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  • In a move aimed at supporting the working class, Alabama is set to introduce a new tax benefit that will directly impact full-time hourly employees. Effective for tax years beginning on or after January 1st, 2024, overtime pay received by these employees for hours worked over 40 in a given week will be excluded from gross income and exempt from Alabama state income tax. This exciting development not only puts more money in the pockets of hardworking Alabamians but also brings significant changes for employers. Continue reading to explore the details of this tax break, the reporting requirements for employers, and the proposed rules issued by the Alabama Department of Revenue (DOR).

    The Overtime Tax Break

    For many full-time hourly employees, overtime pay is a lifeline, often representing the extra effort they put in to make ends meet. Now, Alabama is giving these individuals a well-deserved break by exempting their overtime pay from state income tax. Starting in 2024, any overtime earnings over 40 hours per week will no longer be subject to state taxation. This is excellent news for employees who work hard to provide for their families and have previously struggled with tax burdens on their overtime income.

    Reporting Requirements For Employers

    To ensure the smooth implementation of this tax break, the Alabama DOR has outlined specific reporting requirements for employers. Employers are now required to provide the DOR with a one-time report for 2023 detailing the aggregate amount of overtime paid during the year and the number of full-time hourly employees who received this pay. In addition, beginning in 2024, employers must continue to report this information on a monthly or quarterly basis, tied to their regular reporting of withholding tax. This means that all employers who are required to withhold Alabama tax from their employee’s wages are also obliged to report overtime.

    This reporting requirement is crucial to ensure transparency and compliance with the new tax regulations. Employers play a pivotal role in facilitating the tax breaks for their employees, and accurate reporting will be critical to its success.

    Proposed Rules From The DOR

    To provide further clarity on the implementation of this tax break, the Alabama DOR has also issued proposed rules. These rules aim to guide employers on reporting requirements, define the qualifying overtime exempt from state taxation, and establish precise definitions for relevant terms. These proposed rules will help both employers and employees understand the nuances of this new tax benefit, ensuring that it’s applied fairly and consistently.

    The Assistance Of A PEO

    In light of the proposed rule and the changing landscape of employment regulations in Alabama, partnering with a professional employer organization (PEO) like GMS might be the solution you’re looking for. With our expertise in compliance, HR management, and cost-effective solutions, GMS’ HR experts provide a crucial bridge between businesses and the evolving regulatory environment. By entrusting HR and compliance responsibilities to a PEO, businesses can confidently navigate the complexities of the proposed rule, ensuring that they not only meet the new requirements but also optimize their operations and support their employees effectively. During uncertain times, GMS can be the steadfast partner that empowers businesses to thrive while staying ahead of the curve. Contact us today to learn how we can help your business thrive.

  • In an era of technological innovation, even the most established processes are subject to transformation. The world of employment eligibility verification is no exception. Imagine a future where the cumbersome task of filling out Form I-9 and entering information into E-Verify is streamlined, where employees take an active role in their own verification, and where data entry errors become a thing of the past. This future is closer than you might think, thanks to the proposed features of E-Verify NextGen.

    E-Verify NextGen, scheduled for release in 2024, is poised to reshape the landscape of employment eligibility verification in the United States. This ambitious initiative from the U.S. Citizenship and Immigration Services (USCIS) promises to integrate the Form I-9 process with E-Verify, the federal government’s electronic employment verification system. The result? A more efficient, accurate, and user-friendly system that benefits both employers and employees.

    A Shift In Responsibility

    One of the most significant changes introduced by E-Verify NextGen is the shift in responsibility from HR departments to new hires. Currently, employers must complete a new Form I-9 for each new hire and then enter the relevant information into E-Verify if they are enrolled in the program. This manual process is not without its challenges, often leading to data entry errors and E-Verify mismatches.

    Under the new system, new hires will electronically enter their biographical information, citizenship or immigration status, and acceptable identity documents using their myE-Verify secure personal account. Once the system confirms the employee’s eligibility, the employer will be notified, and they can complete the verification by examining the documents remotely, thanks to the new alternative verification option. The submitted information will be used to generate a completed Form I-9 for the employer to download and store. This seamless process minimizes the chances of data entry errors and ensures that the verification is accurate.

    Empowering Employees

    Another aspect of E-Verify NextGen worth noting is the empowerment it gives employees. Employers will no longer be the intermediary in resolving E-Verify mismatches. Employees will receive notifications and be able to resolve mismatches directly with the government, making the process more secure and private. While this feature may sound appealing, some HR organizations may want to retain an active role in helping employees resolve mismatches, potentially making this a point of contention for certain employers.

    Seamless Job Transitions

    E-Verify NextGen offers a solution to the repetitive process of completing a new Form I-9 and entering a new E-Verify case with each job change. Under this system, employees can carry their verification status when changing jobs. They can save their information in their myE-Verify account and easily update it for new employers, making job transitions smoother and more efficient.

