise

    Tap into the resources and expertise offered by your PEO to drive strategic HR initiatives. Collaborate with your PEO to develop tailored HR strategies that align with your business goals and objectives. Utilize their insights and best practices to optimize recruitment, talent development, and employee engagement initiatives.

    Regularly reviewing and optimizing services

    Consistently review the performance of PEO services to ensure alignment with your evolving business needs. Collaborate with your PEO to identify areas for improvement and optimize services for maximum efficiency and effectiveness.

    Implementing a feedback system

    Establish a feedback mechanism to provide ongoing input to the PEO and foster continuous improvement. Encourage employees to share their experiences and suggestions for enhancing HR services. Use feedback to identify strengths, address concerns, and drive innovation within the partnership.

    By implementing these best practices and tips for organized transition management, you can optimize your partnership with a PEO and achieve your HR objectives with confidence and efficiency. With clear communication, strategic collaboration, and proactive planning, you can navigate the transition process smoothly and unlock the full potential of your PEO partnership.

    Choose GMS For A Seamless PEO Transition

    As you start on your journey to transitioning to a PEO, selecting the right partner is paramount to success, and GMS stands out as a trusted partner. With over 25 years of experience, we understand small businesses’ unique needs and challenges. We’re committed to providing comprehensive HR solutions tailored specifically to your business needs. From ensuring workplace compliance to handling payroll, GMS has a qualified team ready to support you and your business.

    Take the next step towards optimizing your HR operations and achieving your business’s full potential by partnering with GMS. Contact our team of HR experts today to learn more about how we can support your PEO transition journey and help you unlock your business’s full potential.

  • Running a small business gives you the freedom to set the rules, but that doesn’t mean you’re free from laws and regulations. From employment laws to safety standards, staying on the right side of compliance is crucial. These continuously evolving laws aim to ensure fairness, safety, and accountability in business operations. Failure to meet compliance can result in severe consequences such as fines, legal liabilities, and reputational damage.

    It can be difficult to keep track of every single law and avoid non-compliance fines on top of handling the other responsibilities necessary to run your business. Investing in human resource outsourcing through a professional employer organization (PEO) can save you time and money, allowing you to maintain focus on operating your business. By managing HR functions, a PEO can help your business stay in line with complicated laws and regulations.

    The following dives into how non-compliance can cost your business money and how a PEO can help manage these essential tasks.

    Non-compliance Risks And PEO Solutions

    Workplace safety

    Workplace safety is a crucial aspect of sustaining a healthy work environment, as these practices and procedures protect employees and prevent accidents. The Occupational Safety and Health Administration (OSHA) takes safety seriously and will issue significant fines if your workplace is not compliant. According to the OSHA Penalties list, serious violations can cost a business $16,131 per violation. It’s 10 times that amount for willful or repeated penalties.

    Partnering with a PEO for risk management services can provide resources and expertise to uphold safety standards and keep your business compliant. A PEO can complete regular risk inspections and catch hazards before an incident occurs, saving your company from potential fines. In addition to helping you steer clear of expensive OSHA fines, workplace inspections and guidance on compliance can make your work environment safer and minimize the risk of workplace incidents.

    Hiring

    Hiring employees can be a costly experience if you aren’t compliant with appropriate policies and practices. With several laws enforced by the Equal Employment Opportunity Commission (EEOC), companies must stay informed to avoid legal pitfalls. Missteps during the hiring process can lead to lawsuits from disgruntled applicants over improper job applications, discrimination, or other issues. These lawsuits are not only costly, but they can tarnish your business’s reputation.

    Acquiring HR services through a PEO can help you avoid these hiring mistakes and possible lawsuits. From cohesive hiring and onboarding to HR auditing, a PEO like GMS offers plentiful solutions to streamline your HR processes. With expertise in HR regulations, a PEO can ensure compliance and safeguard your business against legal liabilities.

    Health care

    Under the Affordable Care Act (ACA), businesses with 50 or more employees or full-time equivalents (FTEs) are required to offer health insurance coverage. Failure to offer coverage under current legislation could end up costing a business thousands of dollars each month, depending on the number of employees at your company and how or if you have offered employees coverage in the past. Since the specifics can get complicated, use this simple guide from The Henry J. Kaiser Family Foundation to see where you fall.

    One of the best ways to maintain compliance is by collaborating with a PEO to find a group health insurance plan that makes the most sense for your business and employees. A PEO can negotiate with insurance providers for competitive rates so you can receive premium care at a reduced cost. PEOs also handle administrative tasks associated with managing health insurance, including keeping up with health care compliance regulations.

    Payroll

    Managing payroll comes with a host of tax obligations for businesses. Mishandling payroll or filing inaccurately can result in hefty penalties due to non-compliance with tax regulations. In fact, if there’s negligence or disregard for rules or regulations, the accuracy-related penalty stands at 20% of the tax underpayment attributed to these actions. Failing to file on time can also be costly, with fees increasing for each month overdue. The Failure to File penalty is 5% of the unpaid taxes for each month that a tax return is late, capped at 25% of your unpaid taxes. These penalties highlight the importance of timely and accurate payroll management practices to ensure compliance and avoid financial setbacks.

    By optimizing payroll management, a PEO can efficiently handle responsibilities such as strategic planning, processing payroll, benefits administration, and more. A PEO like GMS not only offers payroll administration services but also provides payroll tax management. With a PEO, businesses can benefit from expert assistance navigating complex tax regulations, ensuring accurate tax filings, and avoiding expensive penalties.

    Stay Compliant Through Changing Regulations With GMS

    Some businesses need help remaining compliant with every existing rule and regulation. It gets even more complex when laws are created or updated. A PEO like GMS has a dedicated team of HR specialists who can help you stay up-to-date on the legislation and regulations, keeping your business compliant and avoiding penalties.

    With a PEO, you don’t have to spend hours trying to make sense of every little detail concerning laws and regulations that may affect your business. Our experts handle the complexities of compliance, so your business is safer and stronger in the long run. Contact us today to talk about how GMS can help your business!