    Targeted Audience And Considerations

    E-Verify NextGen is expected to be most beneficial for employers still completing I-9s on paper. For these organizations, the transition to NextGen promises a more seamless experience for new hires and employers. However, larger employers with interconnected onboarding systems and digital storage may not find the initial version of E-Verify NextGen to be the best fit. It lacks the features typically available through an electronic I-9 system. Nevertheless, as NextGen evolves, there is hope that USCIS will make it available to E-Verify Web Services agents, allowing for integration within more complex employer workflows.

    A Nudge Toward Adoption

    Employer use of E-Verify is currently voluntary, except for certain federal contractors, subcontractors, and employers in specific states that mandate its use. E-Verify NextGen is intended to serve as an additional incentive for more employers to consider adopting the system, particularly with the “optional alternative procedure” for examining I-9 documents remotely.

    The Future Awaits

    It’s important to note that E-Verify NextGen will not replace the standard version of E-Verify, at least for the time being. Employers will have the flexibility to choose between the current E-Verify process and the NextGen version. The proposed changes are currently under review by the Office of Management and Budget, signaling that the future of employment eligibility verification is on the horizon.

    E-Verify NextGen promises to revolutionize the way employment eligibility verification is conducted. Streamlining processes, empowering employees, and providing a more efficient system offer numerous benefits to employers and job seekers. As we eagerly await its release in 2024, the potential for a more seamless and error-free verification process is an exciting prospect for the world of employment.

    Have You Considered Partnering With A PEO

    With the employment eligibility verification process constantly changing, the role of a professional employer organization (PEO) becomes even more invaluable. PEOs like GMS specialize in HR functions, compliance, and payroll, offering businesses the expertise and support they need to navigate the complexities of systems such as E-Verify NextGen. By partnering with GMS, companies can ensure they’re well-prepared for the changes ahead, minimize administrative burdens, and focus strongly on their core operations. As the future unfolds and E-Verify NextGen becomes a reality, a PEO can be the guiding hand that leads businesses toward a seamless, compliant, and efficient verification process, allowing them to thrive in a rapidly changing employment landscape. Contact our HR experts today to learn more.

  • In a significant shift from recent years, the U.S. Equal Employment Opportunity Commission (EEOC) has announced updated deadlines for employers to submit their demographic data. The EEO-1 Component 1 data collection for 2022 is set to kick off on October 31st, 2023, with the deadline for employers to file their EEO-1 reports now extended to December 5th, 2023. This shift in the filing cycle is bound to impact businesses across the nation, prompting employers to adapt to the new timeline and understand the implications of these changes.

    Who Needs To File EEO-1 Reports?

    Private employers with at least 100 employees must file the EEO-1 form annually. This form essentially provides a snapshot of the racial, ethnic, and gender composition of their workforce broken down by specific job categories. In addition to private employers, federal government contractors and first-tier subcontractors with 50 or more employees and at least $50,000 in contracts must also submit EEO-1 reports. However, it’s important to note that state and local governments, as well as public school systems, are exempt from this requirement.

    Streamlining The Reporting Process

    One of the most notable aspects of this year’s changes is the shift in the filing cycle. In the past, employers were accustomed to deadlines in May or June. The new timeline aims to streamline the reporting structure, making it more accessible for employers to prepare and submit their EEO-1 reports. This change is a welcome development for many employers who have struggled with previous deadlines.

    One-Year Approval From The White House

    It’s essential to note that the White House Office of Management and Budget (OMB) extended this approval of the EEO-1 form for only one year, despite the EEOC’s request for a three-year approval. While this extension allows the EEOC to proceed with collecting EEO-1 reports this fall, it leaves the future of the EEO-1 reporting format uncertain.

    The primary change accompanying this newly approved EEO-1 form is eliminating Type 6 reports. While only a few employers used these reports, they allowed employers to provide summary data for facilities with fewer than 50 employees. The new EEO-1 report will require employers to provide demographic data for all facilities, regardless of size, creating a more comprehensive overview of workplace diversity.

    Possible Changes To Race Categories

    An aspect that remains unchanged for the 2022 data collection is the race categories on the EEO-1 form, which include white, black or African American, Native Hawaiian, or other Pacific Islander, Asian, American Indian or Alaska Native, and two or more races. On the form, Hispanic or Latino is categorized as an ethnicity, not a race. However, recent comments in court documents during the Supreme Court’s affirmative action case have suggested that these race categories might be overly broad and could undergo revisions in the future.

    Partner With GMS

    As the deadline for EEO-1 submission looms and businesses prepare to meet their reporting obligations, the role of a professional employer organization (PEO) emerges as a powerful partner. PEOs like Group Management Services (GMS) are not just about compliance; they are the bridge to a future where diversity, equity, and inclusion are seamlessly integrated into the workplace fabric. By partnering with GMS, businesses can access expert guidance, streamlined reporting processes, and comprehensive support. Together, we can confidently navigate the complex landscape of EEO-1 reporting, ultimately fostering an environment where employees’ potential is realized, and their contributions are valued. In this partnership, businesses meet regulatory requirements and lay the foundation for a more equitable and prosperous future. Contact us today to learn more.

  • We’ve heard it all. From quiet quitting to quiet firing, there are plenty of new buzzwords that business owners should familiarize themselves with. In the realm of talent acquisition, a new approach known as “quiet hiring” has been generating significant buzz and reshaping traditional recruitment practices. Quiet hiring challenges conventional sourcing and selecting candidates, offering a fresh perspective on how organizations can attract top talent.

    What Is Quiet Hiring?

    Quiet hiring is the idea that a business can add new skills and fill gaps without hiring new full-time employees. It can come in two different forms: internal and external. Depending on the situation, it can involve internally restructuring teams by reskilling existing employees or externally hiring short-term contractors to meet specific needs, resulting in increased workforce flexibility and retention.

    Internal Vs. External Quiet Hiring

    Internal quiet hiring is when current employees temporarily move to another role or take on different organizational assignments. The hiring process is long, with an average of 24 days from the first interview to hire, causing stress not only on you but also on your team, who may be juggling many responsibilities at once. Internal quiet hiring allows you to restructure your team by reskilling and upskilling your existing employees while avoiding costly and frustrating hiring processes.

    Simultaneously, internal quiet hiring is an excellent way to invest in your staff. By training current employees, you assist their professional development, making them more marketable in an ever-competitive workforce. But don’t let this deter you; it doesn’t mean your employees will leave your business. In fact, data shows that employees who feel invested in are more engaged, report hiring job satisfaction, and are 34% more likely to stay with their employer.

    External quiet hiring, on the other hand, is the process of hiring short-term contractors to keep the business running without hiring more full-time employees. This involves proactively vetting well-established contractors, freelancers, or other talent who can fill in whenever necessary.

    Benefits Of Quiet Hiring

    While quiet hiring has existed for some time, it’s become increasingly popular since the COVID-19 pandemic in 2020. Because of the competitive job market and labor shortage across industries, quiet hiring could be the right solution for you to ensure workplace efficiency without causing financial strain. The following are potential benefits of implementing quiet hiring within your business:

    • Provides employees with a reason to care more about their job
    • Equips workers with professional development opportunities 
    • Promotes collaboration and cross-functional teams 
    • Assists with succession planning
    • Establishes a continuous learning culture 
    • Makes companies more agile and ready to take on change 
    • Saves resources by not spending money on training and onboarding new staff 

    In addition, quiet hiring impacts the job market by cutting down on job eliminations. Instead of letting employees go because their job is no longer cost-effective, companies can retrain and move them elsewhere to make an impact.

    Potential Risks And Drawbacks

    One of the most significant risks of quiet hiring is the potential knowledge gap if employees were to leave. The departure of a team member handling niche or multiple responsibilities within your business could lead to the loss of crucial organizational and job-specific information. Thus, you and your team must create detailed process documentation.

    Process documentation refers to recording and detailing the step-by-step procedures, methods, and workflows involved in various organizational tasks, activities, or processes. It’s a comprehensive reference allowing individuals to follow consistent and standardized practices. Through implementing procedural documentation, you can avoid this risk altogether.

    Additionally, while quiet hiring can provide internal opportunities, there is a risk this process could overload a single employee instead of filling needed roles. Giving employees more work can often lead to burnout. Employees who experience burnout are more likely to have lower morale (36% of individuals), be less engaged (30%), make more mistakes (27%), and miscommunicate (25%). It’s a never-ending cycle that could hurt your business in the long run.

    Implementing Quiet Hiring

    Quiet hiring has many benefits, such as saving you time and resources spent elsewhere. But it’s not a strategy to implement without careful thought and planning. By implementing an internal mobility program, you can create structured processes that facilitate job shadowing and swapping. This will enable your team to gain insights into different positions before making a commitment.

    Whether or not you implement a mobility program, be sure you’re communicating with your team effectively. Be transparent about your quiet hiring initiatives and frame it as an opportunity your staff can take advantage of. Unilateral decisions, passing out new assignments, or moving team members across departments without clear communication are surefire ways to create resentment and employee dissatisfaction.

    Equally as important, when you ask employees to take on more or different responsibilities from their initial hire, you must reevaluate their compensation packages. This proactive approach will assist in retention efforts during moments of transition.

    In summary: 

    • Have a clear plan
    • Implement training programs
    • Create a detailed procedural document
    • Be transparent with your team
    • Understand your compensation commitments 

    Allow GMS To Help With Your Decision

    Should you choose to implement quiet hiring within your business, it’s essential you relay the message in a way that makes your employees feel valued. You don’t want them to think they’re interchangeable or not good enough for the job, but instead, you want them in a position where they can utilize their skills more effectively and have a more substantial impact.

    That’s where partnering with a professional employer organization (PEO), like GMS, can benefit you. We can help implement career development and leadership programs so you can train employees to take on more responsibilities in a scenario such as quiet hiring. Plus, through a job market analysis, we’ll help you ensure your compensating employees an appropriate amount.

    Joe Wenger, PHR, GMS’ Human Resources Manager, explained, “With Gen Z entering the workforce, it’s more important than ever for companies to develop programs that offer growth and promotion opportunities. Career advancement is one of the top priorities listed among the majority of this incoming generation. Internally at GMS, we’ve been ahead of the curve by implementing a leadership development program for top-performing frontline employees, aiming to prepare them as the future of our management team.”

    Contact us today to learn more.

  • Ensuring strict adherence to HR laws and regulations is a non-negotiable for small business owners; however, many employers find this process daunting. HR compliance is a complex and ever-evolving process that varies from state and city levels. Additionally, the rise of remote work expands many businesses’ geographical reach, resulting in more intricate multi-state compliance needs. Moreover, since laws and regulations are subject to change, you, as a business owner, must remain continuously vigilant to stay compliant.

    Navigating these intricacies is often an overwhelming and frustrating feat. It can be particularly challenging for small businesses and startups that often rely on limited staff and delegate HR to individuals who are unfamiliar with its complexities. Nevertheless, failing to adhere to the laws and regulations can lead to substantial financial and reputational repercussions. While there is no one-size-fits-all approach to avoiding non-compliance penalties, there are a few common areas businesses tend to struggle with.

    What Is HR Compliance? 

    HR compliance aligns your company’s policies and procedures with a network of federal laws, such as the Fair Labor Standards Act (FLSA) and the Americans with Disabilities Act (ADA), combined with state and local labor laws. These laws outline the obligations and responsibilities you must uphold as an employer. HR compliance encompasses various aspects, including hiring, worker classification, data privacy, and security.

    Failure to adhere to or purposefully neglecting HR compliance can lead to severe consequences for your business. Substantial financial penalties, not to mention time and resources spent on legal fees, will be lost. Beyond financial implications, the reputational impact on your business can be detrimental and lead to an extensive loss in revenue.

    In other words, following HR regulations isn’t just a legal obligation but a safeguard for you, your business, and your employees. It ensures proper measures are in place to avoid legal troubles, financial setbacks, and reputational harm.

    Common HR Compliance Pitfalls

    Although HR compliance varies based on location, company size, and industry, there are a few more universal areas companies tend to struggle with, including:

    Hiring practices

    The laws enforced by the Equal Employment Opportunity Commission prohibit discrimination across all facets of employment. As an employer, ensuring your hiring staff is well-informed about crafting inclusive job postings and understanding the permissible and impermissible questions during the hiring process is crucial. Severe penalties, including lawsuits and fines, can be levied against businesses that discriminate based on factors such as race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age, disability, or genetic information. Adhering to these regulations is not only the law but essential to foster a fair and diverse workplace.

    Pay inequity

    Performing regular salary audits is necessary to guarantee pay equity for employees. Many states, including Ohio, California, Washington, Nevada, and Colorado, to name a few, have implemented legislation to prevent discriminatory pay practices. However, as businesses expand and internal changes occur, such as transfers and promotions, gender pay disparities can inadvertently emerge. Conducting systematic and consistent salary reviews helps identify and rectify gaps, ensuring a fair, equitable, and compliant compensation structure within your organization.

    Health coverage

    The Affordable Care Act’s Employer Shared Responsibility Provision mandates that businesses with 50 or more full-time employees provide affordable health insurance options to employees. This includes ensuring coverage for dependents up to age 26. Failure to meet this requirement can lead to penalties if employees receive premium tax credits through the Health Insurance Marketplace.

    Policies and procedures

    Another significant but easily avoidable challenge stems from outdated or nonexistent employee guidelines. While employees share the responsibility of adhering to laws and regulations, the liability falls on you, as a business leader, to provide comprehensive policies and procedures.

    Unclear guidelines can lead to misunderstandings and misinterpretations, potentially resulting in actions that breach HR regulations. Therefore, ensuring up-to-date and transparent employee guidelines reinforces adherence and minimizes the risk of legal and regulatory infringements.

    Training and orientation

    Additionally, implement a comprehensive onboarding process and offer continuous training for your employees. This is crucial to guarantee your team understands your company’s policies and procedures. Inadequate training can expose your business to vulnerabilities and potential lawsuits in the future.

    Employee misclassification

    Accurate employee classification is essential due to its direct influence on taxation. Distinct categories such as independent contractors, salaried workers, and hourly employees are subject to varying tax regulations. Incorrectly categorizing full-time or hourly employees as contractors deprives workers of their rightful compensation and protections. Even unintentional misclassification holds serious consequences, including substantial fines.

    Inaccurate payroll and tax payments

    Ensuring accurate and timely payment for your staff is an absolute necessity. Failing to do so exposes your business to wage claims that can have detrimental effects, impacting your financial stability and reputation. Additionally, to avoid audits and fines, it’s essential to file payroll taxes accurately.

    Workers’ compensation

    Workers’ compensation is an “exclusive remedy,” meaning that an employee injured on the job cannot sue their employer immediately following an incident. In the event of an on-the-job accident, it’s imperative that managers and staff report the incident and subsequently submit the necessary claims immediately to avoid potential lawsuits.

    Additionally, maintaining current knowledge about accident trends within your industry is paramount. By staying informed, you can proactively support your staff through safety programs and training initiatives, reducing the likelihood of injuries.

    Termination

    In numerous states across the United States, the concept of “at-will employment” reigns supreme. This legal principle grants employers the authority to terminate employees at their discretion, without needing a specific reason, as long as the termination does not violate any laws or regulations.

    However, it doesn’t mean that employees don’t have rights. There are still requirements you are responsible for as an employer. For example, many states, such as Alabama, Alaska, Arizona, California, and Delaware, recognize good faith and fair dealing, meaning you can’t fire an employee to avoid paying retirement benefits or a hefty commission. Additionally, this safeguards employees from being fired from a place of malice. Obeying local laws protects your business from wrongful termination lawsuits and helps create a trusting and respectful work environment.

    Data privacy and security

    As an employer, your employees trust you with their sensitive information. With the shift towards electronic storage of this information, implementing data security has become integral to safeguarding your employees’ data. By ensuring a strong security system, you fulfill your responsibility to protect sensitive information and mitigate the risks associated with unauthorized access and data breaches. In the unfortunate event of a breach, having a detailed action plan allows for a swift and organized response, helps minimize the potential damage, and swiftly rectifies the situation.

    Maintaining compliance is an ongoing and dynamic process that requires time, effort, and continuous refinement of internal policies and procedures. Regulatory landscapes rapidly evolve, and you need to adapt in order to ensure your business remains in line with legal requirements. Maintaining a robust system of regular internal reviews, policy updates, and staying up-to-date with any changes in laws and regulations are essential to protecting your business effectively.

    How GMS Can Help

    You’re an expert in your field but probably not an expert in human resources. Ignoring the need for effective HR management is a recipe for disaster. Deficiencies in any HR function, such as payroll, workplace safety, or performance management, could result in:

    • Non-compliance fines
    • Miscommunication between departments
    • Slow productivity growth

    Professional employer organizations (PEOs) such as GMS can perform human resource audits to review your current HR policies, procedures, documentation, and systems. By conducting an HR audit, we can help your business reduce costs and improve its HR functions in a fraction of the time. In addition, HR audits can help assess compliance with ever-changing rules and regulations to minimize legal and regulatory liability. Contact us today, and let us help take care of the administrative tasks so you can focus on the areas of your business you enjoy most!

  • The landscape of employment regulations can be tricky for employers and employees to navigate. In New Jersey, recent changes to the unemployment insurance law have left many employers wondering about their compliance obligations. Fortunately, the New Jersey Department of Labor (DOL) has released new guidance to help employers understand and adhere to the amended law’s requirements. Continue reading to understand what these changes mean for businesses in New Jersey.

    Delayed Rollout And Fair Enforcement

    One of the first aspects to note is that the New Jersey DOL recognizes employers’ challenges due to the delayed rollout of the amended law. In response, the agency has pledged to enforce the law fairly and equitably, considering the delayed guidance’s circumstances.

    A significant concern for employers was the lack of clear instructions on what information they must provide to the Division of Unemployment Insurance when an employee separates from their job. The department acknowledges this issue and clarifies that employers are not expected to provide this information until they receive specific instructions.

    Preparing For Compliance 

    The department actively provides clear directions to employers to address the informational gap. In addition, they’re developing an online form that will streamline the submission process for employers. While these developments are in progress, the department has already requested that all employers register with the online platform, Employer Access, and provide an email address to the Division. This measure ensures employers can communicate electronically, as required by the amended law.

    Employers must understand that the new law does not mandate immediate submission of the BC-10 form upon an employee’s separation from employment. Instead, the only information required to be provided immediately is when unemployment will begin. However, employees should note that they are not expected to provide this information until the department issues clear submission instructions.

    Enforcement Leniency

    The department has demonstrated a practical approach to enforcing the amended laws in a positive development for employers. They’ve indicated that they will not assess penalties against employers or block them from obtaining relief of benefit charges for failing to provide information immediately upon an employee’s separation. This leniency will apply while the department finalizes the submission directions and revises the necessary forms.

    Employers must continue to respond promptly to all requests from the Division for separation and wage information during this transitional period. While the amended law has shortened the appeal deadline from 10 days to seven days, the department is exercising discretion. They will accept appeals submitted within the previous 10-day limit until the transition from postal to electronic communication with employers is complete.

    Stay Updated By Partnering With A PEO

    In the ever-evolving landscape of employment regulations, it’s essential for employers to remain adaptable, proactive, and compliant. Keeping a close eye on updates from the DOL and seeking legal counsel when necessary will help businesses maintain a smooth transition to the amended unemployment insurance law.

    However, as a small business owner in New Jersey, adding another task to your plate is the last thing you want to do. Luckily, GMS, a professional employer organization (PEO), is here to lend a helping hand, navigating the intricacies of employment regulations. At GMS, we provide you and your business with the following:

    • Compliance expertise
    • Administrative relief
    • Tailored solutions
    • Cost savings
    • Risk mitigation
    • Employee support
    • Focus on growth
    • And so much more

    Ultimately, the constant change in employment regulations demands vigilance and expertise, which can be challenging for small business owners to manage independently. GMS, as a trusted PEO, offers a comprehensive solution that ensures compliance with the amended unemployment insurance law in New Jersey, streamlines your HR process, reduces costs, and allows you to focus on what you do best – growing your business. Contact us today to learn how we can help your New Jersey business thrive.

  • Change is on the horizon for labor standards in the United States. On August 30th, 2023, the U.S. Department of Labor (DOL) unveiled its intention to elevate the minimum salary level for the Fair Labor Standards Act (FLSA) “white collar” exemptions. This proposed rule could substantially impact millions of American workers, and its potential consequences are worth exploring.

    Raising The Bar

    The cornerstone of this proposed rule is a substantial increase in the minimum salary level. Currently set at $684 per week ($35,568 annually), the DOL aims to boost it to $1,059 per week ($55,068 annually). This adjustment reflects the evolving landscape of the American workforce and the increasing cost of living.

    Such a raise in the minimum salary level promises greater financial stability for workers. It aligns with inflation and acknowledges the need for fair compensation in an economy where many struggle to make ends meet. This change could represent a welcome shift towards better work-life balance and financial security for workers previously excluded from overtime pay due to the lower salary threshold.

    Elevating The HCE Benchmark

    The proposed rule doesn’t stop at raising the minimum salary level; it also seeks to elevate the salary requirement for highly compensated employees (HCEs). It’s currently set at $107,432; however, the new threshold would increase to $143,988 per year. This change aims to ensure that highly compensated individuals are fairly compensated for their work while still enjoying the benefits of exempt status.

    Equality Across Territories

    Another significant aspect of this proposed rule is the intention to standardize salary levels across all U.S. territories. This move would bring Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands (CNMI) in line with the federal minimum wage, providing a more equitable standard for workers nationwide. American Samoa, a unique part of the U.S., would see its special salary levels increased to $890 per week. This adjustment acknowledges the distinct economic conditions and cost of living in this territory.

    Keeping Up With Change: Automatic Updates Every Three Years

    One of the critical features of this proposed rule is its commitment to adapting to economic changes. The DOL intends to automatically update the standard salary level and the HCE total annual compensation threshold every three years to avoid stagnation. This approach aims to keep labor standards aligned with the evolving economy and cost of living.

    Empowering Businesses In An Evolving Labor Landscape

    In light of these changes to labor standards, businesses face a complex landscape where compliance and adaptability are paramount. This is where a professional employer organization (PEO) can help. PEOs like Group Management Services (GMS) bring a wealth of experience and expertise in navigating the intricate web of labor regulations, providing businesses with a strategic advantage.

    GMS serves as a dedicated partner in ensuring that your organization complies with the new salary requirements and optimizes your HR processes. By entrusting the intricacies of labor standards and compliance to GMS, your company can concentrate on its core operations, fostering growth and resilience amid evolving workforce dynamics. In times of change, aligning with a PEO can be the strategic method that propels your business toward success in a shifting employment landscape. Contact our HR experts today to learn more!

  • The employment landscape is constantly evolving in an era of digitalization and remote work. One significant change that has emerged recently is the option for qualified E-Verify users in good standing to verify Form I-9 remotely. While this may seem convenient for employers and employees, the road to compliance in this new territory is unclear. Legal experts urge caution and thoughtful consideration as businesses navigate the uncharted waters of remote I-9 verification.

    The Basics Of Remote I-9 Verification

    Effective August 1st, 2023, remote verification of identification and work authorization documents became an alternative option for qualified E-Verify users in good standing. To maintain this good standing, employers must meet the following criteria:

    1. Enroll in E-Verify for all hiring sites using the remote alternative procedure
    2. Remain in compliance with all E-Verify program requirements, including verifying the employment eligibility of newly hired employees 
    3. Continue to participate in E-Verify in good standing each time remote verification is used 

    In addition, new E-Verify employers and case managers must complete an E-Verify tutorial, including fraud awareness and anti-discrimination training. 

    Striking The Right Balance – Document Retention 

    One of the most crucial aspects of remote I-9 verification is document retention. Employers must keep clear and legible documentation of the process when using remote verification. During a live video interaction, the employer watches as the employee completes Section 1 of Form I-9 and uploads it.

    There is no specific platform requirement for the live video chat, leaving employers with flexibility. However, experts recommend avoiding overdocumentation. Over-documenting could be misinterpreted as a sign of discrimination based on an employee’s citizenship or national origin, potentially leading to lengthy investigations by the U.S. Department of Justice/Immigrant and Employee Rights Section.

    Employees have the freedom to present any document or combination of documents from the U.S. Department of Homeland Security’s (DHS’s) list of acceptable documents, and they are not obligated to provide specific items such as a Social Security card or passport. Employees can also request the traditional physical inspection process instead of remote verification.

    Recording The Video Chat: A Matter Of Privacy 

    Employers must be mindful of state privacy laws and consent requirements if they choose to record the live video chat. Privacy rules vary from state to state; some even demand audio disclosure. Prior consent from employer representatives is advisable, and any recording process should be based on nondiscriminatory reasons.

    However, it’s important to note that recording the video chat is not a regulatory requirement but rather an internal compliance decision. The DHS has not indicated that employers must maintain a recording of the document review in either video or screenshot format.

    Recording interactions may also raise data privacy and security concerns, potentially increasing HR departments’ burden. Employers should carefully consider additional tracking and documentation procedures, keeping in mind that the DHS does not mandate these and should be discussed with legal counsel.

    The Assistance Of A PEO

    In the complex landscape of remote I-9 verification, employers can find valuable support and expertise through a professional employer organization (PEO) like GMS. PEOs manage various HR functions, including compliance with immigration and employment eligibility regulations. At GMS, our HR experts help streamline the remote verification process, ensuring employers meet all legal requirements while alleviating the burden of navigating this intricate terrain alone. As we adapt to the ever-changing world of work, the partnership with GMS can prove invaluable in maintaining compliance, protecting privacy, and ultimately facilitating a seamless transition into this new era of remote I-9 verification. Contact our HR experts today!

  • In a stride towards enhancing workplace safety and ensuring regulatory compliance, the U.S. Department of Labor (DOL) has proposed a groundbreaking proposed rule. This rule redefines the individuals authorized to accompany Occupational Safety and Health Administration (OSHA) compliance officers during workplace inspections. This initiative aims to usher in a new era of inclusivity and accountability in maintaining workplace safety by broadening the scope of representation.

    Expanding Representation

    Released on August 29th, 2023, the proposed rule signifies a transformative shift in the landscape of workplace inspections. At its heart, the rule empowers employees to authorize an employee or a non-employee third party to accompany OSHA compliance officers during inspections. It’s important to note the third party’s endorsement does not necessitate employer approval; it’s solely subject to the inspector’s consent. The rule is meant to enhance the efficacy and comprehensiveness of inspections, thereby fostering safer and more informed working environments.

    Embracing Diverse Expertise

    One of the features of the proposed rule is its departure from the traditional confines of who can be designated as a third-party representative. The law highlights that these representatives cannot be restricted to industrial hygienists or safety engineers. The driving force behind their inclusion is the unique expertise they bring, be it specialized skills, profound knowledge, or diverse experiences that can substantially enrich the compliance officer’s inspection process. This rule acknowledges that individuals with insights into specific hazards, workplace conditions, or even fluency in different languages can bridge communication gaps between OSHA representatives and workers.

    Addressing Concerns From Employers

    Employers have raised valid concerns about union representatives potentially exploiting safety inspections for their agendas. The potential presence of a wide array of representatives, including personal injury lawyers, experts, lobbyists, and legal advocates for public interest groups, has ignited discussions around conflicts of interest groups and the protection of sensitive information such as trade secrets. A trade secret is an intellectual property with inherent economic value because it’s not generally known or readily ascertainable by others, and the owner takes reasonable measures to keep it secret.

    While these concerns are valid, the proposed rule incorporates provisions that empower OSHA inspectors to prevent individuals from participating in inspections if their actions disrupt the process or jeopardize an employer’s ability to safeguard trade secrets and proprietary information.

    Leveraging PEOs For Seamless Implementation 

    As the proposed rule for expanded representation during OSHA inspections takes center stage, employers face opportunities and challenges in upholding workplace safety. However, partnering with a professional employer organization (PEO) can be your saving grace. PEOs such as Group Management Services (GMS) specialize in managing various HR functions, including compliance and safety, allowing businesses to navigate regulatory changes more effectively.

    With our expertise, we help employers understand the intricacies of the proposed rule, select appropriate third-party representatives, and ensure a seamless integration of these changes into their safety protocols. By partnering with us, employers can balance representation and safety, fostering a secure work environment that aligns with regulatory mandates and their employees’ well-being. As the discussion of this ruling continues, GMS is ready to support businesses in championing workplace safety while navigating the evolving landscape of employee representation. Get a quote today!

  • In a significant stride towards a fairer and more just work environment, the Fifth U.S. Circuit Court of Appeals recently handed down a ruling that promises to reshape the landscape of discrimination lawsuits. With this ruling, employees now have a stronger basis to challenge discriminatory actions related to scheduling and other employment-related choices.

    Expanding The Boundaries Of Anti-Discrimination Laws

    On August 18th, 2023, the court confirmed that federal anti-discrimination laws can extend their protection to encompass decisions beyond what was previously deemed “ultimate employment actions.” Traditionally, to build a case of discrimination, employees had to demonstrate they had suffered due to a significant employment decision, such as termination, suspension, or demotion. However, this new ruling breathes life into a broader spectrum of scenarios.

    Under the umbrella of Title VII of the Civil Rights Act of 1964, employers are legally prohibited from discriminating against individuals based on race, color, religion, sex, or national origin regarding compensation, conditions, privileges, and terms of employment. Prior to this ruling, legal action necessitated a link to an ultimate employment decision. Now, the court’s verdict enables claims based on any decision that influences employment terms, conditions, or privileges.

    A Case That Ignited Change

    The origin of this case lies in Hamilton v. Dallas County. The lawsuit was brought forth by nine female detention officers from a Texas jail, highlighting gender discrimination. The heart of the matter was the preferential scheduling of male officers with full weekends off, while female officers were obligated to work at least one weekend day. The county’s defense was rooted in the assertion that the scheduling policy didn’t directly impact the female officers’ core job responsibilities, compensation, or benefits. The female officers, however, argued that the scheduling policy’s adverse effects constituted an adverse employment action. The decision by the Fifth Circuit Court of Appeals reverberated with the sentiment of equality. This case serves as a poignant reminder to employers that decisions, even those that don’t culminate in a significant employment outcome, should be untainted by any form of discrimination.

    Balancing The Scale Of Justice

    While this ruling opens the door to justice, it also sets a new standard for employees wishing to bring forward discrimination claims in the scheduling context. Demonstrating that such discrimination had a disparate impact on a protected group is just the beginning. Employees must also establish tangible harm linked to the decision, such as financial loss due to missed overtime pay, bonuses, or premium pay periods.

    However, it’s important to note that the court has drawn a line. The ruling does not hold employers liable for “de minimis workplace trifles,” as highlighted by attorney Tiffany Cox Stacy. This discernment prevents the floodgates from opening to minor claims while still prioritizing the pursuit of genuine equality.

    Navigating The Evolving Landscape

    The implications of this ruling are profound and demand proactive attention from both employers and HR professionals. The increased potential for litigation over what constitutes an adverse employment action could lead to a surge in cases until the U.S. Supreme Court weighs in. Employers must be prepared for an evolving legal landscape and a heightened need for well-documented decision-making processes.

    An attorney with Morrison Cohen predicts that this ruling might give rise to a new wave of complaints post-pandemic as employees strive to protect their positions and counteract perceived retaliation. The challenge for employers is to navigate an environment where almost any business decision could be interpreted as adverse.

    Consequently, HR departments are advised to adopt a discerning lens towards employment actions that fall short of ultimate decisions. This could translate into more active involvement in matters such as progressive discipline, which might have a bearing on employees’ eligibility for promotions, transfers, raises, or changes in schedules. Legal experts recommend carefully scrutinizing existing scheduling policies and forthcoming changes to ensure alignment with business needs and legal requirements.

    While the road ahead might be intricate, employers can navigate it by focusing on legitimate business justifications for their decisions. Documentation will be instrumental in proving that employment choices are rooted in nondiscriminatory principles.

    The Assistance Of A PEO

    As the courts expand the boundaries of what constitutes an adverse employment action, the need for vigilant and comprehensive workforce management becomes paramount for business owners. This shifting legal landscape highlights the crucial role of a professional employer organization (PEO) in guiding businesses through these complexities. A PEO’s expertise in navigating nuanced employment decisions, coupled with their commitment to fostering equality and compliance, offers a steadfast anchor in times of change. By partnering with a PEO like Group Management Services (GMS), business owners can confidently navigate the evolving terrain, ensuring their workplace remains fair, where employees’ rights are safeguarded, and the path to success is paved with integrity. In an era of transformation, GMS empowers business owners to embrace these legal developments and champion a thriving, inclusive, and legally sound workplace. Contact us today to learn more.